Iran Sanctions Successful, But More Must be Done, Senate Committee Members and Federal Officials Say
Despite progress on restricting Iran’s economy -- implementing expansive sanctions, enforcing export controls, targeting the country’s oil and shipping sectors -- Iran and its progressing nuclear program remain a national security threat, and the U.S. must continue the sanctions pressure, federal officials and lawmakers said at a Senate Banking Committee hearing June 4.
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“We have yet to see [Iran’s] regime change its fundamental strategic calculus regarding its nuclear program,” said David Cohen, Treasury Department Under Secretary for Terrorism and Financial Intelligence, in his written testimony for the hearing (here). “Nonetheless, the Administration remains convinced that sanctions pressure has an important role to play in helping to bring about a negotiated resolution.”
Cohen said the Treasury has ramped up its sanctions efforts, adding 38 individuals, 77 entities and almost 200 aircraft and ships to the Department’s sanctions list since 2012. Recent Executive Orders have also allowed the Department to impose additional sanctions, Cohen said, including one issued June 3 that authorizes sanctions against Iran’s automotive sector and use of its currency, the rial (see 13060401).
“We have seen that the value and stability of the rial is of great importance to the regime,” Cohen said. “This new measure will limit the use of the rial in international transactions; places additional restrictions on Iran’s ability to gain access to its foreign reserves; and isolates Iran further from the international financial system and commercial markets.”
The Office of Export Enforcement, and export enforcement officers stationed in the U.S. and abroad, are also working to implement Iran sanctions, said Eric Hirschhorn, Under Secretary for Industry and Security at the Commerce Department, in his testimony (here). He also highlighted Export Control Reform efforts that help combat Iran’s regime growth, including the creation of an Export Enforcement Coordination Center. It lubricates information sharing and cooperation among agencies with export control enforcement responsibility, including BIS, the FBI and the Department of Homeland Security.
Despite this work, Iran continues to attempt to evade sanctions: 300 of the OEE’s 749 open cases involve Iran as the ultimate recipient of diverted U.S. items, Hirschhorn said. The Bureau of Industry and Security is also “very concerned” with the prohibited sale, export, reexport supply or diversion of U.S. censorship and monitoring hardware to Iran. “BIS has launched a number of investigations related to this issue and many are still ongoing,” he said.
Hirschhorn said additional resources -- such as the $8.3 million in President Obama’s budget for additional export control officers, analysts and special agents -- would increase the “operational effectiveness” of BIS.
Cohen cited progress on squeezing Iran’s regime: the country’s crude oil exports have dropped 50 percent from the 2011 passage of the National Defense Authorization Act -- which targeted Iran’s oil exports -- and early 2013. The country’s GDP decreased by 5 to 8 percent in 2012.
Yet Banking Committee leaders stressed more should be done. Iran still acts as a menace to its region, to Israel and to the U.S., “Thus, sanctions may still be too narrowly tailored, have gaps in implementation or be unduly hampered by evasive and deceptive practices that must be closed,” said Ranking Member Mike Crapo, R-Idaho, in his opening statement (here).
Committee Chairman Tim Johnson, D-S.D., said Iran’s “illicit nuclear activities will not be reversed without intensified economic pressure, coupled with heightened political and diplomatic efforts,” by leading countries, including Russia and China (here).