The risk of failing to enforce sanctions on Iran

Since the wars in Iraq and Afghanistan, America has been loath to carry out military actions in the Middle East. In its place, the State Department and Congress have chosen economic sanctions as a primary tool of American foreign policy to influence and punish rogue nations, organizations, corporations and individuals. Unfortunately, enacting sanctions and enforcing them are two different things. Some government officials and think tanks have asserted that sanctions are ineffective, counterproductive and overused. 

The Wall Street Journal reported in fall of 2021, “The Biden administration plans to limit the use of economic and financial sanctions … mark(ing) a potential turning point in U.S. foreign policy. The administration said it has considered rolling back the economy-crippling Iran sanctions, and has given priority to humanitarian waivers for Venezuela, Iran, and Afghanistan.”  

Targeted and fully enforced sanctions do work. Proof of the power of financial sanctions is Iran’s recent threat to the European Union, warning them not to list its Islamic Revolutionary Guard Corps (IRGC) as a terrorist entity, as the U.S. has done. Would Iran make threats about this if economic sanctions were ineffective? The Supreme Leader and the IRGC control much of the Iranian economy. 

The power of sanctions also was evident with Iraq’s recent complaints when, as the Journal reported,  “the New York Fed began enforcing tighter controls on international dollar transactions by Iraqi commercial banks in a move to curtail money laundering and the illegal siphoning of dollars to Iran and other heavily sanctioned Middle East countries. A U.S. official said the measures would limit the ability of malign actors to use the Iraqi banking system.”

But what if the real problem is not with the sanctions themselves but with the lack of will to enforce them thoroughly?

For decades, U.S. presidents from both parties have acted as if they have exclusive authority in foreign affairs, marginalizing Congress and choosing which sanctions to enforce. So when Congress passes sanctions legislation, expecting the executive branch to comply with the law, it is still up to the White House to choose whether to enforce sanctions partially or not at all. For example, President Obama did not fully implement sanctions before or after concluding the 2015 Iran nuclear agreement, perhaps sending Iran’s notoriously wily negotiators the wrong message.

According to Ed Royce, then-chairman of the House Foreign Affairs Committee, “The Obama administration has continuously stressed that it will ‘vigorously’ enforce sanctions on Iran even as it negotiates a nuclear agreement. But its failure to comply with the law because of its zeal for a nuclear deal has resulted in de facto sanctions relief for the Iranian regime.” 

Sometimes the executive branch and Congress even fall behind our usually dovish European allies in sanctions legislation. This month, the Washington Beacon reported Europeans had taken stricter action than the Biden administration in implementing new sanctions against the Iranian regime for human rights abuses against protesters. According to United Against a Nuclear Iran, “The Biden administration has stopped short of designating the highest-ranking officials in the Islamic Republic and is not yet matching the designations of mid-level targets that have been announced by the U.K., Canada, and EU.”  

As for American sanctions already in place, their implementation reportedly has been underwhelming: “Iranian oil sales to China have skyrocketed, jumping 40 percent, sparking accusations that the Biden administration is turning a blind eye to sanctions enforcement. … The U.S. has been notably reluctant to enforce its own oil sanctions against China.” 

And the Foundation for Democracies’ senior adviser on Iran, Saeed Ghasseminejad, has said, “The Biden administration’s failure to fully enforce its sanctions against Iran is helping the Islamist regime survive. Last year, Iran’s non-oil exports reached their highest value, a clear sign the Biden administration has abandoned any serious effort to enforce sanctions.” 

The issue of sanctions again came to mind as the Supreme Court deliberated the case of a Turkish bank, which is an arm of the Turkish government. Halkbank is asking the justices to protect it from charges of evasion of U.S. sanctions and money laundering for the Iranian regime because of sovereign immunity. The Turkish government is a majority stakeholder in the bank. Federal prosecutors allege a “multibillion-dollar scheme to evade U.S. sanctions on Iran” between 2012 and 2016. 

If the Supreme Court rules in favor of Halkbank, allowing them to avoid sanctions in the name of sovereign immunity, then why would Iranian, Chinese or Russian corporations owned by their governments be subject to U.S. economic sanctions? Congress needs to weigh in, but the Global Magnitsky Act already allows the U.S. to sanction foreign government officials who are human rights abusers. Unfortunately, its full weight is not enforced on high-level officials such as Iran’s Supreme Leader or its president. 

American national security interests would be better served if our adversaries felt the full effects of economic sanctions. Our foreign policy would be more respected and influential if we leveraged the consequences of sanctions, rather than watering them down. In the Middle East, our current policies are perceived as a weakness; it worries our allies and gives solace to our adversaries.

Sanctions work only if they are strong, fully enforced, and given enough time to work. Our Middle East adversaries know Americans have a short attention span — their strategy is to wait us out. We must move our timeline to a Middle Eastern one, to get the most benefit from sanctions.

Dr. Eric R. Mandel is the director of MEPIN, the Middle East Political Information Network. He regularly briefs members of Congress and their foreign policy aides. He is the senior security editor for the Jerusalem Report. Follow him on Twitter @gmelillopinOrg.