Iran Sanctions Target Military, Weapons Financing

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Iran isn't the only country currently targeted by U.S. sanctions.

The sanctions the U.S. announced Thursday against Iran stand out for a couple of reasons.

First, they are tough. Second, they attempt to single out and punish Iran's military — and that's not commonly done.

The sanctions target Iran's Revolutionary Guard Corps and defense ministry, and three of the country's largest banks. They are designed to make it much more difficult for Iran to develop and finance its missile and nuclear programs.

Narrow Interdiction

Specifically, the U.S. designated nine enterprises that it says are controlled by the Revolutionary Guard Corps and defense ministry, plus five of the corps' top commanders and three civilian leaders of Iran's Aerospace Industry Organization.

The U.S. says the three banks — Bank Melli, Bank Mellat and Bank Saderat, all well-known in Iran — have facilitated the movement of millions of dollars for weapons proliferation.

In addition, sanctions against the Qods Force, an elite group within the Revolutionary Guard Corps, punish activities in support of Hezbollah in Lebanon, Hamas in the Palestinian territories, and allegedly the Taliban in Afghanistan.

'A Powerful Deterrent'

The sanctions were announced Thursday morning by Treasury Secretary Henry Paulson and Secretary of State Condoleezza Rice.

"No U.S. citizen or private organization will be allowed to engage in financial transactions with these persons and entities," Rice said. "Any assets that these designees have under U.S. jurisdiction will be immediately frozen.

"These actions will help to protect the international financial system from the illicit activities of the Iranian government," Rice added. "And they will provide a powerful deterrent to every international bank and company that thinks of doing business with the Iranian government."

A Long Time Coming

The Bush administration has been looking to punish the Revolutionary Guard Corps for some time. It has tried, so far unsuccessfully, to impose comprehensive sanctions through the U.N. Security Council. The new sanctions are more narrowly targeted.

Paulson warned those few in the U.S. who might still be doing business with Iran that they should be very careful about which enterprises they choose to be involved with.

"The IRGC is so deeply entrenched in Iran's economy and commercial enterprises, it is increasingly likely that if you are doing business with Iran, you are doing business with the IRGC," he said.

Negotiations Versus Military Force

Imposing the sanctions on Iran now appears to be motivated in part by a debate within the Bush administration about the value of diplomacy in dealing with Iran.

Rice represents one pole of that debate. She advocates negotiating with Iran, through the European Union and with the support of the U.N. Security Council.

Vice President Dick Cheney represents the other pole, which favors the use of military force against Iranian nuclear facilities.

'On a Diplomatic Track'

Undersecretary of State Nicholas Burns said Thursday that the new sanctions should not be seen as a step closer to military action.

"This decision today supports the diplomacy, and in no way, shape or form does it anticipate the use of force," Burns said. "Now, the president has never taken that option off the table, and quite rightly so. But we are clearly on a diplomatic track, and this decision reinforces that track."

These are unilateral sanctions, imposed by the U.S. alone. It is not clear how much international backing they will get. Britain has expressed support, but Russian President Vladimir Putin said Thursday that the sanctions will make matters worse.

Russia and China are the principal suppliers of advanced military technology to Iran.

Given its power and influence in the global financial system, the U.S. can punish foreign banks almost anywhere that continue to do business with the Iranian enterprises and banks targeted in the new sanctions.

U.S. Aims to Cut Iran from World Financial System

Secretary of State Condoleezza Rice and Treasury Secretary Henry Paulson said Thursday that new sanctions against Iran will protect the international financial system from "the illicit activities of the Iranian government."

The sanctions will "provide a powerful deterrent to every international bank and government that thinks of doing business with the Iranian government," Rice said.

The Bush administration maintains that the Iranian government threatens peace by pursuing nuclear technologies that can lead to a nuclear weapon.

"Iran exploits its global financial ties to pursue nuclear capabilities, develop ballistic missiles and fund terrorism," Paulson said.

The idea is to cut Iran from the international financial system. U.S. sanctions could hurt because of the signal it sends to the rest of the world. The U.S. has put in its list three banks, in addition to the defense ministry and the Revolutionary Guard Corps.

The Revolutionary Guard Corps controls numerous businesses in Iran, including some in the oil sector. Specifically it means any assets these groups may have in the U.S. will be frozen and Americans can't do business with them.

On the other side of the debate, Rice is playing defense and losing, according to experts who say sanctions only push the two countries into a situation where it will be harder for future administrations to deal with Iran.



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