The Definition and Origin of Economic Sanctions
by Talal S. Hattar for Middle East Center at University of Washington

Economic sanctions are an alternative means to war for international governing bodies, such as the United Nations, to coerce individual members into upholding their international legal commitments. We can trace this concept to Woodrow Wilson, the President of the United States and chief architect of the League of Nations, who saw sanctions as a new device that would be capable of deterring future warfare and even substituting for it. Wilson’s optimism proved unfounded. Sanctions did not emerge as a successful substitute for war. Indeed, scholars use two concepts to evaluate “how well sanctions work.” The first term is efficacy or the extent to which sanctions succeed in imposing an actual economic cost on the target country.

Four factors contribute to the efficacy of sanctions. These are: (1) speed of implementation, (2) ability of sanctioning countries to maintain sanctions, (3) trade dependency and vulnerability, and (4) ability of a sanctioned country to retaliate. Wilson’s intuition led him to believe that trade dependency/vulnerability was the most important factor.

This sort of dependence could be measured by three indices: (1) concentration of commodities within a country’s exports, (2) concentration of the countries in which a country has its exports and (3) total trade as a percentage of gross national product. The second concept used to evaluate economic sanctions is success or the extent to which the costs of the imposed sanctions force the target country to comply with the international organization’s demands. There has never been unqualified case of sanctions success. Until sanctions were imposed on Iraq, it was possible to argue that this was because there had never been a case in which sanctions were imposed with high efficacy. Sanctions had often been imposed at an agonizingly slow pace, the imposing countries often lacked the political will to enforce the sanctions over the long haul, and often the countries on which sanctions were imposed are not particularly dependent on trade. Iraq has proven to be a textbook case to prove Wilson’s theory. Sanctions have been imposed with high efficacy and have failed.

Questions:

What were the long-term effects of economic sanctions on Iraq? Example: http://www.commondreams....

What sanctions are currently imposed on Iran? See Security Council Report below and: http://www.nytimes.com/2...

What are the sanctions most likely to achieve?

What is the effect on the civilian population?

http://www.securitycounc...

Expected Council Action
At press time Council members were discussing the draft of a third sanctions resolution on Iran, sponsored by France, Germany and the UK aimed at increasing pressure on Iran to suspend uranium enrichment activities. The sponsors said they hope to vote on the draft before the end of February, but because of a likelihood of abstentions and a desire to avoid them, negotiations may continue. A lack of unanimity - for the first time on the Iran issue - would weaken the Council's message.

Key Recent Developments
On 22 February, the Director General of the International Atomic Energy Agency (IAEA), Mohamed ElBaradei, issued a report on the implementation of the Non-Proliferation Treaty Safeguards Agreement and Council resolutions 1737 and 1747 in Iran. The report covered developments on the implementation of the August 2007 work plan between Iran and the IAEA to resolve outstanding issues. It noted that:

• All outstanding issues were resolved except for alleged "weaponisation" studies on the "green salt project" (uranium processing, high explosives and a missile warhead design that could have a military nuclear dimension) which remains a major issue of concern.
• The IAEA was able to conclude that Iran's answers were consistent with its findings except for contamination at the technical university and procurement activities of the former head of Physics Research Centre.
• Iran provided access to individuals following the IAEA's request.
• Although the IAEA did not detect any use of nuclear material in connection with the alleged studies, it was not yet in a position to determine the full nature of Iran's nuclear programme because Iran has not yet given inspectors full access to inspect nuclear-related sites.

On implementation of the Additional Protocol to the Non-Proliferation Treaty, the Agency reported that its knowledge of Iran's declared nuclear programme became clearer with new provision of information, but that this was not enough. Finally, ElBaradei reported that Iran had still not suspended uranium enrichment activities and even started developing a new generation of centrifuges. The report will officially be presented to the IAEA Board of Governors on 3 March.

A draft resolution based on elements agreed among the E3 plus 3 (France, Germany and the UK plus China, Russia and the US) was introduced to the rest of the Council on 21 February by the UK and France. It tightens sanctions against Iran because of its non-compliance with the two previous Council resolutions demanding that Iran suspend uranium enrichment. In particular, it includes:

• A call on all states to exercise vigilance regarding entry into or transit through their territories of individuals engaged in Iran's proliferation-sensitive activities and a demand to notify the sanctions committee when individuals listed in the two previous resolutions or new individuals listed in annex I of the draft resolution enter or transit through their territories.
• A travel ban on some individuals listed in previous resolutions (and in annex II of the draft resolution).
• Additional names of persons and entities subject to assets freeze (in annex III of the draft resolution).
• A call to exercise vigilance in granting export credits to Iran.
• A call to exercise vigilance over the activities of financial institutions with Iranian banks.
• An embargo on nuclear-related dual-use items, with the exception of items for exclusive use in light water reactors and for technical cooperation with the IAEA. (Previous measures related to dual-use items were only discretionary.)
• A call upon states to inspect cargoes to and from Iran if there are reasonable grounds to believe that they may contain prohibited items.

The draft also welcomes progress in implementing the work plan between Iran and the IAEA, and stresses that resolving the issues would help in re-establishing confidence. It emphasises readiness of the E3 plus 3 to enhance diplomatic efforts to resume dialogue as long as Iran suspends uranium enrichment. It also encourages the E3 plus 3 Envoy, EU High Representative Javier Solana, to continue communications with Iran. Following the usual practice, the draft requests a report from ElBaradei within 90 days on suspension of uranium enrichment and all steps required by the IAEA Board of Governors to re-establish confidence.

These new measures appear to constitute a modest increment from resolution 1747.

The draft had been informally circulating since 1 February and the P5 met with all Council members to discuss it (bilaterally and collectively). But several elected Council members (Indonesia, Libya, South Africa and Vietnam) were waiting for the ElBaradei report to start discussions on the substance. It seems that only Belgium and Italy made proposals for minor amendments to the draft (expanding the tasks of the sanctions committee to bring it in line with the new resolution and clarifying Javier Solana's role), which were incorporated. In addition, several Council members apparently asked for additional explanation about cargo inspections, concerned with potential costs and influence on commercial relations with Iran.

On 4 February Iran reported it had launched a rocket from its new space centre in the Semnan province. A Russian official said this raised suspicions about Iran's nuclear programme. Iran also stated that it was testing an advanced nuclear centrifuge. The US said that this strengthened the case for a third sanctions resolution.

Also, media reports on 15 February revealed that the US shared intelligence data with the IAEA showing that Iran has tried to develop a nuclear weapon in the past, especially information on the "green salt project". The findings came from an Iranian laptop that the CIA acquired in 2004. Ali Asghar Soltanieh, Iran's envoy to the IAEA, called the data "100 percent fabricated and forged."

Council Dynamics
At press time the official position of Indonesia, South Africa, Vietnam and Libya was still unknown. But those members have previously expressed reservations about the idea of a third sanctions resolution while cooperation between Iran and the IAEA is progressing. This is why they refused to engage in discussions on the draft resolution before the ElBaradei report.

It seems that some within this group of members also believe that the role of the IAEA should be re-emphasised and that if all questions are resolved, the Council's involvement should end since the existence of hidden nuclear activities prompted the Council to act in the first place.

The US and the Europeans hold a different view. They say Iran has not complied with previous demands to suspend uranium enrichment and that, in itself, contributes to the lack of confidence and prompts calls for increased pressure on Iran.

However, some of the reluctant members may still propose amendments to weaken the draft.

The role of the IAEA and the necessity to keep the window of negotiations open is also important for many, including China, which has indicated willingness to emphasise the need for a strengthened parallel diplomatic track.

An important question is also whether the P5 consensus will hold if several elected members signal their decision to abstain.

Overall, the definition of confidence remains a divisive issue. While the US and the Europeans believe that confidence cannot be re-established until Iran agrees to suspend uranium enrichment, others think that resolving outstanding issues would be sufficient. Some also have suspicions that some Western powers, like the US, are aiming for regime change, which they say will not help attain the ultimate goal: that Iran does not seek to develop nuclear weapons.

Within the European Union, there has been no agreement to move forward on sanctions without another Council resolution because of the reluctance of some members including Sweden, Germany and Italy. It is the practice of the EU, however, to adopt measures to implement a new Council resolution.

UN Documents

Other Relevant Facts

Useful Additional Sources

• IAEA press release: Latest Iran Safeguards Report Delivered to IAEA Board, 26 February 2008
• IAEA Iran - A Balanced Safeguards Report, David Albright and Jacqueline Shire, 22 February 2008
  http://www.isis-online.org/
• Iran Installing More Advanced Centrifuges at Natanz Pilot Enrichment Plant: Factsheet on the P-2/IR-2 Centrifuge, David Albright and Jacqueline Shire, The Institute for Science and International Security (ISIS), 7 February 2008
  http://www.isis-online.org/

Watch the following panel discussion and summarize speakers' arguments:

http://fora.tv/2007/10/29/Ahmadinejad_and_Iran_s_Nuclear_Program