The Danger of New Iran Sanctions

December 31, 2013 Topic: EconomicsSanctions Region: Iran

The Danger of New Iran Sanctions

Congressional proponents of additional sanctions believe Iran will buckle under the pressure. History suggests otherwise.

The Geneva “interim” agreement reached in November between Iran and the so-called P5+1 (the United States, Britain, China, France, Germany, and Russia) freezes Tehran’s nuclear program in exchange for modest sanctions relief, with the goal of enabling further talks to comprehensively resolve one of the world's thorniest challenges. Yet despite the landmark accord, more than two dozen Senators introduced legislation on December 19 to impose new oil and financial sanctions on Iran. The Senate could vote on the measure soon after it returns from recess in January. Powerful lobby organizations are mobilized in support of the bill, and it could certainly pass.

The legislation defies a request by the Obama administration and ten Senate committee chairs to stand down on sanctions while negotiations continue. It also flies in the face of an unclassified intelligence assessment that new sanctions “would undermine the prospects for a successful comprehensive nuclear agreement with Iran.” Proponents of the bill note that the proposed sanctions would only come into force if Iran violates the Geneva agreement or fails to move toward a final deal, and would not kick in for months. But the White House warns that enshrining new economic threats in law now runs counter to the spirit of the Geneva pledge of no new sanctions during negotiations, and risks empowering Iranian forces hoping to scuttle nuclear talks. The legislation also defines congressionally acceptable parameters for a final deal that Iran experts almost universally believe are unachievable, namely the requirement that Iran completely dismantle its uranium enrichment program. For these reasons, the administration believes the bill represents a poison pill that could kill diplomacy, making a nuclear-armed Iran or war more likely.

Sanctions hawks disagree, arguing that the legislation will enable, not thwart, diplomatic progress. “Current sanctions brought Iran to the negotiating table,” Senator Robert Menendez, the bill’s leading champion, contends, “and a credible threat of future sanctions will require Iran to cooperate and act in good faith at the negotiating table.”

But this logic badly misreads the historical effect of sanctions on Iranian behavior and under-appreciates the role played by Iran’s fractious domestic politics. A careful look at Iranian actions over the past decade suggests that economic pressure has sometimes been effective, but only when it aligns with particular Iranian political dynamics and policy preferences. And once domestic Iranian politics are factored in, the lesson for today’s sanctions debate is clear: the threat of additional sanctions, at this critical juncture, could derail negotiations toward a peaceful solution.

In the fall of 2003, under Iran’s reformist president Mohammad Khatami and his lead nuclear negotiator, national-security adviser Hassan Rouhani, the so-called E-3 (Britain, France, and Germany) persuaded Tehran to voluntarily suspend its uranium enrichment activities. Iran also agreed to implement the Nuclear Non-Proliferation Treaty Additional Protocol, allowing International Atomic Energy Agency (IAEA) inspectors more expansive access to Iranian nuclear facilities. According to the 2007 U.S. National Intelligence Estimate and a November 2011 IAEA report, the Iranian regime previously halted its organized effort to design a nuclear warhead. François Nicoullaud, the French ambassador to Iran during this period, suggested that Rouhani may have played a key role in convincing Supreme Leader Ayatollah Ali Khamenei to order the halt to Iran’s weaponization work.


These decisions came in the aftermath of the August 2002 revelations that Iran had constructed a secret uranium enrichment facility at Natanz and was building a heavy water reactor at Arak. Iranian leaders feared that the IAEA Board of Governors would refer Iran to the United Nations Security Council for violations of Iran’s nuclear safeguards agreement, raising the prospect of multilateral sanctions. (In the aftermath of the initial lopsided U.S. military victory over Saddam Hussein’s forces in Iraq, the Iranian regime may also have feared they would be targeted next for pursuing weapons of mass destruction.) A year later, the parties signed the Paris Agreement, which extended the temporary suspension of Iran’s nuclear activities, pending negotiation of a comprehensive framework.

In March 2005, Iran presented a proposal to the E-3 offering to cap Iran’s level of enrichment at 5 percent, a level appropriate for civilian nuclear power plants but far from weapons-grade. Tehran also offered to limit the number of operating centrifuges to 3,000 and ratify the Additional Protocol. But negotiations broke down when the E-3, backed by the Bush administration, balked at allowing Iran to continue low-level enrichment. With the resurgence of hardline forces, many affiliated with the Islamic Revolutionary Guard Corps, in the 2004 Iranian parliamentary elections and the June 2005 presidential election of Mahmoud Ahmadinejad, it became impossible for Iranian moderates to sustain elite consensus for nuclear compromise. Moderates were accused of appeasement and retreat, and hardliners demanded a tougher stance. Rouhani was singled out for particular derision. Hardliners showed little concern about possible UN sanctions or U.S. military action, advocating for the abandonment of diplomacy in favor of “resistance” and the creation of irreversible technological facts on the ground.