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former IAEA Director-General

Using Stronger Sanctions to Increase Negotiating Leverage With Iran
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Orde F. Kittrie

Six days after his inauguration, President Barack Obama declared that “if countries like Iran are willing to unclench their fist, they will find an extended hand from us.” Over the 10 months since then, the Obama administration has followed up on the January 26 declaration with numerous friendly gestures to the Iranian regime.

The administration was right to offer incentives to and enter into dialogue with the Iranian leadership. Unfortunately, the Iranian regime has responded by continuing its aggressive and illegal behavior. The Obama administration should increase U.S. negotiating leverage over Iran by imposing crippling sanctions on Iran, beginning January 1, until Iran verifiably complies with its international obligations.

Iran’s record over the past 10 months, coupled with the collapse of the tentative deal to ship about three-quarters of Iran’s low-enriched uranium (LEU) out of the country, calls for changing Iran’s cost-benefit analysis.

At the time of Obama’s statement, Iran had produced a quantity of LEU that, with further enrichment to weapons-grade levels, would be enough for a bomb. Since the statement, Iran has produced more than half of the LEU that would be needed to serve as the basis for a second bomb.[1] Iran has created this LEU in violation of legally binding provisions of three UN Security Council resolutions, which order Iran to “suspend all enrichment-related activities.”[2]

At the same time, Iran has chosen to flout numerous other international legal obligations. Iran’s brutal response to postelection protests violated its human rights obligations under international law.[3] Iran has also continued its destabilizing and illegal support for terrorist groups across the Middle East.[4]

These violations of its international legal obligations demonstrate both that the Iranian regime is responding to Obama’s outstretched hand with a clenched fist and that any nuclear or other agreement that is reached with the Iranian regime must be designed to include measures, such as rigorous timelines and exceptional verification and monitoring provisions, to protect the West against Iran’s proclivity to break its international commitments.

Supreme Leader Ali Khamenei’s November 3 statement, in response to what he described as several personal letters from Obama, that negotiating with the United States would be “perverted and naïve” also calls into question the Iranian regime’s current motivation to negotiate seriously with the United States.

The Rationale for Stronger Sanctions

Obama has set the end of 2009 as a deadline for reassessing engagement with Iran. Barring unforeseen developments before the end of the year, if Obama is to persuade Iran to begin complying with its existing international nuclear and other legal obligations and to enter into rigorous new obligations, he will need to change Iran’s cost-benefit analysis.

Although the United States should remain open to negotiations with Iran after December 31, this deadline should not be allowed to pass without consequence. Iranian officials have crowed about their success in using the 2002-2006 nuclear negotiations with the Europeans to buy time for Iran to advance its nuclear program.[5] In order to deter the Iranian regime from similarly dragging out the current round of negotiations while advancing its nuclear program, it must be made clear that Iran will incur a significant cost for failure to suspend its enrichment-related activities, as required by UN Security Council resolutions, and increasingly higher costs if it has still failed to comply at periodic intervals thereafter.

Strong international sanctions on Iran have yet to be tried. The entirety of UN Security Council sanctions on Iran thus far consist only of (1) a ban on supplying Iran with various nuclear and ballistic missile items and technology, (2) a freeze on overseas assets of a few dozen named Iranian officials and institutions, (3) a ban on the export of arms by Iran, and (4) a ban on the overseas travel of a handful of Iranian officials.[6] The sanctions imposed on Iran by the Security Council thus far are much weaker than the sanctions imposed on Liberia during its civil war, Sierra Leone in response to its 1997 military coup, Yugoslavia during the Bosnia crisis, Haiti in response to its 1991 military coup, South Africa in response to apartheid, Libya in response to its support for terrorism, and Iraq in response to its invasion of Kuwait and weapons of mass destruction (WMD) programs. The current weak sanctions on Iran are a missed opportunity because Iran’s heavy dependence on foreign trade leaves it potentially highly vulnerable to strong economic sanctions.

Secretary of State Hillary Rodham Clinton has said the administration will work to impose “crippling” sanctions on Iran “in the event that our offers are either rejected or the process is inconclusive or unsuccessful.”[7] Such strong sanctions on Iran would serve several useful purposes, including (1) coercing the Iranian regime into halting its illegal behavior, if the costs of proceeding with the nuclear program or supporting terrorism are increased sufficiently to outweigh the benefits to the regime of proceeding with the program or supporting terrorism; (2) constraining Iran from illegal behavior, if the sanctions materially reduce Iran’s supply of goods necessary to advance the nuclear program, oppress its citizens, or support terrorist groups; (3) deterring other countries that might be contemplating similar illegal behavior; and (4) upholding the credibility of the Security Council, the nuclear nonproliferation regime, and the Obama administration.

Opponents of sanctioning Iran often assert that such sanctions might harm innocent Iranians as well as the regime. Yet, whatever harm the Iranian people might incur from a tightening of sanctions in response to their government’s illegal nuclear weapons program would pale in comparison to the humanitarian costs to the United States and the world of an Iranian nuclear arsenal. Such an arsenal would almost certainly embolden Iran to increase its sponsorship of deadly terrorism, likely cause a dangerous cascade of nuclear proliferation in the Middle East that would result in the end of the globally beneficial nuclear nonproliferation regime, and greatly increase the risk of a nuclear 9/11.

Strong Security Council sanctions helped bring down apartheid.[8] In addition, strong sanctions have in recent years helped stop illegal nuclear weapons programs and terrorism. For example, strong Security Council sanctions helped induce Libya’s government to forsake terrorism and completely and verifiably relinquish its nuclear, chemical, and biological weapons programs.[9] In exchange for the lifting of UN and U.S. sanctions, Libya ceased its support for terrorism, paid $2.7 billion to the families of the victims of the Pan Am flight 103 bombing, and allowed a team of British and U.S. government experts to enter the country and completely dismantle its WMD infrastructure.[10]

In addition, it was discovered, in the wake of the U.S. occupation of Iraq, that strong Security Council sanctions had helped destroy Iraq’s nuclear weapons program and succeeded in preventing Saddam Hussein from restarting it between the 1991 Persian Gulf War and the coalition occupation of Iraq in 2003. Sanctions reduced the Iraqi government’s revenue, eroded Iraqi military capability and confidence, blocked the import of key materials and technologies for producing nuclear and other weapons of mass destruction, and provided the United Nations with leverage to compel intrusive inspections and monitoring.[11]

There is evidence that sanctions pressure could similarly dissuade Iran from proceeding with aspects of its nuclear program. The threat, thus far unrealized, of strong sanctions, in some cases supplemented by the threat of military action, reportedly contributed to Iran’s decision to cease assassinating dissidents in Europe in the 1990s, to reach out in 2003 to the Bush administration with a conciliatory fax and a halt to its nuclear weaponization research, and agree in November 2004 to a proposal by France, Germany, and the United Kingdom for a temporary suspension of its uranium conversion and enrichment plans.[12]

There is more recent evidence that sanctions could force Iran’s leadership to modify its behavior. For example, a September 2006 report by an Iranian parliamentary committee said that a cutoff of Iran’s gasoline imports could force Iran “to modify its national priorities and devote most of its resources to prevent a major social upheaval.”[13]

In addition, some Iranian elites have suggested that Iran make compromises to avoid economic sanctions. In November 2008, as Iran began to experience the economic pain resulting from a sharp drop in oil prices, 60 Iranian economists sent a letter calling on the regime to change course drastically. The letter said that President Mahmoud Ahmadinejad’s “tension-creating” foreign policy has “scared off foreign investment and inflicted heavy damage” on the Iranian economy.[14] During the recent Iranian presidential campaign, Ahmadinejad’s opponents blamed him and the sanctions engendered by his combative foreign policy for the country’s economic woes.

Additional sanctions could further increase these feelings of discontent. Iran’s leadership presumably values its continued control over the Iranian people even more than it values its nuclear program. Tehran might be willing to make concessions on its nuclear program if it feels that strong new sanctions are contributing to social upheaval sufficient to reach the tipping point at which the regime loses its grip over the Iranian people.

Although leaders of the opposition “Green Movement” inside Iran publicly say they oppose additional sanctions, several Iranians familiar with the leadership’s thinking have been putting the word out in Washington that movement leaders have privately said that stronger sanctions would help their cause.[15]

Making Sanctions Work

Strengthened sanctions could take several forms. A wide-ranging European embargo, similar to the one the United States now has in place, would almost immediately bring the Iranian economy to its knees. Although vital for Iran, which purchases nearly 40 percent of its gasoline and much of its sophisticated machinery and parts needs from European companies, European exports to that country accounted for less than 1 percent of the European Union’s total worldwide trade in 2008.[16]

The United States could take steps regardless of what the EU and the Security Council do. For example, the United States can increase its leverage over Iran by forcing the foreign countries and companies that keep the Iranian economy afloat to choose between doing business with Iran and doing business in the United States. The U.S. Department of the Treasury has already successfully forced foreign banks to make such a choice, convincing more than 80 banks, including most of the world’s top financial institutions, to cease some or all of their business with Iran.

As a result of Iran’s insufficient capacity to refine its crude oil, Iran must import some 40 percent of the gasoline it needs for internal consumption. Bills currently before the U.S. Congress would prohibit any company that is involved in providing Iran with refined petroleum products, including gasoline, or enhancing Iran’s refining capacity from doing business in the United States. Action by individual members of Congress, including introduction of these bills, has reportedly already persuaded two of Iran’s five top gasoline suppliers in 2008 to stop providing gasoline to Iran.[17] U.S. executive branch action, congressional passage of sanctions legislation, or both could convince Iran’s remaining and potential major suppliers to refrain from providing gasoline to Iran. [18]

Such steps would significantly increase the nuclear program’s economic and political cost to the Iranian leadership. When Iran attempted to ration gasoline during the summer of 2007, violent protests forced the regime to back down. As a BBC report noted at the time, having to ration fuel is “dangerous” for the government of “an oil-rich country like Iran, where people think cheap fuel is their birthright and public transport is very limited.”[19] Squeezing Iran’s gasoline imports would remind the Iranian people that instead of investing in oil refining capacity to meet Iran’s growing demands, the Iranian government has chosen to invest in a nuclear program that is contrary to international law, is economically inefficient, and has resulted in international isolation and various sanctions targeting Iran. Although Iran probably could replace some of its current gasoline imports, finding replacement suppliers would take time, and replacements would be more expensive.

Obama already has sufficient legal authority to compel Iran’s gasoline suppliers to choose between the U.S. and Iranian markets. Quietly squeezing Iran’s gasoline supplies through low-profile executive branch action could make the Iranian people less likely to blame the U.S. government and more likely to blame their own government for resulting shortages. The U.S. Treasury has successfully used this approach with regard to its financial measures. Such a technique could also be applied to companies in other sectors that do business with the United States and supply key materials to Iran.

Sanctions pressure is the best remaining hope for peacefully preventing Iran from obtaining nuclear weapons and for deterring other countries that might be contemplating following Iran’s bad example. The Obama administration must hold Iran to a December 31 deadline and insist that Tehran comply with its international obligations by verifiably relinquishing its nuclear weapons program. If Tehran fails to meet this deadline, it will be time to change the regime’s cost-benefit calculus by beginning to impose crippling sanctions on Iran.


Orde F. Kittrie is a professor of law at ArizonaStateUniversity, a senior fellow at the Foundation for Defense of Democracies, and a former U.S. Department of State attorney specializing in nonproliferation and sanctions. He has testified on nonproliferation issues before Congress and is chair of the Nonproliferation, Arms Control and Disarmament Group of the American Society of International Law.


ENDNOTES

1. “Last February, Iran accumulated enough LEU to be able to enrich enough weapon-grade uranium for one nuclear weapon. At Iran’s current rate of 2.77 kilograms of LEU hexafluoride per day, Iran would accumulate in total enough LEU to use as feed for the production of sufficient weapon-grade uranium for two nuclear weapons by the end of February 2010.” David Albright, Paul Brannan, and Jacqueline Shire, “ISIS Report: IAEA Report on Iran,” August 28, 2009, http://isis-online.org/uploads/isis-reports/documents/Analysis_IAEA_Report.pdf. According to IAEA reports, Iran had produced a total of 1,010 kilograms of LEU hexafluoride as of January 31, 2009, and 1,763 kilograms by October 31, 2009. David Albright and Jacqueline Shire, “ISIS Report: IAEA Report on Iran,” November 16, 2009, http://isis-online.org/isis-reports/detail/iaea-report-on-iran-fordow-enrichment-plant-at-advanced-stage-of-constructi/.

2. UN Security Council Resolution 1737 orders that “Iran shall without further delay suspend the following proliferation-sensitive nuclear activities: (a) all enrichment-related and reprocessing activities, including research and development.” UN Security Council, Resolution 1737, S/RES/1737, December 23, 2006. Resolutions 1747 and 1803 explicitly affirm that decision. UN Security Council, Resolution 1747, S/RES/1747, March 24, 2007; UN Security Council, Resolution 1803, S/RES/1803, March 3, 2008.

3. See International Covenant on Civil and Political Rights, www2.ohchr.org/English/law/ccpr.htm.

4. For example, the Iranian ship carrying weapons from Iran to Yemeni rebels, which was seized by the Yemeni government on October 26, violated UN Security Council Resolution 1747, which orders that “Iran shall not supply, sell or transfer directly or indirectly from its territory or by its nationals or using its flag vessels or aircraft any arms or related materiel.” A second ship, carrying 500 tons of weapons from Iran to Hezbollah in Lebanon, which was seized by the Israeli navy on November 3, violated Resolution 1747 as well as Resolution 1701, which ordered all States to “prevent...the sale or supply to any entity or individual in Lebanon of arms and related materiel of all types.” UN Security Council, Resolution 1701, S/RES/1701, August 11, 2006.

5. See, e.g., Phillip Sherwell, “How We Duped the West, by Iran’s Nuclear Negotiator,” Sunday Telegraph, March 5, 2006, p. 24.

6. See Security Council Resolutions 1737, 1747, and 1803.

7. Hillary Rodham Clinton, Testimony before the House Committee on Foreign Affairs, April 22, 2009.

8. See, e.g., John Kifner, “The Mandela Visit; Mandela Backs Sanctions and Meets U.S. Executives,” The New York Times, June 22, 1990, p. 8.

9. “[T]he surprise decision by Libyan President Muammar Gadhafi in 2003 to renounce weapons of mass destruction was partly influenced by his desire to end the decade-old U.S. sanctions and to gain access to American oil field technology and know-how.” Gary Clyde Hufbauer et al., Economic Sanctions Reconsidered, 3rd ed. (Washington, DC: Peterson Institute for International Economics, 2008), pp. 12-13.

10. The sanctions on Libya both contained Gaddafi’s ability to develop weapons of mass destruction and ultimately coerced him, including by grinding down Libya’s oil industry and causing economic problems so severe they threatened his grip on Libya. See Orde F. Kittrie, “Averting Catastrophe: Why the Nuclear Nonproliferation Treaty Is Losing Its Deterrence Capacity and How to Restore It,” Michigan Journal of International Law, Vol. 28, No. 2 (2007), pp. 337-430.

11. Rolf Ekeus, chief UN weapons inspector in Iraq from 1991 to 1997, said, “Keeping the sanctions was the stick, and the carrot was that if Iraq cooperated with the elimination of its weapons of mass destruction, the Security Council would lift the sanctions. Sanctions were the backing for the inspections, and they were what sustained my operation almost for the whole time.” George A. Lopez and David Cortright, “Containing Iraq: Sanctions Worked,” Foreign Affairs, July/August 2004, p. 96. “UN-authorized sanctions denying Saddam Hussein unlimited access to Iraq’s oil revenues, coupled with the periodic use of force, provided UN inspectors with enough leverage to find and destroy Iraq’s stockpiles and facilities for producing chemical, biological, and nuclear weapons.” Hufbauer et al., Economic Sanctions Reconsidered, p. 12.

12. See, e.g., Dennis Ross and David Makovsky, Myths, Illusions & Peace: Finding a New Direction for America in the Middle East (New York: Viking, 2009), pp. 188-190, 196-197.

13. Agence France-Presse, “Iranian Lawmakers Feared Social Upheaval From Sanctions,” January 20, 2007, www.spacewar.com/reports/Iranian_Lawmakers_Feared_Social_Upheaval_From_Sanctions_999.html.

14. Borzou Daragahi, “Economists in Iran Criticize Ahmadinejad,” Los Angeles Times, November 10, 2008, p. A3.

15. For public reflections of this, see, e.g., Nazenin Ansari and Jonathan Paris, “The Message From the Streets of Tehran,” The New York Times, November 6, 2009; House Committee on Foreign Affairs, Iran: Recent Developments and Implications for U.S. Policy, 111th Cong., 1st sess., 2009, pp. 81-83, http://foreignaffairs.house.gov/111/51254.pdf (testimony of Abbas Milani and Karim Sadjadpour).

16. See European Commission, “Trade: Iran,” http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/iran/index_en.htm.

17. Paul Sampson, “U.S. Gasoline Move Against Iran Seen Ineffective Without UN Support,” International Oil Daily, August 5, 2009; Ammar Zaidi, “Reliance Shifts Exports to Mideast and Europe as Jamnagar Ramps Up,” International Oil Daily, August 12, 2009.

18. In 2009, Iran’s imported gasoline has reportedly been supplied largely by two Swiss companies. See Paul Sampson, “Iran’s Parliament Votes to Phase Out Costly Gasoline Subsidies,” Oil Daily, November 11, 2009.

19. “Iran Fuel Rations Spark Violence,” BBC News, June 27, 2007.