Obama is missing his chance to pressure Iran

By Kristen Silverberg

President Obama's speech last night regrettably omitted any mention of Iran. Any major presidential address is the subject of careful analysis in foreign capitals, and many of our partners will conclude that Obama views the Iranian nuclear question with less urgency than his predecessor. That is precisely the wrong message to send on the heels of the latest IAEA report, especially in Europe, where we need partners willing to continue tightening pressure against Iran.

The day after he became the presumptive Democrat nominee, Obama delivered a speech to the American Israel Public Affairs Committee outlining his approach to the Iranian nuclear question. As he described it, his Iran policy would have two elements: 1) direct engagement with Iran combined with 2) tougher multilateral sanctions. Before a skeptical crowd, he defended his willingness to engage Iran directly by drawing a link between the two elements, noting that our willingness to engage directly could be used as leverage to convince international partners to support tougher sanctions. This would allow us to pursue, as he put it, "diplomacy backed by real leverage."

Following Obama's election, European officials assumed there would be a link between U.S. willingness to engage Iran directly and Europe's responsibility to tighten financial pressure against the Iranian regime. As EU officials understood it, Obama would, like President Bush, adopt a carrot-and-stick approach, but would offer bigger carrots and would want to wield bigger sticks. Late last year, the EU -- perhaps anticipating an Obama request -- took a decision in principle to strengthen its own sanctions against Iran and began the process of debating specific measures. 

Today, however, the Obama administration seems poised to miss the opportunity to work with Europe to tighten financial pressure against Iran.  Having heard repeated public reassurances that the United States is looking for opportunities to engage, without an equally strong public insistence that Europe first produce tougher sanctions, the EU seems less inclined to follow through on its earlier decision to consider new measures. For now, the EU has told Obama administration officials that further sanctions would be inappropriate before the administration completes its Iran policy review, but one worries that the EU has concluded that it is off the hook permanently.    

If this moment is missed, it will be a terrible lost opportunity. EU sanctions, even more than unilateral U.S. sanctions, are capable of capturing the Iranian regime's attention, as we learned following the EU's decision last year to freeze the assets of Bank Melli, one of Iran's most important banks. 

What's more, once a negotiating process with the United States has begun, it will be difficult to convince Europe to take punitive action that could risk disrupting ongoing discussions. A commitment from Europe, China, and Russia to adopt new sanctions only if discussions with Iran eventually fail would be meaningless. By the time talks fail, it will be too late. I'm not optimistic that direct engagement with Iran will produce an acceptable agreement, but if the Obama administration is committed to this course, it would be wise to give itself the strongest possible chance for success.

Obama has enormous capital to use in Europe, and Europeans will be reluctant to turn down a public U.S. request. If we are going to convince Europe to move ahead, it will happen only as a result of explicit insistence from the Obama administration that new European (and ideally Chinese and Russian) sanctions are a necessary prerequisite to any new diplomatic strategy. 

Obama administration officials have been vocal in criticizing the Bush team's approach to Iran, but Bush's multilateral diplomacy produced overwhelming support in the UN Security Council for five Chapter VII Security Council resolutions, three of which impose binding multilateral sanctions. The Bush administration worked with numerous capitals, including Brussels, to adopt sanctions even beyond those mandated by the Security Council.

What's more, the Bush administration, led by Treasury Undersecretary Stuart Levey (who President Obama has wisely decided to retain) persuaded international financial institutions that Iran's deceptive use of front companies had so blurred the lines between licit and illicit conduct that legitimate financial institutions could no longer afford to do business with official Iranian entities. Some eighty financial institutions have since suspended business with Iran, and its difficulties in obtaining financing in turn dried up Western investment in the Iranian oil and gas sector.

The Obama administration has the opportunity to further increase Iran's incentives to take a different course. Let's hope they seize it.