Sanctioning Iran: Anatomy of a Failed Policy
by hossein alikhani
London, New York, I. B. Tauris, 2000. 436 pages
This is an exceptionally well-researched book that analyses the development of US sanctions policy against Iran since the Islamic Revolution, with a focus on developments during the Clinton administration. The extensive documentary evidence provided makes it largely a text for reference purposes: the general reader may occasionally feel overwhelmed by the verbatim legal documentation that is integrated into the main body of the work, between the more narrative and discursive chapters. For example, a central section, pp. 210–88, is taken up by a series of reproduced legal documents, which might have been more suitably placed in an appendix at the end of the book. They tend to detract from the flow of the narrative, which in consequence can appear disjointed. This is unfortunate, given the acute analysis which the author has to offer: it is hard not to be convinced by his central argument with respect to the efficacy of sanctions as a tool of policy.
As his title indicates, Alikhani considers US sanctions against Iran to be a failure. He alleges a distinct lack of foresight on the part of the policy makers who conceived the strategy. The great value of this study, besides its wealth of documentation, lies in the author’s ability to show, in some detail, how irrational, complex and occasionally idiotic the circumstances surrounding the construction of the anti-Iran sanctions policy have been. Alikhani demonstrates that, far from being the product of rational, logical thought processes, the policy was often reactionary, opportunistic and, crucially, a consequence of internal US political rivalries and ambitions.
Take, for example, the Carter administration’s decision to freeze all Iranian assets in the United States following the students’ seizure in 1979 of the American embassy in Tehran. Far from acting boldly and promptly on the issue, the Carter administration procrastinated until a generous mistake was committed by Iran’s then acting foreign and finance minister, Abolhassan Bani-Sadr. As related by Carter’s counsel, Lloyd N. Cutler:
While we were debating the issue overnight on the 12th and 13th of November, Bani-Sadr … announced that Iran was going to take all of its deposits out of US banks both in the United States and Europe. This, he said, would do very serious damage to the dollar. Because of the eight hour time gap, we heard of the announcement around three or four o’clock on the morning of November 14th. That ended all debate and hesitancy within the administration. We decided that we had to go ahead. (Pp. 67–8)
The imposition of sanctions, in particular economic sanctions, with a view to encouraging a change in policy is, as Alikhani points out, nothing new. As far as the United States is concerned, it is a political tool which can trace its pedigree at least to the Boston Tea Party. It should come as no surprise that a commercial power such as the United States, built upon the foundations of capital, should feel inclined on occasion to resort to economic sanctions. To US policy makers, the efficacy of sanctions might even appear self-evident. Sanctions may take time to bite, but they will eventually succeed. Regarding Iran, what does not appear to have entered into the calculations of US policy makers is the target’s global economic situation, by which is meant, not its economic wellbeing, but its integration into the global economic system. There is little doubt that US sanctions on key products hurt the Iranian economy, but they would have had a far more serious and rapid effect had Iran been fully integrated into the international capitalist system, rather than lingering on its margins, as it has been for the past twenty years. Far from being dependent on the United States, Iran has sought to do everything to diversify its economic relations and minimise its exposure and consequent vulnerability to international capital. There are, of course, sound reasons to question the sustainability of such an approach, and the Khatami administration has arguably been seeking a cautious and more equitable reintegration into the global economy. But the point is that until this is achieved, Iran seems curiously impervious to US sanctions.
That is, of course, unless multilateral sanctions can be successfully imposed. Given Iran’s determination to diversify its trading partners, this would require not only power, but considerable authority. Alikhani is particularly good in showing how the Clinton administration has singularly failed to convince its allies of the need to impose sanctions on Iran. This failure is in part due to the general perception that the continuing dispute between Iran and the United States is an intensely personal one, whose occasionally vitriolic nature fails to disguise a profound mutual admiration that could produce an intense and rapid rapprochement. Thus, when in 1995 the United States was urging its allies to desist from trading with Iran, Chancellor Helmut Kohl of Germany expressed dismay at US double standards, pointedly referring to the fact that US companies still extracted some 25 per cent of Iranian oil. But the failure of Washington’s allies to join the embargo also reflects the belief that US sanctions policy is dictated more by domestic political considerations than by an objective assessment of Iranian conduct.
Thus, Alikhani highlights the curious paradox that while Iran was at its potentially most destabilising during the Iran–Iraq War, the United States remained equivocal in its sanctions policy, yet when Iran entered a period of reconstruction and attempted normalisation, sanctions were tightened. This development, he argues, reflects the internal dynamics of American policy making, and in particular the actions of the pro-Israel lobby, rather than any dramatic infringement of international law by Iran. It is well known that Israel, in the aftermath of the launch of the peace process with the Arabs, sought to shift attention from the “centre” to the “periphery” and identify Iran as the real long-term danger to its security. Less well known is the pivotal role played by the American–Israel Public Affairs Committee (AIPAC), whose political influence appeared to be on the wane following the election of Labour leader Yitzhak Rabin as Israel’s prime minister in 1993. Rabin, believing AIPAC to be essentially a tool of the opposition Likud party, determined to conduct US relations directly with the White House and to circumvent the lobby, much to its consternation. AIPAC’s solution to this threatened marginalisation was to develop a new policy directed against Iran. As one commentator remarked, “Although different from the traditional Arab–Israeli threat, Tehran nevertheless is a useful tool for AIPAC’s survival” (p. 177).
This new policy, developed under the rubric of “dual containment”, sought to exaggerate the perceived Iranian threat and to counter it by imposing rigorous sanctions on Iran. The individual discovered to champion the cause in the legislature and propose the Comprehensive Iran Sanctions Act was the chairman of the Senate Banking Committee, Senator Alfonse D’Amato. The proposed legislation, which sought to prohibit US subsidiaries along with their parent companies from trading with Iran, was viewed with incredulity by US industry. Although most companies shied away from direct criticism, the editor of the monthly newsletter on US government export control policy, Export Control News, was sufficiently incensed to print the following withering attack in February 1995:
News Flash: The Iranians are capable of converting toilet paper into tank treads, desks into missile launch pads and Wheaties into rocket fuel. At least that’s what Senator Alfonse D’Amato (R-NY) implied last month in lobbying for a bill that he introduced last month to impose an airtight economic embargo against Iran … Wake up, Alfonse: US companies sell nothing of strategic value to Iran. (P. 180)
The editor cited the example of computers to illustrate his point that the current range of permissible US exports to Iran was limited to “innocuous” and largely “prosaic commercial items”:
A US company cannot export to Iran any computer with a composite theoretical performance (CTP) level exceeding 6 million theoretical operations per second (Mtops). Since Alfonse in the past has shown an embarrassing ignorance of export controls, I’ll explain this computer power in layman’s terms. The current standard for desktop PCs is based on the Pentium chip—most machines so equipped have a CTP rating of 67 Mtops. So a machine exportable from the US to Iran has about 1/11 the power of today’s PCs ... So Al, we’re talking about machines that are barely one product generation beyond the abacus ... If you’re looking for someone who would call this stuff useful for weapons development, try Genghis Khan ... who would no doubt have affixed the computer’s jagged processor boards to his army’s spears and hand-to-hand combat equipment. (Pp. 180–1)
Such was the dismay in the US business community that Clinton was inclined to oppose so comprehensive a bill. But after the furore that greeted the sudden announcement by the US company Conoco that it had signed a $1 billion contract with Iran to develop the Sirri oil fields, Clinton decided to wrest the initiative away from the Senate. He issued an executive order in March 1995 prohibiting US companies from trading with Iran. In seeking to pre-empt D’Amato’s bill, Clinton was in fact aiming to soften the blow of sanctions, but the consequence was that Iran–US rapprochement was delayed by several years. The Conoco contract, a clear signal from Iran of a desire to improve relations with the United States, had instead resulted in a stark rebuff.
If Clinton believed that he had taken the sting out of the tail of the anti-Iran sanctions, and halted the momentum of the anti-Iran campaign, he was proved to be sadly mistaken. D’Amato and AIPAC, now on a roll, pressed for even more extensive sanctions. Aware of the criticism from US companies that forfeited contracts would simply be taken up by foreign competitors, they sought US secondary sanctions against foreign companies that continued to trade with Iran (D’Amato was particularly incensed at the news that Total of France had stepped in to secure what Conoco had been forced to give up). The resulting Iran–Libya Sanctions Act (ILSA) was viewed with incredulity by the international business community and dismissed by the European Union. Yet international corporations, like the US business community before them, found that their failure to take seriously and resist D’Amato’s anti-Iran sanctions campaign in time caused them to suffer the consequences of legislation that was dictated by US political expediency.
There is another element of this story which Alikhani has suggested, but not addressed in any detailed manner, and that is how such a policy was able to be developed and ratified into legislation, almost unopposed by those whom it would affect. On the face of it, US sanctions policy on Iran seems absurd in its extensiveness and impracticability. Yet American companies felt unable to mobilise their considerable corporate strength to oppose such tight restrictions on their ability to operate. This is often put down to the strength of the pro-Israel lobby, and to the fact that there are no votes to be gained in being seen to support Iran. While doubtless true, these explanations suggest an exclusively mechanical understanding of the development of sanctions policy, and neglect one of the central issues, namely, that of the ideological environment. Indeed, arguably far more damaging to Iran than economic sanctions has been the imposition of ideological sanctions and isolation since the Islamic Revolution in 1979. It is the persistent neo-Orientalist image of Iran as a cultural and political anomaly, and as incongruous to traditional patterns of development, which has facilitated much of the anti-Iran legislation. In short, if as Alikhani points out, “the attitude of the US Congress seems to be rooted in traditional prejudices” (p. 335), this can be seen as a consequence of what has been described as the “demonisation” of Iran in the United States (and, of course, vice-versa—emanating perhaps from a mutual sense of betrayal).1 Economic sanctions may fall away, ILSA is due to lapse in 2001, but attitudes take much longer to shift, and it is on this underlying problem that attention must be increasingly focussed.
1. William O. Beeman, “Double Demons: Cultural Impedance in US–Iranian Understanding”, Iranian Journal of International Affairs (summer–fall 1990), pp. 314–19.