The referral of the Iran nuclear file to the UN Security Council opens up the prospect economic sanctions could be used to pressure Tehran to end its uranium enrichment program, feared as a cover for developing nuclear weapons. U.S. and European diplomats have stressed that council action is necessary to maintain pressure on Iran and the threat of sanctions is seen as important leverage for the council. But the United Nations' powerful security body has moved away from sanctions as a coercive tool in recent years. Two veto-wielding members of the council, Russia and China, have virtually ruled out sanctions in dealing with the Iran crisis, leading some experts to call for nations to band together outside of the United Nations to plan meaningful economic penalties.

Any resolution on sanctions is unlikely at the moment due to opposition from Russia and China. Diplomats from the United States and leading European Union (EU) states, which have pressed to bring the issue to the Security Council, are avoiding mention of sanctions at this point to try to maintain a united international front in dealing with Iran. Discussions in the council are focused on issuing a non-binding presidential statement that would list Iran's failures to comply with International Atomic Energy Agency requirements and call on Tehran to suspend all uranium enrichment activities. Under Security Council procedures, such statements are normally followed by a resolution outlining demands and indicating consequences for failure to comply. The fifteen-member council has the power to enforce economic sanctions or authorize military action to deal with threats to international security.

Gary Hufbauer, a senior fellow at the Institute for International Economics and an expert on sanctions issues, says the five permanent members of the Security Council—Russia, China, the United States, Britain, and France—are working to paper over their differences in the absence of a tough resolution. "The United States and Britain have decided it's better to not force the issue and make a split between the U.S. and Britain, and China and Russia," says Hufbauer.

Russian Foreign Minister Sergei Lavrov said at the outset of UN talks earlier this month: "I don't think sanctions as a means to solve a crisis have ever achieved a goal in the recent history." Chinese officials have made similar comments. The remarks reflect longstanding concerns in both capitals about tough interventionist moves by the council as well as interests in protecting important commercial ties with Iran. Chinese foreign policy has been increasingly driven by its soaring demand for energy.

After North Korea abandoned the international Nuclear Nonproliferation Treaty in 2003, Russia and China blocked U.S. efforts to have the Security Council issue a tough resolution, and no punitive measures were taken. The case of Sudan is also illustrative. In 2004, the council overcame a Chinese veto threat and passed a resolution warning indirectly of sanctions against Sudan if atrocities continued against civilians in the province of Darfur. There are ongoing reports of violence against civilians in Darfur and the council's own panel of experts has compiled a list of Sudanese officials implicated in the attacks. But the Council has failed to move on sanctions, prompting exasperation from UN envoy Jan Pronk on March 21, who said "the sanctions foreseen with the establishment of the Security Council Panel of Experts exist only in theory."

In the case of Iran, Russia has close commercial contacts with Tehran and has sought to broker a deal in which Iran's uranium would be enriched in Russia and then returned as fuel to Iranian reactors. China imports a large amount of its oil from Iran and both sides have recently reached a major deal on natural gas supplies. Russia and China have also been important arms suppliers to Iran in recent years.

Experts say at present only a provocative act by Iran could unify the council to pass a resolution threatening sanctions. "If you got sanctions, it wouldn't be because of anything the United States was able to do or Europe was able to do with Russia but because of some untoward act the Iranians would take," says Lee Feinstein, CFR's senior fellow for U.S. Foreign Policy and International Law.

Some analysts are worried that Iran can use debate at the council to drive a wedge between permanent members, following a strategy that Iraq used during the final years of the Security Council's monitoring of its weapons of mass destruction programs. But Feinstein says even non-binding statements from the council, at this stage, can be significant: "If you get all fifteen members of the Security Council united in a strong condemnation of Iranian activities with a clear set of benchmarks about what may happen next and what Iran could and should do, that would send a useful message to Iran that it's not just the United States and Europe but that it's fifteen diverse countries who are united in their concerns about the Iranian nuclear program." But he added: "The problem with this game is that the Iranians believe—probably correctly—that the Europeans and the Americans are not prepared to pull the trigger, not necessarily the military trigger, but the trigger of sanctions."

A number of U.S.-based experts are recommending sanctions be pursued by "coalitions of the willing" outside the United Nations. The United States already has tight restrictions on trade, aid, and investment to Iran and penalizes foreign companies that invest in Iran's energy sector. Hufbauer says there are moves underway by some states to deny Iran components critical for a nuclear weapons program such as cascade centrifuges—a connected series of machines crucial to the uranium enrichment process. He says Russia and China appear to be cooperating in this effort.

Henry Sokolski, director of the Washington-based Nonproliferation Policy Education Center, this month urged EU officials to withhold exports of machinery and materials to Iran. In a paper presented to the Transatlantic Institute, Sokolski said cooperation from Italy, Germany, and France was particularly important because their machine tool and material exports to Iran are a critical part of the country's economy. He also noted Iran relies heavily on outside sources to refine its oil for domestic use.

There have been previous instances when nations operated outside the Security Council to collaborate on sanctions in connection with nuclear weapons developments. The United States, Canada, and Japan imposed economic and military sanctions on India and Pakistan after the two sides conducted nuclear weapons tests in 1998. However, the United States also began a major bilateral dialogue with authorities in New Delhi and Islamabad to try to calm down their nuclear arms competition.

In addition to limiting the supply of critical nuclear materials to Iran, there has been talk of so-called smart sanctions, such as restricting the travel of Iranian leaders, banning international flights to and from Iran, and freezing Iran's financial assets abroad. U.S. Senator Evan Bayh (D-IN) has proposed a ban on exports to Iran of refined oil products. The U.S. Congressional Research Service says such a ban would likely hurt Iran's economy because it lacks refinery capacity to meet demand and must import gasoline. But there are concerns among energy experts that any retaliation by Iran—with some of the world's highest oil and natural gas reserves—could send global oil prices soaring and send the world economy into recession. "Everybody [is] nervous about oil security and oil supplies," says Hufbauer, who along with Jeffrey Schott of the Institute for International Economics authored a paper this month exploring the efficacy of sanctions against Iran.

The Security Council has invoked Chapter VII of the United Nations Charter to impose sanctions sixteen times, most of the cases coming after the end of the Cold War. The council has imposed sanctions against the Taliban regime in Afghanistan, Angola, Ivory Coast, the Democratic Republic of the Congo, Ethiopia and Eritrea, Haiti, Iraq, Liberia, Libya, Rwanda, Sierra Leone, Somalia, South Africa, Southern Rhodesia (Zimbabwe), Sudan, and the former Yugoslavia.

Sanctions have been fully lifted in the cases of Angola, Ethiopia and Eritrea, Haiti, Libya, South Africa, Southern Rhodesia, and the former Yugoslavia. The Security Council has lifted sanctions against Iraq "except for prohibitions related to the sale or supply to Iraq of arms and related materiel." Sanctions against Afghanistan have been fully lifted, but there are measures related to al-Qaeda and the Taliban that remain in effect. In 2005, the Security Council passed a resolution (Resolution 1636) calling on states to prevent entry into or travel through their territory of individuals suspected of involvement in the February 2005 assassination of former Lebanese Prime Minister Rafik Hariri and to freeze all assets held by such individuals.

They have a mixed record. Sanctions are widely viewed as having contributed to Iraq's elimination of weapons of mass destruction, Serbia's acceptance of the Dayton Agreement in 1995, and Libya's eventual cooperation with the investigation into the 1988 Lockerbie bombing. In the case of U.S. sanctions against Iran, Washington could not convince its European allies to join in stringent measures, thereby allowing Iran to continue vital trade with Europe. But the poor state of Iran's oil and gas sector has been attributed in part to under-investment caused by two decades of U.S. sanctions. On the other hand, some critics of U.S. sanctions policy say it is too unilateral and in some cases, such as in Cuba, the United States ends up isolating itself rather than the target country.

In a 1998 book on sanctions, CFR President Richard Haass writes that, in determining the usefulness of sanctions, it is not enough to weigh the costs and benefits of a particular sanction. It requires "a comparison of the likely costs and benefits that would result from doing something else or nothing at all."