Debate: Can Sanctions Be Effective in Halting Iran's Nuclear Program?

By Matthew Levitt

This week I am participating in a week-long online debate for the Council on Foreign Relations on the question "Can Sanctions Be Effective in Halting Iran's Nuclear Program?"  I will post my three contributions as they go live, and encourage readers to read the full debate online.

Can sanctions be effective in halting Iran 's nuclear program?  Absolutely, if used as part of a comprehensive strategy to create leverage for diplomacy.  Asking Iran nicely to kindly halt its nuclear program is not going to get the job done.  Absent increased diplomatic leverage, which is what today’s financial, travel, and other sanctions targeting Iran are all about, decision makers will eventually face the unenviable task of having to decide whether to use military force or tolerate a nuclear Iran.

Targeted financial measures represent the strongest non-military tool to convince Tehran to change its behavior.  It is a myth that policymakers have to choose between sanctions, diplomacy, and military action.  In fact, these tools are best employed in a complementary fashion.  On its own, no one tool can fix this problem.  Together, financial sanctions, international diplomatic censure, and a military option in the form of ships stationed in the Gulf, offer the most effective option for dealing with the threat posed by the Iranian nuclear program.

And let’s be clear: these are not your grandfather’s sanctions.  Unlike the regime-wide sanctions applied against Iraq, today’s sanctions are graduated and targeted. First, they target those elements of Iranian society specifically engaged in illicit conduct (think Bank Sepah, Bank Saderat, Iranian companies engaged in proliferation activities).

Second, employing sanctions in a graduated manner demonstrates that the purpose of such measures is not simply to punish Iran but to encourage a change in the regime's behavior.

Already there are signs of domestic discontent within Iran, and targeted financial measures can produce further political pressure within Iran. Iran’s former chief nuclear negotiator, Hasan Rowhani, recently decried Iran’s increasing international isolation and said economic sanctions were indeed impacting Iran. Rowhani noted that despite high prices for Iran's oil, "we don't see a healthy and dynamic economy."

This should not surprise.  According to the Economist Intelligence Unit, the nuclear crisis (and subsequent sanctions) "is imposing a heavy opportunity cost on Iran 's economic development, slowing down investment in the oil, gas and petrochemical sectors, as well as in critical infrastructure projects, including electricity."  Several major banks have cut or curtailed dealings with Iran , and on October 11 the Financial Action Task Force (FATF)—which works by consensus and includes Russia and China—issued a statement warning that “Iran's lack of a comprehensive anti-money laundering/combating the financing of terrorism regime represents a significant vulnerability within the international financial system.”

Combined with Treasury’s parallel efforts to leverage market forces in direct discussions with the private sector, targeted financial measures are already showing signs of success.

TrackBack