On the Issues: Iran Sanctions

By: 
Dan Brumberg, George Lopez and Robin Wright

The United Nations Security Council on June 9 voted to impose a fourth round of sanctions on Iran, targeting conventional arms and the finances of 40 Iranian companies. The U.N. Security Council decision was not unanimous as two of the 15 nations on the council -- Brazil and Turkey – voted against the measure. Lebanon abstained. In an update to a May 20 “On the Issues,” USIP experts Robin Wright, Dan Brumberg and George Lopez provide different views on the U.N. vote and whether these sanctions can be effective.

Updated: June 9, 2010

Read the original On the Issues posted on May 20, 2010

The United Nations Security Council on June 9 voted to impose a fourth round of sanctions on Iran, targeting conventional arms and the finances of 40 Iranian companies. The U.N. Security Council decision was not unanimous as two of the 15 nations on the council -- Brazil and Turkey – voted against the measure. Lebanon abstained.

In an update to a May 20 “On the Issues,” USIP experts Robin Wright, Dan Brumberg and George Lopez provide different views on the U.N. vote and whether these sanctions can be effective.

Robin Wright: The latest U.N. resolution is unlikely to have any significant impact on Iran's behavior, as Tehran has already made clear. Over the past 30 years, Tehran has become highly skilled at circumventing sanctions through intermediaries and shell companies. Iran may find it trickier to acquire technology and materiel. But the pressure is almost certainly not sufficient to get Iran back to diplomatic negotiations. The impact will be more psychological than political or economic. The proud Persian theocrats don't like sanctions, even though they can survive the new restrictions.

The main issue will be how the new resolution is now adapted and applied, especially since different countries have quite disparate interpretations of Resolution 1929. The United States insists that the resolution lays the groundwork for potential additional action against Iran's pivotal energy sector and Central Bank. But countries like Russia and China, which do major business with Iran and therefore have greater leverage, point out that there are no legal restrictions on either doing business on energy sector or the Central Bank.

The short-term effect of the new resolution may depend on whether the Europeans use it as justification for their own new unilateral or regional sanctions. Several countries do business with Iran.

For the United States, the down side of this resolution is that it carried significant costs. For the first time, Washington was unable to win unanimous backing, even after significantly watering down the resolution.

More importantly, the Obama administration alienated two key emerging powers --Turkey and Brazil - by bungling the reaction to the last-ditch diplomatic deal their leaders brokered with Iran. The deal was immediately dismissed out of hand, without acknowledging the allies' diplomatic efforts or Iran's willingness to negotiate-even though the terms fell short. As a result, for the first time, the obstacles to a unanimous vote were not major powers like Russia and China, but two countries that Washington had previously considered strong allies.

The limited impact of the new U.N. resolution also immediately leaves open the question: What's next? Resolution 1929 took almost one year to negotiate. Since it is unlikely to get Iran to cooperate with the international community, what steps can the major powers - in agreement-- take next to change Iran's behavior. The new resolution comes at a time of unprecedented concern about Iran's suspected secret nuclear activities.

Dan Brumberg: U.S. Ambassador to the United Nations Susan Rice asserts that the new round of U.N. Security Council sanctions are "as tough as they are smart and precise." But if the purpose of the sanctions is to push Iran to provide the International Atomic Energy Agency (IAEA) with the kind of cooperation and information it is demanding, I doubt they will be effective. As recent reporting makes clear, the Iranians have devised a multitude of strategies and mechanisms for evading or mitigating sanctions. My sense is that at the end of the day, sanctions have a political purpose, i.e. to maintain a degree of unity with our close allies, and with Russian and China as well. Sanctions are also designed to buy time, and perhaps to fend off pressures for military solutions. But enhanced sanctions cannot substitute for a more coherent diplomatic strategy, which is still lacking. What we now have is tepid engagement combined with enhanced sanctions, weak incentives for cooperation and not terribly robust disincentives. It's not a winning combination. Of course, the actions and nature of the regime in Tehran don't make our life any easier. A regime that continues to repress a significant sector of its populace is not one that we feel like cutting deals with. So we remain ambivalent--and that ambivalence is just fine with Iran's rulers.

George Lopez: The new U.N. resolution captures the important policy subtlety that sanctions must pressure for compliance, not punish for capitulation. It provides an effective balance between a sanctions bite that hurts and a style of imposition that rejects isolating Iran. Instead, these targeted sanctions rightly aim to refocus Tehran on internationally accepted standards of atomic energy development and use.

The resolution’s first strength is that it undermines real assets and capabilities that Iran might use for weapons production. The document astutely mixes compulsory and voluntary measures targeted at the diverse economic sectors that bolster Iranian uranium enrichment and missile development. These measures will complicate further progress in both areas, and may extend significantly the time that Iran would need to develop an actual weapon.

This resolution also underscores why and how sanctions constitute the cornerstone, rather than the entire edifice, of a nuclear rollback policy. The past successful cases of Ukraine, South Africa and Libya illustrate that an astute application of narrowly targeted sanctions are the critical first step of a larger policy process, the second element of which is engaged negotiation between imposers of sanctions and their targets.

Rather unique in this week’s sanctions resolution is a section providing six full paragraphs expressly dealing with engagement. The resolution also includes as an annex the 2008 incentives package crafted primarily by the EU3 (France, Britain and Germany), which lays out a workable path for Iran to develop peaceful nuclear energy.

The resolution’s conventional arms embargo may be the most extensive imposed on a nation not embroiled in civil war. The measures prohibit Iranian purchases of missiles, naval ships, tanks, artillery and armored vehicles, as well as an array of aircraft, most notably attack helicopters. In addition, the draft resolution puts real teeth into the missile system restrictions that first appeared in earlier U.N. resolutions, while also prohibiting other states from supplying training, spare parts or other assistance for any of these arms.

 

Posted: May 20, 2010

The U.S. this week announced it reached an agreement for new sanctions on Iran over its nuclear program with the other permanent members of the United Nations Security Council, including Russia and China. The proposed U.N. resolution comes shortly after Iran announced its own deal with Turkey and Brazil in which it would turn over nearly half of its stockpile of nuclear fuel.

USIP’s Dan Brumberg, George Lopez and Robin Wright discuss the significance of these recent developments.

What do you make of the draft resolution for U.N. sanctions on Iran?  Could this successfully compel Iran to halt its uranium enrichment work and to cooperate with international inspectors?

Robin Wright: The new U.N. resolution will almost certainly not make a decisive difference in getting Iran to cooperate with the international community on its controversial nuclear program. Some measures do not require member states to take action; others do not have an enforcement mechanism.

The main impact is likely to be more psychological than economic, since the regime has had plenty of time to prepare alternative covert means of acquiring the goods it wants.

George Lopez: I believe these sanctions have a reasonable chance of success.  Past cases like Ukraine, South Africa, Libya and even North Korea illustrate that an astute application of narrowly targeted sanctions -- as these new ones are -- can "work" but only when they are the first step of a larger policy and only when they lead to engaged negotiation between imposers and targets.

These sanctions prompt such negotiations because they are placed on those leaders and economic sectors most responsible for nuclear development. This package submitted by the U.S. is one of the best I've seen at doing this: it will name companies, banks, military goods and individuals. These are truly "smart" sanctions.

What finally seals the deal is the unveiling of a versatile array of economic incentives which await the nation once it renounces nuclear materials and permits international verification of such. These inducement rewards were first put on the table by the Europeans in 2006 and have been hanging around since then.

My hunch is that this will be about a two-year process in all.

Why did Russia and China agree to this U.N. resolution?

George Lopez: Russia and China agreed because this sanctions package does not greatly disturb their core economic interests with Iran, and Russia, more than China, but both to a degree, are running out of patience with Tehran's leadership.  Iran's behavior is too erratic and its unwillingness to see a good deal when they have it has frustrated and alienated Russia and China from Tehran.

To a lesser, but real degree, each state likes the new wave of U.S. dialogue and engagement at the U.N. Security Council level -- they feel very much a part of the 'Big Three' as the U.S. has been very inclusive of them under this administration.

What do you think of Iran’s deal with Brazil and Turkey, which currently have seats on the Security Council without veto power? Did it undermine U.S. efforts on sanctions?

Robin Wright: Iran was clearly responding to the growing international momentum behind a new U.N. sanctions resolution. But Iran flip-flopped on a similar U.S.-backed deal last fall, so the question automatically was whether it might back out again somewhere down the road.

George Lopez: This deal between Brazil, Turkey and Iran was more than just about slowing uranium enrichment.  There was a lot embedded into this for Turkey and Brazil in that they believe in the 'power' of their mid-to-large international status and their claim that they are closed out of too much by the big global powers.

They each want a permanent seat on the U.N. Security Council when and if the size of the council expands.  Brazilian President Luiz Inácio Lula da Silva sees himself as a big 'deal maker,’ while Turkey sees itself as a model of a thriving state between East and West -- and as a state that deserves entrance into the European Union. We and other nations need to welcome this level of leadership and action; we are going to need to do some repair work with them as they are now pretty angry at the US.

Brazil and Turkey were correct to call this agreement a first step and a confidence-building measure -- but they misread the timing for it badly. It might have been a good deal to get in February, but now they would need to insist on some more direct concessions from Iran and they did not. And even if they had gotten some more concessions, the core issue remains that Iran will not stop the plants and reactors that are running to attain 20 percent enriched grade uranium.  That is the most cumbersome stumbling block.

The U.S. would have again liked to get a 15-0 vote at the U.N., but they are right now gearing up for a 12-3 vote -- with a hope that tempers could ebb over the next two to three weeks to the point where one of these countries would "abstain” from voting.

Dan Brumberg: While Tehran certainly hoped that the deal with Brazil and Turkey would help prevent a new round of U.N. sanctions, I do not think its motivation for supporting the deal solely hinged on the assumption that the deal would get China and/or Russia to veto a new round of sanctions.

Indeed, while Iranian President Mahmoud Ahmadinejad certainly doesn't want sanctions, he has repeatedly stated--and I think he means it--that sanctions will not force Iran to comply with the demands of Washington regarding the suspension of enrichment or the carrying out of the October 2009 agreement to enrich uranium outside Iran.

Rather, the primary motivation behind Iran's cooperation was its desire to expand and solidify a growing constellation of large countries – like China and Russia -- and medium-sized countries who are seeking to demonstrate their capacity to affect global developments independently of Washington's will.

These countries include states that are clearly hostile to Washington--such as Venezuela--but they also include countries that maintain, to varying degrees, good relations with the U.S., but whose leaders nevertheless are searching to create a truly multipolar political system. Iran wants to be a key part of such a system, and thus the opportunity to demonstrate that some of its key members--including states with reasonably close relations with Washington, such as Turkey--could take stands adverse to Washington's desire was simply too much to pass up.

It has maintained its determination to continue enriching uranium up to 20 percent, and it is keeping 45 percent of its uranium stockpile in Iran, as compared to the 70 percent it was required to send out by the October 9 agreement. Thus it is not giving much ground.  Instead, it is gaining diplomatic leverage that will be of tremendous benefit to Tehran over the medium and long term.

The above analysis would suggest that the agreement with Brazil and Turkey certainly represents a considerable irritant for Washington, and it is for this reason that the Obama administration was quick to announce its sanctions agreement -- an agreement, the administration has emphasized, which has the support of China.

How do you expect this will play out in Iran? 

Robin Wright: Iran has already indicated it rejects the U.N. draft. So far, there is nothing to indicate it will respond more positively this time than it did to any of the earlier resolutions. The tense political environment at home after a year of unrest could also complicate diplomatic efforts to get Iran to comply, since there are divisions within the regime over what to do.

George Lopez: You are seeing already the accusations coming from Tehran about U.S. and U.N. illegitimacy. That will continue, maybe augmented by attempts to get Lebanon or Turkey to storm out of the Security Council in dramatic fashion. They could also try to take another step with Brazil and Turkey -- but those countries will likely be weary of getting only real concessions that meet the demands set forth in the sanctions resolution. Once the resolution is passed and by the end of year, we'll see how hard the sanctions bite economically and politically, and we’ll also see how well Iran reacts to its increased isolation. I am hoping they don't throw out the international inspectors of IAEA. That would be a serious escalation and might move the five permanent members of the U.N. Security Council to come up with a new resolution where what is now voluntary in this sanctions package to being fully imposed.

I suspect that by this time next year there will be some kind of conference or more serious engagement setting as both the nuclear program will have been slowed and the economy will have slowed.

What happens next? When is the U.N. Security Council likely to vote?

Robin Wright: The United States would like to get a vote as soon as possible, but no later than June. If there is any further slippage, there are fears that a new resolution might have to wait until the opening of the U.N. General Assembly in September—a full year after the Obama administration hoped to win support for U.N. action.

George Lopez: I suspect the vote comes in 2 to 3 weeks, after Lebanon is no longer president of the U.N. Security Council.  Again, I am betting the vote will be 12-3.

What options does the U.S. have here? What does this mean for earlier U.S. attempts to “engage” Iran? Is that off the table?

Robin Wright: The danger for the United States is that this resolution has produced deep divisions within the U.N. Security Council. Russia and China -- countries with veto power -- held out for watered down sanctions.

Three other Security Council members—Turkey, Brazil and Lebanon--were also uncomfortable with the resolution. Turkey and Brazil brokered a last-minute deal to prevent sanctions altogether.

The United States has consistently sought unanimity to signal strong international unity. The final vote will be critical. But unless Iran does an unexpected about-face, the United States is likely to have to go back for another resolution later this year.

George Lopez: The U.S. is actually sitting in a good position overall. They - and the Europeans - may impose other sanctions unilaterally. President Obama has to hope that the U.S. Congress will not compel him to place more punishing sanctions but rather "authorize" him to do it when he needs it. My hunch is that soon after the U.N. sanctions, the U.S. Treasury will blacklist more banks and entities.

There is a big and specific section in this U.N. resolution on engagement -- the U.S. wanted to make sure that this is prominent and a pathway that Iran understands. This is really new for U.N. resolutions.

Dan Brumberg: The truly fundamental question is whether sanctions can have any hope of preventing Iran from pursuing nuclear weapons. If the answer to this question is no, or even a qualified or tepid no, then the questions remains: should the administration demonstrate a clearer and more coherent readiness to pursue the path of negotiations, rather than subordinating negotiations to a strategy of strong-arming Iran --and with an arm that may not have the strength that some attribute to it. If the answer to this question is yes, or even a qualified yes, then the best response from the administration is to pursue the sanctions, while at the same time stating, in very precise language, alterations to the Brazil-Turkey agreement would make it possible for Washington and its allies to revive an acceptable version of the October agreement.

Ultimately, the question is one of strategy: is the U.S. ready to negotiate a diplomatic solution which would give Iran the means to sustain --under international supervision-- enrichment on Iranian soil? Or, to put it differently, is "zero enrichment" the only acceptable option for the U.S.?

I sense that the administration is far from united on the answers to these questions. Indeed, absent an answer to these questions, the U.S. has little to hold on to other than the promised of a new round of sanctions. This limits our negotiating flexibility, while encouraging the kinds of initiatives we have seen from Brazil and Turkey. We should expect more of the same--even while celebrating the apparent agreement on a new round of sanctions, an agreement whose ratification by the U.N. Security Council is not preordained.

Explore Further

  • Learn more about USIP's experts on Iran.
  • Learn more about USIP’s work on Iran.
  • Learn more about USIP’s work on nuclear proliferation.
June 9, 2010
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