Point, counterpoint: effect of Iran sanctions

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?

GOP doubts effectivness of Iran sanctions

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…

Recap of sanctions against Iran

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.

Prosecutors to Hamas donor: take a break

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.

Links of late

• 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>>

Palestine’s NGOs “a byword for corruption”

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.

Paying those who kill our allies

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…

Iran’s clerical elites make billions vanish

The watery socialism of Shia Iran has plucked formerly private wealth out of the economy and into state-controlled hands in order to line the pockets of Iran’s clerical establishment leaders and their families through graft and nepotism.

The rags to riches rise of Iran’s Hashemi Rafsanjani is a remarkable enough example of the Iranian leadership’s personal enrichment through Islamic government “service.”

Now enter the Khamenei family.  Not to be outdone by rival millionaire ayatollahs, Supreme Leader Khamenei has put his own son, Mojtaba, in charge of an outfit called Petro Nahad, which approves every decision with respect to Iran’s oil and gas industry.  The next thing you know, $100 billion went missing.

Read the full, jaw-dropping account from the Iran Channel on May 3 (with a slight tip of the hat to Israel Matzav for linking to a related article), or see below:

Crooked mullahs: Khamenei places his son in control of Iran’s oil

It’s a classic case of an isolated elite in a dying regime, fighting over the spoils of the nation’s wealth.

Iran’s petrodollars are now under the direct personal control of Supreme Leader Ali Khamenei, his son, and his most trusted inner circle. The Khamenei family has taken control of every aspect of Iran’s oil and gas industry, keeping all contracts, agreements and financial transactions away from parliament and the rest of the government.

The corruption is spectacular. Nobody – not the president, the parliament, the judiciary, or even the highest clerics outside Khamenei’s inner circle – will have any knowledge of or say in what happens to Iran’s petrodollars. Paradoxically, the setup makes it easier for Western countries to impose comprehensive oil sanctions.

Follow the money

IranChannel reported on March 18 that the mullahs in parliament found $11 billion missing from the state-controlled petrodollar fund in Iran’s foreign exchange account. On April 29, Asriran.com reported that a member of parliament declared that not even a dollar was left in that account.

Canada revokes Daffy Qaddafi’s fake charity

While Muslim American charities associated with the Muslim Brotherhood are hard at work in Libya, Muamar “Daffy” Qaddafi’s own problematic “charity” has had its nontaxable status revoked by the Canada Revenue Agency.

The World Islamic Call Society serves as a sort of Libyan version of the Goethe Institut, but instead of teaching interested foreigners about the German language and culture, WICS established sites around the world, including Canada, to help channel money to Islamic projects including terrorism.

The most famous project funded by the Canadian branch of WICS was the JFK airport bomb plot in New York in 2007.  That constitutes legal use of zakat under Islamic law, but not proper charity work under Canadian tax law.

Here’s the solid reporting from the Ottowa Citizen on May 7, h/t GMBDR:

Gadhafi charity in Canada linked to terrorism

Government revokes status of World Islamic Call Society

By GARY DIMMOCK, The Ottawa Citizen

OTTAWA — The Harper government has revoked the registration of a longtime Canadian charity that it says was established as a front by Libyan ruler Moammar Gadhafi to funnel money to terrorists the world over — including a Muslim militant cell implicated in a 2007 plot to blow up JFK airport in New York City.

According to government documents obtained by the Citizen, the World Islamic Call Society, based in London, Ont., has been transferring money from Gadhafi’s “Jihad fund” to bank accounts of known terrorists.

A payment of $170,814.20 was made to Jamaat al-Muslimeen, a terrorist group known for a campaign of rape, torture and murder, according to the documents. This same group once attempted to overthrow the elected government of Trinidad and Tobago.

Canada Revenue Agency financial documents also show that the Canadian charity transferred $10,000 directly to the terrorist group’s leader, Yasin Abu Bakr.

In Gadhafi’s scheme, according to federal government files, money was wired in U.S. funds to the personal bank account of Assem Fadel, then transferred to the bank account of the World Islamic Call Society’s Canadian branch, only to be distributed to known terrorist organizations.

Fadel, 75, is the president of the Islamic Call Society’s sole Canadian franchise, located on Kent Street in London, Ont.

“The allegations are unbelievable,” Fadel said, when told the society had been linked to the JFK plot.

Asked why money from Gadhafi’s jihad fund would be transferred to his own bank account and then deposited into the charity’s bank account, Fadel told the Citizen that he handled the money personally because the deposits were in U.S. funds.

“The charity doesn’t have a U.S. bank account so the money came to me and I distributed the money as directed by the mother organization in Libya,” Fadel said.

Fadel said he will not appeal the government’s March 26 ruling to revoke the registration of his charity, saying it’s too much of a “hassle.”

El Adel: no price too high for nukes

Saif el Adel has been named the new, acting head of al Qaeda, according to a reliable insider source.

CNN’s Peter Bergen has the news article here explaining the details.

Long War Journal plumbs farther into el Adel’s background, particular el Adel’s extensive ties to and presence in Iran.

One item of interest from the Long War Journal analysis describes el Adel’s willingness to pay any price in order to procure Russian nuclear devices:

Throughout 2002 and 2003, the CIA collected disturbing intelligence on al Qaeda’s pursuit of lethal weapons while holed up inside Iran. In his autobiography, At the Center of the Storm, former Director of Central Intelligence George Tenet writes:

From the end of 2002 to the spring of 2003, we received a stream of reliable reporting that the senior al Qaeda leadership in Saudi Arabia was negotiating for the purchase of three Russian nuclear devices. Saudi al Qaeda chief Abu Bakr relayed the offer directly to the al Qaeda leadership in Iran, where Saif al Adel and Abdel al Aziz al Masri (described as al Qaeda’s “nuclear chief” by Khalid Sheikh Mohammed) were reportedly being held under a loose form of house arrest by the Iranian regime.

Al Adel told Abu Bakr “that no price was too high to pay if they could get their hands on such weapons,” according to Tenet. But al Adel “cautioned” against “scams,” saying that “Pakistani specialists should be brought to Saudi Arabia to inspect the merchandise prior to purchase.”

El Adel may start pressing the flesh among Arab bankrollers if he wants to keep his new job, restore al Qaeda’s financial health, and get enough money for his old dreams of a nuclear bomb.  And the West will need to keep as much of a financial squeeze on al Qaeda as ever.

Obama pledges stimulus plan for Islam

From Americans’ tax dollars to the Arab plate, Pres. Obama promises a “four pillars” strategy to give an economic boost to an increasingly sharia-infested Middle East.  And will the Arab nations recognize Israel, or will the West receive anything in return?  No.

The fungible aid will pose a genuine risk of being misused by newly forming Arab governments under the influence of the Muslim Brotherhood, al Qaeda franchises, and grass roots orthodox Islamists.

From the Sydney Morning Herald on May 20:

US to push global aid plan for Middle East

THE US has drafted new aid packages for Egypt and Tunisia worth billions of dollars and is urging global trade and financial support for the emerging democracies of the Middle East and North Africa.

President Barack Obama was set to outline details of the deals in a speech today at the State Department, which was set to deal with the historic changes in the region and their impact on US foreign policy.

Billed as a landmark to match his 2009 Cairo speech, in which he cited a ”new beginning between the United States and Muslims”, Mr Obama was expected to call for international aid on a scale similar to that delivered to eastern Europe after the fall of the Berlin Wall in the late 1980s.

It comes as Washington increased pressure on Syria with a new round of sanctions against the government in response to its crackdown on pro-democracy demonstrators, and as key administration figures urged authorities in Yemen to speed up their political transition.

Mr Obama was to outline a possible ”four pillars” approach by the world community