Next for the Iran Sanctions: Making Them Actually Bite

The Obama administration scored a significant diplomatic success Wednesday when it persuaded the United Nations Security Council to approve new economic sanctions on Iran for failing to curb its nuclear program.

On that same day, this newspaper’s European edition carried an article reporting that companies in Germany—a nation that nominally supports the sanctions effort—increased their exports to Iran by 48% in March and 15% in the first quarter. Their imports from Iran rose by even greater margins. On the German front, at least, if Iran is to be economically isolated, the process has a ways to go.

Those contrasting pictures show the challenge in making the new sanctions have the bite they’re supposed to bring—and the extent to which the U.N. action starts rather than ends the American push to turn the economic screws harder.

The goal of the U.N. sanctions isn’t so much to end Iran’s nuclear program as to convince Tehran to engage in a meaningful discussion with the world’s big powers about how to turn that nuclear program into something that actually looks peaceful as opposed to weapons-producing. If there’s to be enough pressure to make that happen, it probably won’t come from the U.N. resolution, passed by the Security Council 12-2.

Instead, it will come in follow-on steps by the U.S. and the European Union to really shut down Iran’s access to international financial flows.

That isn’t to say that the U.N. resolution isn’t important; it is. Certainly Iran thought it important enough that Tehran worked hard to try to kill it in the cradle.

It banked on the Chinese and Russians to block it. When that failed, it turned to Turkey and Brazil to come up with a proposed nuclear swap deal in which Iran would give up some—but hardly all—of its low-enriched uranium in return for safer nuclear fuel.

That didn’t work either, so now there’s a new resolution. Certainly it has holes, but Susan Rice, the Obama administration’s U.N. ambassador, argues that it has “broken ground into whole new categories of sanctions” beyond the three previous sanctions resolutions.

She notes that it freezes the assets of 40 more Iranian companies, the most important of which are 15 tied to Iran’s Revolutionary Guards, protectors of the nuclear program. It prohibits Iranian investment abroad in enterprises that might aid in nuclear proliferation or ballistic missile development.

It bans sales of many conventional arms to Iran, a stricture designed to hit Iranian security services in a sensitive spot. And it establishes a new international framework for inspecting cargo shipments headed for Iran, and not just on Iranian-flagged vessels.

What it doesn’t do is really shut down Iran’s financial links to the outside world; it only urges nations to block transactions that “could” help Tehran’s nuclear program. That’s where follow-on American and European steps are supposed to go further, and hit harder.

And that’s also where European attitudes are so important, and so worrisome. The German relief valve from international economic pressure has been particularly significant. The latest figures from the German-Iranian Chamber of Commerce show that not only have German exports to Iran been increasing as the U.N. sanctions resolution approached, so have German purchases of Iranian goods. They doubled in March, and rose a startling 94% in the first quarter of the year.

Benjamin Weinthal, a researcher for the Foundation for Defense of Democracies, a think tank that has done extensive research on Iran’s economy, said he suspected that the spike was a sign that “the Germans want to absorb as much business as possible before a round of U.S. and EU sanctions.”

Mr. Weinthal noted that German-Iranian trade has “consistently hovered” around $5 billion annually, making Germany Iran’s largest EU trading partner almost every year. The trade has been important in helping Iran maintain and upgrade its economically crucial energy sector.

The think tank has chronicled a long list of blue-chip German companies, many in the energy and technology sectors, with projects under way in Iran.

In a tough economic environment, it’s clear, Germany is no more eager to give up jobs than is anybody else.

So where do things go from here? Iran’s leaders, of course, responded to the new sanctions with a dismissive wave of the hand. Still, it’s at least possible—depending on how well it is enforced, and how well the Germanys of the world abide by it and go further—that the resolution could generate enough pressure to make Iran think about the price of things nuclear.

If not, nobody seems to have a Plan B—at least not one that anybody likes very much.