Editorial: Feeling the Pressure

July 2010 could enter the history books as the month that tipped the balance in the lengthy campaign to force Iran to shelve its nuclear weapons program.

After the U.N. Security Council passed a comprehensive Iran sanctions resolution in June, the United States, the European Union, Canada and Australia each enacted much tougher sanctions of their own in July. If fully implemented, these sanctions—and the international consensus underlying them—have the potential to pressure Iran to stop enriching uranium. Although this outcome is far from assured, the sanctions have already begun to bite, and Tehran has indicated that it is open to talks.

Let’s take a closer look at what happened in July and why it could be a game changer. On July 1, President Obama signed into law the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 (CISADA), the toughest sanctions on Iran ever passed by Congress. CISADA sanctions businesses in the United States and abroad that supply Iran with refined petroleum or the goods, technology and services needed to produce it. (See the NER editorial in the July 12, 2010, issue for more about the meaning of CISADA.)

A few weeks later, on July 26, the European Union followed suit with its own package of tough Iran sanctions, targeting dual-use items that could be used to build nuclear weapons. The E.U. sanctions single out Iran’s oil and gas industry by prohibiting “new investment, technical assistance and transfers of technologies.”

In addition, the E.U. blacklisted Iranian shipping and air cargo companies and banned them from operating in E.U. territory, imposed new visa bans and asset freezes on Iran’s Islamic Revolutionary Guards Corps and sanctioned multiple Iranian banks.

Also, on July 26, Canada enacted hard-hitting sanctions of its own. The sanctions ban new investments in Iran’s oil and gas sector, as well as the export of goods to Iran that could contribute to nuclear proliferation. The new Canadian laws also prohibit Iranian financial institutions from operating in Canada, and vice versa.

And, finally, on July 29, Australia adopted equally stringent sanctions, similar to those enacted by the European Union.

These additional sanctions from multiple sources delivered a second shock to the Iranian regime in as many months. The Security Council sanctions in June demonstrated to Iran that there is a broad international consensus—including even Russia and China—against its nuclear weapons program. The July sanctions added teeth to that consensus.

While the United States has virtually no trade or investments in Iran because of previous sanctions laws, the European Union is Iran’s top trading and investment partner. Iran cannot pretend that it’s “business as usual” anymore. Indeed, if fully implemented, these tough new sanctions will put a serious dent in the Iranian economy.

There are already a number of positive signs. For example, due to the refusal of Lloyd’s of London and other major insurance companies to insure tankers delivering gasoline to Iran, fuel imports are already dropping—a serious blow to Iran, which depends on imports for approximately a third of its domestic gasoline consumption.

In addition, some Iranian cargo ships have been unable to leave Iranian ports because nobody will insure them. And, European airports have refused to refuel Iranian airliners. All of this has occurred within just days or weeks of enacting the new sanctions. More such headlines in the coming months will no doubt command Tehran’s attention.

Initially full of defiance and bravado, the Iranian regime has been rattled. Iranian leaders are now sending more conciliatory messages. In late July, for example, Tehran signalled that it is prepared to resume nuclear talks without preconditions and could suspend part of its uranium-enrichment program.

We’ve seen this act before from Iran. Given its long record of concealment, deception and stalling, such gestures warrant deep skepticism and sustained vigilance. The international sanctions must not be relaxed just because Iran changes its tone. What is required from Iran is nothing less than the verifiable suspension of its efforts to enrich uranium and complete cooperation with international inspectors.

The Iranian regime will exploit any weakening in the sanctions in order to continue its quest to achieve a nuclear weapons capability. Even if the sanctions are fully implemented, there is no guarantee that the new measures will persuade Iran to halt its atomic work. Without implementation, however, Iran will soon become a nuclear weapons power, with dire implications for Israel, the United States and its other regional allies.