The Right Way to Sanction Iran | Commentary
While lawmakers discuss how best to undo the nuclear deal President Barack Obama and his team have diligently pursued over the past 18 months, they leave fallow a far more important and positive area in which they could contribute: How to respond in the event a deal is not reached.
Legislation presently under consideration goes some of the way there. However, the leading legislative proposal to sanction Iran if it does not agree to a deal suffers from its insistence on dictating the pace and progress of the talks.
Rather than creating incentives for Iran to move quickly toward a deal, it threatens an ultimatum for Tehran. It also reinforces concern internationally the U.S. is more concerned with retaining sanctions than removing them as the means to reach a deal. While there is hope negotiators can achieve a deal on Iran’s nuclear program, lawmakers should hold their fire and refrain from legislative maneuvering that will sabotage the talks.
Instead, Congress and the administration should initiate contingency planning on the strategy and legal authorities that would be needed to respond in the event Iran cannot conclude a deal or cheats after it is agreed. This will signal to Congress that the administration is clear-eyed about what the future would look like if diplomacy fails. Though new sanctions now could kill diplomacy, Prime Minister Benjamin Netanyahu’s speech to Congress confirmed the critical test of a deal with Iran may come in Washington, not in the negotiations in Europe. In doing so, it demonstrated supporters of nuclear diplomacy need a broad Iran policy framework and a better “plan B” to support. U.S. resolve in the face of no deal or Iranian malfeasance is absolutely dependent on tough, pragmatic and enforceable sanctions being ready. Now is the time to craft those sanctions.
The first step for effective contingency planning is to embrace specific principles for more sanctions on Iran. In our view, sanctions should be:
Structured to maximize the right pain on Iran.
Enforceable but impactful; even with less-than-perfect compliance.
Designed to engender multilateral support.
Maximizing the right pain on Iran is harder than it sounds. Effective sanctions would sever Iran’s remaining links to the international financial system and its existing abilities to generate revenue, but permit it to continue importing goods and using up hard currency. They should aim to deny Iran access to hard currency, which would undermine the rial, reduce Iran’s ability to import the goods necessary to sustain its economic diversification away from oil dependence, and create competition within Iran for access to what hard currency remains. Sanctions should also be designed to target crucial and easily identifiable nodes, and not focus on murky sectors of Iran’s economy, such as “engineering,” that offer far less in terms of real impact.
With this objective in mind, perfect implementation is less essential. Sanctions must be enforced if they are to be sustained and if foreign entities are to respect the sanctions. Some sanctions, such as those governing access to sensitive nuclear goods, require tighter enforcement than others. But, there has often been a fixation in Washington on perfect compliance with sanctions, which is often unrealistic and unnecessary. Instead, there should be an unwavering focus on powerful, clear and implementable measures that will deprive Iran of billions in assets, as the sanctions in 2012–13 did, and that would create concerns in Tehran that worse is coming.
For this all to work, international cooperation is essential. This means picking targets that are less significant for international partners than they are for Iran and then finding ways to demonstrate to partners they will not absorb all the costs of sanctions. Oil-reduction sanctions, for instance, may be easier to implement now than before oil prices dropped. But we can make sanctions more palatable if we drop restrictions on the export of oil produced in the United States and actively promote a well-supplied oil market. Moreover, Washington’s policymakers should stop micromanaging foreign interactions with Iran where it is not essential to create major sanctions effects. To be blunt: Is it really any concern of the United States how many toasters are sold to Iran? Such nitpicking annoys partners, undermines our seriousness and complicates enforcement without a real impact on Iran.
A renewed emphasis on sanctions is not an ideal outcome for resolving concerns with Iran’s nuclear program. Despite the principles and suggestions outlined above, pursuing a retrenched emphasis on sanctions offers no guarantee for success and great risks to the overall objective of stopping Iran from acquiring a nuclear weapon. It would be far preferable to conclude a deal with Iran that addresses enrichment concerns via direct diplomacy. But, if this path fails then sanctions should be done right and avoid weakening the pressure on Iran or alienating our allies through a misstep in design or execution.
Elizabeth Rosenberg is director of the Center for a New American Security’s Energy, Economics and Security Program and a former senior sanctions advisor at the Treasury Department. Richard Nephew is director of the Economic Statecraft, Sanctions, and Energy Markets program at Columbia University’s Center on Global Energy Policy, and the former deputy coordinator for Sanctions Policy at the State Department.