Center for Arms Control

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Are Sanctions on Iran Working?

A Report by the Center for Arms Control and Non-Proliferation

June 3, 2013
By Laicie Heeley and Usha Sahay

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Introduction

Since 1979, the United States, the European Union, and the United Nations have imposed a variety of multilateral and unilateral sanctions on the Islamic Republic of Iran. These measures are intended to increase the international community’s leverage in efforts to compel Iran to halt its support for terrorism, curb potential WMD development activities, and comply with international norms regarding its nuclear program. Since 2006, penalties on Iran have become more severe and far-reaching as other nations have joined the U.S.-led sanctions effort to an unprecedented degree.

Sanctions seek to influence a target country’s behavior by imposing economic penalties on its national government, individuals within the target country, or entities that conduct prohibited transactions with the target country. Penalties may include denial of loans, credit, trade licenses, or insurance, as well as fines or jail time. In recent years, sanctions have been imposed to penalize state sponsorship of terrorism (examples include Iran, Iraq, Syria, and Sudan), to urge cessation of civil war (Somalia, Angola, and the former Yugoslavia), and to address nonproliferation concerns (South Africa, Libya, North Korea, and Iran).

This paper seeks to explore the impact of U.S. and international sanctions on Iran. We examine the political and economic effects of economic sanctions, as well as their impact on Iran’s decision-making regarding its nuclear program.

Major Findings

Sanctions have been useful for signaling international resolve against Iran’s proliferation activities. Through sanctions, the international community has indicated to Iran that it is united against its defiance of the international nonproliferation regime and also that it is willing to entertain a peaceful solution to the standoff regarding Iran’s nuclear program.

However, sanctions have had important unintended consequences, including empowering the existing regime, while weakening more moderate, pro-Western Iranians who could be allies of the United States in the future. Paradoxically, economic woes have allowed the government to take greater control over the economy, and to use patronage, favors, and other methods to shield regime allies from the pain of sanctions. On the other hand, those hit hardest by the sanctions seem to be precisely those who otherwise would support a more moderate government in Iran, and who look favorably on the U.S. Reducing the economic and political power that such groups wield is not in the U.S.’ long-term interests as it looks to eventually pursue a normalized relationship with Iran.

Iran has continued to defy international demands, but has exhibited some openness to a negotiated compromise that includes sanctions relief. Iran has not yet halted its nuclear program or agreed to a compromise, but there are some indications that it is becoming more open to doing so. Iranian officials have signaled that they could be willing to halt the most problematic parts of their nuclear development, but have emphasized that they require sanctions relief in exchange.

For sanctions to be effective in bringing about this compromise, the path to sanctions relief must be much clearer, and the West must be willing to lift sanctions step-by-step. The sanctions on Iran are a complex, overlapping set of measures that will be difficult to lift in the timely, sequential way that a compromise would require. To date, a clear path forward for how sanctions will be lifted in exchange for certain concessions by Iran apparently has not been put forth. The complexity and inflexibility of the existing set of sanctions makes it difficult to credibly use the promise of sanctions relief as a bargaining tool when negotiating with Iran.

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