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Round Two Against Iran

Prepared by: Lionel Beehner
Updated: March 23, 2007

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On the eve of the Persian New Year, nervousness permeates (RFE/RL) the air over Iran instead of festivity. Across the globe, the permanent members of the UN Security Council and Germany appear united on a new draft resolution that would saddle Tehran with stricter sanctions (Reuters) for the second time in the past four months. The sanctions are in response to Iran’s refusal to suspend its uranium-enrichment program. Iran claims it needs a nuclear program for peaceful, electricity-generating purposes and asserts its right to develop it under an international treaty. But Europe and the United States suspect Iran intends to build a nuclear bomb. Iran's Supreme Leader Ali Khamenei called the proposed sanctions “illegal” and threatened to carry on with its nuclear program outside the realm of international law (IRNA).

The first Security Council resolution last December was limited, freezing the assets of a small handful of Iranian business and individuals with ties to the atomic energy program. It was widely viewed as ineffective. Yet as CFR's Gary Samore said in a recent speech before the International Institute for Strategic Studies, since the first resolution's passage, “the balance has begun to shift,” given Moscow and Beijing's support for graduated punitive measures. The next round of sanctions is expected to be more comprehensive and include asset freezes and travel bans against Iran’s Revolutionary Guards, bans on export credits, and an embargo against Iranian arms exports. Iran’s defense industry has grown significantly in recent years. Iran sells weaponry, not to mention technical know-how, to dozens of countries throughout the developing world, including countries accused of genocide (Daily Times) like Sudan. Tehran also supplies arms to non-state actors like Hezbollah and Hamas, considered terrorist organizations by the United States and EU. Not only is Iran a major arms exporter but also a large importer, getting the bulk of its weapon systems from Russia, as this Backgrounder explains.

Experts disagree if an arms embargo against Iran will do the trick. First, a resolution would not affect Tehran’s alleged illicit transfers of weapons to terrorist groups or Iraqi militias. Second, Russia is reportedly seeking to water down the draft resolution’s wording to exempt existing arms contracts and only refer to future arms deals. As Guy Ben-Ali of the Center for Strategic and International Studies writes, “It is not the loss of this rather insignificant source of foreign currency—Iran exported an estimated $63 billion worth of commodities in 2006—that will cause Tehran to wince if [sanctions are imposed]. Rather, it is the loss of a key foreign and national security policy tool.” Another positive sign is Russia's recent threat to withhold nuclear fuel for a civilian reactor at Bushehr until Iran suspends its uranium-enrichment program (NYT).

Some experts say new sanctions, in addition to financial pressure from the U.S. Treasury Department, could further harm Iran’s economy and erode popular support for President Mahmoud Ahmadinejad. In a new CFR.org Podcast, Matthew Levitt, a terrorism financing expert with the Washington Institute for Near East Policy, says he applauds efforts by U.S. officials to “think outside the box” and leverage market forces to pressure Iran into compliance. CFR Senior Fellow Ray Takeyh, however, in the most recent Foreign Affairs calls for a paradigm shift in U.S. diplomacy aimed at bolstering the standing of “pragmatists” in Iran’s elite who want to move the country away from confrontation with the United States. “Washington must strengthen the hands of the pragmatists in Tehran by offering Iran relief from sanctions and diplomatic relations,” Takeyh writes.

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