The Obama administration made the correct decision earlier this week to impose sanctions on Belarusneft, a subsidiary of the Belarusian petrochemical company Belneftekhim, for doing business with Iran. But it’s small beer — Belarusneft is hardly a major player in Iran’s energy industry. And this latest announcement of sanctions suggests to some in Congress that the administration is not really that serious about enforcing sanctions on Iran after all.
Last year, Congress passed the Comprehensive Iran Sanctions, Accountability and Divestment Act by overwhelming majorities in both houses, and President Barack Obama signed the bill into law in July 2010. The sanctions bill was supposed to be a strengthening of the bill already on the books — the Iran Sanctions Act (ISA) of 1996. And Congress crafted last year’s bill to send a clear message to the White House, the Iranian leadership, and energy firms around the world: The U.S. government was finally getting serious about Iran.
Under the enhanced ISA, when provided with credible information that any entity might have invested $20 million or more in Iran’s energy sector, the administration is required to investigate them. The law also prohibits companies from supplying Iran with refined petroleum and any related technology, goods, or services.
In 2007, in clear violation of U.S. sanctions, Belarusneft struck a $500 million agreement with Naftiran Intertrade Company to develop Iran’s Jofeir oil field. And even more recently, the company has completed deals with other Iranian companies to develop the Band-e-Karkeh and Azagedan oil fields. In 2010, Naftiran, an Iranian company operating out of Switzerland, became the first company sanctioned under the Iran sanctions bill.
Obama deserves credit for finally sanctioning some companies — a step neither Presidents Bill Clinton nor George W. Bush took. The U.S. Department of the Treasury had already been watchful of Belarusneft’s parent company Belneftekhin, since it’s controlled by Lukashenko. In the administration’s defense, as the State Department has quietly put pressure on international energy companies, an increasing number of them have voluntarily terminated their trade with Iran.
Yet Congress remains justifiably concerned. On March 29, after the Belarusneft designation announcement, Sens. Mark Kirk, Joseph Lieberman and Jon Kyl sent Secretary of State Hillary Clinton and Secretary of the Treasury Tim Geithner a letter expressing disappointment over what they see as the lack of “full compliance with the sanctions regime put in place by Congress.” The senators wrote that they are “deeply concerned with what appear to be sanctionable activities by other entities involving energy investments in Iran, the provision of refined petroleum products to Iran, financial relationships with Iran, as well as the regime’s proliferation activities.”
In the end, the time for an incremental approach has come and gone. Only tough sanctions against meaningful targets will inspire confidence that the administration is committed to exhausting every means short of war to stop Iran from building a nuclear weapon.
Mark Dubowitz is executive director of the Foundation for Defense of Democracies (FDD) and head of its Iran Energy Project. Laura Grossman is a senior research analyst for FDD’s Iran Energy Project.