Home inFocus Missed Opportunities to Pressure Iran

Missed Opportunities to Pressure Iran

Laura Grossman Spring 2010

President Barack Obama stepped into the Oval Office on January 20, 2009, with new strategies to confront Iran’s illicit nuclear activity. His bold offer to engage the Mullahs, however futile, should be appreciated as an effort to prevent conflict. However, Obama’s reluctance to take definitive action during his first year has allowed Tehran to continue its nuclear weapons program. Meanwhile, Iran continues to sponsor terrorism around the world, and its people continue to suffer at the hands of an oppressive regime.

Despite ample and clear manifestations of Tehran’s intransigence, Obama has consistently failed to act on his campaign promise to increase the diplomatic pressure on Iran if it did not curb its nuclear ambitions. Adopting what can only be viewed as more of the same, his administration has opted to sanction the Islamic Revolutionary Guard Corps (IRGC) because it is the guardian of the regime’s ballistic missile and weapons of mass destruction programs. However, this is nothing new. During the Bush administration, the U.S. Treasury Department already decided to designate the IRGC as a “Specially Designated Global Terrorist” in 2007. These designations have little impact without support from America’s international allies and the IRGC has become adept at skirting sanctions while operating on the black market.

Even with the president’s missteps during his first year, he can still take steps to effectively pressure the Iranian regime. Notably, sanctions against Iran’s refined petroleum supply could be an effective measure to stymie Iran’s nuclear program. This is because Tehran does not have the ability to produce the gasoline it needs to operate its economy at full capacity. It imports roughly 40 percent of its gasoline from foreign refiners. The president can still exploit this vulnerability, forcing the regime to make difficult choices about the allocation of its limited financial resources, and perhaps even abandon its nuclear weapons activities.

The Candidate

While running for the presidency, Senator Barack Obama campaigned on the promise of a renewed and rehabilitated American image around the world based on policies of greater engagement to insure national security. Three months into his campaign, he introduced the Iran Sanctions Enabling Act that called for the Secretary of the Treasury to track investments valued over $20,000,000 in Iran’s energy sector for potential targeting. The legislation also granted state and local governments the power to divest pension funds from public companies invested in Iran’s energy sector. The bill clearly illustrated the candidate’s desire to thwart Iran’s nuclear ambitions through economic pressure.

On the campaign trail in June 2008, Obama vowed to remain firm with Tehran while promising that his administration would open new lines of communication and diplomacy. “We will pursue this diplomacy with no illusions about the Iranian regime,” he said. “Instead, we will present a clear choice. If you abandon your dangerous nuclear program, support for terror, and threats to Israel, there will be meaningful incentives –
including the lifting of sanctions, and political and economic integration with the international community. If you refuse, we will ratchet up the pressure.” This policy stood in contrast to the Bush administration’s singular policy to isolate the regime and it appeared to resonate with the American electorate.

The First 100 Days

After he won the presidency, President Obama’s language of greater engagement piqued world interest, especially in light of his campaign promises regarding Iran. In March 2010, he boldly released a video message to the Iranian people amidst the celebrations of Nowruz, the Iranian new year. In the video, Obama told 66 million Iranians that his administration was “committed to diplomacy that addresses the full range of issues before us, and to pursuing constructive ties among the United States, Iran, and the international community.” He was quick to add, however, that the “process will not be advanced by threats.” His message was clearly an opening for the Iranian regime to take steps to re-join the international community.

Predictably, Iran’s leaders reacted quickly and coldly to Obama’s statement. Ali Akbar Javanfekr, a close advisor to President Mahmoud Ahmadinejad stated, “We welcome the wish of the U.S. President to put away past differences. But the way to do that is not Iran forgetting the previous hostile and aggressive attitude of the United States.”

Two months later, Obama reiterated the choices that were before the Iranian regime, stressing that the current trajectory of Ahamdinejad’s foreign policy would only lead to “increased isolation, international pressure, and a potential nuclear arms race in the region that will increase insecurity for all.”

By April 2009, analysts assessing the president’s first 100 days noted that while he was willing to negotiate with Iran, he appeared less eager to impose penalties against the Islamic Republic. In fact, the president rarely discussed what penalties might even be imposed.

A Nuclear Facility Revealed

During the summer, talk of the need for gasoline sanctions dominated Congress. The White House, for its part, remained quiet.

On September 25, the dangers of the Iranian nuclear program came into sharp focus. President Obama, flanked by British Prime Minister Gordon Brown and French President Nicholas Sarkozy, announced at the G20 Summit in Pittsburgh that Iran “has been building a covert uranium enrichment facility near Qom for several years.” Sarkozy went further, issuing a December 31 deadline to Iran’s leaders to halt their program or face sanctions.

Meanwhile, news reports indicated that President Obama had prior knowledge about the Qom facility, and curiously failed to denounce it a week earlier at the opening of the United Nations General Assembly. Indeed, the president’s omission forced Sarkozy to remove mention of the Qom site from his UN address.

Critics were also quick to point out that Obama chaired the Security Council meeting, where the announcement of Qom would have been appropriate. However, instead of using his position to constructively confront Iran’s illicit activity, Obama articulated his dream of a nuclear-free world. This was a missed opportunity. Had he exposed Iran’s covert nuclear facility, Obama could have ratcheted up the pressure on the regime and had a stronger case for sanctions, if the regime did not comply.

Less than a week after the G20 Summit, the P5+1 negotiations (US, Russia, China, France, UK + Germany) began with the goal of convincing Iran to send its nuclear fuel abroad to be processed and returned for Iran’s medical reactor. However, it soon became apparent that Iran was dragging its feet – agreeing and then reneging.

Congress and Gasoline Sanctions

Congress had less patience for Iran’s behavior. Notably, Representative Howard Berman (D-CA), Chairman of the House Foreign Affairs Committee, announced in September 2009 that he was ready to push the Iran Refined Petroleum Sanctions Act (IRPSA) through the House. The measure called for economic sanctions against Iran’s refined petroleum supply, specifically its gasoline suppliers and the insurance and reinsurance companies that support its supply chain.

IRPSA came to a vote in December 2009, and passed by an overwhelming vote of 412 to 12. The White House, for its part, appeared lukewarm to the legislation. Indeed, Obama could have pointed to this measure as an example to Iran of a penalty it would face if it did not act before the December 31 deadline. Instead, 2009 ended with another valuable opportunity missed by the president to leverage the threat of sanctions against the Iranian regime.

The State of the Union

Obama’s first State of the Union address in January 2010 was another opportunity to rally Americans around the idea of sanctioning Iran. However, dogged by continued high levels of unemployment and a battle to pass his healthcare plan, the president dedicated the majority of his speech to domestic issues. When he did call attention to Iran, he articulated that “as Iran’s leaders continue to ignore their obligations, there should be no doubt: They, too, will face growing consequences. That is a promise.” Yet, the threat rang empty in light of Obama’s earlier pledges of action against Iran.

Congress, however, was still energized about the potential impact of sanctions. Shortly after the State of the Union, the Senate passed the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2009. In addition to levying sanctions against Iran’s refined petroleum supply, the legislation granted states the power to divest assets from companies that invest in Iran, and included measures to prevent the transshipment of sensitive materials to Iran.

The passage of this legislation gave Obama yet another opportunity to endorse sanctions. But again his administration remained quiet. This was almost certainly a mistake. Put simply, even without implementation, sanctions can be a strong diplomatic tool.

It is also important to note that as Congress debated its gasoline sanctions legislation, a variety of companies abruptly ceased or announced that they would terminate their commercial ties to Iran. The Islamic Republic’s gasoline suppliers BP, Reliance and Glencore have stopped shipping to Iran, while insurance companies Munich Re and Allianz have announced their intentions to cease writing policies with companies in Iran. Additionally, Lloyd’s of London has stated that the company would stop insuring shipments to Iran if the U.S. enacts sanctions legislation.

Squeezing Iran

After Ahmadinejad defiantly announced in February that Iran had initiated a program to enrich uranium to 20 percent – a clear indication of Iran’s weapons ambitions – the Obama administration began to speak more openly about “targeted sanctions.” However, these have yet to be clearly enumerated, except for the aforementioned targeting of the IRGC. The president has made scant mention of the refined petroleum sanctions now sitting in conference committee on Capitol Hill.

Gasoline sanctions may be a critical tool in dissuading Iran from its nuclear weapons program. They should not be viewed as collective punishment against the Iranian people, but rather a part of Obama’s strategy of engagement with Iran. The mere threat of sanctions has already encumbered the Islamic Republic’s gasoline supply chain.

To be effective in statecraft, both carrots and sticks are used to reward and cajole. A dangerous regime like Iran will not cease its actions simply because it is asked. It is more likely to curtail its behavior if it knows there are immediate and significant consequences. As such, by adding gasoline sanctions to his arsenal, President Obama could move one step closer to derailing Iran’s nuclear weapons program thereby increasing stability in the Middle East.

Laura Grossman is a research analyst at the Foundation for Defense of Democracies.