Obama Administration Not Keen on Congressional Calls to Crack Down on Iran’s Central Bank

Patrick Goodenough | November 10, 2011 | 4:47am EST
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Central Bank of Iran headquarters in Tehran (Photo: Wikimedia Commons)

(CNSNews.com) – Following the U.N. nuclear watchdog’s latest report on Iran, the Obama administration appears to be cool on some of the tougher steps members of Congress are proposing, such as bringing down the Central Bank of Iran.

Russia and China, meanwhile, look unlikely to withdraw their customary support for Tehran, complicating any attempt to strengthen U.N. sanctions.

The International Atomic Energy Agency (IAEA) said there was “credible” evidence that Iran carried out “activities relevant to the development of a nuclear device” as part of a “structured program” until the end of 2003 – when Iran is known to have dismantled some facilities – and that there were indications that some of those activities had continued after 2003 and “may still be ongoing.”

“The Agency is concerned because some of the activities undertaken after 2003 would be highly relevant to a nuclear weapon program,” it said.

The report also said Iran’s total stockpile of low-enriched uranium (LEU) produced at its Natanz fuel enrichment plant now stands at 4,922 kilograms. According to the Washington-based Institute for Science and International Security (ISIS), that amount of LEU, if enriched to weapons grade, would be enough to make four nuclear weapons.

ISIS said in an analysis that if the allegations of weaponization activities were true, that would “constitute a major violation of the Nuclear Non Proliferation Treaty.”

“The activities documented in the IAEA report, including research related to nuclear warheads, underscore that Tehran’s claims that it is only seeking the peaceful use of nuclear energy are false,” the Arms Control Association said in its assessment of the report.

Iran hid its nuclear program from the international community for almost two decades before it was exposed by opponents of the regime in 2002. Over the drawn-out standoff with the international community ever since it has consistently maintained that the activities are peaceful.

On Capitol Hill, support is growing for measures aimed at collapsing the Central Bank of Iran (CBI). Not only is it a pivotal cog in Iran’s energy and trade sectors, the institution is also suspected of facilitating illicit activities and financial transfers to organizations designated under U.S. law including the Islamic Revolutionary Guard Corps (IRGC) and Hezbollah.

With strong bipartisan support, the House Foreign Relations Committee last week approved the Iran Threat Reduction Act, which includes a provision requiring the president to determine within 30 days whether the CBI is supporting weapons of mass destruction or missile programs, the purchase of advanced convention weapons, the IRGC, or international terrorism.

If the bank is found to be doing so, the administration is required to bar any foreign bank that is doing significant business with the CBI from doing any business in the United States.

With 349 co-sponsors on both sides of the aisle, the Iran Threat Reduction Act is expected to pass easily.

In the U.S. Senate, 92 senators signed a letter to President Obama over the summer stating that the “time has come to impose crippling sanctions on Iran's financial system by cutting off the CBI.”

On Monday the letter’s co-author, Sen. Mark Kirk (R-Ill.), announced he would offer an amendment this week to foreign operations appropriations legislation aimed at collapsing the CBI.

“Following the [alleged IRGC] bomb plot and IAEA report on Iranian atomic developments, it is time for President Obama to join 92 senators who back the plan to collapse the Central Bank of Iran,” Kirk said.

But although State Department spokesman Mark Toner on Wednesday described the conclusions drawn by the IAEA report as “alarming” and said the administration would now “look at ways to impose additional pressure on Iran,” he stopped short of voicing support for the CBI initiative.

“I think that there’s a lot of ideas under discussion and under review, but I think right now I just will say that we’re looking at a range of options, with the overall intent of being ways that we can put additional pressure on Iran,” he replied in response to a question about targeting the bank.

Asked again specifically about the CBI proposal, Toner said, “I’ll just say that we’re looking at a range of options. I don’t want to say one’s off the table and one’s still on the table. I think that limits our ability to make sure that we look at all possibilities and come up with additional pressure as appropriate.”

Iran’s enablers

Any reluctance to support a measure that would punish third country companies doing business in Iran may be linked in part to China, which has been Iran’s biggest trading partner since 2009.

“Washington, worried about potentially destabilizing economic effects, has historically shied away from putting pressure on Beijing over its ties to Iran,” American Foreign Policy Council vice-president Ilan Berman wrote in an op-ed on Tuesday.

Noting reports that China acts as an enabler for Iran’s nuclear activities, Berman argued that sanctioning Chinese companies doing business with Iran may be the best way to derail the Iranian nuclear drive.

Adopting a characteristic cautious approach, Chinese foreign ministry spokesman Hong Lei responded to the IAEA report by saying all parties must “do more to promote dialogue and cooperation,” stressing that Beijing advocates a peaceful resolution to the issue.

Russian Prime Minister – then president – Vladimir Putin and Iranian President Mahmoud Ahmadinejad at a summit in Tehran in October 2007 (AP Photo/RIA-Novosti, Mikhail Klimentyev, Presidential Press Service)

Moscow is even clearer in its stance, with Deputy Foreign Minister Sergei Ryabkov saying Wednesday it was “common knowledge that Russia objects to stronger sanctions against Iran.”

Russia’s foreign ministry in a statement described the report as “a compilation of known facts that have been purposely twisted and given a political slant.”

“The authors juggle the facts to create the impression that Iran’s nuclear program has a military component,” RIA Novosti quoted the statement as saying. “This approach can hardly be called professional and unbiased.”

The IAEA’s 35-nation board of governors, which meets on Nov. 17-18 in Vienna, will now consider whether to refer the report to the U.N. Security Council.

When the board of governors in previous years voted for resolutions referring Iran to the Security Council, Russia and China voted in favor along with most democracies, while only a small handful of Iranian allies voted no (Venezuela, Cuba and Syria in February 2006; Venezuela, Cuba and Malaysia in November 2009). A larger group of developing countries abstained.

With Russia and China less likely to vote for referral this time, their opposition could sway some developing nations, which this year account for 17 of the board’s 35 seats.

If the board does vote to refer Iran to the Security Council, any attempt by the top U.N. body to pass a fifth Iran sanctions resolution will run into opposition from veto-wielding Russia and China.

Russia and China did support the four previous sanctions resolutions, in Dec. 2006, Mar. 2007, Mar. 2008 and Jun. 2010.

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