A turning point for Iran sanctions? Not so fast.

Under Secretary for Political Affairs Wendy Sherman leads the U.S. delegation for the P5+1 talks with Iran in Geneva, Switzerland, on October 15, 2013. Also pictured in the photo are E.U. High Representative Catherine Ashton and Iranian Foreign Minister Javad Zarif. Photo courtesy of the U.S. State Department.  

By Abraham Shanedling

Last week, Iran and six world powers concluded two days of talks about Tehran’s nuclear program—the first formal negotiations between Iran and the five permanent members of the United Nations Security Council since the Iranian President Hassan Rouhani took office in August.

Despite a lack of details about the discussions, Iran’s foreign minister and the European Union’s foreign policy chief, issued a rare joint statement following the meetings, calling the talks “substantive and forward looking.” Further discussions are scheduled in Geneva for November 7 and 8. However, government officials and nuclear experts among the United States and its allies remain sharply divided on whether the negotiations represent a positive shift in relations with Tehran warranting “cautious optimism” or whether the world community should increase pressure on the regime to prevent Iran from using yet another round of negotiations as a delay tactic while the country strengthens critical nuclear capabilities.

Now that the government shutdown/debt-ceiling “debate” has been punted until next year, Iran sanctions legislation will likely resurface as a key issue in Congress. Appearing two weeks ago before the Senate Foreign Relations Committee, Wendy Sherman, the chief U.S. negotiator in Geneva, urged Congress to delay imposing stringent new Iran sanctions legislation until after the negotiations in Switzerland. The bill, which passed overwhelmingly (400-200) in the House in July and is now pending in the Senate, aims to cut Iran’s oil exports by another million barrels per day over the course of a year, decreasing the country’s oil exports to near nothing.

However since July, some have pointed to a possible “thaw” in relations with Iran as indicating an opportunity to reach quick diplomatic solution with Iran and possibly the lifting of sanctions. Much of this optimism has emanated from Rouhani’s visit to the United Nations in September, which culminated in a phone call with President Obama and a meeting between U.S. Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif (the first direct contact between the two countries since Iran’s 1979 revolution).

As David Ignatius recently wrote in a column in the Washington Post, “President Obama is approaching one of those moments when a big turn in foreign policy is possible. . . . There’s no doubt that this is a time of opportunity.”

Yet at the same time, equally as strong skepticism remains toward serious progress.

Most vocal has been the Israeli government, which has consistently stated that no sanctions should be eased unless Iran relinquishes all uranium enrichment. In a statement issued ahead of the Geneva talks, Israeli Prime Minister said that relaxing pressure on Iran before sanctions achieve their goal would be a “historic mistake.” At the United Nations in September, Netanyahu warned the world community not to be fooled by Rouhani’s recent conciliatory language, decrying the Iranian president as a “wolf in sheep’s clothing.”

Israel’s rhetoric may seem extreme, but at this point its fears are not necessarily irrational.

Since last year, Iran has begun installing hundreds of next-generation centrifuges at its largest uranium-enrichment plant Natanz. Likewise, since this past August, an additional 6,250 first-generation centrifuges were installed at the Natanz facility, and a new reactor based on heavy-water technology in Arak will likely be completed next year, allowing Tehran to produce plutonium.

This has all led the Institute for Science and International Security, a nonproliferation think tank in Washington, to project that Iran could produce enough weapons-grade uranium to achieve critical breakout capacity by mid-2014.

To delay or prevent Iran’s progress, many argue that now is precisely the time to hit Tehran with stronger sanctions—largely in part because of the current state of Iran’s economy.

A new study released by the Foundation for Defense of Democracies (FDD) and Roubini Global Economics concluded that “Iran’s foreign currency reserves, which are critical to the Iranian government’s ability to withstand sanctions pressure, are being depleted and, in large part, impeded.” The study of Iran’s currency resources found that Iran’s foreign exchange reserves have dropped from $100 billion in 2011 to $80 billion by July 2013, but that the Iranian government only has $20 billion in fully accessible hard currency.

To further deplete Iran’s total and accessible reserves, Mark Dubowitz, FDD’s Executive Director, argues that the administration and Congress should impose new sanctions immediately. These could include further restrictions on Iranian oil prices exports or output, imposing additional sanctions against entities controlled by Iranian Revolutionary Guard Corps, as well as sanction any financial institution providing Iran access to, or use of, its foreign reserves.

Bi-partisan demands for such an escalation of sanctions have already been renewed in Congress, where the Senate Banking Committee is already expected to draft new sanctions that mirror the earlier House bill from July. It’s unclear whether such measures will be passed, let alone signed by the White House, before the follow-up negotiations early next month. However, given the long and unproductive history of nuclear talks with Iran, not to mention Iran’s activities in Syria and support for Hezbollah, the U.S. would be wise to at least, demonstrate its willingness to increase the pressure.


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