The United States of Sanctions
The Use and Abuse of Economic Coercion
Even as Iran dismantles large portions of its nuclear facilities and the United States lifts sanctions, critics continue to believe that Iran is bent on achieving regional hegemony, is increasing its support of proxies such as Hezbollah in Lebanon and the Houthis in Yemen, and is likely to cheat on the nuclear deal. As Republican presidential candidates Ted Cruz and Marco Rubio like to remind voters, Iranian Supreme Leader Ayatollah Khamenei continues to claim that “Death to America” is a pillar of Iranian culture. But instead of taking Khamenei at his word, which is meant more for Iranian hard-liners, observers should focus on Iran’s actions.
Iran has made historic strides. It has complied with the nuclear deal in full up to this point, sooner and more comprehensively than expected. It has returned a number of unlawfully detained Americans, and when U.S. swift boats errantly breached Iranian territory, Iran set the crews free in less than a day—and with all their gear intact.
Of course, getting to this point has not always been smooth. Iran can seem erratic, compliant one moment and lashing out the next. But there is a method to Iran’s madness. Following cooperation with doses of defiance allows it to move forward on the nuclear deal while appeasing domestic hard-liners and keeping up the appearance that it is standing up to the United States.
For example, subsequent to the nuclear deal signing in July, and after Russia got involved in Syria in September, Iran intervened more deeply in Syria by supplying President Bashar al-Assad with additional military advisers, though with far fewer troops than predicted. Then not long after it signed the nuclear accord, Tehran rapidly passed the legislation through its parliament and the Council of Guardians, and by the supreme leader. Iran “covered” its cooperative behavior by convicting Washington Post reporter Jason Rezaian of espionage and violated sanctions by testing its first medium-range ballistic missile. Later, as it initiated a significant drawdown in Syria, Iran tested yet another rocket.
And just when it appeared that Iran was warming up to the United States, Khamenei issued a dictum in October saying that further negotiations with the United States were “forbidden.” Days later, however, Iran accepted an invitation to join the West in talks about Syria. Shortly after that, Iran launched a wave of cyberattacks. Iran also ramped up cyberattacks just before the nuclear deal, but toned things down during the actual negotiations, when its interests were immediately at stake.
Moreover, since the nuclear deal, Iran’s positive actions have outweighed its negative ones. It has dismantled thousands of nuclear centrifuges, shipped 25,000 pounds of enriched uranium out of the country, and disabled its plutonium heavy water reactor at Arak. It complied with a deadline from the International Atomic Energy Agency to provide evidence that it ended the military application of its nuclear program. After a U.S. warship forced an Iranian ship, loaded with weapons for the Houthi rebels in Yemen, to return to port, Iran backed off significantly from militarily supporting the group. And in November, after the attacks in Paris, Iran began cooperating more directly with the United States against the Islamic State (also known as ISIS) via the Shia militias that it influences in Iraq. Prior to Russian intervention, Iran also negotiated two different cease-fires in western Syria and, at home, granted civilians greater freedom. Now it has released five American hostages—through a harmless prisoner swap, which Republicans again decried.
Iran’s behavior suggests that it plans to stick to the deal, which it took considerable risk in negotiating, because, quite simply, it needs the sanctions lifted in order to heal its bruised economy. Iran happens to be interested in gradually normalizing its relations with the rest of the world, and even in playing a leadership role on the regional stage—but it has been careful to take pragmatic steps, and at a protracted pace. The top leadership paid close attention to the overwhelmingly positive response of average Iranians to both the interim and final nuclear deal signings; it knows its people want greater integration. However, Khamenei will not risk regime destabilization or having Iran appear as if it is in the business of giving in to the West, so Iran will undoubtedly continue to act defiantly—though with little material consequence for the United States.
With important elections coming next month, it may appear at first glance as if Iran has fallen back to its old disruptive ways, at least in the short run. Khamenei is likely to give space to hard-liners in order to balance out the recently strengthened moderates led by President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif. In the wake of its full compliance with the nuclear deal, thus far, and especially now that the United States has enacted fresh sanctions in response to Iran’s missile tests, we should expect not only more revolutionary rhetoric but also occasional bouts of bad behavior—detaining yet another American, using its own swift boats to buzz U.S. destroyers and carriers in the Gulf, or putting regulatory hurdles in the way of U.S. firms seeking to do business in Iran.
The West, and the United States in particular, plays a critical role in determining whether Iran will continue to progress toward greater moderation both at home and abroad. For this reason Washington must stay focused on sending Iran positive signals to further incentivize acceptable behavior and to bolster the moderates. In fact, this is the most important factor influencing Iran’s decision over whether it will continue its cooperative behavior. The United States has already provided some incentives by inviting Iran to top-level talks on Syria and by releasing Iranian assets once it achieved the first round of compliance with the nuclear deal. It could also work with the UN to bring Iran into talks on Yemen. But seeking to punish Iran for harsh moves in the lead-up to the parliamentary elections will directly strengthen its hard-liners. As such, it was unwise to proceed with sanctions over Iran’s missile tests—essentially a gift to the hard-liners who oppose Rouhani and Zarif. Were the West to begin taking its own hard-line stance, thereby forcing Iran back into the cold, one can be certain that Iranian hard-liners, under Khamenei’s approval, will begin to hold sway again.
After Iran’s parliamentary elections, the West needs to continue avoiding any disincentives that could trigger defiant behavior from Iran. That could, in turn, lead to a tough vote among the P5+1 (China, France, Russia, the United Kingdom, and the United States, plus Germany) for snapping nuclear sanctions back into place. In fact, the new sanctions alone could catalyze Iran’s next round of menacing actions, so the West should find additional ways to incentivize Iran to stay on the moderate path. This is particularly important at this juncture. Saudi Arabia is proving to be an unreliable ally in this regard, particularly since Tehran cut off diplomatic relations with Riyadh after the kingdom executed an outspoken Saudi Shia cleric.
It is still to be seen whether Iran will fully embrace global integration. Much of it depends on its domestic politics. As its moderates make use of sanctions relief to repair their economy, the hard-liners will still be a powerful part of the regime and will no doubt resort to additional menacing behavior to weaken them. Lest the West tempt the supreme leader to allow these hard-liners to engage in more than just moderate defiance, it behooves the United States and its allies to remain focused on strengthening Iranian moderates and, ultimately, to bring Iran fully in from the cold.