Now is the time to not only maintain pressure on Iran, but increase it
On May 23, 2012, the chief negotiators of the five permanent members of the Security Council plus Germany will meet their Iranian counterparts in Baghdad to discuss Iran’s nuclear programme. This follows last April’s meeting in Istanbul, when negotiations were resumed after more than a year’s inaction. This summit will test whether Iran is serious and whether concrete results can be achieved.
The strengthening of the sanctions regime over the last six years has unquestionably triggered Iran’s return to the negotiating table. Although the main measures of the new packages are not coming into force until July, their economic consequences have already made themselves felt within the country. The devaluation of the Iranian currency, the Rial, caused by years of economic mismanagement, has accelerated dramatically. The new measures against the Iranian financial system and the oil and gas industry has led to a significant drop in state revenue.
To that end the sanctions regime must be reinforced by the international community. It would be totally counterproductive to give way to political pressures to soften or end any of the sanctions that are already in place unless Iran takes steps to prove conclusively that it is not developing nuclear weapons. It is of course essential that Iran limit its nuclear enrichment program to the needs of civilian reactors.
On the sanctions front, we propose decisive action by governments in four key areas not yet covered by the existing sanctions regime. First, Iran must be comprehensively denied access to the international banking system. An airtight international banking blockade must be imposed against all Iranian banks, so that Iran is completely cut off from the international financial system.
Second, companies worldwide should be required to disclose all investments and business transactions in Iran. They will then realise that their international reputation will suffer if they are publically known to be conducting business with the country.
Third, Iran must be denied all access to international shipping. Such a move would greatly damage the regime given its dependence on global trade and seaborne crude oil exports. The ports of the EU, U.S. and elsewhere must be closed to cargo shippers that service Iranian ports or do business with the Tidewater Middle East Co — the company, owned by the Revolutionary Guard, that handles 90 percent of Iran’s container traffic.
Fourth, the international community should dramatically increase pressure through the insurance and banking sector. Insurance companies or financial institutions that significantly support or contribute to Iran’s ability to trade should be identified and prohibited from doing business in the U.S. and the EU, and precluded from entering into reinsurance agreements with any insurers, financial institutions and companies there. Financial institutions and insurers must also disclose substantial investments in entities that are known to either invest or conduct business transactions in Iran.
Private business must do more to support governments in imposing a stricter sanctions regime in Iran and to keep up the pressure on the country. It is in the long-term interest of European businesses to prevent a failure of the current negotiation process and the inevitable destabilisation of the Persian Gulf. For companies, the economic and political costs of such a crisis would be much higher than those caused by voluntary restraint in dealing with Iran.
Some critics will say that the above measures are too stringent and detrimental to the Iranian people, while others will say that no amount of economic pressure can prevent Iran from acquiring a nuclear weapon, and so the only option is a military one. To the first group, we respond by saying that Iran’s economy is controlled by the regime (specifically Iran’s Revolutionary Guard Corps), which shamefully profits at the expense of the Iranian people. History has made it clear that the regime will never change course due to half-measures, only serious steps like the measure we’ve outlined have a chance of success. Iran is finally feeling a real impact from international sanctions. Now is the time to not only to maintain the pressure, but increase it.
Admittedly, we cannot state with certainty that sanctions and pressure will ever compel the Iranian regime to change course. But it’s simply common sense that before even considering military action against a country, one should first exhaust every possible option to economically pressure it. Doing so will show the regime that the world is serious and committed, and is willing to do whatever it takes to stop Iran’s potentially dire pursuit of a nuclear programme.
Image — Iran’s International Atomic Energy Agency (IAEA) ambassador Ali Asghar Soltanieh briefs the media during a board of governors meeting at the United Nations headquarters in Vienna March 8, 2012. REUTERS/Herwig Prammer
Charles Guthrie, Lord Guthrie of Craigiebank is the former UK Chief of the Defence Staff, Kristen Silverberg is former U.S. ambassador to the European Union, and Dr August Hanning is the former head of the Foreign Intelligence Service of Germany.