(photo credit: AP [file])
The Bush administration slapped serious sanctions on Iran Thursday designed to isolate it from the world economy, escalating the pressure on the Islamic Republic to stop its nuclear defiance and on allies to comply with the US
The new measures designate Iran's Islamic Revolutionary Guard Corps (IRGC) and its Ministry of Defense and Armed Forces Logistics as weapons proliferators, and the Quds Force off-shoot of the IRGC a supporter of terrorist organizations.
Two Iranian banks, Melli and Mellat, were also cited for proliferation-related activity and a third, Bank Saderat, was labeled a terror financier.
The classification means any US assets of 25 named IRGC companies and individuals would be frozen and Americans would be barred from doing business with them. Most significantly, US officials said, foreign firms would be subject to American sanctions should they engage with the designated entities.
US Secretary of State Condoleezza Rice described the new steps as ways "to increase the costs to Iran of its irresponsible behavior." She cited Iran's ongoing pursuit of nuclear technology, missile buildup, support for terrorist groups in Iraq and the Palestinian territories and calls to wipe Israel off the map in explaining the administration's decision.
The Israeli Foreign Ministry welcomed the US decision, saying it represented "an important contribution through international means to pressure Iran to abandon its nuclear program."
A senior official in the Prime Minister's Office said, "We totally and absolutely back and support it, and hope other countries will take similar steps."
The move comes at a time when international diplomatic efforts to convince Iran to stop enriching uranium have been stalled. It has been seven months since the passage of the last UN Security Council resolution, which imposed limited sanctions on Iran and the IRGC, with another resolution coming no earlier than November. These efforts have been hindered by Russia and China. The Europeans have also often been less supportive of broad punitive financial measures.
Rice expressed some frustration at the pace of those efforts during testimony before Congress Wednesday.
"I have preferred a voluntary effort rather than secondary sanctions on foreign companies," she said. "But I've also been very clear to our allies that this is not something that can go on endlessly, that there is urgency to this issue."
Diplomacy, she said, needs "teeth" to cut Iran off from the financial system and make it "difficult for Iran to do its business."
A former US government official said frustration with the Security Council process "definitely" was a factor in the decision to impose unilateral sanctions. "Not a lot has happened in a while," he said. "You have to do a lot more to move the ball forward."
At the same time, he said, the IRGC - other than the Quds force - was spared a blanket designation for terrorism and was instead labeled a weapons proliferator. That reflected the existence of a greater international consensus on the proliferation charge, he said. When it comes to terrorism, the EU has been reluctant to take steps such as designating the Iran proxy Hizbullah a terrorist group.
The test of success for these unilateral measures would be how successful they would be in gaining traction from other governments and financial institutions, the former official said.
One sign of the unease of other nations to go along with such designations is the reports that have suggested the IRGC designation - first reported over the summer - was postponed due in part to the objections of some European and other allies, as well arguments from some quarters of the administration.
But since then, little diplomatic progress with Iran has been made, and Europe has indicated willingness to go along with further action on Iran. In one such step, the Financial Action Task Force, which counts Europeans among its member states, issued a warning recently on the risk of doing business with Iran.
"It's likely to get a mixed reaction," with countries such as the UK and France supportive but others less enthusiastic, said Michael Jacobson, a senior fellow of the Stein Program on Terrorism, Intelligence, and Policy at the Washington Institute for Near East Policy, of Thursday's designations.
"Even if there are foreign governments that don't like it, you still hope the private sector, especially those companies that want to do business with the US, heeds it."
But Russia on Thursday already reacted negatively to the American announcement.
Speaking in Lisbon, Portugal, Russian President Vladimir Putin said, "Why worsen the situation by threatening sanctions and bring it to a dead end? It's not the best way to resolve the situation by running around like a madman with a razor blade in his hand."
In Teheran, the Guards' leader, General Muhammad Ali Jafari, shrugged off increased US pressure on the force.
"Today, the enemy has concentrated the sharp point of its attacks on the Guards," Jafari told a military ceremony in Mashhad, east of Teheran, according to the state news agency IRNA. "They have applied all their efforts to reduce the efficiency of this revolutionary body. Now as always, the corps is ready to defend the ideals of the revolution more than ever before."
Some in America have expressed skepticism about the efficacy of the sanctions.
Anthony H. Cordesman, the Arleigh A. Burke chair in strategy at the Center for Strategic and International Studies, questioned the move, saying the Bush administration "has not provided any analysis to show how the new sanctions are justified, how they would actually work, or what effect they should have."
"There has been no mention of how they relate to US efforts to work with Britain, France and Germany, or in the context of the UN," he said. "There has been no explanation of why and how these sanctions would be enforced when in so many previous cases the US has taken no action or made empty threats."
But Jacobson, who has tracked the effect of previous US designation of Iranian banks, said, "There's real impact there. It's not just symbolic." US Secretary of the Treasury Henry Paulson, in announcing the measures alongside Rice Thursday morning, said financial institutions are already heeding the call.
"It is plain and simple: reputable institutions do not want to be bankers to this dangerous regime," he said. "We will continue to work with our international partners to prevent Iran from abusing the international financial system and to advance its illicit conduct."
Paulson also warned: "In dealing with Iran, it is nearly impossible to know one's customer and be assured that one is not unwittingly facilitating the regime's reckless behavior and conduct."
The Revolutionary Guards organization, formed to safeguard Iran's 1979 Islamic revolution, has pushed well beyond its military roots, and now owns car factories and construction firms and operates newspaper groups and oil fields.
Current and former members now hold a growing role across the country's government and economy, sometimes openly and other times in shadows. The guards have gained a particularly big role in the country's oil and gas industry in recent years.
The small Quds Force wing is thought to operate overseas, having helped to create Hizbullah in 1982 in Lebanon and to arm Bosnian Muslims during the Balkan wars.
Rice repeated earlier offers of the opportunity for negotiations with Iran should it comply with international demands regarding its nuclear program. Other officials echoed that sentiment, maintaining the announcement was not a prelude to armed conflict with Iran despite concerns from some allies that the administration is building a case for war.
"In no way, shape or form does it anticipate the use of force," said Nicholas Burns, the State Department's No. 3 diplomat.
Herb Keinon and The Associated Press contributed to this report.