The problem, however, is a familiar one: the absence of any good options. Yes, Tehran is closer to becoming a nuclear state and direct talks have failed to produce results. But Washington is nervous that any military attack, especially one by Israel, would be a catastrophe for the region. With options ranging from bad to worse, it seems that the sensible first step will be to engage in a stricter from of “coercive diplomacy.” In practice, this will mean harsher sanctions against Iran.The problem with sanctions, however, is that they have to be multilateral and extremely well-enforced to be effective. Historically, very few sanction regimes were able to produce tangible results within a reasonable time frame. As the Financial Times recently argued, three UN sanctions resolutions have been passed in recent years against Tehran with little discernible impact on Iran’s nuclear progress. The first covered sensitive nuclear materials and froze the assets of Iranian individuals and companies linked with the nuclear program. The second included new arms and financial sanctions. The third measure increased travel and financial restrictions. These are the so-called “smart sanctions.” They are targeted to specific sectors of the economy or to specifically the political elite in order to maximize the effectiveness of sanctions and to minimize their impact on the population at large. This is why, for instance, the EU has established a visa bans system that targets senior Iranian officials and top nuclear and ballistics experts. Similarly, Iranian assets frozen in Britain alone under EU and UN sanctions total $1.6 billion. The US and the UK froze business ties with several Iranian banks such as Bank Mellat, Bank Saderat and Iran Shipping Lines. Finally, there were also sanctions targeting Iran’s Revolutionary Guard, which is deeply entrenched in the country’s economy.
The problem with these sanctions, however, is that they are not part of an international consensus that should forge a fully multilateral sanctions regime. Russia and China, two veto-wielding UN Security Council members with significant economic interests in Iran, remain highly reluctant to agree to punitive measures. Although the focus is usually on these two countries, it is important to remember that the EU is in fact Iran’s biggest trading partner. The EU exported some 11.4 billion euros to Iran in 2008 alone. Within the bloc, Germany is by far the biggest exporter to Iran, accounting for more than one-third of trade, with Italy and France in second and third place. It is also quite telling that while Iran’s trade with the rest of the world fell by 15 percent in the last year, trade between Iran and the EU dropped by just 8 percent, according to the Financial Times. This is why getting EU governments such as Germany and Italy as well as French and British companies to agree to much harsher sanctions will not be easy. Others agree that in spite its criticism of Iran, the EU is reluctant to reduce its trade relations. It is not clear whether Germany, Italy and France will sign up to measures that will hurt companies in their own countries. While Europe itself is economically involved with Iran, the real problem with Russia and China is not trade connections but something else: military sales. For instance, again according to the Financial Times, Russia, alone accounts for 85 percent of Iran’s arms imports. Russia exported $2 billion in weapons to Iran between 2000 and 2007.
Finally, there is also the political dilemma of placing sanctions on Iran at a time when the regime appears to be in domestic trouble. Will harsher sanctions allow the establishment to play victim? Will such sanctions confirm their conspiracies that the whole world is against them and that the domestic opposition is helped by the same external forces that want to undermine the regime? This is why as Washington is getting ready to step up sanctions, it is crucial to make one issue absolutely clear to Iran: what the West wants is policy change, not regime change. If there is any ambiguity on that point, Tehran will end up winning the propaganda war and sanctions will be counterproductive.
