March 11, 2007 Further Sanctions Needed to Prevent Nuclear Iran In defiance of the international community, Iran is rapidly advancing its enrichment of uranium and may be nearing the point at which it will be able to produce the nuclear fuel needed for weapons on an industrial scale. With the Iranian regime vulnerable to sanctions such as those imposed by the U.N. Security Council last December, the United States and the international community should pursue tougher measures to change Iran’s course. Additional diplomatic, economic and political sanctions can further isolate the regime and persuade it to suspend its nuclear program. Iran is rapidly advancing its uranium enrichment program in violation of U.N. Security Council Resolution 1737. • Iran, according to the International Atomic Energy Agency (IAEA), is close to operating more than 650 centrifuges—machines that rotate at supersonic speeds to enrich the uranium needed to produce fuel for nuclear reactors or bombs—with imminent plans to begin feeding uranium gas into the machines. • Iran has advised the IAEA that it plans to have 3,000 centrifuges operating by May, which could potentially give the regime the capability to produce one or two nuclear weapons a year. • IAEA Director General Mohamed ElBaradei recently stated in an interview with The Financial Times that “it could be six months, it could be a year” until Iran is capable of enriching uranium on an industrial scale. Once Iran can enrich uranium on such a scale, it will have the ability to produce fuel for an atomic reactor or nuclear weapons. • The IAEA reported last month that Iran is in violation of Security Council Resolution 1737, unanimously approved in December 2006. The resolution represented the first time the world body imposed mandatory sanctions on Iran under Chapter VII of the U.N. Charter, thereby declaring that Iran’s atomic program represents a threat to international peace and security. • The resolution banned trade related to Iran’s nuclear and missile programs, froze the assets of individuals associated with those programs and imposed strict monitoring of the foreign travel of these individuals. Current sanctions imposed on Iran, including U.S. financial restrictions and U.N. Security Council penalties, are starting to have an impact. • The prices of basic foods such as beef, poultry, fruits and bread have increased by 25 percent and housing costs have risen 30 percent in recent months, resulting in rising public discontent and anti- government protests. • Iran’s Supreme Leader Ayatollah Ali Khamenei has allowed criticism of Ahmadinejad’s nuclear and economic policies not only in reformist newspapers, but also in his own state-run media. • Iran’s deputy oil minister for international affairs said Jan. 6—two weeks after the passage of the Security Council resolution—that Iran’s oil-dependent economy cannot sustain itself without increasing investment. “If the projects for increasing the capacity of the oil and protection of the oil wells will not happen,” he said, “within 10 years, there will not be any oil for export.” • European banks ABN Amro Holding NV, Credit Suisse Group and UBS AG of Switzerland, Credit Lyonnais and Société Générale SA of France, and Barclays PLC and HSBC Holdings PLC of the United Kingdom all limited or ended their dealings with Iranian banks during the past year. • The U.S. Treasury Department barred banks operating in the United States from concluding transactions with Iran’s state-owned Bank Sepah because of its involvement in Iran’s illicit missile activities, curtailing Iran’s access to the international financial system. More robust penalties could persuade the Iranian regime to end its nuclear pursuit without the need for the West to consider military force. • Further sanctions, such as an arms embargo, enforced travel bans, asset freezes and other economic sanctions, could bring more pressure to bear on the Iranian government and further stimulate internal forces already pushing the regime to alter its nuclear policies. • Imposing more robust sanctions will force companies considering business deals with Iran to reconsider such investments. Royal Dutch Shell, close to finalizing a $10 billion development deal for Iran’s South Pars natural-gas fields, has said sanctions are creating “quite a dilemma” in its business decisions. Companies such as British Petroleum have already withdrawn major deals. • Tougher U.S. law and further U.N. sanctions can prevent Iran from obtaining the $100 billion in energy investments it needs to maintain its oil and gas infrastructure. Without such foreign investments, a recent Johns Hopkins University study estimates Iran’s oil exports will decline to zero by 2015. Such pressure could alter Iran’s nuclear drive. • Iran’s energy sector is highly vulnerable to sanctions, with more than half of the Iranian government’s revenue coming from oil exports. Iran also imports 40 percent of its refined petroleum and spends between $20 and $30 billion a year on subsidies to keep the price of gasoline, some foodstuffs and the cost of heating artificially low to quell domestic unrest.
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