Israel Matzav: Iran sanctions act passes Congress

Iran sanctions act passes Congress

On Thursday, the US Senate approved by an 80-17 vote legislation that bars companies that sell more than $1 million per year of refined petroleum products to Iran from bidding on United States Department of Energy contracts. Similar legislation has already been passed by the House and it now goes to President Obama for signature. There is also now a bill pending in the House that would prohibit any non-US company that sells gasoline to Iran from doing business in the United States.

Meanwhile, Iran is seeking to increase its gasoline production.

The plan focuses on supplying the country's needed gasoline within 48 hours to curb the possible impacts of sanctions imposed by the US on the country.

The initiative first proposed by the Iranian oil minister proposes change in the production process of a number of Iranian petrochemical complexes.

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Iran is the world's fourth-largest exporter of crude oil but due to the lavish consumption of heavily subsidized fuel by Iranian drivers, the country is forced to import large amounts which it then sells at very cheap pump prices, burdening the budget through giant subsidies. Iran imports 22-25 million liters of gasoline per day at present.

Unfortunately, this seems unlikely to work. And while we're figuring that out, the Iranian centrifuges are churning out enriched uranium.

What could go wrong?

Israel Matzav: Iran sanctions act passes Congress

Israel Matzav: Iranian opposition backs sanctions, unsure about military action

Iranian opposition backs sanctions, unsure about military action

Writing in the Los Angeles Times, John Hannah expresses confidence that the Iranian opposition would agree with the imposition of harsh sanctions against the regime, but is less sure of what the reaction to a military strike would be. Israel is not mentioned as the possible party to strike Iran, and it may well be that the reaction to an Israeli strike would be different than the reaction to an American strike.

Before June 12, conventional wisdom suggested that both harsh sanctions and military action would likely strengthen the Islamic Republic by triggering a "rally around the regime" effect. Iran's rulers, so the argument went, would exploit outside pressure to stoke Persian nationalism, deflecting popular anger away from the regime's own cruelty onto the perceived foreign threat -- in effect, short-circuiting the country's incipient democratic revolution.

But the conventional wisdom has taken something of a beating post-June 12. Before the elections, Iranian President Mahmoud Ahmadinejad sought to blame all of Iran's travails -- a deteriorating economy, international isolation, the mounting threat of war -- on the United States and Israel. But the Iranian people were buying none of it. On the contrary, by the millions they have gone to considerable lengths over the last four months to make one thing clear: When affixing responsibility for the misery, shame and danger being visited on their once-great nation, they focus overwhelmingly on the ruling regime itself -- on its economic incompetence, its tyrannical nature, its international belligerence.

There's good reason to doubt they would react differently now were the United States and its partners to impose painful sanctions. If anything, the bloody crackdown the Iranian people have endured since the election has only fueled their hatred of the current ruling clique and their determination to be rid of it as soon as possible. Popular loathing of the regime has reached such levels that almost any negative development is likely to be seized on as ammunition to attack its gross misrule. Almost any outside action that further squeezes Iran's tyrants and calls into question their legitimacy in the eyes of the world will be welcomed, even at the risk of imposing additional hardships on the Iranian people. The last thing on their minds is defending an indefensible regime in the face of tough international sanctions.

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What about military action? This is a much harder call. Iran experts are split. The majority still maintain that Iranians would quickly unite to confront any foreign attacker. While opposition representatives I heard in Europe think that's unlikely, they are deeply worried that if the regime is not crippled in any military attack, it will move ruthlessly to crush their movement for good.

But a few Iranians -- especially in private -- see other possibilities. They suggest that a bombing campaign that spared civilians while destroying Iran's nuclear installations as well as targets associated with the regime's most repressive elements -- the Revolutionary Guard and Basij militia -- might well accelerate the theocracy's final unraveling at the hands of an already boiling population.

Hmmm.

Israel Matzav: Iranian opposition backs sanctions, unsure about military action

Israel Matzav: Obama strikes out again: Lavrov says Iran sanctions 'counterproductive'

Obama strikes out again: Lavrov says Iran sanctions 'counterproductive'

Oops.

Barack Obama may have thought he was buying Russian cooperation on Iran when he abandoned the United States' allies in Poland and the Czech Republic. But he was wrong.

Secretary of State Clinton met Russian Foreign Minister Sergey Lavrov in Moscow on Tuesday, and Lavrov says that sanctions against Iran would be 'counterproductive.'

Russian Foreign Minister Sergey Lavrov said on Tuesday that the threat of sanctions against Iran would be counterproductive, resisting US efforts to win agreement for measures if Iran fails to prove its nuclear program is peaceful.

Lavrov spoke following talks with US Secretary of State Hillary Rodham Clinton, who is trying to gauge Moscow's willingness to join the US in imposing sanctions if Iran fails to come clean on its nuclear activities.

Lavrov said Russia's position is that under current conditions even the threat of sanctions against Iran would be counterproductive.

Clinton said the US agreed it was important to pursue diplomacy with Iran.

"At the same time ... we have always looked at the potential of sanctions in the event we are not successful" in persuading Iran to comply, she said at a joint news conference.

What could go wrong?

Israel Matzav: Obama strikes out again: Lavrov says Iran sanctions 'counterproductive'

Israel Matzav: Another reason sanctions against Iran won't work: Smugglers

Another reason sanctions against Iran won't work: Smugglers

This is from a New York Times report on the problems that the United States has had in enforcing its own sanctions against Iran.

Black market networks have sprouted up all over the globe to circumvent the sanctions. A typical embargo-busting scheme was detailed in a plea agreement filed in federal court here on Sept. 24, the day before Mr. Obama and European allies announced the existence of a previously undisclosed Iranian nuclear enrichment facility near Qum.

In the court filings, a Dutch aviation services company and its owner admitted that they had illegally funneled American aircraft and electronics components to Iran from 2005 to 2007. Under the scheme, Iranian customers secretly placed orders with the company, which served as a front, buying the parts and having them shipped to the Netherlands, Cyprus and the United Arab Emirates. The materials were then quietly repackaged and shipped on to the real buyers in Iran.

The Dutch company was eventually caught. But the ease with which it had operated until then illustrates a key hurdle facing the United States: even if diplomatic challenges can be overcome to persuade countries with significant economic ties to Iran, like China, to approve sanctions, it is virtually impossible to make an embargo airtight.

“The Iranians have a lot of experience at this point in evading sanctions,” said Michael Jacobson, an intelligence and sanctions specialist at the Washington Institute for Near East Policy. “They are adaptable, learn from mistakes, see where the United States cracks down and move elsewhere. And on the part of businesses, there is a lot of willful blindness.”

With months at most until Iran becomes a nuclear power, there is no time for sanctions to work. There is only one way to stop Iran before it goes nuclear. That way is not sanctions.

Israel Matzav: Another reason sanctions against Iran won't work: Smugglers

Israel Matzav: Russia agrees to new sanctions on Iran?

Russia agrees to new sanctions on Iran?

Reuters is reporting that Russia has agreed to new sanctions on Iran.

[Russian President Dmitry] Medvedev made clear that Moscow was ready to back further sanctions against the Islamic Republic unless it changes course on its nuclear program, despite Russia's general reluctance to support such punitive measures.

"Russia's position is simple," he said. "Sanctions are seldom productive but they are sometimes inevitable."

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Russian Foreign Minister Sergei Lavrov is expected to join his counterparts from the other five countries to discuss their Oct. 1 meeting with an Iranian delegation in Geneva. It is the six powers' first meeting with Iran since July 2008.

Russia had previously ruled out new sanctions against Iran but appears to have reversed its position.

Obama announced last week that he would scrap plans for a U.S. missile shield in the Czech Republic and Poland that had angered Russia. Washington and Moscow have denied any quid pro quo deal on Iran sanctions in exchange for scrapping the shield, but analysts and U.N. diplomats suspect otherwise.

The previous U.S. administration said the shield would protect against an attack by Iran but Moscow suspected it was the target. Moscow's anger about the project was one of the reasons U.S.-Russian relations sank to a post-Cold War low.

Russia and China reluctantly backed three council resolutions imposing sanctions against Iran over its nuclear program but worked hard to dilute the measures.

Iranian Foreign Minister Manouchehr Mottaki met with British Foreign Secretary David Miliband at the United Nations on Tuesday. Mottaki said afterward that the Western powers knew sanctions were a failed policy.

"If they would like to taste once again the failed policies, that is up to them," he said.

The United States and Germany have called for targeting Iran's energy sector if it refuses to suspend its enrichment program. The U.N. sanctions in place against Tehran focus on its nuclear and missile industries.

Let's not celebrate prematurely. Russia may be willing to endorse sanctions but what's left unsaid is what sanctions they might be willing to endorse and whether those sanctions might be effective.

We're still a long way from stopping Iran's pursuit of nuclear weapons.

Israel Matzav: Russia agrees to new sanctions on Iran?

Israel Matzav: Russia says 'nyet' on new Iran sanctions

Russia says 'nyet' on new Iran sanctions

On Monday, Prime Minister Netanyahu disappeared for about ten hours. It now appears that Prime Minister Netanyahu traveled to Russia for an urgent meeting relating to Iran (Moscow is about a 3.5 hour flight from Tel Aviv), probably relating to the sale of anti-aircraft missiles to the Islamist regime.

But by Wednesday, Israel's largest daily, Yediot Ahronot, was reporting that Netanyahu had flown secretly to Moscow to voice concern over the possible sale of Russian anti-aircraft missiles to Iran. Other Israeli newspapers published similar accounts, saying Netanyahu had made the 15-hour trip on a private plane leased from a local business mogul.

People familiar with Netanyahu's movements said the plane belonged to Yossi Meiman, head of the Merhav Group, an Israeli conglomerate with energy and media interests. Netanyahu leased the plane - instead of using a government aircraft - to help ensure secrecy, they said, speaking on condition of anonymity because of the sensitivity of the matter. Merhav had no comment.

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The Haaretz daily said Netanyahu discussed Russian arms deals with Iran and Syria, and that Israel presented evidence that Russian arms were making their way to Iranian-backed Hezbollah guerrillas in Lebanon. In another report, the paper said the talks were also focused on sophisticated anti-aircraft missiles that Russia has agreed to sell to Iran. The delivery of the S-300 missiles would make it much more difficult for Israel to carry out an attack on Iran.

The reported visit follows the hijacking last month of a freighter that was later intercepted by Russia off Cape Verde, thousands of miles from the Algerian port where it was supposed to have docked. A Russian maritime expert and the European Union's top anti-piracy official have suggested the Arctic Sea may have been carrying missiles bound for Iran. Israeli media have speculated the Mossad tipped off the Russians to the elicit cargo.

As the rumors swirled of clandestine talks, Russian officials remained silent. "We have seen these reports in various media, and you know that not all the details add up, but there is nothing more I can tell you," Foreign Ministry spokesman Andrei Nesterenko was quoted as saying Thursday.

The Russian daily Kommersant, citing a "highly placed source in the Kremlin," confirmed the visit and speculated the talks had been on an extremely urgent matter, "like Israel updating Russia on its intention to attack Iran."

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Israel Matzav: Russia says 'nyet' on new Iran sanctions

Israel Matzav: Iran using Venezuelan banks to skirt existing sanctions

Iran using Venezuelan banks to skirt existing sanctions

Manhattan District Attorney Robert Morgenthau told the Brookings Institution on Tuesday that investigations by his office show that Iran is using Venezuelan banks to circumvent existing sanctions designed to penalize Iran for continuing its pursuit of nuclear weapons. At the same time, Venezuelan President Hugo Chavez wants to build a destabilizing 'nuclear village' in his country. And the Obama administration is not paying attention.

"Generally speaking, nobody is focused sufficiently on the threat of the Iran-Venezuela connection," said Morgenthau, whose New York jurisdiction includes the offices of numerous U.S. financial institutions.

Venezuela is not subject to U.S. or international economic sanctions. That means U.S. banks processing wire transfers from Venezuelan banks rely on their Venezuelan counterparts to ensure the exchanges are for legitimate purposes.

"I have little faith that this is being effectively done, and the Iranians, aware of this vulnerability, appear to be taking advantage of it," he said.

In early 2008, Iran opened in Caracas a subsidiary of the Export Development Bank of Iran. Last fall, the Treasury Department's Office of Foreign Assets Control imposed economic sanctions against both banks for providing financial support to the military organizations responsible for Iran's nuclear program.

Still, Morgenthau said he believes Iran's Caracas subsidiary has ties with banks in Venezuela and in Panama, which has a reputation as a center for money laundering.

Morgenthau said Iranian-owned and operated factories have sprung up in remote and undeveloped areas of Venezuela. While there's little known about what's going on inside these plants, "we should be concerned that illegal activity might be taking place," he said.

Morgenthau cited cases his office has recently pursued that underscore the lengths Iran will go to avoid sanctions aimed at curbing its nuclear program.

Well why would anyone be focused on Venezuela's activities when the Obama administration has decided that Hugo Chavez is their friend?

There's a big problem with trying to cozy up to your enemies: There's usually a reason why they were your enemies in the first place. That's certainly true here. What would happen if - let's just say - Iran were to sell a few Shihab missiles to Venezuela and Chavez were to install them pointing north? What could go wrong?

Israel Matzav: Iran using Venezuelan banks to skirt existing sanctions

Israel Matzav: Another nail in the Iranian sanctions coffin

Another nail in the Iranian sanctions coffin

Ten days ago, I reported that Israel's Foreign Ministry had accused the International Atomic Energy Agency of hiding incriminating material that would show that Iran was attempting to develop nuclear weapons. On Monday, France took the Israeli accusations a step further:

France went farther, alleging the existence of an unpublished annexe that addresses the evidence that Iran may be building an atom bomb.

Bernard Kouchner, the French Foreign Minister, said that France had attended a technical briefing that covered the material, so was surprised to find it missing from the report.

“In the annexes there are specifically elements which enable us to ask about the reality of an atomic bomb,” he said “There are issues of warheads, of transport.”

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Western intelligence agencies had given the IAEA material suggesting that Tehran secretly combined uranium processing, airborne high-explosive tests and efforts to revamp a missile cone in a way that would fit a nuclear warhead.

The agency described the material as compelling and insisted that Iran clarify the matter rather than reject it as fabricated evidence. It is likely, however, that it did not meet the standards of proof required for inclusion in the report.

The reason that the French - and the Germans - are suddenly becoming more vocal in their desire to stop Iran may be this report by Uzi Rubin, which I blogged here, which suggests that Iran may be targeting western Europe with its nuclear weapons, and not just Israel.

In the meantime, outgoing IAEA chairman Mohamed ElBaradei admitted on Monday that Iran was still enriching uranium and urged it to ''substantively re-engage'' with the IAEA and to 'respond positively' to a United States initiative for dialogue. As I noted on Monday, Iranian President Mahmoud Ahmadinejad has said that there is nothing to discuss.

Meanwhile, Haaretz reported on Tuesday that Russia and China have rejected a proposal by the other members of the '5+1' group (the US, Britain, France and Germany - Germany being the only one of the six that is not a permanent, veto-wielding member of the United Nations Security Council) to impose harsher sanctions against Iran.

The two nations refused to discuss the possibility of further pressuring the Islamic Republic, according to the official, during high-level six power talks held last week in Germany.

Officials in Jerusalem are concerned by the failure of the meeting and the obstacles put up by Russia and China. Nevertheless, they believe the delay in action on Iran stems from the fact that the powers are waiting for Tehran's official response to the West's offer of dialogue, which it will apparently give this week.

The six powers met last Wednesday in the German city of Frankfurt, in a meeting at which all the countries' most senior officials dealing with the Iran nuclear issue were present.

"Nothing was agreed upon," the Israeli official said. "Russia and China avoided a serious discussion, presented an inflexible stance and set things back one year."

Ironically, Russia and China's intransigence makes war more likely, not less. And war makes it less likely, not more likely, that Iran will succeed in developing nuclear weapons.

For reasons I have noted, sanctions against Iran are very unlikely to be effective at this late date, even if an agreement can be reached on imposing them. On the other hand, war could be quite effective in delaying the Iranian program, or in putting a stop to it altogether.

Will the United States try to prevent Israel from stopping Iran? I don't believe President Obama will be given that opportunity.

But what seems clear is that the Russian and Chinese refusal to act is another nail in the coffin of international cooperation to stop Iran in a non-military fashion.

Israel Matzav: Another nail in the Iranian sanctions coffin

Israel Matzav: Bolton: Too late for sanctions

Bolton: Too late for sanctions

I feel vindicated when a guy who is as savvy as John Bolton writes essentially the same things I have been writing all along. Bolton writes in the Wall Street Journal that the time for sanctions was six years ago. Now, it's too late.

First, the U.N. Security Council is no more likely now to approve strict sanctions against Iran than in the past. The prospects for Russian and Chinese support are between slim and none, since endorsing sanctions would harm their own economic and political interests in Iran. The most to expect from the council is a fourth sanctions resolution, as weak and ineffective as its predecessors, and only after weeks or months of agonizing negotiations.

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Israel Matzav: Bolton: Too late for sanctions

Israel Matzav: EU and Germany may impose sanctions against Iran

EU and Germany may impose sanctions against Iran

The European Union and Germany may impose stronger sanctions against Iran - including cutting off Iran's supply of refined oil products - unless the Iranians show a willingness to compromise over their nuclear facilities. And while the Europeans are willing to try to take it to the UN Security Council, it doesn't sound like a Russian or Chinese veto threat will stop them.

SPIEGEL has learned that Germany and the EU are considering stopping all exports of gasoline to Iran, which according to analysts' estimates depends on imports to cover 30 percent of its gasoline supplies, even though it exports crude oil.

Diplomats are also considering imposing further restrictions on shipping and air traffic to and from Iran, for example by banning Iranian ships or aircraft from docking or landing in the EU.

Major insurance companies that insure many freight shipments to and from Iran, such as Lloyd's, may be foreced to cease such deals.

The German government will initially try to get these additional sanctions passed by the UN Security Council, where veto powers China and Russia have been hesitant on measures against Iran. But senior German diplomats have said the EU and the US would be prepared to impose "very strict sanctions" on their own.

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Israel Matzav: EU and Germany may impose sanctions against Iran