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Here is a comment I left on an article published on The New Republic written by Ed Morse and Michael Makovksy, entitled “Over a Barrel”. These guys seem to get the idea that new sanctions against Iran won’t work.

“The United States Department of Treasury Office of Foreign Assets Control already administers U.S. sanctions against Iran. Under these sanctions no U.S. persons (individuals and entities alike) are prohibited from engaging in transactions with the Islamic Republic of Iran. These sanctions are country based, therefore, they carry over to prohibiting transactions with any Iranian individuals or companies.

To date their is no empirical evidence to show that these sanctions regulations have been effective. The Islamic Republic is no closer to collapse than it has ever been. Iranians and those wanting to export have shown incredibly ingenuity in deftly circumventing the Iranian Sanctions Regulations. Moreover, there is nothing to show that this will not be the case when a new set of sanctions are leveled at the regime.

Essentially, sanctions regulations by themselves are today’s equivalent of the Maginot Line. It’s a static defense in a world where business transactions are carried out at lightspeed.

That’s not to say they should not exist. They should, however, where we have failed is in their implementation. We need more awareness and cooperation with the private sector. This is to say, we need to enforce the regulations we already have, before we begin drafting more expansive and convulted regulations. OFAC and the United States Department of Commerce Bureau of Industry and Security must put more effort into investigating the international business transactions being conducted by U.S. individuals and entities that may potentially involve sanctioned entities and nations.

On an international front, incentives should be provided to other nations for their implementation of sanctions regulations against Iran that mirror ours.

We have been engaging in tough talk for 30 years and it has done nothing. The culture inside the Beltway of “who can be tougher on Iran” is flawed and counterproductive.

In business when you want a job done you pay someone to do it. What you do not do is threaten others with chest pounding and rhetoric until they do want you want. So if the U.S. wants Iran to abstain from engaging in certain activities, and wants the international community to support its position, then its time to incentivize that abstainment and that support.

Acting as if our opinion on the matter is the right one and everyone needs to fall in line has not worked in the past, is not working now, and will not work in the future. It is time for a change in Washington’s thinking on this matter.”

The author of this blog is Erich Ferrari, an attorney specializing in OFAC litigation. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

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