New sanctions would hurt but not cripple Iran

By Sylvia Westall and Fredrik Dahl – Analysis

VIENNA/DUBAI (BestGrowthStock) – A draft plan for new U.N. sanctions seeks to squeeze Iran’s banking and shipping sectors and strengthen curbs on military and nuclear work, but crippling steps were passed over in favor of big power unity.

Western powers do seem to have won backing for an extended arms embargo in the draft Security Council resolution leaked on Tuesday, a step diplomats said Moscow had earlier objected to and which may be a tough setback for Iran if states stick to it.

Some analysts said the measures broke new ground.

“Iran’s economy is going to suffer, the tools to curb its nuclear program will be strengthened,” said David Albright, director of the Institute for Science and International Security in Washington. “We should compare this to past resolutions which did not have some of the stronger language seen in this one.”

More harmful measures to the Iranian economy — to blacklist its central bank and restrict its vital oil and gas industries — were put aside weeks ago after objections by Russia and China, which have close business ties with Iran. Some said this meant the resolution was weak.

“It is a pretty light-weight resolution. The emphasis was more on getting some sort of international agreement,” independent Abu Dhabi-based economist Mohammed Shakeel said.

“The content of the resolution is probably less important than the fact that an agreement has been reached with Chinese and Russian support.”

The draft measures seek to restrict expansion of Iran’s banking activity if there are suspected links to nuclear proliferation and the draft calls on states to exercise vigilance over transactions involving Iranian banks.

Iran’s financial system already faces restrictions and Tehran has been able to get around these in the past, analysts said. However the new steps would make it increasingly unattractive to do business with Iran.

The banking measures could restrict its ability to expand and improve its nuclear work, said Mark Fitzpatrick of London’s International Institute for Strategic Studies, adding that Iran had already been having some difficulty in acquiring components.

“The sanctions, depending on how strictly there are implemented, will further restrict Iran’s ability to acquire the wherewithal for its nuclear program in the sense that its access to the finances will be restricted,” he said.

“This will depend however on individual states and in particular the European Union agreeing to adopt stricter sanctions than those required by the Security Council.”

But he said sanctions would probably not fully curb Iran’s ability to make advanced equipment for its atomic work because it did not appear to rely as much on foreign goods for this.

Iran has been able to operate a large uranium enrichment program despite current sanctions although its equipment has been prone to breakdowns. According to Western intelligence agencies, Tehran has also conducted research on atomic weapons.

Iran says this intelligence is fabricated and that its nuclear program is for peaceful uses only.

ARMS AND SHIPPING

The sanctions would extend existing restrictions on the supply of missile technology to Iran to include further categories of heavy weapons, such as tanks and combat aircraft.

“It would be an embargo on all potentially offensive weapons,” said Pieter Wezeman, a researcher at the Stockholm International Peace Research Institute, adding that it was the same kind of text used previously for North Korea.

“It would pose major problems because Iran is strongly dependent on imports for its weapons.”

But he said the resolution would allow Iran to purchase air defense systems, including the advanced S-300 from Russia.

“Whether Russia would still be politically prepared to do so is difficult to assess,” Wezeman said.

Independent defense analyst Paul Beaver said the measures would be significant if they were implemented, although he pointed out that such restrictions were hard to put in place.

“The problem with embargoes is that you have to police them and step up intelligence gathering. It is not a simple matter of making a resolution. You have to enforce it as well.”

The draft resolution also calls for an international inspection regime for vessels suspected of containing cargo related to Tehran’s nuclear program, a move meant to bolster existing measures.

Analysts said the sharper language on cargo and shipping was meant to enforce the resolution and give states and regional groups a foothold to implement their more restrictive measures.

“Clearly this is an attempt to enforce the resolution. It worked fairly well against North Korea,” said Andreas Persbo, Executive Director of the Verification Research, Training and Information Center (VERTIC) in London.

He added however that Iran’s trade volume was higher compared to North Korea’s so it was not clear how effective the interdictions would be in practice.

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New sanctions would hurt but not cripple Iran