Weapons of Mass Destruction (WMD)

22 March 2007

U.S. Seeks To Limit Iranian Economic, Diplomatic Capabilities

New U.N. Security Council sanctions resolution expected soon

By David Shelby
USINFO Staff Writer

Washington -- The United States sees Iran’s hand at work in the four primary crises troubling the Middle East currently and is determined to limit Tehran’s ability to play a negative role in the region, says a State Department official.

Speaking at a March 21 conference sponsored by the Rand Corporation, Under Secretary of State for Political Affairs R. Nicholas Burns identified the primary foreign policy challenges in the Middle East as the continuing unrest in Iraq, Hezbollah’s efforts to bring down the democratically elected government in Lebanon, the rise of rejectionist Palestinian forces who threaten progress toward peace with Israel and Iran’s nuclear program.

“What we have tried to do over the course of the last year or two is to put together a rather comprehensive policy to try to blunt, limit and contain Iran’s ability to be successful in those four areas,” Burns said.  “We’ve done that in trying to establish multiple points of pressure against the Iranians, and by that I mean diplomatic and economic pressure, so they’ll have to recalculate the price of these ambitions.”

A central element of Washington’s policy is the effort to bring U.N. sanctions against Iran’s nuclear program.  A December 23, 2006, U.N. Security Council resolution imposed a first round of sanctions against Iran and called on Tehran to halt its uranium enrichment activities.  Burns said he expects the council to pass a second sanctions resolution soon in response to Iran’s continued defiance. (See related article.)

He said the new resolution “would open up new areas of sanctions.”  In its current draft form, the resolution calls for sanctions on the Iranian Revolutionary Guard command, which controls many of Iran’s weapons programs; sanctions against Bank Sepah, a state-owned bank that finances the weapons programs; and a ban on Iranian arms exports.  He said it likely also would encourage countries to curtail their export credits to companies doing business in Iran.

Burns said there is also progress toward isolating Iran outside the Security Council actions.  He welcomed Russia’s decision to suspend work on Iran’s Bushehr nuclear power plant, characterizing it as “a very clear signal to the Iranians; it’s not going to be business as usual on Bushehr.”

In testimony to the Senate Banking Committee earlier in the day, Burns said the U.S. government also is working to convince international financial institutions that they should not engage in “business as usual” with Iran.

The U.S. Treasury Department has prohibited two major Iranian banks from engaging in dollar transactions because of their ties to terrorism and proliferation, but Treasury officials are asking international financial institutions to move beyond these currency prohibitions and cease doing business with Iran altogether.  Under Secretary of the Treasury for Terrorism and Financial Intelligence Stuart Levey, who has met with the directors of more than 40 leading international banks, told the senators that many of the banks have been receptive to the U.S. message.

“Many leading financial institutions have either scaled back dramatically or terminated entirely their Iran-related business, and they've done so of their own accord, concluding that they simply did not wish to be a banker for a regime that deliberately conceals the nature of its illicit business,” he said.

Burns said the United States also is encouraging oil and gas companies to forgo investments in Iran.

He said U.S. efforts to contain Iran economically are having an impact.  “We are clearly cutting into what the Iranians value most,” he said, “their integration with financial and trade markets around the world.”

Burns said Iranian economic officials and financial analysts in Tehran now are beginning to realize that they should “worry about credit and trade because the rest of the world outside the Security Council has begun to shut down the normalcy and volume of trade to which Iran had grown accustomed.”

Burns said that over the past few months Iran has found itself on the defensive as its diplomatic capabilities shrink and its international support dwindles.

As the vise tightens on Iran with the second, or possibly a third, Security Council resolution and as financial pursuits become more restricted, he said, “we hope that those in Iran who understand that they don’t live in the world alone and have to relate to other countries and the opinions of those countries, those people in Iran will get the upper hand in the discussion, and at some point the Iranians will want to sit down and negotiate.”

For more information on U.S. policies, see Limiting Nuclear Weapons.

(USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)