Although American officials have blocked millions of dollars in Al Qaeda, Hamas, and Hezbollah assets, two of the wealthiest jihadist organizations in the world, the Taliban and al-Shabaab, are not listed in the U.S. Treasury Department’s 2011 report on blocked terrorist assets. Here’s a graphic from the report showing whose funds have actually been blocked under various U.S. sanctions:
What has been frozen from the Taliban plus two dollars will buy you a cup of coffee.
But in their defense, the U.S. can only freeze or confiscate money that flows through its own financial institutions or correspondent banks. It may be that members of the Taliban and al-Shabaab have been more circumspect about where and who they bank with, and whether they use banks at all.
But should U.S. officials continue to take victory laps about “unprecedented” sanctions and financial pressure being brought to bear against the enemies of the West when government figures don’t even show a penny being blocked from the Taliban’s clutches?
While the U.S., Canada, Europe, and Australia have joined together in sanctions against Iran, South Africa has not. In 2010, South Africa bought $22.9 billion in fuel, crude, natural gas, and minerals from Iran. The quantity easily outstrips purchases by China, the country most often singled out for counterbalancing Western sanctions. From a Jan. 26 report from the Congressional Research Service using data from the World Trade Atlas:
Source: The World Trade Atlas, adapted by Susan Chesser, Knowledge Services Group, CRS.
The report has been followed by a Feb. 8 Associated Press article about South Africa’s involvement with Iran:
South Africa’s close ties to Iran under scrutiny
JOHANNESBURG — The West’s increasing pressure on Iran has meant scrutiny for South African businesses that operate in the Middle Eastern nation accused of having nuclear ambitions.
South African-Iranian political ties have long been close, and that has meant close business ties. A politically connected South African telecommunications company has been accused of pushing Pretoria to support Iran’s nuclear power program. A South African energy and chemicals company is reviewing its Iranian investments. Iranian oil makes up nearly a third of South Africa’s oil imports…
The only good thing about the data is that Germany has slipped in the rankings of Iran’s biggest customers.
In its November report, the International Atomic Energy Agency revealed that:
The Iranian military has procured nuclear and dual-use material and equipment
Iran has acquired information on how to create nuclear weapons through a secret network
Iran has tested nuclear weapon components
The advance in Iranian efforts to use nuclear program for military purposes strongly suggests that the sanctions regime is not having the impact necessary to stop their acquisition of the bomb. Sanctions may have damaged their economy and currency, but that is irrelevant because Iran has shown that it will continue funding its nuclear program regardless of economic conditions.
Pres. Obama’s decision to appoint lightweight David Cohen as undersecretary of Terrorism and Financial Intelligence indicated a lack of seriousness about enforcing serious sanctions against Iran to bankrupt its nuclear program. In 2011, Cohen has succeeded mostly in alienating the U.S. Senate by stabbing New Jersey Democrat Bob Menendez in the back. If only we would treat our foreign enemies that way.
David S. Cohen, a former Clinton lawyer who Pres. Obama entrusted with a sanctions regime that is supposed to provide for the nuclear containment of Iran, is wrapping up a four-day trip to Saudi Arabia and Bahrain.
The State Department says that Mr. Cohen was conferring with officials in those countries about sanctions against the Central Bank of Iran and against Bashar al-Assad’s regime in Syria.
Surprisingly, although Bahrain shockingly has no legal means of freezing assets in its own country, there is no indication that Mr. Cohen addressed this shortcoming with officials in Manama.
Mr. Cohen has consistently misled the American public about the level of Saudi cooperation in combating terrorist financing. Consequently, it will be difficult to judge the truthfulness of whatever statements are released at the conclusion of this trip.
Seeking cooperation on sanctions is a good objective, but sending a flawed messenger indicates Pres. Obama’s lack of seriousness about sanctions against Syria and Iran.
Democrats aren’t the only ones angry at the lack of Obama administration cooperation on the sanctions regime against Iran. When several executive branch officials, including Deputy Treasury Secretary Neal Wolin, skipped a November hearing on Iran sanctions, Rep. Jason Chaffetz (R-UT) was peeved:
But this still isn’t nearly as bad as how the administration watered down a recent amendment on Iran sanctions behind closed doors, then had the audacity to oppose the final amendment for being too punitive.
For an administration that has opted for sanctions (or as Obama officials call it, “pressure”) rather than force, it’s a wonder why Congress must consistently drag administration officials kicking and screaming to adopt real sanctions targeted specifically at Iran’s central bank or its energy sector.
Sen. Bob Menendez (D-NJ) wanted a tougher set of sanctions against Iran, particularly against the Central Bank of Iran and any foreign banks still doing business with it. Pres. Obama’s underlings objected, saying it would restrict oil sales by Iran and increase the international price of oil, damage the world economic recovery, and turn off our allies who supposedly (contrary to all recent evidence) support a slower approaching to sanctions tightening. But the underlings claimed that they shared the same goal as Sen. Menendez, and would work with him to develop a compromise acceptable to the White House.
So people like David S. Cohen, Treasury undersecretary for terrorism and financial intelligence, worked diligently over the last couple weeks to water down the amendment to the defense authorization bill that Menendez and Republican Sen. Ron Kirk jointly proposed. Once Obama’s Treasury and State officials had forced a significant number of exceptions, waivers, and escape clauses into the amendment, Sen. Menendez thought the legislation was ready for bipartisan support in the Senate and support by the Obama administration.
Suddenly, during a Senate foreign relations committee hearing on Dec. 1, the Obama bureaucrats pulled the rug out from under Sen. Menendez, and came out against even the watered down financial sanctions. The video from an impassioned Sen. Menendez is a must-watch for insight into how this administration behaves:
Immediately after Sen. Menendez finished his remarks about the bureaucrats “vitiating” the amendment, Sen. John Kerry quipped that they didn’t vitiate it, they villified it. With that, the Obama flunkies had succeeded in alienating Senate Democrats on this matter, who then defied the White House and joined with Republicans to approve the amendment by a vote of 100 to zero.
The president will veto the bill over an unrelated matter, further delaying stronger sanctions.
Meanwhile, allies who supposedly want to move slower, like France, are pushing for a blanket oil embargo on Iran. The officials at Treasury constantly try to convince the public that Iran faces enormous pressure from existing sanctions, and Mr. Cohen always trots out some graph depicting the falling market value of the Iranian rial against the U.S. dollar. Sir, if a nuclear bomb lands on Tel Aviv, will you still be lecturing us on the great job Treasury did at weakening the Iranian rial?
The normally reticent director of OFAC, Adam Szubin, has written a blog post about Iran sanctions on the U.S. Treasury Department’s website. The post accompanied Treasury’s designation of six front companies that own more vessels from Iran’s maritime fleet (IRISL), and Szubin dubiously claimed that “IRISL’s days may be numbered.”
Szubin also linked to a somewhat disorienting Treasury graphic to show the measures Iran has taken to conceal the true identity and ownership of its vessels:
At any rate, the post highlights Treasury’s desire to demonstrate that the Obama administration’s sanctions on Iran are “tough” and “smart,” although critics have pointed out that sanctions against Iran have done little to deter Iranian nuclear advances.
During his opening statement at a Senate hearing last month, Banking Committee ranking minority member Sen. Shelby (R-AL) levied a scathing review of the sanctions strategy:
Despite 30 years of progressively more stringent economic sanctions, Iran remains one of the more serious threats to the national security of the U.S. and our allies. Iran continues to support authoritarian regimes, terrorist organizations and radical militias in Iraq and Afghanistan. For allies such as Israel… Iran’s threat to its very existence is real, continues unabated, and cannot be ignored.
More than one year has passed since Congress, the UN, and many of our allies levied the most recent round of sanctions against Iran in an attempt to derail Iran’s efforts to obtain nuclear weapons. Unfortunately, the heightened sanctions have not yet produced any significant change in Iran’s behavior regarding its nuclear program, international terror, or its record on human rights.
One problem is that the White House and the State Department have carefully managed to avoid labeling any major Russian, Chinese, or other US-trading partner’s companies as violators of US-mandated sanctions. China, Russia, and others are expanding trade with Iran, continuing to provide it with banking assistance and investing in its energy sector. Additionally, China and Russia have further undermined U.S. sanctions by supporting Iran’s military programs. For sanctions against Iran to be as effective as possible, the Administration needs to do a better job at securing the cooperation of the global community.
During an Oct. 13 hearing on Iran sanctions, Sen. Bob Menendez (D-NJ) described his proposal to make the European Union certify that any refined fuel products it sells to the United States did not originate from Iranian crude oil.
The concern of the power establishment is that an outright embargo on Iranian crude would limit global supply, damage the fragile economic recovery, and ultimately enrich Iran through soaring oil prices. But the current sanctions regime hasn’t done much to deter or delay Iran from acquiring the hydrogen bomb. Sen. Menendez’s proposal is an effort to split the difference, and get Europe to do the legwork of finding alternate suppliers to Iranian crude. In a question to a State Department flunky (to which he later received a boilerplate answer), Menendez explains his reasoning:
The full two hour hearing can be viewed on C-SPAN’s website.
Perhaps Europe can explore for oil off the shores of America where environmentalists won’t let the U.S. do it, refine it, and sell it back to the U.S. as a certified non-Iranian product. Or the U.S. could expand its own oil production and cut out all the middlemen. Just saying…
According to an August report on Iran sanctions from the bipartisan Congressional Research Service, Germany is the world’s third largest importer of Iranian fuel, oil, natural gas, and other energy products. Germany pays $400 million a year to Iran for energy.
This provides further confirmation that the U.S.-backed sanctions regime against Iran is weak unless Europe, especially Germany, can be brought aboard with an Iranian energy boycott. Without German cooperation, Iran will be able to continue diverting oil profits toward its illicit nuclear program.
During an Aspen Institute panel discussion on terrorist financing in July, former counter-terrorism official Juan Zarate rebuked the 2009 to 2010 “pause” in economic sanctions pressure while Obama administration sought engagement with Iran.
Reporter Erin Burnette asked Zarate and former under secretary for terrorism and financial intelligence Stuart Levey about the wisdom of easing up on the sanctions regime while trying to engage Iran. Stuart Levey said that top Obama advisors underestimated how long it would take from the time they began seeking engagement until the time a new round of international sanctions would be approved, which was not until July, 2010.
That delay gave Iran a year and a half of essential time to develop their nuclear program without significant financial pressure. In this video, Juan Zarate calls that pause in the financial pressure “a major strategic mistake.” The momentum from sanctions beginning in 2005 had been working, and Washington could have kept applying financial pressure simultaneously while pushing for diplomatic engagement.
The timing of the pause was most unfortunate, Zarate argues, because the U.S. already knew about Iran’s “secret” nuclear site at Kom.
In addition to pointing out the Obama administration’s strategic blunder on Iran sanctions, Zarate also lets it slip in the final seconds of the video that Pres. Obama kept the well-respected Stuart Levey “leashed.”
Iran, the grand Shia deceiver, managed to trick nine New York bank houses into making transactions on behalf of their shipping industry in violation of U.S. sanctions laws. Iran is known to use its own banks and international banks to funnel money back into its nuclear programs. At least this time they were eventually discovered, $60 million later…
Banks Receive Praise and a Warning in Press Conference Announcing Indictments Tied to Iranian Shipper
By Brian Monroe and Kieran Beer
Banks were the subject of praise and a warning at a press conference on Monday unveiling a 317 count indictment against 11 corporations and five individuals for their alleged participation in a conspiracy involving an Iranian shipping company.
Manhattan District Attorney Cyrus R. Vance characterized nine banks as victims of deception when they processed more than $60 million of payments for the Islamic Republic of Iran Shipping Lines (IRISL) in violation of U.S. sanctions.
The banks “were not complicit in any way, but on the contrary have been very helpful” during the 14-month investigation that culminated in the indictments, said Adam Kaufmann, who is chief of the investigative division in the district attorney’s office.
And, the efforts of the nine large clearing banks to aid the district attorney’s investigation were “very aggressive and very sophisticated,” according to Adam Szubin, director of the Office of Foreign Assets Control (OFAC), the U.S. Treasury Department agency tasked with managing U.S. economic sanctions, who also took part in the press conference.
But Vance added that “to the extent there are banks that are banking sanctioned entities or not paying enough attention, this indictment is a continuing indication that our office and OFAC are watching carefully and will take action when we see intentional, pervasive efforts to violate federal and state law.”
IRISL and 15 others set up shell companies in Singapore, the United Kingdom and the United Arab Emirates in order to fool major New York-based dollar clearing banks into processing about $63 million in transactions, according to the indictment.
“Go forth, light-armed and heavy-armed, and strive with your wealth and your lives in the way of Allah!”—Koran (Sura 9, Verse 41)
“The warrior gets his reward, and the one who equips him gets his own reward and that of the warrior”—Muhammad (Sunan Abu Dawud, Book 14 No. 2520)
“Your duty is to support the Mujahideen with money and men... The Zakat of one affluent Muslim merchant is enough to finance all the Jihadi front against our enemies”—Osama Bin Laden
More Iran sanction wind whistling
November 10, 2011The normally reticent director of OFAC, Adam Szubin, has written a blog post about Iran sanctions on the U.S. Treasury Department’s website. The post accompanied Treasury’s designation of six front companies that own more vessels from Iran’s maritime fleet (IRISL), and Szubin dubiously claimed that “IRISL’s days may be numbered.”
Szubin also linked to a somewhat disorienting Treasury graphic to show the measures Iran has taken to conceal the true identity and ownership of its vessels:
At any rate, the post highlights Treasury’s desire to demonstrate that the Obama administration’s sanctions on Iran are “tough” and “smart,” although critics have pointed out that sanctions against Iran have done little to deter Iranian nuclear advances.
During his opening statement at a Senate hearing last month, Banking Committee ranking minority member Sen. Shelby (R-AL) levied a scathing review of the sanctions strategy:
Posted in Charts & tables, News commentary | Tagged Adam Szubin, Iran, IRISL, OFAC, sanctions, Senate, Treasury Department | 1 Comment »