Friday, November 08, 2013

Obama Secretly Watered Down Iran Sanctions Months Ago


Apparently President Obama was carrying out his own weakening of the Iran sanctions...without telling congress or the American people.

Ace foreign policy and national security reporter Eli Lake over at the Daily Beast has the story:

The Obama administration began softening sanctions on Iran after the election of Iran’s new president in June, months before the current round of nuclear talks in Geneva or the historic phone call between the two leaders in September.[...]

A review of Treasury Department notices reveals that the U.S. government has all but stopped the financial blacklisting of entities and people that help Iran evade international sanctions since the election of its president, Hassan Rouhani, in June.

On Wednesday Obama said in an interview with NBC News the negotiations in Geneva “are not about easing sanctions.” “The negotiations taking place are about how Iran begins to meet its international obligations and provide assurances not just to us but to the entire world,” the president said.

But it has also long been Obama’s strategy to squeeze Iran’s economy until Iran would be willing to trade relief from sanctions for abandoning key elements of its nuclear program.

One way Obama has pressured Iran is through isolating the country’s banks from the global financial sector, the networks that make modern international commerce possible. This in turn has led Iran to seek out front companies and cutouts to conduct routine international business, such as selling its crude oil.

In this cat and mouse game, the Treasury Department in recent years has routinely designated new entities as violators of sanctions, forcing Iran to adjust in turn. In the six weeks prior to the Iranian elections in June, the Treasury Department issued seven notices of designations of sanctions violators that included more than 100 new people, companies, aircraft, and sea vessels.

Since June 14, however, when Rouhani was elected, the Treasury Department has only issued two designation notices that have identified six people and four companies as violating the Iran sanctions.

This is exactly the same strategy former President George W. Bush used on al-Qaeda, one of the few things he got right in the so-called 'war on terror'. The world's banking system still flows through New York, and getting barred from that particular playground can be catastrophic...unless, as I've documented here previously, you deliberately give waivers on sanctions to selected players, as the Obama Administration has done since the inception of the sanctions. According to what Lake uncovered, that watering down process has been even more widespread than anyone realized:

Mark Dubowitz, the executive director of the Foundation for the Defense of Democracies, an organization that has worked closely with Congress and the administration on devising the current Iranian sanctions, said the slow pace of designations was only one kind of sanctions relief Obama has been offering Iran.

“For five months, since Rouhani’s election, the United States has offered Iran two major forms of sanctions relief,” Dubowitz said. “First there’s been a significant slowdown in the pace of designations while the Iranians are proliferating the number of front companies and cutouts to bust sanctions.”

The second kind of relief Dubowitz said the White House had offered Iran was through its opposition to new Iran sanctions legislation supported by both parties in Congress.

By Dubowitz’s estimates, Iran is now selling between 150,000 and 200,000 barrels of oil per day on the black market, meaning that Iran has profited from the illicit sale of over 35 million barrels of oil since Rouhani took office, with little additional measures taken by the United States to counter it.

“Sounds like Obama decided to enter the Persian nuclear bazaar to haggle with the masters of negotiation and has had his head handed to him,” Dubowitz said.

Sounds like Iranian-born Obama consigliere Valerie Jarret had a say on this.

With the deal  that's shaping up in Geneva now, it looks like even the thin blanket of sanctions remaining is about to be ripped exchange for nothing.

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