Bid To Toughen Iran Sanctions Faces Obstacles On Capitol Hill

Government Report Questions American Efforts To Target Tehran

By Nathan Guttman

Published January 23, 2008, issue of January 25, 2008.
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Washington - Congressional efforts to impose new, tougher sanctions on Iran are stumbling after the publication last week of a report questioning the effectiveness of American sanctions.

The report, compiled by the Government Accountability Office — the investigative arm of Congress — argues that despite 20 years of American sanctions, Iran’s economic indicators remain strong. It suggests a reevaluation of the current measures against Iran and already appears to be affecting two major pieces of legislation that are awaiting Senate approval. One of those measures calls for broader sanctions and strips the president of his ability to waive sanctions against Tehran, even on national security grounds. The other supports divestment from companies doing business with Iran.

Congressional sources acknowledged this week that the language of the sanctions bill is likely to be modified in the Senate and that it probably will ease some of the restrictions originally included in the bill.

“We want it to pass, but we also need to face reality,” a congressional source said. “No one believes the current language can pass.” A Democratic staffer added that the new GAO report “surely doesn’t help,” since it might be used by opponents of sanctions to try to derail the bill.

Economic pressure against Iran, whether by American and international sanctions or by divestment, has become the centerpiece of pro-Israel advocacy on Capitol Hill in recent years, with Jewish groups pushing for strong legislation on these issues. Pursuing these legislative goals, however, is proving to be more complicated than expected.

In the House of Representatives, there is strong bipartisan support for the sanctions measure, and the bill, formally known as the Iran Counter-Proliferation Act, was approved in a 397-16 vote.

Still, the bill faces numerous obstacles in Senate. The Bush administration opposes the current language, while lobbyists for multinational companies are working against the legislation as a whole. Several lawmakers have sought in recent months to promote legislation favoring diplomatic negotiations with Iran over sanctions. These legislative efforts got a boost from the National Intelligence Estimate, released last December. The NIE stated that Iran had halted its nuclear weapons program.

While Washington struggles with the issue, sanctions efforts in the international arena have begun moving at a faster pace in recent days, after being stalled for months due to Chinese and Russian opposition. Foreign ministers of the five permanent United Nations Security Council members plus Germany met Tuesday in Berlin, where they agreed on language for a new sanctions resolution to be presented shortly to the world body. This would be the third round of international sanctions against Iran. Though details of the new resolution were not yet made public, European diplomats said they fell short of Washington’s desire to see substantive punitive measures against Iranian banks and financial institutions.

The 60-page GAO report, published January 16, criticizes all government agencies except the Treasury for failing to assess whether sanctions against Iran are actually working. Congress and successive administrations have been imposing sanctions on Iran since 1987. The measures were reinforced with new legislation in 1992, 1996 and 2000. Yet, according to the congressional investigators, Iran’s trade grew immensely during these years. Iranian exports were at $8.5 billion in 1987 and reached $70 billion in 2006, while imports grew to $46 billion from $7 billion in the same period. The report also raised the possibility that Iran continue its international trade and financial transactions despite American restrictions on several Iranian banks. “U.S. officials and experts report that U.S. sanctions have specific impacts on Iran; however, the extent of such impacts is difficult to determine,” the report concludes.

The report, which is not binding, calls on Congress to make sure that government agencies come up with credible data regarding the impact of the sanctions. Rep. Chris Shays, a Connecticut Republican who asked for the GAO investigation, has already introduced a resolution requiring the secretary of state “to conduct ongoing assessments of the effectiveness of sanctions against Iran.”

While acknowledging the difficulty of accurately measuring the effectiveness of sanctions against Iran, State Department spokesman Sean McCormack said that actions taken against Iran do have an impact. “Over time, if the Iranian government persists in its current behavior, there are going to be effects on the Iranian people,” McCormack said.

Supporters of sanctions against Iran offer a different understanding of the GAO report. “If you read it correctly, it should help our efforts,” said Rep. Brad Sherman, a California Democrat who is among those pushing hardest for sanctions. The new report, Sherman told the Forward, underlines the fact that so far not enough has been done to pressure Iran. He blamed the Bush administration for blocking congressional attempts to get tough on Iran. “The administration violates American laws in order to protect Iran’s business partners,” Sherman said. “Bush is fiercely dedicated to the absolute freedom of multinational corporations.”

According to congressional sources, the administration has conveyed to senators its opposition to the new sanctions bill, making clear that Congress is expected to insert a provision allowing the president to waive sanctions against Iran if it wants the bill to be signed into law.

Further opposition comes from lobbying groups representing companies that will be affected by the bill. Edmund Rice, president of the Coalition for Employment Through Exports, an advocacy group representing multinational firms that deal with international investment, trade and financing, is one of the lobbyists meeting with committee members and stressing what he sees as the downside of the proposed legislation.

“We believe unilateral American measures will reduce the chances of getting multilateral sanctions,” Rice said.

He added that the legislation would put American multinationals “in an impossible situation,” because they would face conflicting sets of laws in America and overseas. The GAO report helps make the case that the impact of unilateral sanctions should be carefully considered by Congress, Rice said.

One of the main driving forces behind the sanctions resolution has been the pro-Israel lobby, which advocates diplomatic and economic pressure in order to force Iran to give up its nuclear program. Josh Block, spokesman for the American Israel Public Affairs Committee, said that Aipac still supports legislative measures calling for sanctions and for divestment from Iran, and sees them as “the most effective way to stop Iran.” Block added that “the best evidence that sanctions are effective are statements from Iranian officials saying they are feeling the pressure.”

Pro-Israel lobbyists expect the new Iran sanctions bill to pass Senate by the end of this term. Within the pro-Israel advocacy community, however, sources admit that the bill will probably undergo changes. “At the end, there is always a presidential waiver,” one activist said. “That’s the way it works.”






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