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Copyright © 2019 The American Israel Public Affairs Committee

Editorial: Iran's Aggression Merits Sanctions, Not Concessions

Both the sanctions relief package of the Joint Comprehensive Plan of Action (JCPOA)—valued at more than $100 billion—and the lure of further international trade and investment have not softened Iran’s opposition to the West nor its attempts to dominate the Middle East. Since the deal’s conclusion, Iran has carried out numerous illegal ballistic missile tests, further destabilized Syria and Yemen, and directly confronted the U.S. military.

Nonetheless, Iran is now demanding further sanctions relief to overcome the reluctance of foreign nations and banks to do business with it. Reports that the administration is considering additional concessions beyond what the JCPOA requires—including potential access to the U.S. dollar in trade transactions—are deeply concerning. Members of Congress from both sides of the aisle are rightly speaking out against this potential move.

U.S. policy must encourage good behavior and penalize bad behavior. If Iran wants additional sanctions relief, it must rein in its regional aggression and adhere to its international commitments. A policy that offers new concessions to Iran in the hope that it will engender better conduct will fail. Granting Iran access to the U.S. dollar and facilitating reintegration of its corrupt financial institutions into the global financial system would reward continued bad behavior while jeopardizing efforts to counter money laundering and terrorism finance.

Effective sanctions, not unilateral concessions, are needed now. Unfortunately, America’s response to date has been too weak to affect Tehran’s behavior. On March 24, the Obama administration announced limited ballistic missile sanctions, which merely designate subsidiaries of already sanctioned entities, rendering them largely symbolic. These subsidiaries do not engage in international trade and do not have any assets subject to U.S. jurisdiction. Therefore, U.S. sanctions against them are unlikely to have any real effect.

Iran must also reform its antiquated, opaque financial system, which discourages legitimate businesses from engaging it. Today, Iran’s banking system remains a U.S. Treasury Department-labeled "jurisdiction of primary money laundering concern." The Financial Action Task Force (FATF), the global anti-money laundering and anti-terror finance standards body, has also called for countermeasures against Iran’s ongoing illicit funding of terrorism.

Iran has complied with its initial requirements under the JCPOA to ship uranium stockpiles out of the country and disconnect significant numbers of centrifuges. And America has lived up to its end of the deal as well, granting Iran relief from nuclear-related sanctions. Numerous European trade delegations quickly made their way to Iran in the wake of the nuclear agreement, but their reticence to reenter the Iranian market is entirely of Iran’s own making. President Barack Obama correctly diagnosed the issue on April 1, remarking, “Iran so far has followed the letter of the agreement, but the spirit of the agreement involves Iran also sending signals to the world community and businesses that it is not going to be engaging in a range of provocative actions that are going to scare businesses off.”

Iran has a clear path forward to make the most of its sanctions relief: it must curtail its efforts to destabilize the region, adhere to its international commitments and carry out structural reforms.  In the meantime, Washington should take tougher steps to press Iran until it makes meaningful change.

Tags: Near East Report Near-East-Report