Following U.S. accusations on Oct. 11 that elements of Iran’s government conspired to assassinate the Saudi ambassador to the United States, members of Congress reiterated calls to increase sanctions on foreign firms doing business with Iran.
Obama administration officials insisted that they were taking steps to strengthen sanctions against Iran in response to the alleged plot and Iran’s nuclear program.
Lawmakers particularly insisted that the United States penalize foreign firms making purchases through the Central Bank of Iran (CBI). Many countries, including U.S. allies in Europe and Asia, rely on oil imports from Iran and make payments through the CBI. Cutting off access could have implications for global oil markets.
“Our best hope for slowing the Iranian nuclear train is to bring its financial machinery to a grinding halt,” Rep. Howard Berman (D-Calif.), the ranking member of the House Foreign Affairs Committee, told the panel during an Oct. 14 hearing.
“Sanctioning banks and companies in other countries that do business with Iran’s central bank would have a uniquely powerful impact on the Iranian economy,” Berman added.
In August, more than 90 senators signed a letter to President Barack Obama calling on the administration to sanction the CBI. Sen. Mark Kirk (R-Ill.) has threatened to introduce legislation to do so if the administration did not take that step by the end of the year. (See ACT, September 2011.)
Members of Congress pressed administration officials in hearings Oct. 13 and 14 on U.S. efforts to toughen sanctions against Iran and the prospect of sanctioning the CBI. The officials said that they were focused on implementing the existing sanctions and would seek international cooperation to cut off the CBI from the global financial system.
“We are engaged in an effort to develop the multilateral support that would be…critically important in having action against the CBI be really effective,” Undersecretary of the Treasury for Terrorism and Financial Intelligence David Cohen told the House committee during the Oct. 14 hearing. Cohen said current sanctions were having a serious impact on Iran’s financial sector and that many foreign banks already were cutting relationships with Tehran. “Iran is now facing unprecedented levels of financial and commercial isolation,” he told the committee.
Congress also is mulling additional efforts to target other countries doing business with Iran, in particular with Iran’s Islamic Revolutionary Guard Corps. Legislation introduced in the House and Senate would sanction foreign firms purchasing oil or gas from Iran if the Guard was involved in the transaction, with the Senate bill extending this prohibition to include any transaction in which the Guard was involved.
The Guard has become increasingly involved in many aspects of Iran’s economy, including its energy sector.
The House foreign affairs panel is expected to take action on its bill early this month. That bill also would place greater limitations than current law on the president’s ability to waive the sanctions and eliminates such waivers in some cases. The Obama administration, like the two previous administrations, has sought to maintain waiver provisions for such sanctions to preserve diplomatic flexibility and to prevent the sanctions from causing friction with diplomatic partners.
Former National Security Council staffer Gary Sick said in an Oct. 13 e-mail to Arms Control Today that sanctions have a role as “bargaining chips” if the United States is willing and able to lift them in return for improvements in Iran’s policies, such as accepting additional International Atomic Energy Agency safeguards. “That gives us an exceptional array of tools we could use,” he said, adding that the “greatest failing of our diplomatic track” has been that the United States has not used such leverage in negotiations.
During congressional testimony, U.S. officials said the administration still is adhering to a “dual-track approach” of negotiations and sanctions, as is the so-called P5+1, a group comprising the five permanent members of the UN Security Council (China, France, Russia, the United Kingdom, and the United States) and Germany.
In an Oct. 21 letter to Iranian nuclear negotiator Saeed Jalili, EU High Representative for Foreign Affairs and Security Policy Catherine Ashton, who represents the P5+1, said the six countries would be willing to meet with Iran “within the coming weeks” if Iran is ready to “engage seriously in discussions” on the nuclear issue.
The last meeting between the two sides, in January, ended without agreement for follow-on talks. In a Jan. 22 statement, Ashton said that “the Iranian side was not ready” for constructive talks, having demanded the lifting of sanctions and recognition of a right to enrich uranium as preconditions for progress. She said those preconditions “are not a way to proceed.”
In Oct. 6 remarks to the First Committee of the UN General Assembly, Iranian UN ambassador Mohammed Khazaee said that his country was ready to engage in “serious and constructive negotiation” without preconditions.