Sanctions to Put Pressure on Iran

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Although the second round of trade sanctions on Iran agreed upon by the major U.N. Security Council powers is only an incremental increase from measures previously agreed to, Washington hopes to use them to go after companies and officials associated with the Iranian Revolutionary Guard Corps (IRGC).

The draft resolution agreed upon by the five permanent members of the Security Council in talks over the past day is less than Washington had hoped for, but a senior U.S. official said that while the increase in pressure on Tehran "is incremental, ... it's a tough resolution." And the best thing about it, he says, is the steps it takes against the Revolutionary Guard. Stopping short of the travel ban preferred by the U.S., the draft calls on nations to "exercise vigilance and restraint" in allowing certain Iranians across their borders, and to alert a special committee of Security Council when they do so. An annex to the resolution specifically designates seven top officers of the IRGC to be treated in this way. It also singles out three IRGC-run aeronautics companies, on the basis of their role in Iran's "asymmetric warfare doctrine."

U.S. officials pursued these measures as part of a wider campaign to limit the Guard's business activities abroad. U.S. Treasury official Stuart Levey recently argued that the IRGC's activities have expanded exponentially under the regime of President Mahmoud Ahmedinajad, and he claimed it "is used by the regime to provide a 'train and equip program' for terrorist organizations like Hizballah, as well as to pursue other military objectives of the regime." He also noted the Guard is taking over regular government functions such as management of the Tehran airport and building a new Tehran metro. "When corporations do business with IRGC companies," he warned, "they are doing business with organizations that are providing direct support to terrorism."

Bank Sepah, Iran's fifth largest bank, and its principal officers are also listed in the resolution annex as targets of heightened surveillance. The U.S. has already barred it from doing business with U.S. banks and companies on grounds that the Iranian regime had used it to finance weapons of mass destruction, and now the U.S. hopes to use the Security Council resolution to hamper its access to global capital markets. But in a sign that not all the Security Council powers share the U.S. agenda, China's U.N. Ambassador Wang Guangya told Reuters, "The main objective is our concern about Iranian nuclear and missile activities, so there is no need to expand beyond that area" — and quoted Bank Sepah as an example where the resolution would have to be narrowed to exclude affecting transactions unrelated to those activities.

The resolution also urges, but does not require, U.N. member nations to refrain from giving financial assistance to Iran except for humanitarian and development purposes, and bans Iranian exports of conventional arms. U.S. officials hope to use this provision to add the force of international law to its efforts to prevent Iran from smuggling arms to its allies elsewhere, particularly in Iraq, where the U.S. charges Tehran has been arming Shi'ite militias.

The U.S. was unable to convince the Security Council powers to support an embargo on conventional weapons sales to Iran, although it calls for "vigilance and restraint" on the sale of heavy weapons. Russia and China have continued to supply the Iranian military despite U.S. objections, most recently in January when Moscow completed delivery of 29 TOR-M1 anti-aircraft rocket systems to Tehran at a cost of some $700 million.

For Moscow, the deal, while lucrative, was not only about money, according to George Perkovich of the Carnegie Endowment for International Peace. "They don't want to alienate the Iranians politically, and they don't want to lose business in nuclear exports, arms exports, and so forth," says Perkovich. "Perhaps as important, Russia has a desire to create an OPEC for natural gas, which is only possible with close Iranian-Russian cooperation. They don't want to jeopardize that, either."