The Use and Abuse of Sanctions

Last week’s interim agreement with the Islamic Republic of Iran over its nuclear weapons program offers the regime sanctions relief even as U.S. lawmakers, Republicans and Democrats, are demanding more and stricter sanctions. The White House counters that more sanctions will only narrow diplomatic channels, drive the Iranians away from the negotiating table, and lead to war. Critics of the deal argue that by providing sanctions relief Obama is simply feeding an Iranian beast hungry for more concessions.

Sanctions relief, as critics argue, is indeed likely irreversible, and Congress should certainly not let up in its push for more sanctions. However, the danger is that the fight over sanctions will continue to distract, as it already has, from the much more important battle to prevent the Islamic Republic from acquiring a nuclear weapon. Therefore, it would be useful to consider how the sanctions issue has been understood and used and to imagine how the regime in Tehran sees it.

The common wisdom, held by both the administration and opponents of the interim deal, is that sanctions forced the Iranians to the negotiating table. Why, reason critics, should we offer relief when pressure is what made the Iranians buckle in the first place? And yet the notion that sanctions did the trick is partly a function of mirror-imaging—the assumption that Iranian officials respond as American policymakers would to the same set of circumstances—and partly what the revolutionary regime calls istikbar, arrogance.

First of all, it’s not clear how much sanctions really shaped the regime’s decision-making. A recent three-part report from Reuters showed that Supreme Leader Ali Khamenei heads a business empire worth at least $95 billion, a sum exceeding the value of Iran’s annual petroleum exports. This enormous cushion means the regime is able to absorb quite a bit of economic pain without flinching. Sanctions may have hurt ordinary Iranians by sending the economy into a nosedive, but it’s unclear why this would matter to a ruling clique that manages domestic unrest by shooting its own citizens in the streets.

But perhaps the key issue arguing against the notion that sanctions forced the Iranians to the table is this: No competent negotiator enters talks confessing weakness and petitioning for mercy. And yet this is the scenario the sanctions narrative puts forth—that the opening gambit of a people famous for their bargaining skills was to come to the Obama administration on bended knee.

In reality, it was the White House negotiating team that lost its way in the bazaar. The deal itself, in which the administration ignored six U.N. Security Council resolutions and implicitly acknowledged Iran’s right to enrich uranium, is merely a flourish punctuating a prolonged period of self-abasement. From the Iranians’ perspective, it must have seemed as if the White House was weak and desperate for a deal.

The administration, as we learned last week, had been engaged in secret talks with the Iranians since at least March if not earlier. It is not difficult to imagine the impression this must have made on the regime in Tehran and how Supreme Leader Ali Khamenei might have discussed the America file with subordinates: The White House negotiates behind Israel’s back, observes Khamenei. But we keep our scariest and most volatile assets, like Hezbollah, on a very loose leash to show our interlocutors that it would be wise to accept any offer as soon as possible. That the White House bargains in secret shows that they will take a deal so bad that they know before the fact that the Israelis would object.

The White House’s response to the election in June of Hassan Rouhani, and the media campaign it waged through press surrogates touting Rouhani’s “moderation,” also signaled America’s anxiety for a deal. The Americans have come down with Rouhani Fever, Khamenei must have noted. But they have been negotiating with our so-called hardliners for months now. All of the excitement about Rouhani ushering in a new age of comity and cooperation is simply political cover to prepare the U.S. public and American allies for a deal the White House has already decided to accept. This Obama is as mendacious as we are—except he’s weak. We’ll give him nothing but assurances, which, as a man who chronically confuses words with actions, he’ll gladly pocket. In short, we’ve won. But one last thing: Tell the negotiators that we demand immediate sanctions relief. We won’t haggle too much over numbers, any opening will prove sufficient to frame our victory.

Here again the Iranians targeted American vulnerability, for the sanctions regime was always felt by this White House to be a burden. It was hard getting Russia and China on board, and even the Europeans, ever eager for Iranian contracts, found loopholes. Obama didn’t want sanctions; it was Congress that forced them on the White House. Even advocates of sanctions recognized they were of limited value—they weren’t a magic bullet but were part of a larger toolkit to stop Iran without having to resort to military force. And if the United States did eventually have to strike Iranian nuclear facilities, at least the sanctions regime would show the Europeans that all nonmilitary options had been exhausted.

In time, Obama came to see that he could use the existence of sanctions to persuade Congress and the Israelis that he was serious about stopping an Iranian bomb. In other words, sanctions were cynically invoked by the White House both to hide the truth that Obama wasn’t going to follow through on his own stated policy of using military force against Iran in the event all else failed, and to deter the Israelis from a military strike of their own.

Again, it’s instructive to see the sanctions issue from the Iranian perspective. As they see it, sanctions must be something like performance art, lots of movement and drama that only signaled the White House had no stomach for military action. Rather, sanctions represented the furthest limit to which the Americans were willing to go to stop Iran from going nuclear—not far enough. Sanctions relief would show that the American policy of prevention had entirely collapsed. And that’s why the Iranians went to Geneva, not because sanctions drove them to the table, but because they wanted the administration to agree publicly to what it had already conceded in its secret talks with Tehran. The reason sanctions relief is so important to the Iranians is that it makes Obama a partner in facilitating their nuclear weapons program.

The importance of sanctions relief lies not in the amount of money—whether it’s $7 billion or several times more than that—to which Tehran will now have access. The cash is not insignificant—a fraction of it would go a long way toward prosecuting the Iranians’ war in Syria—but the main issue is that even a small erosion of sanctions will give rise to a powerful global lobby that will do much of the heavy lifting on behalf of the deal. To put it in language that comports with Obama’s worldview, sanctions relief creates an entitlement program with lots of stakeholders, from Russian oligarchs and the Chinese Army to EU officials and American companies, determined to see it succeed.

With sanctions relief, the Iranian economy has gone from being a bad bet that might get you kicked out of the international financial system to a huge opportunity. All that these potential “stakeholders” care about is getting in early enough to win a piece of the pie. The Iranian press is already reporting indirect contacts between Tehran and American energy concerns, and a recent French report claims that General Motors and Boeing are interested in exploring deals. Who in their right mind would sabotage an agreement between the White House and the Islamic Republic that is potentially worth hundreds of billions of dollars and, just as important for the Western democracies, jobs?

It’s little wonder that British foreign secretary William Hague warned the Israelis not to undermine the agreement. He’s speaking for everyone in the world aside from Israel and America’s now-abandoned Arab allies, especially Saudi Arabia. Were the Israelis to strike Iranian nuclear facilities, not only would it shake global energy prices, it would also scatter all that potential gold, and political patronage, to the winds.

In Obama’s hands, first sanctions and now sanctions relief are simply tools to deter the Israelis from crashing the party and striking Iran. To focus too narrowly on the debate over sanctions, then, means letting the White House change the subject. The issue is not sanctions but preventing the Iranians from getting a bomb.

Lee Smith is a senior editor at The Weekly Standard.