Clinton Touts Administration’s ‘Painstaking’ Efforts on Iran Sanctions—But Credit Goes to Congress

October 19, 2012 - 4:05 AM

Hillary Clinton

Secretary of State Hillary Clinton speaks at Healy Hall of Georgetown University in Washington, Thursday, Oct. 18, 2012, on Energy Diplomacy in the 21st Century. (AP Photo/Pablo Martinez Monsivais)

(CNSNews.com) - Secretary of State Hillary Clinton on Thursday touted the administration’s role in adopting sanctions targeting Iran’s crucial oil sector, although the measures were largely a result of prodding from Capitol Hill.

In a speech on “Energy Diplomacy” at Georgetown University, Clinton said efforts to pressure Tehran over its nuclear programs constituted “perhaps the most important energy diplomacy we have conducted in the Obama administration.”

“I’m sure you know that the United States and the European Union and other likeminded countries, as well as the United Nations, have imposed sanctions on Iran as part of our dual-track diplomatic effort to persuade or compel Iran to stop its pursuit of a nuclear weapon,” she said.

“You may also know that a major target of these sanctions is Iran’s oil industry. What you may not know, because it doesn’t make headlines, is how much painstaking diplomacy went into making these sanctions first, adopted -- and then, effective.”

Among the toughest current U.S. legislative measures against Iran are the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA), passed in mid-2010; and the Iran Threat Reduction and Syria Human Rights Act, signed into law over the summer.

CISADA, which significantly expanded the 1996 Iran Sanctions Act, penalizes companies that sell gasoline or related products to Iran or support its refining efforts. The Iran Threat Reduction Act was intended to close loopholes in the earlier law. It also provides additional penalties for those helping Iran’s oil and gas, financial and shipping sectors.

In both cases the bills enjoyed massive bipartisan support in the House and Senate, and in both cases lawmakers across the aisle expressed frustration about the administration’s approach to the measures – including appeals to delay them – as well as concerns that it may not implement them effectively.

In the case of CISADA, an earlier iteration of the bill was passed in early 2010, but the administration persuaded Congress to delay the push while it tried to win support for multilateral sanctions against Iran. That process led to the U.N. Security Council finally passing a resolution in June 2010 which, while the strongest U.N. measure yet, was watered down to accommodate Russia and China and crucially did not target Tehran’s energy sector. (Turkey and Brazil voted no; Lebanon abstained.)

Two weeks later the U.S. House and Senate passed CISADA by large margins (408-8 and 99-0).

Last week Foundation for Defense of Democracies senior fellow John Hannah wrote that both President Obama and his predecessor were leery of oil sanctions because of gas price concerns.

Writing on the Foreign Policy magazine blog, Hannah said Obama and President Bush “quite legitimately feared that removing Iranian crude from the market would disrupt global supplies and trigger a devastating price shock. Only in late 2011, with Iran rapidly approaching the nuclear threshold, did Congress finally steamroll the administration by forcing through legislation that targeted Iranian oil.”

Waivers

Under the terms of the National Defense Authorization Act (NDAA), signed into law late last year, Iranian oil customers were given an end-of-June deadline to stop buying Iranian oil, or face U.S. sanctions on their financial institutions that conduct transactions with the Central Bank of Iran (CBI) for the sale or purchase of petroleum and related products.

The administration was not initially supportive, with officials arguing that targeting the CBI would send oil prices soaring. Ninety-two U.S. senators signed a letter urging the White House “to impose crippling sanctions on Iran’s financial system by cutting off the CBI.”

After the Senate passed the NDAA by a 100-0 vote Obama signed it into law, with reservations, and in an executive order last February announced sanctions including restrictions on the CBI.

The NDAA makes provision for waivers – for a potentially renewable period of 180 days – in the case of countries that have reduced their purchases of Iranian oil “significantly.”

Between March and the deadline, Clinton certified that 20 top customers, including China, had done so – a development which the White House in a July 31 fact sheet said demonstrated “the success of U.S. sanctions policy in reducing Iranian oil sales and revenues.”

There have been signs since, however, that some of Iran’s biggest customers are looking for ways to get around the restrictions, and Chinese imports from Iran have begun to pick up again.

In her Georgetown speech, Clinton took credit for the diplomacy required to make sanctions legislation effective.

“First, we needed to convince consumers of Iranian oil to stop or significantly reduce their purchases. At a time when demand for energy is high, many countries understandably were worried that reducing their purchases would put them in a very difficult position,” she said.

Clinton explained that the U.S. encouraged other major oil producers to increase their production to make up for shortfalls resulting from the Iran sanctions, “and we engaged countries on the benefits of diversifying their energy supply as a national security matter.”

“The approach has worked. The E.U. put an oil embargo into place in July, and we have certified that every single one of Iran’s oil importers have either significantly cut or completely ended their purchases of Iranian oil,” she said. “We’ve been able to put unprecedented economic pressure on Iran, while minimizing the burdens on the rest of the world.”

In his 2012 State of the Union, Obama took credit for the pressure faced by Tehran: “Through the power of our diplomacy, a world that was once divided about how to deal with Iran’s nuclear program now stands as one,” he said. “The regime is more isolated than ever before; its leaders are faced with crippling sanctions, and as long as they shirk their responsibilities, this pressure will not relent.”

Heritage Foundation scholar James Phillips commented in response, “Left unsaid in his reference to ‘crippling sanctions’ is the inconvenient truth that his administration repeatedly has opposed and sought to soften congressional legislation to ratchet up sanctions against Iran.”