Confronting Iran: The Case for Targeted Sanctions

The following is a guest column from Pirooz Hamvatan, a pseudonym for a Washington, D.C.-based analyst focusing on Iranian domestic and security issues, and Ali K., currently a business student in the U.S. and a supporter of Iran’s Green Movement who was severely beaten by the Basij militia during a peaceful demonstration in Tehran last year.

Congress is on the verge of sending a petroleum sanctions bill to President Obama that has wide bipartisan support in Congress. But far from posing a serious challenge to the regime, the bill could in fact inadvertently undermine long-term U.S. interests by weakening the Iranian civil rights movement and strengthening President Ahmadinejad and his cronies.

The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2009, currently in conference committee, will direct the president to impose sanctions on any entity providing Iran with “refined petroleum products” worth $200,000 or more per transaction, or $1 million per year. The bill defines refined petroleum products to include diesel, gasoline, jet fuel and aviation gasoline.

The new bill aims to cripple Iran’s economy in response to Iran’s refusal to halt its nuclear program. But the sanctions being proposed are not the right answer. Such a sweeping measure would end up only hurting ordinary Iranians, especially the middle class that the U.S. must shore up to improve Iran’s chances for reform.

Instead, our top priority should be helping to increase the space for the Iranian civil rights movement. That means moving beyond the limited focus on “solving” the nuclear issue. An Iranian government that is more accountable to — and representative of — its moderate majority would not pose a security threat to the U.S. and its allies. Rather than heavy-handed sanctions, the Obama administration should consider restrictions that are more targeted, which would hit the ruling regime where it hurts, and increase the possibility of change from within.

The Wrong Path

Introduced in the House by Rep. Howard Berman (D-CA) and in the Senate by Sen. Chris Dodd (D-CT), the sanctions bill currently in conference aims to limit Iran’s access to gasoline in the hopes that the suffering population will pressure the regime to give in to Western demands. But if the end goal is to induce Iran to be a more responsible regional actor that doesn’t threaten U.S. security interests, then petroleum sanctions are likely to achieve the opposite effect.

Just look at the experience of the last couple of decades. In 1995, in response to Iranian pursuit of nuclear technology and support of terrorism, President Clinton issued two executive orders prohibiting American investment in Iran’s energy sector and banning U.S. imports of most Iranian goods. The following year, Congress passed the Iran-Libya Sanctions Act (PDF), calling for sanctions on foreign firms investing more than $20 million per year in Iran’s energy sector. Although such measures have impeded the development of Iran’s economy, they have not caused the Islamic Republic to change course on its nuclear program or its funding of groups like Hamas and Hezbollah. In fact, in order to achieve their foreign policy and domestic goals, Iran’s leaders have repeatedly demonstrated their willingness to let the Iranian people suffer.

Just as important, history has shown that crippling sanctions undermine the middle class — the very people who are the backbone of civil society and the voices of moderation. International sanctions on Iraq weakened its population, making them more reliant on, and more vulnerable to, Saddam Hussein’s regime. Gasoline sanctions on Iran could have a similar effect, exacerbating inflation, lowering the quality of life for the middle class and pushing more people below the poverty line.

Gasoline sanctions would also distract Iranians from President Mahmoud Ahmadinejad’s own mismanagement of the economy — an important issue mobilizing people around the Green Movement — and divert blame to the U.S. Iran is already facing a 20-percent inflation rate, a crippled domestic industry, unemployment of over 11 percent (with 24 percent of 15-to-24 year-olds unemployed), and one of the worst rates of brain drain in the world. Many Iranians are still seething over the fact that, since becoming president in 2005, Ahmadinejad squandered unprecedented oil revenues that the Islamic Republic accrued as a result of high world oil prices. Amid all of this, Ahmadinejad has backed a controversial measure that would phase out government subsidies on gasoline and is likely to increase inflation. The Iranian people are already facing enough hardship without the U.S. adding to their woes and diminishing the pro-American sentiments of a wide array of Iranians.

Nor will the sanctions loosen the regime’s grip on power. Ahmadinejad’s faction would, in fact, fare better than the majority of the populace. Masters of smuggling, Iranian Revolutionary Guards Corps members would still be able to bring in gasoline through Iran’s porous borders, perversely enriching themselves even more.

The Right Path

But if broad sanctions are a heavy-handed tool that could only risk the development of Iran’s civil rights movement, what options do U.S. policy makers have to challenge the regime?

A preferred approach would be something more targeted against those responsible for Iran’s actions: the members of the ruling regime. Congress should consider the following:

  • Pass a bill calling on the U.S. State Department to identify Iranian human rights abusers (primarily from within the Revolutionary Guards; the Basij, the regime’s volunteer militia; and the judiciary) and impose travel bans on them. The bill should also seek the cooperation of our allies in enforcing the ban as widely as possible and place pressure on key countries like Dubai to block entry to these individuals. The list of targeted offenders should be made public in order to show the Iranian people that the U.S. is on their side.
  • Pass a measure calling for human rights abusers’ assets to be frozen. Because Iranian officials have gone to great lengths to distance themselves from the U.S. financial system, the U.S. Treasury may not have much of a role to play here. Rather, such a measure would simply be a first step in convincing banks in Europe and the United Arab Emirates — where many regime insiders’ assets are squirreled away — to enforce restrictions.

What specific effect will travel bans have on hardline officials and their mid-ranking employees? Besides being a major inconvenience, it would hurt their pocketbooks. This is because a large number of these individuals have side-businesses in which they smuggle goods from places like Dubai, Thailand, Indonesia and Syria — buying, for example, electronic goods and bringing them back to Iran through Revolutionary Guard-controlled customs stations without having to pay import duties. They then sell these goods at highly marked-up prices in the isolated Iranian market. A strictly enforced travel ban — including on individuals working for these human rights abusers’ front companies — would close off a lucrative source of income.

To be clear, the overall intent of this plan is not necessarily to deal a significant economic blow to the entire hardline establishment — that would be next to impossible. Neither will it convince, in the short term, current Iranian leaders to change course on the nuclear program — no outside pressure will. Rather the strategy is to increase the disincentives for individuals to participate in or condone oppressive behavior, with the goal of helping the Green Movement flourish.

At the same time, it is important not to target certain high level officials who may have the capacity to play a role in moving Iran toward reform. For instance, while it may be justified to sanction Judiciary Chief Sadegh Larijani for allowing hardliners to abuse Iran’s legal system to persecute reformers, his brother Ali Larijani — the pragmatic conservative Speaker of Parliament and bitter Ahmadinejad rival — has not been complicit in human rights abuses, and thus should not be snared by the sanctions net. This nuanced targeting will send a signal to the regime’s officials that they will be left alone if they refrain from abusing their fellow citizens.

Moreover, certain Iranian leaders are sensitive to international accusations of human rights abuses. This is not for altruistic reasons, but because they want the Islamic Republic to be seen as a role model to the Islamic world, and not simply another run-of-the-mill Middle Eastern dictatorship.

To be sure, human rights sanctions alone may not alleviate the pressure currently being placed on Iran’s Green Movement. Regime hardliners could blame the U.S. for fomenting post-election unrest and paint Iran’s dissidents as Western spies. Republican Guard members and Basijis could continue their human rights abuses regardless of travel bans and asset freezes. But that is the status quo in Iran. There is little cost to the U.S. if human rights sanctions don’t work — and much to gain if they do.

A Broader, Pro-Reform Agenda

Human rights sanctions are not a silver bullet. They will not bring the regime to its knees. But neither will gasoline sanctions. Fortunately, it appears that the Obama administration is asking Congress to slow down its push for unilateral gasoline sanctions as the U.N. Security Council deliberates over its own sanctions during the next few months. Meanwhile, targeted sanctions against human rights abusers is being pushed by Sen. John McCain, though not as stand-alone legislation but as an amendment to the flawed gas sanctions bill.

A human rights sanctions package can be an effective part of a broader effort to help Iran’s Green Movement chart its own course toward a better future for Iranians. Other essential pieces to this strategy would include:

  • Rep. Jim Moran’s (D-VA) Iranian Digital Empowerment Act, which seeks to help get information-sharing software and filter-breaking technology into the hands of Iranian reformers.
  • Rep. Keith Ellison’s (D-MN) Stand With the Iranian People Act, which (in addition to calling for human rights abusers to be sanctioned) calls for suspension of U.S. government funding to entities that sell censorship and surveillance equipment to the regime, and seeks to ease restrictions on American charities that want to work in Iran.

Bills focusing on the Islamic Republic’s human rights abuses have an excellent chance of passing in Congress because they are politically appealing — they help legislators look tough on national security while promoting American values of freedom and democracy. Moreover, they avoid the danger that is inherent with sweeping economic sanctions: that of harming the people they were intended to help.

Moreover, U.S. passage of human rights sanctions could lead allies in Europe to follow suit. Although the U.N. Security Council is unlikely to do so — China and Russia are adamantly opposed to interfering in others’ domestic affairs — if the U.S. and European allies banded together to pressure countries like Dubai to enforce travel bans, sanctions would have a greater chance of success.

In the end, it is important to remember that the members of the Green Movement are fighting for reform within the Islamic Republic system. Their demands include an independent electoral commission, the release of all political prisoners and freedom of speech. Acknowledging that it is up to the Iranian people to chart their own course, the U.S. can best protect its own security interests by helping to level the playing field in Iran, allowing the moderate, peace-loving majority of Iranians to continue their journey toward a better future for their country and the broader Middle East.


The views expressed here do not necessarily reflect those of the Progressive Policy Institute.

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