The U.S. Issues Sanctions on Iran to Tighten Economic Noose

Today, I attended a hearing where Under Secretary for Political Affairs (State Department) William Burns and Under Secretary of Development (Treasury) Stuart Levey testified before the Senate Foreign Relations Committee. Last week, the Treasury released information on tougher sanctions that the U.S.  specifically will impose on Iran to tighten the noose around its already crumbling economy.

To recap: The new sanctions announced last week revealed Iranian entities that have contributed to the creation of nuclear weapons materials and different groups that have helped fund those efforts. These findings go against the Iranian government’s claim that it is pursuing a peaceful energy program.

The government officially froze the assets of the following orgs:

~ The Post Bank of Iran

~ Members of the Islamic Revolutionary Guard Corps

~ Rah Sahel and Sepanir Oil and Gas Engineering Co.

~Five different Islamic Republic of Iran Shipping lines.

In addition, the Treasury identified 22 entities in the insurance, petroleum, petrochemicals industries that are owned by the Iranian government. The goal in exposing these different transactions is to discourage foreign private businesses from doing any sort of business with entities shown to fund nuclear and terrorist activities.

The Treasury IDed the commander in chief of the Revolutionary Guard, Mohammad Ali Jafari and the head of the Basij Resistance Force, Mohammad Reza Naqdi.

In a press conference last week ( I know…I’m so behind, my bad), Timothy Geithner, said that the UN Security Council has put forth its toughest sanctions against Iran in history, and the U.S. will take steps to implement these sanctions in Congress in the coming months.

“To be truly effective in ending Iran’s proliferation activities and Iran’s support of terrorism, we need to have in place a concerted international approach. This is not something the US can do alone,” he said. At the hearing today, it was again reinforced that the sanctions are the wishes of the international community, including Arab and Gulf states.

“And I know regionally with my meetings with leaders throughout the region..they are deeply concerned about it. There is not a leader in the Gulf States or the Arab world who hasn’t expressed concern about the potential of a nuclear Iran,” said Sen. Kerry. With China and Russia, two main business partners of Iran, on board with sanctions, the Iranian government will continue to become isolated into economic collapse.

Sec. Burns responded by saying that the risk of a nuclear arms race in the Arab states and Gulf states could result if sanctions are not enforced.

Burns and Levey speculated that at this rate, Iran could have a nuclear weapon in between 3 to 5 years and obtain all necessary materials within one year.

The panelists also discussed increased communications efforts and how those will play into the nuclear weapons issue. Not only will the government suffer financially from increased isolation, but the U.S. government has increased its efforts to spread independent media in the country through the VOICE act and fund technology that thwarts efforts to block forms of censorship.

“We’ve taken another step which is to issue a specific waiver for a kind of technology that helps avoid jamming—which is certainly a tool the Iranian government has used to cut down on the free flow of information,” said Burns.

At the end of the day, the big question becomes–will increased pressure give the Iranian government more fuel to its arguments against the United States, or will it convince them to come to the table for negotiations? Some argue it could build resentment of the people inside the country if their government tells them “our economy is suffering because of them.” On the other hand, it could build pressure from within for the government to open up discussions if it wants to avoid another revolution.

Burns and Levey said the tangible results of the UN Sanctions, America’s implementation and continued efforts in Congress will be hard to predict. Nonetheless, they have stirred up concern among government officials in Iran and could mark the beginning of change.

“It will certainly not change the calculations of Iranian leadership overnight, nor is it a panacea. But it is a mark of their potential effect that Iran has worked so hard in recent months to avert action in the Security Council and tried so hard to deflect or divert the steps that are now under way.Iran is not 10 feet tall—and its economy is badly mismanaged. Beneath all their bluster and defiant rhetoric, its leaders understand that both the practical impact of resolution 1929 and its broader message of isolation create real problems for them.”