The Danger of More Iran Sanctions

The “bomb-bomb-bomb Iran” caucus is back at it demanding continued sanctions on Iran despite the tight constraints on its nuclear program, another scheme to kill the deal, as ex-CIA analyst Paul R. Pillar explains.

By Paul R. Pillar

Attention has increased recently on sanctions against Iran and relief from sanctions under the terms of the agreement, known as the Joint Comprehensive Plan of Action, to limit Iran’s nuclear program. As usual whenever this set of subjects comes up, commentary in the United States reflects different agendas, some of which are not congruent with U.S. interests or the interests of international security.

Also as usual, there is much exploitation of misunderstanding of what economic sanctions can and cannot do.

Iran's President Hassan Rouhani addressing the United Nations General Assembly on Sept. 24, 2013. (UN Photo)

Iran’s President Hassan Rouhani addressing the United Nations General Assembly on Sept. 24, 2013. (UN Photo)

Relief from sanctions clearly was an important part of getting Iran to agree to the severe restrictions and unprecedented degree of international monitoring and inspection provided for in the JCPOA. Although Iranian leaders evidently had already decided that their country faced a better future as a state without nuclear weapons than as a nuclear-armed pariah state — and their acceptance of the agreement would make no sense if they had not so decided — they would not have signed on to an agreement as far-reaching as the JCPOA, which subjects Iran to limits and scrutiny beyond what any other country is subjected to, unless significant relief from the economic punishment of sanctions were involved.

The sanctions relief and prospective economic improvement were a critical part of the case that President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif made to sell the agreement to skeptics and opponents in Tehran.

In short, if you want the kind of restrictions on Iran’s nuclear activities that assure there will be no Iranian nuclear weapon, then significant relief from sanctions, with the economic improvement that comes from that relief, is necessary. Besides, getting Iran to agree to restrictions on its nuclear activities was what the sanctions in question were supposed to have been about to begin with.

It was only after those who are determined to kill the agreement were scrambling for every rhetorical weapon they could use against it that we started hearing about supposed additional reasons to keep sanctions in place that were not part of their original purpose of curbing the Iranian nuclear program.

And anyone who doubts that significant sanctions relief is needed to achieve that purpose need only recall the years of fecklessly piling on ever more sanctions, in the absence of any negotiations offering a channel for relief from those sanctions — years that failed to bring about any positive result on the Iranian side as the Iranians continued to expand their nuclear program and to enrich ever more uranium.

A reason for renewed attention to the issue right now is that, even though Iran promptly complied with its obligations under the JCPOA regarding curtailment of uranium enrichment and all of the other measures it was required to take under the agreement, it has yet to see significantly increased trade and investment despite the formal removal of the nuclear-related sanctions by the United States when the agreement was implemented earlier this year.

The chief reason Iran hasn’t seen such improvement concerns the size, complexity and outright ominousness of the structure of sanctions that have been erected against it over the years. If the purpose of that sanctions edifice was to scare foreign commercial and financial institutions away from doing business with Iran, it has served that purpose very well.

The prospect of heavy fines from the United States and of being shut out of the U.S. financial system — the system that owns the currency that is still the world’s principal reserve currency and in which much international trade is denominated — has scared stiff foreign institutions, especially European banks that might otherwise be involved in facilitating payments for trade with Iran.

They are still scared. Even though U.S. officials have traveled abroad to instruct the foreigners on exactly what changed with implementation of the JCPOA and what is and is not allowed today, the complexities of this system of sanctions piled upon sanctions still engenders fear of inadvertently stepping over a line into what is impermissible.

As a matter of business risk, the risk of accidentally taking that step and getting hit with more huge fines and exclusion from the United States appears greater than the reward from engaging in any new business with Iran.

This case illustrates how whatever leverage and influence the United States may get from economic sanctions depends in equal importance on two things: not only the punishment that occurs when another government does not conform with U.S. wishes, but also relief from that punishment when it does conform. Without assurance of the latter, there is no incentive for the other government to change its policies.

Thus the formidable sanctions edifice aimed at Iran that has been so laboriously erected over the years, with the U.S. Congress repeatedly enacting legislation on the subject as it strains to find additional Iranian things to sanction, is reducing, not increasing, U.S. influence. It has taken away, at least partly, the ability of the United States to induce changed behavior through the prospect of economic relief.

U.S. Treasury Secretary Jack Lew.

U.S. Treasury Secretary Jack Lew.

The fears and complications involved in the United States imposing such onerous arrangements on the dollar-denominated financial system may, as Secretary of the Treasury Jacob Lew has warned, also hasten moves away from international use of the U.S. dollar, and that would further reduce U.S. global influence in numerous ways.

Even if that were not to happen, it should not be surprising if the next country to be sanctioned by the United States, regardless of the issue, were to react by observing that it has no reason to change its policies because, just as with Iran, it cannot expect its sanction-damaged circumstances to change much even if it does change its policies.

There is significant danger that the Iranians themselves may get sufficiently fed up with the West not living up to its side of the bargain that renunciation of the agreement becomes possible. Or at least Rouhani and the political forces allied with him will find it increasingly hard to answer the Iranian skeptics who question with good reason whether Iran is getting anything out of the agreement; the hardliners in Tehran will be strengthened, and the chance of renunciation will increase.

Of course, collapse of the agreement is exactly what hardliners on the U.S. side, some of whom are complaining today about even the modest steps that the administration is taking to assuage unfounded foreign fears about the consequences of dealing financially with Iran, would like.

As has been true all along with such opposition, the opponents need to be asked how collapse of the agreement, which would mean an end to the special scrutiny of the Iranian program and to the special restrictions on Iranian production of fissile material, would be in the interests of the United States and of international security.

It clearly would not be; the motivations of opponents have much more to do with the desire to deny Barack Obama a significant foreign policy achievement and/or to stay in line with the wishes of an Israeli government that wants to keep Iran as a perpetually ostracized bête noire.

The drawbacks and misuse of much of the sanctions regime against Iran are grounded as well in how much over time the sanctions have come to be treated as if they were an end in itself, as if any economic pain felt by Iran is ipso facto a gain for the United States, which it is not. The direct economic effect on the United States itself of U.S.-imposed sanctions is negative.

All sorts of misleading statements, such as from Ed Royce, Republican chairman of the House Foreign Affairs Committee, are currently being applied to the issue of sanctions and Iran. Royce doesn’t like that the Obama administration is even considering issuing further clarifications to foreign banks indicating that — while Iran itself and all of its banks still would be firmly shut out of the U.S. financial system — it is permissible for other foreign banks to handle dollar-denominated transactions that involve now-allowed trade with Iran.

That clarification, Royce asserts, would be “above and beyond the agreement — in return for nothing.” No, it wouldn’t. The partial opening of the Iranian economy to trade and investment that is part of relief from nuclear-related sanctions is fundamental to the agreement. And what it is in return for are all those extraordinary limitations and the intrusive international monitoring that Iran agreed to in the JCPOA.

The editorial writers of the Washington Post go in a similar direction, describing the financial clarifications as “waffling,” although they concede that “there’s logic” that such action may be needed to comply with the spirit of the nuclear agreement.

But then they, like Royce, try to drag in other matters on which we don’t happen to like something Iran is doing, with particular reference to test firing of ballistic missiles. Attempts at such linkage, besides impeding the full carrying out of the spirit and letter of the U.S. side of the agreement that made the nuclear restrictions possible, also fly in the face of the reality that the only way to arrive at such restrictions was for all the negotiating parties to focus explicitly on the nuclear issue and nuclear-related sanctions.

If one party or the other had started inserting other issues then there would have been no end to each side throwing its preferred issues on the table, and today there would be no agreement and no restrictions on the Iranian nuclear program.

As far as ballistic missiles are concerned, the attempts at linkage also fly in the face of the reality that — given the ubiquity of such devices, the wide variety of them used in conventional warfare including down to the battlefield level, the substantial missile capabilities of some of Iran’s neighbors, and the fact that Iran has suffered significantly from past use of neighbors’ missiles — Iran is never going to give up missiles.

There are possibilities for placing useful negotiated limits on ballistic missiles, such as limits on the range of the weapons, although for any such negotiations to succeed they probably would have to include other parties in the Middle East besides Iran.

This is another respect in which the Post, Royce and other members of Congress who have been talking lately about missiles and more sanctions on Iran are not proposing anything that has any chance of doing any good, regarding missiles or anything else. They say nothing about exactly what Iran would have to do to avoid or end such sanctions, let alone about the realistic prospects for such incentives to work in changing any Iranian policies. They propose no negotiations that would offer a way out of the sanctions.

Sanctions kept in place in the name of missiles — either new sanctions designated with that name, or a de facto continuation of the nuclear sanctions because of the fear among international bankers about accidentally crossing lines — would be another feckless statement in which we would be saying, “we don’t like what you’re doing, so we will inflict pain on you indefinitely.”

Such a gesture would be just as ineffective in changing any Iranian behavior as were all those years of imposing more and more nuclear sanctions without offering any negotiated way out, as the Iranians just kept spinning more and more centrifuges and enriching more and more uranium.

Paul R. Pillar, in his 28 years at the Central Intelligence Agency, rose to be one of the agency’s top analysts. He is now a visiting professor at Georgetown University for security studies. (This article first appeared as a blog post at The National Interest’s Web site. Reprinted with author’s permission.)

6 comments for “The Danger of More Iran Sanctions

  1. JohnnyD
    April 11, 2016 at 18:08

    My personal feelings about the entire “encirclement” policy being applied by the US against Russia, of which the Iran sanctions are but an integral part, is that it is an insane throwback to an earlier time. The US empire is on its’ last leg, economically speaking, and like all bullies when backed into a corner, sees fighting their way out as the only option. Military force or the threat of it is synonymous with US diplomacy today. Just as with ancient Rome, the morons in the Congress have given over power to the generals at the Pentagon, and have never taken the steps to rein them back in. So it is now the military calling the shots WRT US diplomacy, by means of their paid stooges in the Congress. They supply the authorizations, the Pentagon the means of enforcement. The Pentagon supplies the required intelligence, real or contrived, via the NSA, which can make up anything they choose and sell it, just as CIA used to do. But CIA was answerable to the President, whereas NSA owns the President, and everyone else in our government, and directs them on behalf of – well, knowing just WHO would be very useful, wouldn’t it? But I can guarantee you they are not in Iran, Russia or China, whoever they are.

    You can accept this or not, as is your desire. Ignoring it does not alter the reality that US foreign policy has not really been under civilian control for at least 50 years. Nuclear weapons production and the spy agencies created as needed to keep them safe, and keep track of our enemies’ own bomb developments, have sold us entirely down the river. They were America’s deal with the devil, so to speak. And as with all such deals, the devil always wins in the end, and exacts a terrible price, which America will soon pay. The democratic experiment has been unwinding rapidly ever since. Eisenhower knew what he was talking about. But this has gone far beyond what he envisioned, and warned about. Influence over policy has given way to outright control with veto power.

    All that said, I see this foolish policy as driving Russia straight into the loving arms of China, a process which has already begun. They have more in common with each other than just the US as a global competitor, and seem to have smoothed over the rivalries which once had them fighting along their common borders. I expect they will form an alliance of convenience to defend Asia and attempt to kick the US out of the Old World altogether, NATO notwithstanding. In fact, the idiotic retention and expansion of NATO post-cold-war is the slap in the face which will drive the Russians into a treaty with China, and I can hardly blame them.

    China can singlehandedly destroy our global economy practically overnight, and can weather the financial blowback far longer than the US can, particularly with Russian ICBM’s and nuke subs to hedge their bets in case the US gets antsy, and Russian oil to keep China’s industries cranking out weapons, and their population subdued. Both those nations are far better at brinkmanship than the US could ever hope to be. Look at their history, then look at ours. America’s only “trial by fire” was when were fighting against ourselves, 150 years ago. Our presumed dominance has actually left us weak and ineffectual today. Which is why we can’t win a conflict anywhere without actually eradicating the population of the target country. Either we kill them all, or we lose. In Viet Nam. In Lebanon. In Iraq. In Afghanistan. Because we don’t fight for anything except to show that we can, in order to cow nations into signing over their resources to us. Like I said, a bully stealing the other kids’ lunch money.

    Now try applying that paradigm to a global conflict between a Russian/Chinese bloc and the US. It would take about 20 minutes before the US was ready to concede it had no options left except to vaporize the planet. At which point they would call our bluff. Because for us, it’s ALWAYS been a bluff, just like the recent change in national strategy authorizing “first strike”. The nuke threat doesn’t work unless the other guys are really convinced of your willingness to use them. That change in policy was meant to send that signal. But no one really believes it, just as no one believes anything the US says anymore. We’ve proven ourselves to be consummate liars, albeit well-armed ones, and not being believed even when being truthful is what ALWAYS results from such behavior, isn’t it?

    Sorry if this strikes you all as off-topic, in my mind all this is interrelated. Do I have any proof of all this? Or any of it? Just my own reasoning, which as I said, you can take or leave. Most of the opinions voiced here are no less subjective and just as unprovable, history depending as it does on which books you read and whom you choose to believe. All I can ask is that you remember what I’ve said, and see if the reality bears it out in the end. I would hope it doesn’t, but I have no more faith left in government, ANY government. They are all liars and grasping at all the money and power they can collect, and nothing will stop this except the elimination of the current state of things. I hate the term “new world order”, it’s been so overused lately as to become trite. But yeah, something of that nature.

    I will now turn this back over to you guys so you can continue to squabble over whether Syria should be angry, based on the non-observance of her 6000-year-old borders (she should, Assyria had sole claim to both modern Syria and most of upper Mesopotamia, i.e, Iraq. Everybody else who’s lived there since, is squatting on THEIR land, or re-drawing THEIR borders. Ask the Israelis how this “original ownership” thing works. They’ve been lying for years about being the original owners of a piece of the levant, to justify their own existence). Have fun. I’m all done now.

  2. Rob Roy
    April 10, 2016 at 14:04

    As Gorbachov said, “You can’t trust the Americans.”

  3. Andrew Nichols
    April 10, 2016 at 01:20

    The Iran nonsense is over. It was P5 +1 not P1. If the dopey narcissistic paid for Yank politicians try and resurrect sanctions, the rest of the world will go “Meh?” and get on with business.

    • Peter Loeb
      April 10, 2016 at 06:57


      As Paul Pillar’s article above shows, the U.S. never ever intended to remove
      any sanctions on Iran, I pointed this out in less eloquent and well-documented
      form than Pillar, that this was the case at the time of the “historic” (US)
      agreement. The US considered then and now that the agreement was
      a military “surrender” of Iran and statements such as those from the
      US (eg Secretary of State John Kerry) underline this interpretation.

      The “Iran deal” with the representatives of the UN. Iran has
      kept its part of the deal especially as regards the military aspects.
      (Despite US whining that it has not done so!)

      Is there a means whereby Iran can inform the IAEA and the
      UN Secretary General that it has kept to its agreement
      as far as military factors are concerned, that it reserves its
      rights under NPT (the Nuclear Nonproliferation Treaty) but
      the US has failed to keep to its part of the agreement.Not only
      have sanctions on Iran not been lifted but further sanctions
      have been unilaterally applied by the US.

      At what point does the UN consider that the agreement
      will henceforth be null and void as its agreement to lifting
      of sanctions has not been adhered to?

      Can one party to an AGREEMENT simply pick and choose
      which portions it wishes to implement?

      Or, to use an American expression, is Iran just being
      “taken to the cleaners” ( punnished with no other parts
      of agreement followed by the US…fooled).

      The U,S. domestic situation cannot be used as an excuse.
      It is an explanation of a kind. But when negotiating, the U.S.
      would most certainly have been (or should have been)
      informed of ) its impending domestic situation.

      The Iran agreement was approved in the US Congress.

      In sum, the UN (appropriate agency) should be confronted by
      Iran as to whether only one party is obligated to keep to
      agreements. At what date will the US announce its lifting
      of sanctions?

      —–Peter Loeb, Boston, MA, USA

  4. Gary Hare
    April 9, 2016 at 21:24

    I regard the US/Western imposition of sanctions as merely a more bullying and cowardly act of war, affecting only the non-combatant citizens of the Country sanctioned. To me, it is as much a war crime as the wilful carpet bombing of civilian areas. It is used as an expedient alternative to honest, dignified and logical diplomacy – any attempt to view a situation as those who must obey see it. So we use the blunt instrument of sanctions to force either regime change, or a reluctant acceptance of what is, most often, a set of irrational demands (bullying). And we don’t need to risk any of our own lives to press our unilateral point-of-view (cowardly).
    As a result, the sanctioned population usually falls in behind its leaders in defying the sanctions.
    So not just bullying (only the economically strong can impose them), and cowardly (it hurts only them, but never at a cost to us) – it is ineffective as a method of altering behaviour, but very effective as a means of punishing those who will not do as they are told.

    When I become Secretary-General of the UN, I will take the use of sanctions off the table. I will make it a war crime.

  5. JWalters
    April 9, 2016 at 21:22

    “the motivations of opponents have much more to do with the desire to deny Barack Obama a significant foreign policy achievement and/or to stay in line with the wishes of an Israeli government that wants to keep Iran as a perpetually ostracized bête noire.”

    The “bomb bomb bomb somebody” chorus would probably be happy with any profitable war. Iran just happens to be most convenient now. The historical facts show that the so-called “War on Terror” was manufactured by war profiteers using radical Jewish extremists as boots on the ground, and archaic, barbaric religious claims as their cover story.

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