Raising the Costs for Tehran

By Michael Jacobson

In the wake of the National Intelligence Estimate (NIE) on Iran, questions are being raised as to whether sanctions and financial pressure remain a viable approach to changing Tehran's decisionmaking on its nuclear program. As evidence of this strategy's demise, critics point to the foundering attempts to negotiate a third round of UN sanctions against Iran -- sanctions that appeared imminent before the NIE's publication. While additional punitive measures by the UN are important and necessary, better enforcement of the various sanctions regimes already in place could have an equally significant impact.

Multiple Sanctions Regimes

There are three separate, but often overlapping, sets of sanctions in place against Iran. The UN Security Council has passed two resolutions against Iran -- Resolutions 1737 and 1747 -- that blacklisted a number of Iranian officials and entities. Of these, the most significant designations were of Bank Sepah, a large state-owned bank, and a number of entities tied to the Islamic Revolutionary Guard Corps (IRGC). The UN also designated the IRGC's then head, Maj. Gen. Yahya Rahim Safavi.

The European Union (EU) has followed the UN with two rounds of its own sanctions, in many areas going well beyond what was required by the UN. For example, in addition to freezing the assets of the fifty individuals and entities listed in the two Security Council resolutions, the EU has added more than twenty others to its own blacklist. The EU has also enacted a more comprehensive arms embargo and travel ban against Iran and its officials than required by the UN.

The United States has its own list of designated Iranian officials and entities, some of whom have been named by the UN and EU as well. For example, Washington designated Bank Sepah unilaterally for its proliferation-related activity before it was blacklisted by the UN. On the other hand, the UN and the EU have yet to follow Washington's lead in designating the Iranian financial institutions Bank Melli, Bank Saderat and Bank Mellat, and the entire IRGC -- unilateral actions the United States took in October based on these organizations' involvement in Tehran's terrorism and proliferation-related activities. In addition to these targeted sanctions, the United States also has in place more comprehensive trade sanctions against Iran as a whole, dating from the mid-1990s. Notably, however, while the United States maintains the most robust sanctions against Iran, it has not yet designated all of the individuals listed by the UN.

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