Sanctioning Iran after Northern Shield: To bite, America must also sanction Iraq

Exports of Iranian oil are expected to drop as much as 1.7 million barrels daily.

Iranians shout slogans during a protest in Tehran, Iran, against President Donald Trump, May 11, 2018 (photo credit: REUTERS/TASNIM NEWS AGENCY)
Iranians shout slogans during a protest in Tehran, Iran, against President Donald Trump, May 11, 2018
The IDF’s Operation Northern Shield exposed a network of terror tunnels 25 meters below ground dug by Hezbollah with the explicit intent of a ground offensive against Israel.
Project ‘Conquering Galilee,’ as (Hassan Nasrallah, the leader of Hezbollah often refers to it) is only part of Iran’s annual investment in Hezbollah that is between $800 million and $1 billion.
Israel has already demanded sanctions against Lebanon as a result, hastily declined by the United States already. But Hezbollah’s long-term planning of over four years revealed by the tunnel network escalates the urgent need for the US and the world to expand anti-Iran sanctions, including Iran’s activities in Iraq, if Iran’s overtly predatory influence in the region is to be curtailed.
Rick Perry, the US Energy Secretary, told a Baghdad audience this week that the US sanctions against Iran continue and that the US is a strong supporter of the Iraqi economy.
The recent arrest in Canada of a Huawei executive underlines the consequences of violating these sanctions. Also this week, EU foreign policy chief Federica Mogherini confirmed plans to defy US Iran sanctions and continue with a plan for a new payment system to trade with Iran.
Iran’s President Hassan Rouhani has long been capitalizing on shoring political capital derived of escalating anti-American sentiment. Europe, spearheaded by the UK, France and Germany, is scrambling to create a “special purpose vehicle,” or an economic channel to safeguard European interests in non – US trade with Europe. Russia has vowed to continue selling Iranian oil to third parties, irrespective of penalties.
Particular focus has been on evading restrictions on the international messaging system SWIFT (the Society for Worldwide Interbank Financial Telecommunication) which permits global money transfers.
The United States has already banned Iran from using US dollars and barred trade in automobiles, gold, steel, coal and aluminum. Oil exports in Iran, which surged to 2.5 million barrels of crude daily after President Barack Obama lifted Western sanctions in conjunction with the Iran Nuclear Deal, will now be sanctioned as part of the current administration’s escalating pressure on Iran.
Exports of Iranian oil are expected to drop as much as 1.7 million barrels daily. Excluding Iran from the SWIFT messaging system seeks to prohibit financial transactions with Iran’s central bank.
To date, the United States has granted eight nations waiver status. South Korea, India and Japan, among others, will be allowed to continue buying Iranian oil after the sanctions. Turkey is also angling for waiver status.
This is vital for Turkey as the country buys more than half its oil from Iran. Earning international political capital following the brutal Jamal Khashoggi murder, Turkey appears not only to have leverage over the United States but to be willing to apply pressure to both the US and Saudi Arabia both of whom fear further destabilization of Saudi Arabia should more incriminating evidence implicating Crown Prince Mohammed Bin Sultan be released by Turkish President Recep Tayyip Erdogan.
Overlooked in all this noise is the critical role Iraq plays in the equation. Astonishingly, the United States has also granted Iraq waiver status from the Iran sanctions, even as Iran sees Iraq as its own economic marketplace and launching pad for military operations.
Recently-elected Iraqi Prime Minister Barham Saleh has announced his desire to tie Iraq ever closer to Iran. These revelations follow US Secretary of State Mike Pompeo’s announcement that Washington is canceling its 1955 treaty with Iran after the International Court of Justice ruled the American sanctions needed to be modified, days after President Donald Trump’s address to the UN General Assembly.
In his UNGA address, Trump made clear the United States’s intention to curtail Iran’s transnational militia activities. It is a striking contrast from Obama’s earlier overt legitimization of Iran from the same group of leaders.
Announcing that re-imposed US sanctions (lifted under Obama only two years ago) against Iran would not only continue, but escalate until Iran’s ambitions in the Middle East Region are duly sobered, Trump has already designated the Iranian Revolutionary Guard Corps a foreign terrorist organization, freezing the Iranian militia out of the US financial system.
Iranian ambitions inside Iraq are growing unchecked within the wreckage that remains of the legacy of the American invasion and occupation of Iraq. Because of Iran’s penetration into the failing state, today’s federal Iraq must be considered annexed to Iran.
If any sanctions the United States places on Iran are to bite, they must encompass federal Iraq – (exclusive of pro-American and staunch US ally semi-autonomous Kurdistan) – in order to target Iran’s transnational activities.
In a reflection of escalating US sanctions, Iranian President Hassan Rouhani, in a classic Islamist move cried Islamophobia, accusing the United States of ‘starting a war’ against ‘the Islamic system.’ (The insinuation is that Islamophobia is America’s motive). Rouhani reiterated this accusation of American ‘unilateralism’ explicitly in a recent Financial Times column.
Rouhani attended the UNGA where Iran urgently sought to obtain relief from the economic burden of current US sanctions through greater engagement with Russia, China, Britain, France and Germany.
That was even as these same nations remain committed to the Iran deal, despite ignoring their own role in strengthening the Iranian Revolutionary Guard Corps. The IRG is now designated a foreign terrorist organization by the United States, and has emerged in recent years as a more formidable foe. Its ambitions are revealed in the recently discovered Hezbollah tunnels.
While the Kurdish Regional Government under President Masoud Barzani stands shoulder to shoulder with the United States in opposition to Iran, the central Baghdad Shi’ite government has allowed southern and central Iraq to become de facto Iran’s western front, at least for missile launching operations. Sanctioning central and southern Iraq is a necessary jolt to the increasingly anti-American, anti-Israeli, pro-Iranian stance Baghdad now assumes with impunity while directly impacting Iran’s domestic economy and its military ambitions.
Until sanctioning federal Iraq, Iran continues to enjoy an increasingly militarized outpost in a geopolitically critical area, a vibrant rogue economic market where reportedly black market goods and corruption facilitate arms smuggling including the unlawful transfer of conventional weapons across the region.
There is also reportedly money laundering and the sale of oil on the black market, and a direct land-route to its other outpost, Syria, which is now in the process of ‘Lebanonization’.
Certainly, economic sanctions can drive radicalization, as economist and counter terrorism expert Loretta Napoleoni has observed in her book, The Islamist Phoenix. Critics claim denying Iraq waiver status in the US sanctions on Iran could cause blowback.
Hollowed by 15 years of conflict including the American occupation, Iraq is now fully reliant on Iran for goods, electricity, natural gas, water and even foodstuffs. Ironically this Iraqi dependence on Iran has been a direct outcome of the American invasion and occupation of sovereign Iraq. Penalizing federal Iraq in addition to Iran could drive an already pro–Tehran Iraqi government even closer to the Islamic Republic of Iran.
The risk may be necessary. While US sanctions on Iran are a powerful deterrent to its regional ambitions, weakening Iran’s grip on Iraq is essential to curtailing its regional influence.
Limiting Iran now involves defanging the Shia-proxy government in Iraq through sanctions, repelling Iranian influence from Federal Iraq, and an unalloyed commitment to the true empowerment of the Kurds into formal political independence.
This involves US backing of the Barzani-allied Kurdish Democratic Party who are committed to the West and share America’s circumspection towards Iran.
Without the sanctions on Iraq, a country seemingly de facto annexed to Iran in all ways except name, US sanctions on Iran would have limited impact. Without sanctions, Iran’s nefarious influence will only grow and more Hezbollah tunnels will follow, anticipating future international conflict.
Qanta A. Ahmed is a physician, author of In the Land of Invisible Women and Life Member of the Council on Foreign Relations. @MissDiagnosis