Obama Administration Ignores Hawks’ Demands on Sanctions

The Obama administration announced penalties today against Naftiran Intertrade Co., a Swiss subsidiary of Iran’s national oil company but avoided any mention of Chinese or Russian companies who continue to trade with Iran.

Neoconservatives have called on the Obama administration to sanction Russian and Chinese companies—despite the likely political and economic backlash which would follow—as well as several German and Swiss companies who participate in trade with Iranian companies. Earlier this month, the Foundation for Defense of Democracies’ Iran Energy Project released a report on this theme.

In today’s Wall Street Journal the FDD’s Benjamin Weinthal and Mark Dubowitz (Dubowitz co-authored the above mentioned report) made the case for  U.S. sanctions against Ceresola TLS, a Swiss firm which signed an agreement to provide tunneling technology to an Iranian engineering firm; Elektrizitäts-Gesellschaft Laufenburg (EGL), a Swiss firm which signed a gas contract with the National Iranian gas Export Company; and various German firms which continue to export to Iran.

Meanwhile, the State Department did recognize companies who pledged to end their activities in Iran’s energy sector, including: Total of France, Statoil of Norway, Eni of Italy, and Royal Dutch Shell of the United Kingdom and the Netherlands.

“These companies have provided assurances to us that they have stopped, or are taking significant verifiable steps, to stop their activity in Iran,” said Deputy Secretary of State James Steinberg at a news conference Thursday. “We welcome and applaud the decision by these companies.”

Neoconservative pundits have been quick to point fingers at Germany for increasing its exports to Iran over the first six months of 2010, as compared to the same period in 2009, and German Chancellor Angela Merkel’s unwillingness to shut down the European-Iranian Trade Bank.

As I’ve written before, sanctioning Russian and Chinese companies which do business with Iran could have severe implications for the U.S.’s bilateral relations with these two countries.

In a September 14th Wall Street Journal op-ed, FDD’s Dubowitz and Reuel Marc Gerecht made it clear that a conflict with Russia and China might just be the inevitable price to pay for enforcing sanction. They suggested that in retaliation to sanctions, Russia might deliver S-300 antiaircraft missiles to Tehran which “could well provoke an Israeli preventive strike on Iran’s nuclear facilities.” Clearly the possibility of increasing the likelihood for the “military option” is of little concern to the FDD scholars. This past July, Gerecht made the case for an Israeli bombing of Iran’s alleged nuclear facilities in The Weekly Standard.

Reading through today’s State Department announcement, it seems the Obama administration has decided not to follow the Iran hawks’ strategy of aggressively confronting every company or country which does business with Tehran.

“The absence of any sanctions on Russian and Chinese companies is very conspicuous,” observed the notoriously hawkish Rep. Ileana Ros-Lehtinen of Florida, the ranking Republican on the House Foreign Affairs Committee, according to The Los Angeles Times. The Executive Branch “must not continue to cover for Russian and Chinese activities which undermine U.S. efforts to pressure the Iranian regime.”

Although the Obama administration has refused to turn the enforcement of Iran sanctions into a stress test for U.S.-China and U.S.-Russia relations, it might only be a matter of time before hawks in Washington declare the sanctions a failure and strengthen their demands for a U.S. or Israeli military strike.

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Eli Clifton

Eli Clifton reports on money in politics and US foreign policy. Eli previously reported for the American Independent News Network, ThinkProgress, and Inter Press Service.