EU Agrees to Stronger Iran Sanctions

The European Union announced today that it would be imposing robust sanctions on Iran, targeting its energy, shipping, insurance and financial sectors. After seven years of being out-negotiated and out-organized by the mullahs, the 27 member states of the EU are now more cognizant of the Iranian regime's deceptive financial practices to secure funding for its nuclear weapons program and its terror entity, the Islamic Revolutionary Guards Corps (IRGC).

This move comes on the heals of the U.S. Congress's recently passed hard-hitting sanctions, aiming at Iran's vulnerable energy sector and its IRGC. The IRGC are the hard-line Ahmadinejad loyalists who crushed the country's pro-democracy movement a year ago.

Given the massive EU-Iranian trade relationship, the EU is uniquely positioned to leverage its economic muscles over Iran's rulers and bring the regime's financial interests to a grinding halt. EU exports to Iran totaled 14.1 billion euros in 2008, and import trade amounted to 11.3 billion euros, 90 percent of which was energy. If the EU decides to pump resources into enforcing the sanctions, the efficacy of ratcheting up the pressure might cause further labor unrest and deep social discontent. In the first half of July, probably as a result of the sanctions already imposed, powerful merchants in the Tehran bazaar went on strike. The last time roving bazaar strikes hit Iran was 1978, prompting the collapse of the Shah in 1979.

Coupled with U.S. sanctions that also target Iran's energy and financial businesses, the EU sanctions might well be the last, best chance to stop Iran's illegal nuclear program without the use of military force.

Iran's bellicose rhetoric and recalcitrant behavior have alarmed the international community, which helps explain the June Global Pew poll showing that a majority of the French (59 percent) and even the typically dovish Germans (51 percent) would consider armed action against Iran if its rulers do not pull the plug on its unlawful drive toward obtaining nukes. Iran's aggressive plan to dominate the Middle East has also upset Sunni countries, including Egypt and Jordan. Even majorities in Egypt and Jordan, according to the Pew survey, are not averse to launching attacks against Iran, revealing the widespread anxiety in the region about a nuclear-armed regime in Tehran.

Writing in last week's Wall Street Journal, Gerald Seib noted that the potent combination of EU and U.S. sanctions ” have the potential to directly slow Iran's nuclear program by shutting off the flow of international financing and technology needed to keep elements of it moving ahead”.

According to Mark Dubowitz, executive director of the Foundation for Defense of Democracies, and Ilan Berman, vice president of the the American Foreign Policy Council, “about 60 percent of the technology used by Iran to exploit its natural gas sector comes from one European nation: Germany.”

All of this means that if Germany and countries, for example, like Switzerland, whose energy giant Elektrizitäts-Gesellschaft Laufenburg (EGL) is set to implement its 18 billion euro gas deal with the National Iranian Gas Export Company (NIGEC) in defiance of U.S. complaints, pull the plug on their support of Iran's energy and infrastructure, there might very well be a chance to alter Iran's dangerous conduct. The alternative could have even graver implications.

Benjamin Weinthal is a fellow at the Foundation for the Defense of Democracies.