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What Are Options For Tougher Sanctions Against Iran?

Placing sanctions on Iran's gasoline imports -- Tehran does not have enough refining capacity to meet domestic demand -- is one of the options being discussed.
Placing sanctions on Iran's gasoline imports -- Tehran does not have enough refining capacity to meet domestic demand -- is one of the options being discussed.
U.S. Secretary of State Hillary Clinton said after meeting Russian Foreign Minister Sergei Lavrov in Moscow that she did not ask the Kremlin to take any specific steps to pressure Iran over its disputed nuclear program.

"Iran's nuclear program remains a matter of serious concern and we are working closely with Russia through the P5+1 process," Clinton said at a joint press conference with Lavrov on October 13 after their closed-door meeting.

"We had a constructive meeting in Geneva on October 1, and we are working to ensure that Iran moves forward with us on this engagement track and demonstrates unequivocally that it is seeking only the peaceful use of nuclear [power]."

Clinton had been expected to ask Russia to help pressure Tehran by joining in a threat to impose tougher sanctions. But Lavrov said the threat of sanctions and pressure on Iran works against diplomatic efforts aimed at getting Tehran to halt uranium enrichment and give UN nuclear inspectors greater access to Iranian nuclear facilities:

"At this stage, every effort should be made to support the negotiation process that began on the first track," Lavrov said. "Threats of sanctions and threats of pressure in the current situation are, in our opinion, counterproductive."

As a permanent member of the UN Security Council, Russia has veto power over any UN sanctions. But that wouldn't prevent the United States and its European allies -- like France and Britain -- from imposing sanctions on their own. Germany opposes sanctions outside of the UN, arguing that such moves would undermine the Security Council process.

Any additional U.S. or international sanctions would add to a wide range of U.S. measures imposed since the seizure of U.S. hostages in Iran in 1979.

Targeting Sanctions

But a recent report by the U.S. Congressional Research Service says President Barack Obama's administration opposes new unilateral U.S. sanctions because they could offend allies whose companies would be targeted.

Rosemary Hollis, a visiting professor at City University London who specializes in the international politics of the Middle East, agrees with this assessment.

"In terms of the application of economic sanctions, supposing it were designed to target Iranian imports of refined petroleum. [Iran] does not have enough capacity internally to refine enough petroleum for domestic consumption," Hollis says.

"Now, if you try to target their imports, you end up hurting Iranians in addition to the regime. You also may well run across some of your own allies."

However, a ban on shipments of refined oil and gasoline to Iran does appear to be under consideration by the P5+1, the five permanent UN Security Council members --Britain, China, France, Russia, and the United States -- plus Germany.

Hollis says the problem with banning gasoline shipments to Iran is that the move could strengthen Iranian President Mahmud Ahmadinejad's regime within the country by giving it a propaganda weapon -- a chance to blame Western countries for Iran's domestic economic troubles.

Building A Sanctions Coalition

But the Congressional Research Service says there are a number of other options available to the Obama administration and its partners if they decide to increase international pressure on Iran by imposing sanctions as a "coalition" of countries operating outside the authorization of the UN Security Council.

The United States already has imposed a ban on travel by some Iranian officials. One option would be to expand the list of Iranian officials under such a travel ban -- and possibly to expand the number of countries joining such a ban.

Another would be to limit sports or cultural exchanges with Iran -- such as Iran's participation in the World Cup soccer tournament. But that kind of move is opposed by officials who say sporting events should not be used to accomplish political goals.

The Congressional Research Service notes that there is talk in Washington about getting partners to join a ban on international flights to and from Iran. But there are no indications that a passenger-aircraft flight ban is being considered by the P5+1.

The P5+1 reportedly is considering a broad ban on the provision of insurance for Iran's oil-tanker fleet. Hollis says that there are pitfalls to that approach as well.
Russia's Lavrov (right) called talk of sanctions "counterproductive."

She notes that "as soon as you try to target the insurance industry, and thereby cripple shipping, you end up damaging some of the interests of Western countries. It's a mine field and you will probably reopen the debate we had back in the 1990s about secondary boycotts."

Individual Companies Targeted

Existing UN resolutions do not freeze all Iranian assets that are outside of the country. A future UN resolution could add more Iranian banks to those that are now under sanction, or even go as far as banning transactions with any Iranian banks.

Such a freeze does not appear to be under Security Council consideration for now. But Britain has imposed unilateral sanctions on specific banks and firms that it suspects are involved in an Iranian effort to build nuclear weapons.

On October 12, authorities in London banned all British companies from doing business with Iran's Bank Mellat and the Islamic Republic of Iran Shipping Lines -- two state-controlled firms linked to Tehran's nuclear program. Hollis says that development fits into a policy pattern from the British government:

"In the case of the British, a fairly sophisticated approach designed to target specific financial transactions and banks does fit with the pattern we have seen in the past with the British and how to deal with this situation," Hollis explains. "Targeted in terms of financial transactions."

British Prime Minister Gordon Brown also has indicated support for limiting loans to Iran by banks or international financial institutions. Some EU countries and their banks already have begun to take such steps without a specific UN mandate.

Iran expert Konstantin Kosten of the German Council on Foreign Relations says that France also is among European countries that appear to be moving toward tougher sanctions against Iran:

Kosten says French President Nicolas Sarkozy "seems to be convinced that Iran will [only be persuaded] by a tougher sanctions strategy. I think that it might also go along with the energy sector -- with [a ban on] gasoline imports [into Iran] and cutting Iran off from every trade line that is possible."

A ban on worldwide investment in Iran's energy sector would expand on Washington's unilateral Iran Sanctions Act. The British government continues to favor such an option, which could prevent firms from UN members states from shipping parts or technology to Iran that are needed to build oil refineries or other similar facilities.

The most sweeping of sanctions being discussed would be an international ban on the purchase of Iranian oil or other products. But that strategy has the potential to send global oil prices soaring. Experts say the Security Council is unlikely to consider such a ban unless Iran is found to be developing an actual nuclear weapon.

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