New Iran sanctions: Can U.S. bring other countries on board?

McClatchy NewspapersSeptember 25, 2009 

WASHINGTON — The announcement and confirmation Friday that Iran has constructed a secret underground plant to enrich uranium raises the prospects that the United Nations Security Council will propose new international sanctions in attempt to derail Iran's nuclear ambitions.

The U.S. and its allies Friday gave Iran two months to comply with international demands to come clean on its expanding nuclear program, or face broader international sanctions, perhaps even targeting the country's gasoline imports.

In a news conference at the close of the Group of 20 summit in Pittsburgh, President Barack Obama declined to say what sanctions he was advocating but noted that "if you have the international community making a strong, united front, then Iran is going to have to pay attention."

Experts don't expect Iran to change course, making it likely that Obama will have to convince other nations to do as the U.S. and adopt financial sanctions.

"The United States is doing that, some of the other countries are doing it, but it is not universal," said Gary Sick, an Iran expert at Columbia University in New York and a former staff member of the National Security Council.

The U.S. has sanctioned more than 40 Iranian entities, including state-owned banks and construction companies. These sanctions have lacked a global buy-in, but that could change.

"There are some things that could give us some immediate success and traction. I think what people are hoping is that it's going to animate partners to sign on to these things," said Matthew Levitt, a former deputy assistant Treasury secretary for intelligence who helped craft past sanctions on Iran.

These measures include having a number of allies adopt the sanctions to isolate Iranian banks already imposed by the U.S.; trying to isolate the Central Bank of Iran; and creating an inspection regime for ports of call visited by Iran's shipping line, known by its acronym IRISL.

"We're going to have to do a lot of different things, at a lot of different enforcement levels," said Levitt, noting that sanctions can put "significant pressure on a regime already facing tremendous domestic political challenges."

Members of Congress fired off statements Friday calling for new sanctions targeting Iran's gasoline imports.

"It is time to impose meaningful sanctions on the Iranian government," said Indiana Rep. Mike Pence, the chairman of the House of Representatives Republican Conference.

Sen. Russ Feingold, D-Wis., a member of the Senate Foreign Relations Committee, said: "The international community must act, through multilateral sanctions if necessary."

Despite being a global oil producer, Iran imports about 40 percent of its gasoline, much of it from Europe and increasingly from China.

A Western European official familiar with the Iran discussions at the Group of 20 summit in Pittsburgh confirmed that oil and gas sanctions were a likely route to explore. However, he emphasized that discussions wouldn't pick up steam until after an Oct. 1 meeting on Iran's nuclear program with the U.S. and other major powers.

"We're not at that point," said the official, who wasn't authorized to make a formal statement on behalf of his country.

Russia's and China's positions on sanctions will determine whether gasoline is targeted for sanction, he said.

Experts such as Sick, the Columbia professor, think that gasoline sanctions would prove ineffective.

"The smuggling across the border is enormous . . . and China has just announced it is supplying Iran a full third of its needs for refined petroleum products," he said. "It looks extremely unlikely they would go along with it."

Going after Iran's imports of gasoline would be risky. Iran has threatened to disrupt both oil supplies and the passage of oil tankers through the Straits of Hormuz if it's attacked by Israel or the U.S.

"It's hard to envision a positive outcome here. This could ultimately result in a severe dislocation in oil markets. Certainly, this is not a situation that is going to have Israel sitting idly by for long," said John Kilduff, an energy analyst for investment firm MF Global in New York. "I think it's going to be a volatile fall as this (issue) progresses and comes to a head."

A recovering global economy and potential Iran supply problems could push oil back up around $100 a barrel late this year, he said. Oil traded around $66 a barrel in after-hours trading on Friday.

"We're going to the precipice on this one in short order," Kilduff said.

(Margaret Talev in Pittsburgh and David Lightman in Washington contributed to this article.)

ON THE WEB

Levitt testimony on sanctions

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