Sanctions Bill Rears Its Ugly Head

On Tuesday, April 8, the Senate Finance Committee is expected to hold a hearing on the Iran Counter-Proliferation Act, S. 970, introduced by Senator Gordon Smith (R-OR). The legislation currently has 70 co-sponsors.

I have been told that Section 10 in S. 970 on World Bank Loans to Iran has been deleted. As a result, there are now jurisdictional issues being worked out between the Senate Banking Committee and the Senate Finance Committee and the bill will now also be referred to the Banking Committee. Section 10 would have required reports on the number of loans provided by the World Bank to Iran; the dollar amount of such loans; and the voting record of each member of the World Bank on such loans. It would have also reduced the U.S. contribution to the World Bank for fiscal year 2008 by the same ratio of the total of the amounts provided in the preceding year by the World Bank to entities in Iran to the total of the amounts provided by the Bank to all entities, and for all projects and activities.

One of the biggest shortcomings in U.S. policy towards Iran is that the so-called “diplomatic option” has been defined as sanctions. But, sanctions are punitive measures, not diplomacy. There has been no real diplomacy with Iran and the U.S. has maintained preconditions for negotiations. I am baffled as why there is such a stigma for diplomacy with Iran. Diplomacy is not capitulation to an enemy; it is a strategic and vitally important component of international relations and foreign policy. Let’s not forget that President Reagan negotiated with the “Evil Empire.” And, it has become acceptable under this administration to engage in diplomacy with North Korea, another member of the “axis of evil.”

Unilateral sanctions against Iran are likely to fail. They will continue to push Iran into a corner, where it will be less likely to negotiate and more likely to act out against the U.S. In the past, groups that have favored confrontation between Iran and US have closed small windows of opportunity for diplomacy by pushing to sanction Iran. Unilateral sanctions not only undermine diplomacy with Iran, they also significantly increase the risk of conflict, particularly since there is an absence of U.S. diplomacy with Iran.

In addition to the consequences of attempting to coerce Iran through sanctions mentioned above, another key issue with S. 970 is that it will further undermine U.S. relations with Russia, which is specifically targeted under Section 6 of the bill.

Section 6 of S. 970 essentially threatens Russia to end nuclear and missile cooperation with Iran or the U.S. will not enter into any 123 Agreement for nuclear cooperation with Russia. This has actually been the long-standing policy of both the Clinton and Bush administrations in trying to gain leverage on Russia regarding the issue of Iran. A Section 123 Agreement is the necessary agreement for the U.S. to enter into nuclear cooperation with another country, as stipulated originally in the US Atomic Energy Act. It provides and outlines the “terms, conditions, duration, nature, scope, and other requirements of proposed agreements for cooperation; Presidential exemptions; negotiations; Nuclear Proliferation Assessment Statement.”

In July, 2006, Presidents Bush and Putin announced they were open to negotiations on an agreement that would permit full nuclear cooperation between the two countries. Russia has long sought a 123 Agreement with the U.S. Nonproliferation experts have noted that a 123 Agreement between the U.S. and Russia could yield important nonproliferation benefits such as providing the international community with greater access to Russia’s civil nuclear facilities. A 123 Agreement could also lead to increased efforts to secure and dismantle Soviet-era nuclear weapons.

Additionally, Russia is also an important partner for any diplomatic efforts with Iran. The U.S. needs Russia’s support to maintain and increase international pressure on Iran, which is more meaningful and will have better results than U.S. unilateral sanctions and coercion. If in fact this section of S. 970 becomes law, Russia could feel threatened and would not have any incentive to be a party to diplomatic efforts to end the political standoff over Iran’s nuclear program.

The fact that Russia is cooperating with Iran on the Bushehr reactor is not the heart of the matter and targeting Russia for this cooperation in S. 970 only deters focus from the real issues surrounding the political standoff over Iran’s nuclear program. While the U.S. initially opposed Russian participation in building the Bushehr reactor and supplying it with fuel, the Bush administration changed its position last year in order to get Russian support for United Nations sanctions on Iran. The reversal in the U.S. position on the Bushehr reactor also followed Iran’s agreement to return spent nuclear fuel from the reactor back to Russia to ensure it doesn't extract plutonium to make nuclear weapons. The Bush administration has since been pointing to the Bushehr program to support arguments that Iran does not need a uranium enrichment program.

Instead of pushing forward with legislation that will only undermine prospects for a real solution to U.S.-Iran relations, the Senate should employ a more far-sighted, responsible approach that includes sustained, direct, unconditional and comprehensive talks with Iran, and include in such an approach engaging, rather than isolating, strategic allies and partners.