In Case You Missed It: "2013 Is the Right Year to Impose a Full Embargo Against Iran"
Op-Ed by UANI CEO, Ambassador Mark D. Wallace, Says "International Community Must Exert All of Its Leverage, and Force the Regime to Make a Choice"
2013 Is The Right Year To Impose A Full Embargo Against Iran
By Ambassador Mark D. Wallace
March 8, 2013
With 2013 now in full swing, it is important to look back and note just how far the international movement to economically isolate Iran has come. Last year was a consequential one for sanctions against Iran, and it taught us valuable lessons for 2013.
With the lessons of 2012 in mind, we should recognize that sanctions once considered ineffective or too drastic have in fact worked well, and that now is the time to take the next logical step - a full-scale financial blockade against Iran.
Doing so is the best way to persuade Iran to choose a different path, and prevent a potential military confrontation.
Just one year ago, the Iranian regime had nearly full and complete access to world markets, and was able to efficiently transfer funds from its Central Bank to any other bank in the world.
The group I am a part of, United Against Nuclear Iran (UANI), worked to change that reality by campaigning for the Belgium-based SWIFT network, which is the clearinghouse for global banking transactions, to cut Iran's Central Bank off from its system.
SWIFT's eventual action, combined with congressional sanctions against the Central Bank, once dismissed as a radical "nuclear option" and general economic mismanagement by the regime greatly contributed to a historic Iranian recession and the collapse of Iran's currency, the rial.
Significant Drop
Since the end of 2011, the rial has lost 80% of its value and inflation is now estimated at 60%.
Two years ago, many were saying that it would be foolish to target Iran's oil exports, for fear of sending energy prices skyrocketing and further weakening the global economy.
Very few would have predicted that the EU, traditionally lukewarm to isolating Iran, would eventually implement a comprehensive oil embargo on Iran, and deny insurance coverage for Iranian oil shipments.
Such doubts, however, have proved unfounded. Last year alone, crude exports from Iran and corresponding revenues were more than halved, from 2.5 million barrels per day to some 1 million today, with little effect on the global oil market.
The cutback represents an annualized loss of some $60 billion, a huge chunk of the Iranian government's budget for the 2012/2013 fiscal year. This is serious economic pressure, and some of us are legitimately hopeful that it can force change.
Diplomatically, it is clear that 2012 encouraged Iran to return to the negotiating table.
Of course that may just be a ploy and a delaying tactic, but there is growing evidence that Iranian influentials across the political spectrum are prodding the regime to reach a negotiated settlement before their nation's entire livelihood crumbles.
Now, with robust international sanctions gradually altering the regime's calculus, it is time to go all in. A full economic blockade of Iran is now necessary to press the regime to give up its nuclear program.
As the nuclear clock ticks, the international community must exert all of its leverage, and force the regime to make a choice between having a nuclear weapon, or having a functioning economy.
Cut Ties
The idea is simple but immensely powerful: Any bank, business, or entity that does work in Iran must be barred from receiving U.S. and EU government contracts, accessing U.S. and EU capital markets, entering into commercial partnerships in the U.S. and EU, or otherwise doing business in America and the European Union.
With respect to banking, SWIFT needs to play its part. While SWIFT did deny access to Iran's Central Bank and some other financial institutions, it failed to cut off all Iranian banks and entities.
SWIFT should immediately sever its ties with all Iranian banks, particularly those that have been sanctioned by the U.S. government but unfortunately still maintain SWIFT access.
Every day SWIFT permits these illegitimate banks continued access to its network is a day the regime will continue to circumvent international sanctions.
Realistically, there is only one solution left given the stakes and timeline: blocking all of Iran's economic ties to the rest of the world.
Some may consider such a move too severe, but in reality it is simply the next step in the drive to economically isolate Iran.
Surely it is less drastic than military action, or a nuclear weapon in the hands of the mullahs.
If we are to prevent catastrophe, the international community owes it to itself to say it has done all it can to put maximum economic, political and diplomatic pressure on the Iranian regime.
* Ambassador Wallace is CEO of United Against Nuclear Iran. He served as U.S. ambassador to the United Nations, representative for U.N. management and reform.
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