This issue brief, authored by Richard Nephew, Program Director for Economic Statecraft, Sanctions and Energy Markets at the Center on Global Energy Policy, examines the possible application of new sanctions against Iran if a deal is not achievable between Iran and the P5+1. Nephew concludes that new sanctions would be a far riskier strategy to pursue than a successful negotiation and outlines the best way to design a sanctions regime if, unfortunately, it is needed. The brief reviews the logic of sanctions and how they can be best calibrated to achieve desired effects, drawing on lessons from past sanctions experience. Nephew is a former director for Iran at the U.S. National Security Council and was a member of the U.S. nuclear negotiating team with Iran from August 2013 to December 2014. The views expressed here are his own.
The executive summary is below. You can download and read the full brief here (pdf) as well as engage with all of the Center’s content related to sanctions on our dedicated program webpage.
***
Executive Summary
Sanctions will not solve the Iranian nuclear problem. However, sanctions have—and still may—contribute to a solution if judiciously, strategically, and appropriately applied. In short, the brief finds:
A) The best way to design new sanctions against Iran is to ensure that they meet three basic criteria:
- Structured to maximize the right pain on Iran;
- Enforceable but impactful even with less than perfect compliance; and,
- Designed to engender multilateral support.
B) Sanctions and sanctions-related steps do exist that generally meet these criteria. They are:
- Reduce and eventually cut off all purchases of any Iranian oil or oil-related products.
- Prohibit any purchases of any Iranian non-oil exports.
- Permit continued humanitarian transfers to Iran as well as the export to Iran of finished consumer goods, information technology, and luxury items.
- Prohibit the export to Iran of any goods not explicitly permitted within the categories above and regardless as to which sector of Iran’s economy it is destined.
- Prohibit cargo carriers providing service to Iran for the export of its goods.
C) US success in implementing sanctions along these lines will depend greatly on partner support, which will be risked if the sanctions path is embarked upon without adequate testing of a realistic and reasonable comprehensive solution via negotiations. Permitting the ongoing process to play out is essential.
D) The Administration and Congress ought to begin contingency planning for new sanctions along these lines now, but without crossing the line into formal drafting of bills or similar steps that would undermine negotiations (aside from steps such as removing restrictions on the export of US crude oil, which could assuage concerns about future market impact). A quiet, internal process ought to be initiated along these lines. The focus ought to be on the substance of sanctions, the efficacy of a common US strategy, and the imperative of stopping Iran from acquiring a nuclear weapon rather than on meaningless displays of tough talk or snapping up headlines.
***
Download and read the full brief (PDF)
