Mon, Oct 29, 2007 - Page 9 News List

Latest sanctions on Iran may be overly optimistic

Despite mixed results with past sanctions against Iran, Cuba and North Korea, the US is still hopeful that economic pressure can lead to a `diplomatic solution' with Tehran

By Jeannine Aversa  /  AP , WASHINGTON

Economic sanctions in place for decades have not stopped Iran from pursuing nuclear ambitions or, if Bush administration allegations are true, from funding terror across the Middle East.

So why would the sanctions announced Thursday -- a big dose of more of the same -- cause Iran to change its policies?

The latest sanctions might even make Iran dig in more, analysts said.

``It is unlikely to directly affect Iranian behavior on the nuclear side,'' said Robert Hunter, a Middle East expert and senior adviser at the RAND Corporation. ``It is a symbolic message to Iran and everyone else that the US is deadly serious.''

The US has had only mixed results using sanctions as a foreign policy tool in the past against countries like Iran, Cuba and North Korea.

Under decades-old US financial sanctions, virtually all trade and investment activities with the government of Iran, including government-owned banks, are prohibited. Other sanctions have hit Iranian entities that the US believes are linked to terror activities and the proliferation of weapons of mass destruction.

`banker of terror'

Despite all that, the US says Iran funnels hundreds of millions of dollars a year to Hezbollah, Hamas and other groups the US considers terror organizations. The US has called the country a ``central banker of terror.''

Tehran also has not backed down from its nuclear ambitions, which the US insists are to make nuclear weapons.

Iran's defiance of UN Security Council demands that it stop uranium enrichment has led to two sets of economic sanctions. A third, tougher set of UN sanctions has been stalled by opposition from China and Russia.

The US and some of its allies accuse Iran of secretly trying to develop nuclear weapons and have demanded it halt uranium enrichment, a step both to the production of energy and the production of atomic weapons. Iran denies the claim, saying its program is for peaceful purposes only, including generating electricity.

US Secretary of State Condoleezza Rice, in announcing the new sanctions with US Treasury Secretary Henry Paulson, said Washington remains open to a ``diplomatic solution.''

The latest sanctions against Iran, the harshest since the takeover of the US Embassy in 1979, include among other things targeting Iran's Revolutionary Guard Corps, part of the country's military, as well as the Iran's special operations unit, Quds Force, which is part of the Guard Corps.

Three of Iran's largest banks -- Bank Melli, Bank Mellat and Bank Saderat -- also were targeted. The US had already moved in 2006 to sever Bank Saderat from the US financial system.

The order also designates companies believed to be owned or controlled by the Revolutionary Guard Corps, as well as military officials and people involved in Iran's ballistic missile programs.

Under the action, any financial assets found in the US belonging to those named Thursday must be frozen. Americans also are prohibited from doing business with them. Essentially those targeted are frozen out of the US, the world's largest economy and home to the globe's most influential banking system.

Importantly, the new sanctions can make others outside the US think twice about having relationships with those blacklisted.

That requires skillful financial diplomacy.

The US, which has been pressing allies in Europe, Japan and elsewhere, has had only limited success with persuading financial institutions outside the US to voluntarily sever or scale back business with Iran.

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