Political Science 472 S98

International Security Affairs

Professor Raymond Tanter

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Ginger L. Zabel

June 16, 1998

Dealing with Iran:

Policy and Motivations in the International Setting


Why does the US government frequently apply sanctions on "rogue states" despite lack of ally support for such sanctions?

More specifically, when looking at the recent trends in US policy dealing with Iran, what are the motivations behind incorporating sanctions and what changes in circumstances have led to a seemingly modified US policy with regard to foreign interests in the country?


Short Background on Recent Events


The United States broke diplomatic relations with Iran in 1979 following Tehran's support of student radicals who stormed the US embassy and held 52 Americans hostage for 444 days. Since then, the US and Iranian governments have cooperated in a limited fashion though they still disagree on numerous issues in the Middle East1 .


According to an official release from the US State Department on January 8, 1998 these issues include Iranian policies on support for terrorism, the development of weapons of mass destruction, and its support for violent opposition to the Middle East peace process.2


This release was in response to the words of Iranian President Khatami's January 7 address to the American people on CNN. The interview was the first time that an Iranian president had addressed the American people on television since the Islamic revolution of 1979.3


The media widely regarded the address as a signal that Iran was seeking better relations with the West in spite of President Khatami's clear statement that he was not seeking a dialogue between the governments of the two nations.4


In addition, there was concern over Russian missile technology being sold to Iran. A New York Times article dated March 9, 1998 states "Under strong American pressure, the Russians have taken a number of steps, including a new decree by President Boris Yeltsin tightening controls on the export of missile know-how to Iran. But American officials are waiting to see if the Russians strictly enforce the measure."5 Sources from Israel and Russia itself also expressed concern over Russian weapons technology seeping into Iran.6 7 8


This came in the midst of US discussion over enacting the Iran and Libya Sanctions Act of 1996 against three foreign oil companies who were investing in a multi-billion dollar deal in Iran's South Pars oil field. After a year of negotiations, a White House Fact Sheet on non-proliferation and counter-terrorism, released on May 18, 1998 announced a 9-C waiver of sanctions for the specific project involving France's Total, Russia's Gazprom, and Petronas of Malaysia.9


A White House press briefing10 the same day details the reasons for the waiver to be put in place. These reasons include increased cooperation from the European Union and Russia to halt the spread of nuclear and dual-use technologies to suspect purchasers in Iran. But more interesting yet is the fact that US sanctions would have had no effect on these companies since they each divested themselves of US assets prior to engaging in the South Pars deal.


Less than one month later, on June 10, 1998, the House and Senate passed HR 2709, the Iran Missile Proliferation Sanctions Act of 1998. It's purpose is "to impose certain sanctions on foreign persons who transfer items contributing to Iran's efforts to acquire, develop, or produce ballistic missiles, and to implement the obligations of the United States under the Chemical Weapons Convention."11 12


Of primary interest in the context of the Total/Gazprom/Petronas situation, the address by Khatami to the American people, and especially the concern over Russian technology being sold to Iran, are sections 10213 and 10614 of this bill. Section 102 deals with a presidential report that must be submitted to the Committee on International Relations of the House of Representatives and the Committee on Foreign Relations of the Senate, identifying every foreign person who transferred items contributing to Iran's efforts to acquire, develop, or produce ballistic missiles. Sec. 106 requires a report on the knowledge of such transactions and actions taken to prevent such transactions by the governments of primary jurisdiction over these persons.



In Rogue Regimes, Professor Raymond Tanter states, "In the context of retribution, it is unnecessary to evaluate the effectiveness of economic sanctions in changing a regime's behavior. They are effective because sanctions make interested domestic groups "feel good." While it is not mandatory to invoke a rehabilitative test, if one were to do so, the issue would be whether a policy that makes the American people feel good makes the regime in Tehran feel bad enough to alter its ways."


While Tanter's section is entitled "Retribution Trumps Rehabilitation," and he makes an effective argument that "American Politics and idealism trump alliance obligations," the response to recent occurrences explained in the background section imply a shift in US policy toward Iran.


To explain such a phenomenon, it is important to remember that psychological explanations for actions should not be reserved for the actions of rogue states only.


The United States policy makers and their allies act out of the same windows of opportunity and basements of fear. Their actions may not include sponsoring terrorism and proliferation of WMD, but the reasoning behind policy decisions is consistent with their sense of threat perception and opportunities at any given time. Prospect theory allows us to examine this potential shift in US policy with regard to Iran and US allies.


The Iran and Libya Sanctions Act has failed the rehabilitative test. The policy of dual containment has failed the rehabilitative test.


While this does not matter if the sanctions were imposed for purely retributive purposes, the ILSA was clearly also an attempt by US officials at deterrence by denial. Since sanctions could be held against foreign "persons" who engaged in questionable transactions with Iran, the ILSA was also a potential threat to allied economies. Such a threat to allies would not have been credible without the desire for a rehabilitated Iran as espoused by official US statements on the matter.17


US retributive actions against Iran seemed to work more out of a basement of fear than a window of opportunity. Since Clinton signed the ILSA less than a month after the TWA Flight 800 explosion, there is reason to believe that domestic pressure for retributive punishment may have had an impact on the signing of the Act in its final form. According to Tanter, "the Clinton sanctions also had a domestic political bonus for him: they sent a signal to the pro-Israel community that wrongs were being righted."


Since the January 7 address on CNN by Iranian President Khatami, a window of opportunity has opened for a US shift in policy toward Iran. While this window is not large enough to deal with Iran in a way that would encourage direct dialogue between Washington and Tehran, or to cause President Clinton to end the National Emergency with respect to Iran20 , it is large enough to allow United States diplomats room to align themselves more closely with their allies.


Three situations that allow this small shift in US policy are Khatami's address to the United States, the threat of Russian missile technology being sold to Iran, and the fact that the Iran and Libya Sanctions Act would have had no effect on the investment of Total/Gazprom/Petronas in the South Pars oil field.


Khatami's address was of limited political value in that it called for increased cultural exchange between Iran and America without a direct political dialogue. Yet the desire for a "people exchange" is seen as the first step in a long-term process that might lead to the type of discussion that US government officials desire.21


The possibility of Russian missile and nuclear technology being sold to Iran and discussions with the Russian government regarding increased export controls of these sensitive materials allowed the US government an additional reason to waive the ILSA sanctions on the oil deal.


The lack of effectiveness of the ILSA against Total/Gazprom/Petronas allowed the US a bargaining ship with EU countries and Russia that would have had no detrimental effect on the US rehabilitative or retributive sanctions against Iran. This was the window of opportunity.


Granting a waiver allowed the US a chance to apply symbolic concessions to the EU and Russia in exchange for increased cooperation in sanctioning missile and nuclear technology and creating tougher export controls. Since ILSA would have had relatively little effect on the oil deal, the US took no risks. Yet an opportunity was also created by the situation for US allies to maintain the possibility of future economic opportunities in Iran while appeasing the US government's desire for sanctions. Again, no risks were taken since the concessions only strengthened information sharing and already existing collaboration such as the 1987 Missile Technology Control Regime.22


Since the reference point in this case was the status quo of no change in relations with Iran because the ILSA would not effect the particular case of Total/Gazprom/Petronas, the possibility of gains were more salient in the minds of US policy makers. The strategic interest of increased cooperation in missile and nuclear technology controls by allies outweighed the strategic interests of being seen as tough on Iran by applying such strict sanctions. The first interest could create gains, while the second would continue the status quo.


The allied reference point was a continued strain in relations with the US. Their actions seem to more closely relate to a rational choice model of decision making. Concessions on the part of the US government allowed for concessions on their side which would more closely align them with the US in regards to Iran. Yet I would argue that any "window of opportunity situation" in which there are no serious risks involved could look like a rational choice model of decision making.


The official governmental jargon with regard to Iran has not changed so no risks were taken. A strict policy of WMD technology containment is still in place as seen in the Iran Missile Proliferation Sanctions Act (HR 2709) passed shortly after the announcement of the waiver and increased allied cooperation.


Yet HR 2709 builds a groundwork for governmental responsibility regarding missile technology transactions between individual persons, their governments and Iran. Sections 102 and 106 create a framework for responsibility of implementing and executing export controls relating to such technology.


Non-proliferation and sanctions will continue to go together. They are by nature tied together, even in the form of a government office. "The Nonproliferation and Export Controls Office advises and assists the President and the National Security Advisor on all aspects of U.S. foreign policy with respect to all issues relating to nonproliferation and arms control."23


The Situation Stands As...

The Iran and Libya Sanctions Act is not done away with. It will continue to be selectively applied to corporations and persons who attempt to supply Iran with an income that could be used for the proliferation of weapons of mass destruction, terrorist activities, and inhibiting the Middle East peace process.


Waiving the ILSA for Total/Gazprom/Petronas has shown that the US policy is not set in stone and rehabilitative actions can now be prioritized above retributive actions as being the primary purpose for ILSA.


Increased cooperation between the US, European Union and Russia, as indicated on the ILSA waiver and HR 2709, will now be closer and more specifically focused on denying Iran technologies which would increase it's WMD proliferation program.


In summary, there is currently a slight tendency for the US government to lean toward a differentiated containment policy which denies Iran an unconventional weapons capability while allowing for unrelated financial investments with foreign corporations.


This policy should continue to good effect in dealing with the WMD aspect of Iranian objectives. However, none of these situations or agreements between governments deal with terrorism.


Since they ignore this chief concern of the US government and US domestic pressure, the sanctions and agreements will be put to the test at the next blatant instance of Iranian supported terrorist activities abroad. The ILSA will remain in effect for American citizens and corporations, and for future foreign corporations as the situations arise.



1 http://www.fas.org/news/iran/1998/u-s-iranian_relations_980110.htm

2 http://www.fas.org/news/iran/1998/98010801_tpo.html

3 http://www.fas.org/news/iran/1998/iran-us_980108.htm

4 http://www.fas.org/news/iran/1998/980108-mr.htm

5 http://www.fas.org/news/iran/1998/980309-iran-nyt.htm

6 http://www.fas.org/news/iran/1998/980219-il-iran.htm

7 http://www.fas.org/news/iran/1998/980408-iran.htm

8 http://www.pircenter.org/yke/messages/41.html

9 http://www.fas.org/news/iran/1998/98051802_wpo.html

10 http://www.pub.whitehouse.gov/uri-res/I2R?urn:pdi://oma.eop.gov.us/1998/5/19/9.text.1

11 http://thomas.loc.gov/cgi-bin/query/D?c105:6:./temp/~c1050HR15V::

12 http://www.house.gov/htbin/lgwww_bill?202709

13 http://thomas.loc.gov/cgi-bin/query/D?c105:6:./temp/~c1050HR15V:e1001:

14 http://thomas.loc.gov/cgi-bin/query/D?c105:6:./temp/~c1050HR15V:e10233:

15 Rogue Regimes, pg 65.

16 Rogue Regimes, pg 80.

17 See note 9.

18 Rogue Regimes pg. 68

19 Rogue Regimes pg. 67

20 http://www.fas.org/news/iran/1998/98031701_npo.html

21 see note 4

22 http://www.usis-israel.org.il/publish/press/security/archive/november/ds11118.htm

23 http://www.whitehouse.gov/WH/EOP/NSC/html/export.html