Iran sanctions and business as usual

A bunch of Jewish groups are indignant about last week’s New York Times report that “over the past decade the United States government has allowed American companies to do billions of dollars in business with Iran and other countries blacklisted as state sponsors of terrorism.” 

But I can’t imagine any of them are really surprised.

The trade took place under the tough-talking Bush administration as well as under an Obama administration that initially sought diplomatic openings with Tehran.

In a particularly revealing paragraph, the Times reports that “Most of the licenses were approved under a decade-old law mandating that agricultural and medical humanitarian aid be exempted from sanctions. But the law, pushed by the farm lobby and other industry groups, was written so broadly that allowable humanitarian aid has included cigarettes, Wrigley’s gum, Louisiana hot sauce, weight-loss remedies, body-building supplements and sports rehabilitation equipment sold to the institute that trains Iran’s Olympic athletes.”

No doubt hot sauce is a matter of vital U.S. national interest.

This illustrates the hard reality that under all the bluster about sanctions, when there’s money to be made, loopholes will be found – even in the United States, which is the nation most committed to tough sanctions. If Washington has been lax in enforcing Iran sanctions, just imagine enforcement by governments that are far less convinced Iran represents a mortal threat to world peace.

I’m sure a tough-talking new Congress will find a way to restrict what the Times called a “little-known office of the Treasury Department [that] has granted nearly 10,000 licenses for deals involving countries that have been cast into economic purgatory, beyond the reach of American business.”

I’m just as sure pressure from business interests – and their allies in the campaign finance industry – will ensure that new loopholes are opened, all in the name of “national interests.”

In the end, foreign trade is like water running downhill; if there’s enough of it, it will find its way to the bottom no matter how many obstacles are thrown in its path.

That isn’t to say that in a universe of unattractive options sanctions aren’t worth imposing. But as the New York Times suggests, sanctions are hardly a panacea, given the economic imperatives that make strict enforcement so difficult.

About the Author
Douglas M. Bloomfield is a syndicated columnist, Washington lobbyist and consultant. He spent nine years as the legislative director and chief lobbyist for AIPAC.