Insider news & Analysis in Iran
On Eve of Re-Imposing Sanctions


By Edward Carney

On Wednesday, the New York Times published a report detailing some of the conditions surrounding the imminent re-imposition of US sanctions that were suspended under the 2015 Iran nuclear deal.

The first batch of such sanctions already went back into effect in August, 90 days after President Donald Trump’s announcement of American withdrawal from the agreement. But with secondary sanctions on Iranian oil exports and other transactions due to come back into effect on Monday, the Times suggested that the US was facing “steep obstacles,” primarily in the form of tentative plans by key US allies to defy the sanctions and provide Tehran with financial and logistical incentives to remain a party to the Joint Comprehensive Plan of Action despite US withdrawal.

The article in question suggested that this defiance is being driven in large part by a lack of confidence in the Trump administration’s strategy and stated objectives. The White House has highlighted 12 specific areas of Iranian policy and behavior that it feels must change in order to set the stage for possible return to suspension of economic sanctions. According to the Times, many analysts see this as a pipe dream, noting that the theocratic regime would almost certainly not be able to halt its support of regional militant groups or make other fundamental changes without risking the collapse of the system.

But others have suggested that this may be the entire point. The administration has avoided provocative phrases like “regime change,” but White House National Security Advisor John Bolton has specifically said on a number of previous occasions that he believes this should be the precise objective of Western policies toward the Islamic Republic.

Some of those statements have been delivered in the context of speeches before the summer rallies of the National Council of Resistance of Iran, a coalition whose main constituent group, the People’s Mojahedin Organization of Iran, has been credited with organizing and promoting many of the anti-government protests that have been erupting all across Iran since the end of last year.

In official statements in her capacity as the leader of the PMOI and the NCRI, Maryam Rajavi has declared that the fortunes of the Iranian people will only improve in the wake of the ouster of the clerical dictatorship.

She has also stated repeatedly that this outcome can be attained by the Iranian people themselves, by way of sustained uprisings. Some observers have speculated that President Trump and his foreign policy principals see things in much the same way, and indeed Trump has at times framed his Iran strategy in terms of support for the “long-suffering” Iranian people in their struggle against the clerical regime.

However, as long as the White House does not formally acknowledge this position, traditional partners of the United States will have little choice other than to respond to the stated goal of compelling the existing government to change its behavior in multiple areas. Those same partners will certainly set policy accordingly, and so far they have expressed commitment to a policy that is clearly based on skepticism about the prospects for behavioral changes brought about by economic sanctions.

Nevertheless, as the New York Times points out, this situation apparently has not affected the confidence of the Trump administration, given that the prior warnings and skepticism espoused by Western critics have not been validated by the facts on the ground.

Specifically, those critics expressed the belief that Iran would pull out of the JCPOA in response to the White House’s move, and would ramp up its nuclear activity to pre-agreement levels or higher. Instead, Tehran has been actively working with the other signatories in an effort to keep the deal in force, and the Trump administration hopes that the desire for broader relief from sanctions will lead the Iranians to enter into a new agreement that includes greater restrictions on a wider range of the regime’s behaviors.

Despite all this, many of the administration’s detractors continue to argue that sanctions will not prove effective when applied unilaterally by the United States. But this line of argument may not take into account the fact that the capacity for enforcement of those sanctions has grown significantly in the five years since economic penalties began to be lifted in line with the start of negotiations between Iran and the US.

A video report by the Wall Street Journal provided details of this change on Thursday, noting that there is much more satellite imagery of international maritime trade routes today, and that the computer algorithms for analyzing that imagery has become much more sophisticated. As a result, the Islamic Republic may find that it can no longer make illicit, unreported shipments of oil or other goods to partner countries without being caught out by enforcement bodies and subjected to relevant penalties.

Naturally, this situation could also have an impact on US trading partners who attempt to aid in sanctions evasion. This may in turn help to diminish the prospects for the European Union to stand by its promise of facilitating Iranian transactions and keeping the JCPOA in force. At the same time, Iran’s own ongoing activities may contradict the existing incentives for these European efforts.

On Wednesday, Agence France Presse reported that the government of Denmark was reaching out to fellow European governments to discuss the possible imposition of new sanctions related to the alleged Iranian plot to kill at least three opposition activists on Danish soil.

In a press conference discussing the plot, Danish authorities noted that this was not an isolated incident but part of a pattern of Iranian threats against persons living in the West. In March, Iranian operatives were prevented from attacking a residence of PMOI activists in Albania, and in June another two operatives were arrested en route to the international gathering of the NCRI outside Paris, in possession of 500 grams of TATP explosive.

Direct threats to Western sovereignty have been accompanied by threats to Western interests in the area surrounding the Islamic Republic, and this also may harm the Iranian regime’s chances of securing a long-term European commitment to defiance of US sanctions.

On Thursday, an article in the Wall Street Journal pointed to one of the latest sources of Western anxiety over Iran’s regional role, namely payments that were reportedly given to Syrian rebels by the Iran-backed Hezbollah terrorist group to compel them to switch sides following the loss of American financing.

While this development may raise legitimate criticisms of the Trump administration’s broader Middle East policy, it also underscores the potential impact of sanctions on the Islamic Republic. In the nearly three years since implementation of the JCPOA, Iran has expanded its funding for militant proxies including Hezbollah, and any new interruptions to this funding would surely have knock-on effects upon the beneficiaries of those proxies’ own largesse.

It is partly with Iran’s regional influence in mind that the Trump administration has advanced its strategy of “maximum pressure.” But some of the latest reporting suggests that the White House may be trending toward compromise on certain aspects of that strategy.

CNBC reported on Thursday that both India and South Korea seemed poised to receive waivers from the US government allowing them to continue importing a reduced quantity of Iranian oil, on which their economies are supposedly dependent. The report went on to suggest that the administration is providing more wiggle room in general, albeit only after widespread compliance with the imminent sanctions led to Iran losing about one third of its oil export business.

Reuters quoted National Security Advisor Bolton, a noted Iran hawk, as saying that the US doesn’t want to “harm friends or allies” in its pursuit of “maximum pressure.” Toward this end, the administration will reportedly be examining waiver requests on a case-by-case basis, although there is every indication that it is still expecting a very large reduction in loadings of Iranian oil to justify waivers. Furthermore, India and South Korea presently stand alone as beneficiaries of the newfound shift in the administration’s tone.

A separate Reuters report indicates that Japan has yet to secure waivers or the promise thereof, after four rounds of talks and a temporary halt of all loadings of Iranian oil.
The White House had set its goal as the reduction of Iran’s global oil exports to zero, but this was generally recognized as unrealistic.

The apparent shift in the administration’s tone may reflect a newly pragmatic approach to the issue, but it may also reflect confidence that European partners of the United States will either willingly comply with sanctions or be compelled to do so, leaving Trump with room to negotiate terms with other entities whose reductions in Iranian oil loadings involve a higher level of sacrifice.

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