Recent revelations from the International Atomic Energy Agency that Iran has continued and expanded its uranium enrichment activities have focused attention anew on U.S. policy toward the Islamic republic — and what more can be done to stop Iran's march toward the bomb.
This is, necessarily, a conversation about sanctions. Given the advanced state of Iran's nuclear program and the growing possibility that third parties — namely, Israel — might resort to force to stop it, it stands to reason that the full arsenal of U.S. economic and financial sanctions would be deployed against the Iranian threat. Yet it has not been.
Current sanctions policy is simultaneously extensive and flimsy. It amounts, in large part, to labeling a broad array of business activity as “sanctionable.” But the actual sanctioning of violators has been markedly absent.
Reporters and pundits alike have been complicit in ignoring this important distinction. Just about every piece of sanctions legislation and every executive order adopted over the past 16 years has offered an escape hatch that gives the president discretion over which violators are targeted and whether they are named and penalized.
The result is that very few “sanctionable” companies are ever penalized. Instead, successive administrations have opted against the strict application of economic penalties on countries and companies that do business with Iran.
President Barack Obama takes great pride in pointing out that his administration has levied the most extensive sanctions to date against the Iranian regime. Indeed it has. The centerpiece of the administration's sanctions effort, the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010, known as CISADA, focused on one of Iran's major economic vulnerabilities: its need to import refined petroleum.
But enforcement has lagged far behind. In the rare instances when the White House has chosen to enforce CISADA and other measures, it has penalized only obscure violators and those with the most minimal impact on the global — and the Iranian — economy. The last five companies to be sanctioned by the Obama administration — FAL Oil, Bank of Kunlun, Kuo Oil, Zhuhai Zhenrong and Elaf Islamic Bank — are all marginal entities in Iran's economic edifice.
Administration after administration has been reluctant to enforce sanctions against foreign companies with ties to Iran because of the diplomatic fallout that would invariably accompany such a decision. More often than not, the most egregious violators are companies headquartered in countries that are close U.S. allies or represent key strategic relationships for the United States. Fully implementing sanctions would require the political will to persist through a temporary downturn in those ties. But such fortitude is strikingly absent.
The full enforcement of sanctions is a logical intermediary step before the use of force. The administration's failures on that front suggest that it views warfare as more palatable than ruffled diplomatic relationships with countries such as China, the primary violator of “sanctionable” activity currently on the books. That, in turn, makes the likelihood of some sort of conflagration over Iran's nuclear program all the more probable.
Andrew K. Davenport is chief operating officer of RWR Advisory Group, an economic and geopolitical risk consultancy.
