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How to Punish Iran’s Despots


Berlin — In a few weeks’ time, the European Union’s foreign ministers will gather in Brussels to discuss a common response to Iran’s ongoing nuclear activities. To its credit, the EU reached a tentative agreement on Wednesday to impose an oil embargo on the Islamic Republic of Iran. Yet the EU can inflict still more economic and diplomatic pain on Iran’s rogue regime.

In November, the International Atomic Energy Agency (IAEA) published a report confirming that Tehran is developing nuclear weapons. The U.K. responded to the IAEA report by blacklisting the Central Bank of Iran, which conducts vital energy transactions for the Islamic Republic. Sanctioning the CBI will deny Iran funds for its nuclear-weapons program and its primary terror proxies, Hezbollah in Lebanon and Hamas in the Gaza Strip.

If the rest of the EU were to follow the lead of Britain — and U.S. legislation banning transactions with the CBI — Iran would lose billions in desperately needed revenue. Last year, Iran garnered about $73 billion in energy profits, making its gas and oil sector account for more than half its national budget.

In November — just a little over a week before Iran’s regime ordered a militia group to overrun the British Embassy in Tehran — the German media reported that the country’s defense ministry had made Europe’s most bizarre end run around international sanctions to date by selling Chancellor Merkel’s official jet to the sanctioned Iranian airline Mahan.

The deal, made through a Ukrainian middleman, demonstrates Germany’s reluctance to take any measures that might compromise its roughly €4 billion annual bilateral trade volume with Iran. EU leaders may soon witness the absurd spectacle of Iranian president Mahmoud Ahmadinejad and other sanctioned officials arriving at world capitals in Merkel’s old ride.

In early December, Iranian oil minister Rostam Ghasemi arrived at an OPEC meeting in Vienna despite an international travel ban. The EU, the United States, and Australia have all sanctioned Ghasemi for his involvement with Iran’s Islamic Revolutionary Guard Corps.

In December, an Austrian foreign ministry official called me, insisting that Vienna must honor its international agreements regarding OPEC, which has its seat there. Yet Austria and its EU partners have granted unnecessarily wide travel latitude to unsavory Iranian officials, including Atomic Energy Organization head Fereydoon Abbasi-Davani, who delivered a talk at the Vienna-based IAEA’s general conference in September. The Wall Street Journal rightly refers to Abbasi-Davani as a “dangerous man,” and according to the U.N. sanctions list, he is deeply involved in Iran’s nuclear and ballistic missile programs. The Austrians welcome him nonetheless.

Meanwhile Germany, Europe’s main economic engine, has proven equally lax toward Iran’s top representatives. #more#In October, the German Council on Foreign Relations, one of Germany’s leading think tanks — and a recipient of German foreign ministry funding — hosted Iranian deputy finance minister Muhammad Reza Farzin for a talk about promoting business ties with Iran and why EU sanctions against Tehran are futile.

The Free Democratic Party foreign-policy spokesman and Bundestag MP Rainer Stinner facilitated the Farzin visit. Stinner has previously stated his opposition to sanctioning Iran’s IRGC, on the grounds that it controls the majority of Iran’s economy and could endanger trade relations. (The Bush administration sanctioned the IRGC in 2007 because of its global terror activities.) Only four months earlier, Ruprecht Polenz, the head of the Bundestag foreign-affairs committee, welcomed members of the Iranian parliament, declaring that “sanctions do not rule out talks” with Iran.

The vulnerability of Iran’s economy cannot be overstated. Iranian deputy oil minister Ahmad Qalebani said in December that sanctions were making an impact, telling the regime-controlled Iranian Students’ News Agency that the country’s crude-oil production fell in 2011 “due to lack of investment in oil field development.”

If Iran’s leaders conclude that the world will not simply accept their nuclear program but will impose real costs if Iran continues its advances, they might rethink their calculations.

— Benjamin Weinthal is a Berlin-based fellow at the Foundation for Defense of Democracies.