Jonathan Jacobs PolySci 472 Final Paper The United States and Iran : Is There A Strategy to Deter Terrorism? On August 5, 1996 President Clinton signed the Iran and Libya Sanctions act. The act continues the United States policy toward Iran of implementing economic sanctions with the hopes of deterring such rogue state activities as the exportation of terrorism. It is the most recent in a series of sanctions against Iran which have, up to this point, proven ineffective. However, this continues to be the United States policy towards Iran. The issue at hand is why the United States continues to use economic sanctions against Iran if they have proven unsuccessful in preventing Iran from engaging in terrorist activities. Before constructing the policies to be taken against a nation, it is necessary to first determine whether the leaders of that nation are acting in a rational manner. If they are not rational, it will be nearly impossible to determine what values they possess, and even harder to deter them. Decision makers are considered rational if they choose that alternative which promises the highest expected value or lowest expected loss. To make this determination they must be able to identify their options, estimate the likely consequences of each, consider cost, benefit, and the likelihood of success, and trade off the expected cost and benefit to establish the expected value. 1 From American eyes, Iran does not appear to be rational. They are more eager to support terrorist groups such as Hizbollah than they are to have economic interaction with the United States. They would rather suffer an all out trade ban with the US then they would cease their rogue activities. The only way to define Iran as rational in American eyes is to assume that Iran benefits more from engaging in such activities than they do from trading with the United States. Iran feels that they gain more from supporting terrorism than they lose by being sanctioned. Obviously the issue of rationality is difficult to establish because it is based on perception. What is not ambiguous however, is that Iran is a sponsor of international terrorism. According to the State Department, Iran is the worlds most active state sponsor of international terrorism and continues to be involved in planning and executing terrorist acts. Tehran has established over 20 ideological and military training camps in Iran, Lebanon, and Sudan staffed by Arab - speaking Revolutionary guards. 2 State Department information cites Iran as providing arms, training, and money to Lebanese Hizbollah and several Palestinian extremist groups that use terrorism to oppose the Middle East peace process. In recent years Iran has stepped up its terrorist attacks against exiled Iranian leaders and Israel. More than a dozen Iranian dissidents have been assassinated in European cities since 1987, including the August 1991 murder of former Iranian Prime Minister Shahpour Bakhtiar in Paris.3 Iran's attacks have even occurred within the United States. The Islamic Republic provided support for the group that bombed the World Trade Center and, much speculation abounds as to Irans connection to the crash of TWA flight 800. Irans terrorist actions have contributed to the instability in the Middle East and will continue to destabilize the region until proper action is taken. A prime area which US officials fear Iran increasing its ties with is the Sudan. Iran has recently become the chief supporter and ally of Sudan's National Islamic Front. Sudan is Africas largest state and potentially offers Iran a foothold to outflank Saudi Arabia and extend its revolutionary influence throughout North Africa and the horn of Africa.Sudan has become in effect a new Lebanon where Iranian revolutionaries arm, train, and equip Arab fundamentalists for political violence while denying responsibility for their actions. 4 This results in a very dangerous situation for the United States allies in the Gulf region. Another major terrorist organization which Iran supports is Hamas. Israeli intelligence reports that Tehran gave Hamas $30 million over the past two years and permitted them to open an embassy in Tehran. Iran now provides ten to twenty percent of the roughly $70 million in donations that Hamas receives annually from its supporters around the world. This money goes directly into Hamas operations against Israel and US citizens in Israel. 5 The list of terrorist organizations which receive Irans support goes on and on. Secretary of State Warren Christopher stated that, in addition to Hamas and Hizbollah, Iran supports the Islamic Jihad, Ahmed Jabrils Popular Front, and similar groups in Algeria, Tunisia, and Jordan. Statements such as Christophers that, Iran is the foremost state sponsor of terrorism in the world 6are not new. Iran has been on the State Departments list of countries engaging in terrorist activities since the lists inception in 1984. Punitive measures were taken against Iran even before this time. Looking at the history of US sanctions against Iran, it is obvious that much has been tried to quell its terrorist endeavors. Iran and the United States became enemies with the fall of the Shah in 1979. With the Islamic Revolution, the Ayatollah Khomeini assumed power and began to preach an overtly fundamentalist form of Islam. He played on Iranian citizens dislike of the Shahs human rights abuses and the US support which he had been receiving and began to preach anti-US rhetoric. With the United States acceptance of the Shah into the country for cancer treatment, the Ayatollah fueled his citizens rage in an attempt to gain unity. The growing dislike of the US led to Iranian students taking over the United States embassy and taking 61 hostages on November 4, 1979, an act that was condoned by the Ayatollah. 7 President Carter, unable to communicate with Iranian leaders, abandoned search and persuasion techniques and went immediately to coercion with the first set of US economic sanctions against Iran. The Export Administration Act of 1979 requires a validated license...for the export of goods or technology to a country if the secretary of state has determined that the government of that country has repeatedly provided support for acts of international terrorism. 8 It sought specifically to limit the military capability of a foreign state to sponsor international terrorism. As the hostage crisis dragged on, Carter broke diplomatic relations with Iran. With the advent of the Reagan administration, the hostage crises was finally resolved. Terrorist activities continued however, and Reagan signed the Arms Export Control Act which prohibited foreign military sales to Iran and required US government consent to any transfer of military equipment to Iran. In addition The Foreign Assistance Act barred all aid to countries providing support for acts of international terrorism. Following the Iran-Contra affair President Reagan banned Iranian imports. Reagan stated that this was in response to the unprovoked attacks on US vessels, Irans refusal to end the Iran - Iraq War, Iranian attacks against non-hostile Gulf nations, and the support of terrorism. While tough on rhetoric, the sanctions up until 1992 had been largely ineffective. The United States was no longer aiding Iran, but other nations, many of them US allies, were. The Iran-Iraq Arms Non-Proliferation Act of 1992 punished for the first time, not only US firms that engaged in military sales to Iran, but foreign firms and individuals as well. President Clinton took this step one further in 1996 by implementing the Iran and Libya Sanctions act. In order to deny Iran and Libya revenues that could be used to finance international terrorism and obtain weapons of mass destruction, the act is a comprehensive combination of sanctions. Any foreign company that provides new investment of over $40 million or that violates existing United Nation sanctions against Iran or Libya can be subject to any of the following penalties: 1. Denial of Export-Import Bank assistance 2. Denial of export licenses to the violating company 3. Prohibitions on loans or credits from US financial institutions of over $10 million in any 12 month period 4. Prohibition on designation as a primary dealer for US government debt instruments 5. Denial of US government procurement opportunities 6. Ban on all or some imports of the violating company While it remains to be seen what effect the new act will have on Iran, it is important to note that the Iran and Libya Sanctions act was necessary because previous measures had not been effective. This is evidenced by the fact that Iran is still considered one of the largest sponsors of international terrorism in the world. The question that still remains to be answered then is, why does the US continue to sanction Iran if this action has so far been ineffective? Many people have argued for appeasing Iran and relaxing the sanctions on them in the hopes that Iran will reciprocate with friendly actions. The reason why the United States Government does not do this lies in the concepts of motivated bias, domestic politics, and morality. When employing a motivated bias policy-makers see what they want to see. With regards to Iran, American legislators see Iran as hostile and therefore magnify its threat. International Relations scholar Michael Klare makes the argument that the Pentagon magnifies the rogue state threat to enable it to maintain its current spending levels. 9 They therefore enhance Irans perceived hostility and influence Congress to remain fearful of Iran as well. Professor Raymond Tanter agrees with this idea saying, Because of Washingtons practice of demonizing the alien others the US overestimates the rogue state threat. 10 Therefore, the United States could never retract the economic sanctions against Iran as long as Iran continues to exhibit rogue behavior. The US is suffering from a motivated bias. To alleviate sanctions would be to admit that Iran never posed a real threat after all. A second reason why the United States continues to sanction Iran is because of the influence of domestic politics on the law makers. It is interesting to note that the United States government is relatively unitary in its views about Iran. Almost all lawmakers view Iran as a threat that must be dealt with forcefully. The domestic conflict over Iran does not occur in Congress, but between the US business sector and the ethnic lobbies. 11 Tanter shows that the Pro-Israel community pushes the American government to magnify Irans threat. He claims that the pressure begins in Israel itself. The Israeli leaders recognize that they are a relatively wealthy nation and are strong militarily. They are not totally dependent on US support, but do not want the United States government to realize this. They therefore portray Iran as more dangerous than they actually are, thus, holding on to US support. In turn the Pro-Israel community in the United States pressures Congress to maintain support for Israel and sanction Iran. 12 The main player for the Pro-Israel group is the American Israeli Public Affairs Committee. Since Iran became an enemy of the United States, AIPAC has aggressively lobbied for anti-Iranian measures. At the same time its membership rose from only 9,000 in the late 1970s to 55,000 by the end of the 80s. 13This surge in membership suggests that similar to the Pentagon, the American people hold a motivated bias against Iran as well. AIPAC believes that sanctions such as the Iran and Libya Sanctions act impose a real cost on Iran and will eventually cause it to change its behavior. Regardless of the truth, the pressures AIPAC applied enabled the act to gain Congressional approval very quickly. 14 The major voices against the Iran and Libya Sanctions act were those of US oil companies and others with business interests in the Islamic Republic. However, they were relatively quiet compared to their opposition and never openly opposed AIPAC. Tanter explains this by pointing out that businesses groups fear being labeled anti-Semitic as well as they fear being labeled supporters of terrorism. They therefore take their losses and look for business opportunities elsewhere. In Tanters words, ethnic politics triumph over business economics. 15 In addition to motivated biases and domestic pressures, the United States maintains sanctions against Iran for moral reasons. The United States considers itself a morally sound country. It can not back down from a state that is knowingly sponsoring terrorism and causing international disorder. Apart from a military campaign, sanctions are the strongest way that the US can attempt to coerce Iran to cease its rogue behavior. Even though current sanctions are not working, the US feels it has a moral obligation to continue its efforts. So if the United States is so dedicated to imposing sanctions against Iran, why have they not been effective? A major reason why the economic sanctions have not been effective is because they have not been multi-lateral. Other than Israel, El Salvador, and the Ivory Coast, no other nations support the US sanctions. 16 While the United States has denied giving economic support to Iran, many Japanese and European companies have more than made up for the economic loss. The US has offered to negotiate with Iran, but because the Europeans and Japanese refuse to join with the US, unilateral actions have not been enough to pressure the current regime into dialogue. And, no Iranian leader will authorize a dialogue with the United States while Iran is under economic sanctions. He would be totally discredited internally.17 The countries of the European Union purchase 20% of their oil from Iran and Libya, and their oil companies have major investments there. They claim to deal more effectively with the rogue nations by doing business as usual and maintaining cordial contact. 18 The US sanctions are therefore viewed by Europeans as naive and idealistic. The Europeans feel that they understand third world countries and political movements better than Americans do and should be left alone to reason with and persuade countries like Iran to act responsibly. Germany is Irans number one European trade partner and the reasoning principle is the central premise of their critical dialogue with Iran. 19 Europeans predict that the Iran and Libya Sanctions act will fail to change Irans behavior. As long as they continue not to engage in sanctions of their own they are right. An equally important reason why economic sanctions have not worked against Iran is that, from the Iranian point of view, such sanctions are unfair. Iran feels that they are threatened and militarily insecure. They feel isolated internationally and face trouble on all their borders. To Irans west, north, and east are unstable regimes. To its south lies a suspicious group of rich Arab countries supported by the United States. At the same time, Iranian leaders believe that America refuses to accept the revolution and is unable to normalize relations with a country that supports Islamic ideals. 20 While it is fair to admit that Iran may be misunderstood, it can not be denied that they garner intense hatred for the United States. Irans grievances with the US are linked to the past. The current regime dislikes the US for its support of the Pahlavi regime which was considered illegitimate by the revolutionaries. The US is also hated for its support of Iraq during the Iran - Iraq War. Additional disapproval is placed on the US for its refusal to release Iranian assets which were impounded after the revolution. Finally, Iran hates the US because their economy is hurt by the economic sanctions. 21 In addition to Iranian hatred of the United States, economic sanctions against the regime have failed because Irans leadership is far from unitary. As a result, its foreign policies have been incoherent. President Rafsanjanis political power has been undermined by the extreme radicals in the country. 22 Their leader, the Ayatollah Khameini exerts a strong influence on the Iranian government. The consequence of these competing forces are policies that appear haphazard and inconsistent. Perhaps Anthony Cordesman of the Center for Strategic International Studies sums up best the problems with US sanctions as seen by Iran. What we are doing with our current sanctions policy is simply strengthening the radical elements that are making the US into the devil, into the enemy, into the threat. In other words, sanctions by the United States give Iranian leaders something to rally behind and a common enemy to fight against. Finally, sanctions against Iran have not obtained their desired effect because sanctions as a whole are flawed diplomacy. They represent an attempt to use an economic instrument to achieve a political objective. Diplomacy is about persuading other governments to do or not to do something you want. Trade is only one tool which is available to do this, but it is never cost free. 23 Any time the United States restricts trade, it loses exports it would otherwise make. Sanctions can also get legally messy. The Iran and Libya Sanctions act represents extraterritorial application of US law. Trade as a coercive tool is likely to be effective if it is used in conjunction with allies, but only if the allied cooperation is voluntary. 24 Current US sanctions use coercion to force allied cooperation. Not only are these sanctions restricting the United States own trade and investment, but they are penalizing allies who do not similarly restrict their own. This results in legal entanglements and antagonizes the United States friends. Consequentially, the US isolates itself nd loses the ability to influence outcomes. Meanwhile, Iran continues to behave contrary to American demands. Sanctions are further flawed because they rarely bring about their desired outcome. Cuba has been under sanctions for nearly thirty five years and Castro continues to remain in power. Iranian sanctions have been constant for almost seventeen years. Such information suggests that merely inflicting economic hardship on the citizens of a country will not always be effective coercion. 25 And once launched, sanctions are hard to terminate. The combination of domestic politics and mutual contempt assures this. Iran is a perfect example. Thus far it has been shown that sanctions have not, and do not appear able to change Irans behavior. Iran is unlikely to change its behavior based on appeasement and, domestic politics prevent President Clinton from making concessions to Iran. A policy of expanded confrontation would only agitate US allies, and could result in an angrier Iran and an increase in terrorism. What then, are some alternative options for President Clinton and the United States government to explore? Geoffrey Kemp of the Carnegie Endowment suggests a centrist policy towards Iran. He recognizes that sanctions alone have not been effective in coercing Iran to change its behavior. The United States should therefore attempt to normalize relations with Iran. This would entail offering Iran rewards in return for compliance. One specific reward to offer Iran would be granting it better terms for repaying its debts and obtaining additional loans from international financial institutions in return for modified behavior. 26 Additional sanctions could be lifted as Irans actions further changed. Kemp understands that in order for this to happen, however, a consensus must be reached with the United States allies. 27 The United States goal must be to present the Iranian regime with a unified front if it continues its rogue actions. At the same time, the Europeans must assure Iran that their own relationships will deteriorate if Iran continues its support of terrorism. The US can not act alone against Iran. Until a concerted allied approach exists, more extreme policies offering either more carrots or more sticks are not practical. If these actions fail and Iran continues with its terrorist attacks, the media must publicize these crimes worldwide. The more negative attention Iran receives, the more likely other countries would be to isolate it. Eventually the regimes leaders would have to come around. Once a consensus is reached, Iran will have no choice but to open itself up to dialogue. They will recognize that it is in their best interests to communicate with the US and Europe and will hopefully become a law abiding nation. Presently the United States and Iran are involved in a tense situation. The US tries to change Irans terrorist activities by applying economic sanctions. Meanwhile, Iran reacts to these sanctions by increasing its support of terrorism. The result is a dangerous escalation that can not be permitted to continue. Handicapped by a motivated bias and domestic pressures, President Clinton is unable to move towards appeasement. Constrained by international pressures, he can't significantly expand the US-Iranian confrontation either. Therefore Clinton has no choice but to employ a tit-for-tat policy. As long as Iran continues its terrorist actions, economic sanctions will remain. If they decide to tone down their actions, they will be rewarded with economic assistance. While such a plan appears simple in theory, underlying complexities make its success virtually impossible. What we are left with is two nations, unable to understand eachother and unlikely to reach a common ground. As a result the stability of the world suffers. Endnotes: 1 Tanter, Raymond PS472 note 1. Fall 1996 2 Phillips, James. The Challenge of a Revolutionary Iran. Committee Brief No.24, The Heritage Foundation. March 29, 1996 3 Phillips, James. The Challenge of a Revolutionary Iran. Committee Brief No.24, The Heritage Foundation. March 29, 1996 4 Ibid. Phillips 5 Ibid. Phillips 6 Christopher, Warren. State Department Briefing . May, 1 1995 7 Port, Chris . Term Paper. PolySci472 Fall 1995 8 Kemp, Geoffrey. Forever Enemies:American Policy & the Islamic Republic of Iran. The Carnegie Endowment 1994 , p.105 9 Klare, Michael. Rogue States and Nuclear Outlaws. Hill and Wang. 1996 p.12 10 Tanter, Raymond. Iran chapter of Rogue Regimes 11 Ibid. Tanter 12 Ibid. Tanter 13 Ibid. Tanter 14 Ibid. Tanter 15 Ibid. Tanter 16 Port, Chris . Term Paper. PolySci472 Fall 1995 17 Friedman, Thomas. Rethink Iran. The Times-Picayune. Sept. 12 1996 18 Examiner Editorial Writer, The San Francisco Examiner. Aug. 7 1996 19 Hoagland, Jim . Sanctioning Terrorism. Sacramento Bee. Aug. 12 1996 20 Kemp, Geoffrey. Forever Enemies:American Policy & the Islamic Republic of Iran. The Carnegie Endowment 1994 21 Ibid. Kemp 22 Ibid. Kemp 23 Holt, Pat. Can Trade Buy Political Change? The Christian Science Monitor. Sept. 5, 1996 24 Holt, Pat. Can Trade Buy Political Change? The Christian Science Monitor. Sept. 5, 1996 25 Ibid. Holt 26 Ibid. Kemp 27 Kemp, Geoffrey. Forever Enemies:American Policy & the Islamic Republic of Iran. The Carnegie Endowment 1994