Archive for May, 2011

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Point, counterpoint: effect of Iran sanctions

May 31, 2011

Reading the tea leaves of the U.S. Senate, one senses an overall skepticism about the effectivness of the sanctions regime against Iran.   It sounds like one thing that Senate Republicans and the oil minister of Iran may agree on.  From the Iran’s perspective last month:

Minister Downplays Effects of Sanctions on Iran’s Oil Sector

Iranian Oil Minister Seyed Massoud Mir-Kazzemi stressed on Wednesday that the international and the West’s unilateral sanctions against Iran have left no negative impact on the country’s oil sector and merely strengthened the country’s independence and national resolve.

Mir-Kazzemi made the remarks in a message to the 16th International Oil, Gas, Refining and Petrochemical exhibition here in Tehran on Wednesday.

The minister stressed that presence of the different Iranian and specially foreign companies in the exhibit “is a true evidence for the inefficiency of the sanctions imposed by a few hegemonic powers against Iran.”

“It is also a clear evidence of interaction and companionship of the countries interested in the expansion of economic and industrial relations with the Islamic Iran and Iran’s oil industry,” he added.

Elsewhere, Mir-Kazzemi noted Iran’s status and position in the international energy market, and pointed out, “Owing to the strategic position of the Islamic Iran as a country with rich energy sources, the country is necessitated to play an active and constructive role in international circles and events.”

Iran, which sits on the world’s second largest reserves of both oil and gas, is facing US sanctions over its civilian nuclear program.

Iranian officials have dismissed US sanctions as inefficient, saying that they are finding Asian partners instead. Several Chinese and other Asian firms are negotiating or signing up to oil and gas deals.

Following US pressures on companies to stop business with Tehran, many western companies decided to do a balancing act. They tried to maintain their presence in Iran, which is rich in oil and gas, but not getting into big deals that could endanger their interests in the US.

Yet, after oil giants in the West witnessed that their absence in big deals has provided Chinese, Indian and Russian companies with excellent opportunities to sign up to an increasing number of energy projects and earn billions of dollars, they started showing increasing interest in investment or expansion of work in Iran…

More recently, the Tehran Times also contended that the sanctions against selling gasoline to Iran has produced a new wave of self-sufficiency in Iranian oil refining.

On the other hand, Parviz Mina from the Foundation for Iranian Studies recently concluded:

…contrary to the claims made by the leaders of the Islamic Republic, sanctions have had a devastating effect on Iran’s oil and gas industry. In a sense, oil and gas are the Islamic Republic’s Achilles heel. Iran is the biggest consumer of energy in the Middle East and one of the least efficient users of energy in the world. Oil and gas exports provide more than 80 percent of foreign exchange, 70 percent of public investment, and approximately 50 percent of the budget. Yet, the crude oil production capacity, which was 6 million barrels per day before the revolution, is about 4 million barrels today and according to a former minister of oil the productive capacity in mature oil fields is falling by 300 thousand barrels per day annually as a result of faulty or inadequate recovery policies, tools, and methods.

Greg Thielmann of the Arms Control Association takes a subtler view:

These various sanctions are clearly registering with Iran’s leaders.  We can see it clearly from the very active efforts Iran has mounted around the world to circumvent the sanctions.  While the high price of oil has at least temporarily cushioned Iran from some of the effects of sanctions, the sanctions are already taking a significant toll and the impact will only increase over time.

But while Iran’s leaders are feeling the pressure, the sanctions have not yet produced a change in Iran’s strategic thinking about its nuclear program.  So far, they seem only to have made a tactical adjustment.

This question comes to mind:  even if Treasury implemented and enforced sanctions law and regulations to the hilt, would it really make a difference in stopping Iran’s nuclear ambitions?

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GOP doubts effectivness of Iran sanctions

May 31, 2011

Republicans are delaying the confirmation of Treasury flunky David Cohen until the Obama administration proves it’s serious about enforcing sanctions against Iran.

Somehow this article snuck by me.  We’ve been following the David Cohen Treasury nomination pretty closely, and observed that at least one prominent Senate Democrat expressed reservations about Cohen’s confirmation, but did not realize that seven GOP lawmakers also moved to hold up the confirmation until Treasury gives more enforcement oomph to CISADA, which among other things sanctions gasoline sales to Iran.

Certainly, the White House is giving private assurances to Cohen that it’s all just “politics” about Iran that’ll blow over in due course, and that Cohen shouldn’t take it personally.  However, one suspects that if Pres. Obama had selected a tougher operative with stronger credentials on Iran or on sanctions enforcement in general, this hold-up would have never taken place.

From Foreign Policy’s The Cable earlier this month:

Seven Republican senators are demanding that the Obama administration take tougher measures to punish banks still doing business in Iran, and they are threatening to stall the nomination of a top Treasury Department official unless they get their way.

The dispute between the White House and Congress revolves around implementation of the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) of 2010, the wide-ranging law signed into law last year. The Treasury Department issued a draft rule last week that lays out how it intends to implement a key provision of the law, which deals with Iran’s banking partners in countries around the world. And that rule raised the ire of seven GOP senators, who expected Treasury to enforce the law much more stringently.

The key provision, section 104(e), directs the administration to punish any international financial institutions still doing business with Iran by cutting them off from the U.S. financial system.

“We were extremely unhappy with the draft rule to implement section 104(e) of CISADA publish by the Treasury Department last week,” wrote Sens. Jon Kyl (R-AZ), Mark Kirk (R-IL), Roger Wicker (R-MS), David Vitter (R-LA), Jerry Moran (R-KS), Mike Crapo (R-ID), and Mike Johanns (R-NE), in a previously unreported letter sent Tuesday, and obtained by The Cable.

The letter was addressed to David Cohen, the acting undersecretary for terrorism and financial intelligence at the Treasury Department. Cohen took over for Stuart Levey, the previous sanctions chief at Treasury, who moved on to the Council on Foreign Relations last month after more than 4 years on the job.

The senators are threatening to hold up Cohen’s nomination if their demands regarding enforcement of the sanctions provisions aren’t met. Cohen had his confirmation hearing before the Senate Banking Committee on Tuesday and, afterwards, Kirk sent Treasury a list of follow-up questions he says must be answered before he’ll allow Cohen’s nomination to move forward.

“The acting undersecretary’s response to our letter and questions for the record will weigh heavily in any confirmation decision,” Kirk told The Cable.

Kirk also identified 44 international financial institutions servicing Iranian banks and 18 U.S. institutions that are working with those who do business inside Iran. He got this list from a 2010 report entitled “Iran’s Dirty Banking”, which sourced the information to the Banker’s Almanac…

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Recap of sanctions against Iran

May 31, 2011

Attorney Barbara Linney has provided readers with a good summary of sanctions laws against Iran that have expanded over the past year.  From Lexology on Apr. 28:

U.S. Developments. On July 1, 2010, long sought amendments to the Iran Sanctions Act (“ISA”) became law. As amended by the Comprehensive Iran Sanctions Accountability & Divestment Act (“CISADA”), the ISA targets persons determined to have invested $20 million or more in Iran’s ability to develop or obtain petroleum resources. CISADA expanded the definition of petroleum resources to include petroleum, refined petroleum products, oil or liquefied natural gas, natural gas resources, oil or liquefied natural gas tankers, and products used to construct or maintain pipelines used to transport oil or liquefied natural gas. Also targeted are persons contributing to Iran’s conventional and nuclear weapons proliferation activities, persons supplying refined petroleum products to Iran, and those who supply goods, services, and technology that could facilitate or contribute to Iran’s ability to produce or import refined petroleum products (subject to certain materiality and value thresholds). Provision of ships or shipping services to deliver refined petroleum products to Iran is a sanctionable service. CISADA also imposed or required adoption of other measures designed to tighten the blockade of Iran, including increased penalties for violations of U.N. Security Council resolutions.

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Prosecutors to Hamas donor: take a break

May 30, 2011

A German federal court will consider a proposed settlement in which the IHH, an organization that “works through established social organizations associated with Hamas,” may continue its operations if it ceases transmitting funds to the Palestinian territories for the next three years and submit annual financial statements during that time.

In other words, as long as the German IHH agrees to take a three-year break from funding Hamas’s social network, it can resume those activities afterward.  Presumably, IHH will still be able to fund Islamist networks in other countries on an ongoing basis.

From The Global Muslim Brotherhood Daily Report on May 26:

The website of a federal German court has reported the details of a proposed settlement involving the German International Humanitarian Relief Organization (IHH) which had been banned for financing Hamas. According to the details of the settlement notice:

The applicant is a local organization in Germany who sees it purpose as providing worldwide humanitarian assistance and, among other things, it has supported projects in Palestine. According to the Federal Ministry of the Interior, the applicant is opposed to the idea of international understanding and therefore meets on of the legal grounds for being banned. Because the applicant works through established social organizations associated with HAMAS, the applicant indirectly supports the use of violence against Israel by HAMAS. The applicant replies that the it exclusively pursues humanitarian purposes and is not associated with the violence of Hamas.

The notice goes on to proposes that until June 30, 2014 that IHH provides no specific assistance to the  Palestinian territories in the Gaza Strip and the West Bank and submits each year a statement of revenue and expenditure of the previous year to the Federal Ministry of the Interior. If the IHH fails to comply with these provisions, the ban will come back into effects. The matter is to be finally decided later in June.

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Links of late

May 29, 2011

• Feeling thirsty, Arabia?  You have OPEC, but we have water… more>>

The Abbottabad files could expose al Qaeda’s next million-dollar man, but Matthew Levitt suggests keeping your eye on the little guy… more>>

The response to Israel’s blockade of an “aid” flotilla?  Global outrage.   The Syrian rejection of Kuwaiti aid?  International yawn… more>>

Aiding Arab autocrats to the tune of £12 billion would feel so much satisfying if they said thank you instead of wielding “knives and machetes”… more>>

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Palestine’s NGOs “a byword for corruption”

May 27, 2011

Nonprofits in the Palestinian territories are a cesspool of corruption.  The author of the article who made this argument in The Guardian says he’s really just calling for reform though, and complained that Elder of Ziyon used the article as “Palestinians are bad” evidence.

Count us in with Elder of Ziyon.  The non-governmental organizations (a combination of questionable Islamic charities and do-gooder Western aid outfits) are extremely problematic.  Read all about it:

…Palestine’s NGO sector…has become a byword for corruption, incompetence and meaningless job creation. Thousands of NGOs have sprung up, promoting everything from family planning to liberal arts education, bloating the aid industry without delivering long-term benefits.

Naseef Mu’allem, director-general of the Palestinian Centre for Peace and Democracy, revealed that “JICA – the Japanese government aid mission – invested $5m last year, but practically what they spent is $600,000. The rest is given as salaries, accommodation, hotels, retreatment and transportation for the foreign employees here but not for the Palestinians”. Without donors thoroughly checking on their investments, this kind of private profiteering has become normal.

Palestinian perceptions of foreign NGOs are revealing. Bir Zeit University’s 2008 survey found just 35% of the West Bank population feel they contribute to the development of Palestinian society; 78% said they played some role in reducing human suffering and 55% felt they contribute to reinforcing the Israeli occupation.

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Paying those who kill our allies

May 26, 2011

The Palestinian Authority is set to make payments to men encarcerated for terrorism in Israel.  This is especially despicable given the amount of cash in the PA’s budget that comes from Western governments (see here for example).  From Palestinian Media Watch on May 20:

PA to pay salaries to all terrorists in Israeli prisons

Financial aid from many donor countries goes directly to PA budget from which salaries are paid

by Itamar Marcus and Nan Jacques Zilberdik

A law published in the official Palestinian Authority Registry last month grants all Palestinians and Israeli Arabs imprisoned in Israel for terror crimes a monthly salary from the PA. The Arabic word the PA uses for this payment is “ratib,” meaning “salary.” Palestinian Media Watch has reported numerous times on Palestinian Authority glorification of terrorists serving time in Israeli prisons. Following the signing of this new law, the PA is now paying a salary to these prisoners.

The PA has defined by law which Palestinians would be considered “prisoners.”

“Anyone imprisoned in the occupation’s [Israel’s] prisons as a result of his participation in the struggle against the occupation.”
[Ch. 1 of Law of Prisoners, 2004/19, passed and published by the PA Chairman and Government, December 2004. The Prisoners’ Centre for Studies,www.alasra.ps Accessed May 9, 2011]

In other words, all Palestinians in Israeli prisons for terror crimes officially join the PA payroll. According to the definition in the PA law, Palestinian car thieves in Israeli prisons will not receive a salary, but Hamas and Fatah terrorist murderers will.

The PA also gives a salary to Israeli Arabs convicted of terror crimes against Israel – the country of which they are citizens. PA benefits to Israeli Arab terrorists, in fact, are greater than the ones extended to Palestinian terrorists.

Those serving more than 20-year sentences will receive a greater PA salary than prisoners serving shorter sentences, the new PA law establishes. Salaries are to be paid from the day of arrest until release.

More than 6,000 Palestinian prisoners are currently serving time in Israeli prisons for terror-related offenses. Among those now eligible are Abdullah Barghouti, serving 67 life sentences; Hassan Salameh, serving 38 life sentences; and Jamal Abu Al-Hijja, serving nine life sentences, all of whom are imprisoned for planning suicide bombings. These three terrorists were recently called “heroic” by the official PA daily…

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