UN Sanctions on Iran: The Dance of Mutual Deniability

by Joy Gordon on March 27, 2013

The comprehensive economic sanctions imposed on Iraq by the UN Security Council in the 1990s fundamentally changed the way we think about sanctions. Sanctions had been seen as a middle route, which was nonviolent, yet more robust than diplomacy. But in Iraq, the humanitarian impact was devastating: child mortality spiked, malnutrition was widespread, the middle class disappeared, and critical infrastructure, such as electricity and water treatment, declined precipitously and never recovered. As the humanitarian crisis continued, activists, practitioners and scholars questioned the ethical legitimacy of sanctions.

The response was the development of targeted “smart” sanctions, which would ostensibly harm only the political or military leadership of the targeted state, or block prohibited goods, without impacting the civilian population. Targeted sanctions included arms embargoes, asset freezes of individual persons and companies, visa denials, and targeted trade sanctions, such as conflict diamonds. There were still unilateral measures that were patently indiscriminate, most prominently the U.S. embargo against Cuba. But by the late 1990s, the Security Council was no longer imposing new measures that were comprehensive.

In the last couple of years we have seen a return to aggressive, deeply damaging measures that are designed to cripple the target nation’s economy as a whole, particularly in the case of Iran. The U.S. sanctions on Iran have been extreme, broadly prohibiting trade, shipping, banking transactions, and investment in Iran’s energy sector. In the last few years we’ve seen the U.S. expand these prohibitions, to restrict not only American companies, but foreign banks and companies as well. The U.S. has aggressively prosecuted major global financial institutions for violations of U.S. sanctions law, and in the last two years there have been a number of cases where banks paid penalties on the order of half a billion dollars each.

Unsurprisingly, the result has been a considerable chilling effect: it is now common to see companies refusing to engage in any transactions at all with Iranian nationals, even for clearly legal purposes. For example, a Swiss organization, the GAVI Alliance, provides vaccines to developing countries. The GAVI Alliance is not subject to U.S. law, but its efforts to provide medical goods to Cuba and Sudan are hampered by U.S. restrictions on shipping companies. Canada’s TD Bank summarily closed down the accounts of Iranians residing legally in Canada. In the U.S., there are growing reports that Iranian-Americans, who in principle are permitted to send remittances to family members in Iran, cannot find any bank in the U.S. or elsewhere that will transfer the funds.

No one could plausibly claim that the U.S. sanctions on Iran are “smart” sanctions. They have crippled Iran’s ability to export oil, to buy gasoline, to import goods of all kinds, to extract and refine oil and natural gas, and to manufacture pharmaceuticals. The irony is that the UN Security Council measures on Iran are perceived to be narrowly crafted to avoid exactly this outcome. The Security Council resolutions only require member states to address cargo, technology, or financial transactions that could contribute to Iran’s nuclear program or ballistic missiles. No one would think that such a specific mandate could have humanitarian consequences—how can depriving a country of nuclear weapons affect education and food security?

But the resolutions contain “hooks” that are then invoked by U.S. allies to impose measures that mirror those of the United States, in a kind of dance of mutual deniability. The Security Council resolutions invite nations to “exercise vigilance” in their dealings with Iran, specifically with Iran’s Central Bank, and with two of its leading banks, Bank Saderat and Bank Melli. It is hard to imagine a term that is more vague and less informative than “exercise vigilance.” After all, we exercise vigilance every time we cross a street or lock a door. But a number of U.S. allies, known as the “like-minded” countries—the European Union, Canada, Australia, Japan, and South Korea—have invoked the call to “vigilance” as justification for imposing broad, damaging measures on Iran, approaching the blanket nature and severity of the U.S. sanctions. Last year, the EU cut off gasoline sales to Iran, and blocked Iranian access to European ports and shipping lines. SWIFT, the global hub for financial messaging critical for international commercial transactions, cut off access to Iran last year.

This disconnect between a seemingly narrow mandate and its broad application is far from a coincidence; it is a deliberate strategy that affords the international community mutual deniability. The EU and the “like-minded” countries can claim that they are not acting unilaterally; they are just being vigilant, as the Security Council has asked them to. At the same time, the Security Council can maintain that it has not imposed unreasonable measures on Iran; its sanctions only concern nuclear weapons and are meant to minimize the humanitarian damage.

In the end, the result is not so different than what we saw in Iraq two decades ago. If you cripple a nation’s access to shipping, energy, and banking, that will cripple its ability to provide health care, food security, electricity, transportation, and other basic needs of its population. The dance of mutual deniability may mean that it’s harder to see how the sanctions work. But that doesn’t mean they’re doing any less harm.

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