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US-IRAN: Key Senator Pushes “Nuclear Option” Against Central Bank

Jim Lobe*

WASHINGTON, Nov 17 2011 (IPS) - Amid simmering tensions surrounding Iran’s nuclear programme, a key pro-Israel U.S. senator has tabled legislation that would effectively ban international financial companies that do business with the Central Bank of Iran (CBI) from participating in the U.S. economy.

Dubbed the “nuclear option” by its critics, the measure, which was introduced Thursday in the form of an amendment to the 2012 defence authorisation bill, is designed to “collapse the Iranian economy”, according to its principal sponsor, Illinois Sen. Mark Kirk, by making it virtually impossible for Tehran to sell its oil.

But independent experts, including some officials in the administration of President Barack Obama, say the impact of such legislation, if it became law, could spark a major spike in global oil prices that would push Washington’s allies in Europe even deeper into recession and destroy the dwindling chances for economic recovery here.

“The price of oil …is a primary driver of the recovery that’s going on worldwide, and the strength of our economy and that of many of our allies,” warned the director of the U.S. Treasury’s Office of Foreign Assets Control, Adam Szubin, in testimony before a Congressional committee earlier this week.

The measure could also split the international coalition, including Washington’s European allies, as well as Russia and China, that Obama has carefully built and nurtured over the past three years to press Iran into curbing its nuclear programme, according to the legislation’s critics.

And it could also boost popular support for regime hardliners in Tehran who have long charged that Washington is trying to destroy Iran.

Reformist forces, including senior figures in the “Green Movement”, have long warned that sanctions affecting the general population – as opposed to “targeted sanctions” against specific individuals or institutions – would undermine their efforts to challenge the regime.

The amendment, which is more stringent than a similar measure that is wending its way through the House of Representatives, was introduced amid simmering regional tensions touched off earlier this month when the Israeli press reported that Israeli Prime Minister Binyamin Netanyahu and his defence minister, Ehud Barak, were trying to persuade their government to approve a pre-emptive strike on Iran’s nuclear facilities.

Those reports appeared to be part of a deliberate campaign in the run-up to last week’s release by the International Atomic Energy Agency (IAEA) of its latest report on Iran’s nuclear programme to “generate stronger international sanctions” against the regime, according to Yossi Alpher, a former senior intelligence officer who publishes the widely read blog.

While the report offered little that was not already known by experts about Iran’s nuclear programme, it cited what it alleged was new evidence that “Iran has carried out activities relevant to the development of a nuclear device” since 2003 – the date when most analysts believe it abandoned a centralised effort to build a nuclear bomb.

Iran claimed that the evidence cited by the IAEA was fabricated, and the report itself has come under attack by some experts, including a U.S. nuclear engineer and veteran IAEA inspector and department director, Robert Kelley, who characterised it as consisting mostly of “old news” and also questioned the authenticity of some of the evidence cited in it.

Nonetheless, in deliberations that began at IAEA headquarters in Vienna Thursday, the so-called P5+1 – the five permanent members of the U.N. Security Council and Germany that have been negotiating with Iran over its nuclear programme since 2008 – reportedly agreed to a draft resolution that expresses “deep and increasing concern about the unresolved issues …, including those which need to be clarified to exclude the existence of possible military dimensions.”

The resolution, which is expected to be approved by the agency’s governing board Friday, also reportedly insists it is “essential” and urged the IAEA to “intensify their dialogue” to clear up the issues. But it reportedly does not refer the report to the U.N. Security Council for the possible imposition of a fifth round of U.N. sanctions against Tehran, a move that Russia and China were considered certain to oppose.

Nonetheless, the excitement spurred by Israel’s whisper campaign, the actual release of the IAEA report, as well as Israel’s apparent encouragement of speculation that it may have been behind an explosion at the Alghadir missile base close to Tehran that killed the architect of Iran’s ballistic missile programme and 16 others in the Islamic Revolutionary Guard Corps (IRGC) Monday, have combined to create a sense of urgency on Capitol Hill where the Israel lobby, acting mainly through the American Israel Public Affairs Committee, exerts its greatest influence.

Kirk, who is among the biggest recipients of campaign dollars from AIPAC-linked political action committees over the past decade, has been calling for sanctions against the CBI, or Bank Markazi, for well over a year. In August, he sent a letter signed by 91 of his 99 fellow-senators to Obama in which he renewed his appeal, asserting that “(t)he time has come to impose crippling sanctions on Iran’s financial system.”

The clamour on Capitol Hill to impose what are often referred to as “crippling” sanctions rose last month after the Obama administration charged that the IRGC had plotted with an Iranian-American car salesman in Texas to retain a Mexican drug cartel to assassinate the Saudi ambassador here in Washington.

The House version of the CBI sanction, which was sponsored by Democratic Rep. Howard Berman, requires the president to determine whether the CBI is providing support for Iran’s nuclear programme, major conventional weapons systems, or terrorism.

If so, he would be required to sanction any international financial institutions doing business with the CBI but doesn’t specify what sanctions are to be imposed. The president is also given blanket authority to waive sanctions if he deems it in the national security interest.

Kirk’s version, which had not been expected to be taken up until next year, is far more draconian in that it gives the president no discretion in how to impose sanctions and grants him waiver authority for only 60 days at a time.

It also provides a six-month delay for sanctions on companies buying oil from Iran in order to allow the international oil market to adjust and thus presumably avoid a price surge of the kind the administration has warned against.

“I think a big part of this is getting it on the books, so it’s not left up to Obama to decide what to do,” said Jamal Abdi, policy director of the National Iranian American Council (NIAC), which strongly opposes the legislation.

“Brick by brick, they’re building a wall designed to prevent the U.S. from diplomatically engaging Iran,” he said. “If it breaks up the (international) coalition, so be it. It’s probably viewed as a useful way of telling the international community, ‘Look, it’s either this, or it’s war.”

Attaching the amendment to the defence authorisation bill, which is due to be voted on after the Thanksgiving recess late this month, puts the measure on a faster track, although it could still be derailed by the partisan bickering that has paralysed the legislative process for much of the past year.

*Jim Lobe’s blog on U.S. foreign policy can be read at

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