Free Markets, Free People

sanctions

So how are those sanctions against Russia going?

Ask France:

France will press ahead with a 1.2 billion-euro ($1.66 billion) contract to sell helicopter carriers to Russia because cancelling the deal would do more damage to Paris than to Moscow, French diplomatic sources said on Monday.

France has come under pressure from Washington and some European partners to reconsider its supply of high-tech military hardware to Moscow. It had said it would review the deal in October – but not before.

However, French diplomatic sources said on Monday the 2011 contract with Russia for two Mistral helicopter carriers, with an option for two more, would not be part of a third round of sanctions against Moscow.

“The Mistrals are not part of the third level of sanctions. They will be delivered. The contract has been paid and there would be financial penalties for not delivering it.

“It would be France that is penalized. It’s too easy to say France has to give up on the sale of the ships. We have done our part.”

And, we can’t have the sanctions hurt France, can we?

One of the attack helicopter carriers will be deployed in the Black Sea, where all the trouble began:

The first carrier, the Vladivostok, is due to be delivered by the last quarter of 2014. The second, named Sebastopol after the Crimean seaport, is supposed to be delivered by 2016.

How does France justify its intention to provide the ships?

“We are not delivering armed warships, but only the frame of the ship,” the source said.

That, of course, misses the entire point of sanctions. It is a punishment for wrong behavior. It is supposed to be a way one side teaches the other not to do what it has done. And the Western powers agreed that “strong sanctions” be imposed because of Russia’s unacceptable behavior. Now we see the exceptions being made – exceptions that Russia will, rightfully, view as weakness.

Additionally, that “frame” the French are dismissing as inconsequential will give Russia access to advanced technology. And these “frames” have quite a potent capability. The Mistral can carry up to 16 attack helicopters, such as Russia’s Kamov Ka-50/52; more than 40 tanks or 70 motor vehicles; and up to 700 soldiers.

As for leadership from the US insisting that the French not provide the Russians with advanced weaponry?

A French government source said at no point had the U.S. officially expressed any concern over the sale …

Another example of why “strong sanctions” is, in reality, an oxymoron, especially when the Western powers are concerned.

~McQ

Iran, the Straits of Hormuz and “Armageddon”

Iran is supposedly being sternly warned that attempting to close the Straits of Hormuz will not be tolerated.  The Iranians have put forward a bill in their Parliament which would require warships from any nation desiring to transit the Straits to get the permission of Iran first.

Of course, the Straits are considered by the rest of the world as “international waters” while the premise of the Iranians is they’re national waters subject to the control of Iran.

Most experts believe that this has been precipitated by sanctions imposed on Iran by much of the world, but especially the Western powers.  Closing the Straits of Hormuz would be viewed by most of them as an act of war.

So, per the New York Times, a secret channel has been opened with Iran’s top leader, Ayatollah Ali Khamenei, in which he has been informed the US would consider any such attempt to close the Straits as “a red line” that would provoke a response.

DoD has made the position publically official:

Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, said this past weekend that the United States would “take action and reopen the strait,” which could be accomplished only by military means, including minesweepers, warship escorts and potentially airstrikes. Defense Secretary Leon E. Panetta told troops in Texas on Thursday that the United States would not tolerate Iran’s closing of the strait.

So the line is drawn.  The hand is closed into a fist with a warning.  Bluff or promise?  Will Iran test it to see?

Here’s why some think they won’t:

Blocking the route for the vast majority of Iran’s petroleum exports — and for its food and consumer imports — would amount to economic suicide.

“They would basically be taking a vow of poverty with themselves,” said Dennis B. Ross, who until last month was one of President Obama’s most influential advisers on Iran. “I don’t think they’re in such a mood of self sacrifice.”

Of course fanatics often don’t think or reason in rational terms, but Ross has a point.

Meanwhile, as the sanctions continue to bite, Iran’s president is finishing up a South American swing to shore up support (and resources one supposes) for his regime from the usual suspects – Chavez, Ortega and their band of merry socialists.  China is also a player in all of this, although not a particularly enthusiastic one.  Iran exports 450,000 barrels a day of oil, which is now not being bought by Europe or the US.  So it sees an opportunity here to up its share of that total.  John Foley thinks China will fudge on sanctions, at least partially.  That, of course, could extend the drama.

And while all of this is going on, Iranian nuclear scientists are blowing up pointing to some sort of effort by some nation(s) or group to slow and frustrate what everyone believes is Iran’s push for nuclear weapons.  That, by the way, may be part of the discussions in South America if you get my drift.

Don’t know if you noticed recently, but the Doomsday Clock has added a minute, the first since 2007 when it subtracted one.  We’re no 4 figurative minutes from “Armageddon”.  Iran certainly figures in the move.

So far, the “reset” is going just swimmingly, isn’t it?

~McQ

Twitter: @McQandO

Turkey continues to sell gasoline to Iran despite sanctions

So now what?

We had the tough talk from Obama and the State Department about “new” sanctions designed to bring Iran to its knees over the development of nuclear weapons.

But now the administration is face with walking the walk concerning those sanctions.  And apparently Turkey isn’t at all worried or concerned about the US’s reaction:

Ankara will continue to permit Turkish companies to sell gasoline to Iran, despite US sanctions against fuel exports to Islamic regime, Reuters reported on Wednesday.

"If the preference of the private sector is to sell these products to Iran, we will help them," said Turkish Energy Minister Taner Yildiz.

Tupras, Turkey’s sole oil refiner and gasoline exporter, expressed little fear of retribution from US Treasury officials who have the power to ban sanctions violators from accessing the US banking system or receiving US contracts.

"For us, Iran is more important than America because we get crude oil from them. We don’t get anything from America," a Tupras official was quoted as saying.

It seems that Turkey has figured out that our new motto is “Speak loudly and carry no stick”.  No fear and certainly no respect is shown in the statement by the Tupras official.  And Minister Yildiz is obviously waving away any official concern with his statement.

Two things are demonstrated by their stance.  A) Turkey is “all in” in it’s support of the “Islamic world”.  It has obviously made a choice between the being a part of the coalition of Middle Eastern Islamic countries and the West and NATO.  B) Turkey has been given absolutely no reason to believe we’ll actually enforce our sanctions and thus demonstrates no respect for them or the US.

I’m not sure that would have been the case 2 short years ago.  While Turkey was certainly moving away from the Western orbit at the time, their overt hostility to the US wasn’t at all evident.  And my guess is they knew the US would enforce sanctions then.  However, they have deduced that the US is a weak horse right now, and they plan to build their credibility in Middle East at our expense.  Defying the “Great Satan” is a great way to do that. 

And, of course, there’s the China problem.  China too is shipping in gasoline.  So in order to enforce sanctions against Turkey the US would have to do the same against China.  Oh – and our “good friends” the Russians as well.  Yeah, that’s right, Russia and China are both selling gasoline to Iran, and have come to no harm.  What’s the risk of bucking the US?  Turkey figures it to be nil.  And, it appears, they’re right.

The tough “new” sanctions, it appears, are a farce and our “friends” see no risk it flouting them.  It sort of boils down to the old western adage of “if you’re going to wear a gun, you have to be ready to use it”.  Apparently these three have figured out the gun the administration is wearing is empty.

There’s something to be said for respect and fear in foreign policy – but you have to actually do something (or be willing to do it) before the world community will heed what you say.  This administration’s weapons are words, not deeds.  And the expected result is on display in this little scenario, a scenario that you can expect to see replayed over and over and over again as long as it is in power.

~McQ

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Iran: If these are tough sanctions, what were the "low-impact" options?

Well I’m pretty sure Iran is just horrified at the new sanctions – the toughest ever as our president claimed.

“With time, we got a resolution that we felt was very meaningful and credible and significant,” said Susan E. Rice, the United States ambassador to the United Nations. “But had we wanted a low-ball, low-impact resolution, we could have had that in a very short period of time.”

Good thing they went for the brass ring and didn’t take a low-ball, low-impact resolution, by gosh. I mean, check this beauty out:

The main thrust of the sanctions is against military purchases, trade and financial transactions carried out by the Islamic Revolutionary Guards Corps, which controls the nuclear program and has taken a more central role in running the country and the economy.

Right – so now they’ll set up front companies and do their business through willing countries like Turkey, Brazil and Venezuela. Moving on:

The sanctions tighten measures previously taken against 40 individuals, putting them under a travel ban and asset freeze, but adds just one name to the list — Javad Rahiqi, 56, the head of the Isfahan Nuclear Technology Center.

Whoa – they added one person to the sanctions of travel bans and asset freezing for a total of 41? My goodness, the humanity. That has a terrific chance of stopping any nuclear program dead in its tracks.

More:

The sanctions require countries to inspect ships or planes headed to or from Iran if they suspect banned cargo is aboard, but there is no authorization to board ships by force at sea. Iran has also proved itself adept at obscuring its ownership of cargo vessels.

So, wait, other countries can try to inspect Iranian ships they suspect of carrying banned cargo, but they cannot use force to board that ship. In other words, all the Iranian captain has to say is “no” and refuse to allow them on board, and the “inspection” is over? Thank goodness they didn’t go for low-ball, low-impact sanctions. They’d have probably allowed the Iranians to board the inspecting ship.

Another aspect of the sanctions bars all countries from allowing Iran to invest in their nuclear enrichment plants, uranium mines and other nuclear-related technology, and sets up a new committee to monitor enforcement.

Well there you go – the one positive aspect of this whole thing: the UN has managed to form yet another committee which will offer employment to a plethora of 3rd world diplomats who might otherwise have to do something useful to earn their keep without it.

The almost childlike belief by this administration that it can accomplish anything through the UN, especially stopping Iran from achieving a nuclear device, is incredible on its face. But to think the list of “sanctions” above equals “tough” is mind-boggling.

There is no appetite among the 3rd world to punish Iran in favor of the US’s policy desires. And especially now that they see a weak horse in charge here. The Obama administration can call this anything they want, but calling them “tough sanctions” is embarrassing. Thank goodness they didn’t opt for the low-impact, low-ball option. I’m sure that included a strongly worded letter.

~McQ

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Mission Impossible

Yesterday, in the New York Times and other media outlets:

President Barack Obama secured a promise from President Hu Jintao of China on Monday to join negotiations on a new package of sanctions against Iran, administration officials said, but Hu made no specific commitment to backing measures that the United States considers severe enough to force a change in direction in Iran’s nuclear program.

In a 90-minute conversation before the opening of a summit meeting on nuclear security, Obama sought to win more cooperation from China by directly addressing one of the main issues behind Beijing’s reluctance to confront Iran: its concern that Iran could retaliate by cutting off oil shipments to China. The Chinese import nearly 12 percent of their oil from Iran.

Obama assured Hu that he was “sensitive to China’s energy needs” and would work to make sure that Beijing had a steady supply of oil if Iran cut China off in retaliation for joining in severe sanctions.

U.S. officials portrayed the Chinese response as the most encouraging sign yet that Beijing would support an international effort to ratchet up the pressure on Iran and as a sign of “international unity” on stopping Iran’s nuclear program before the country can develop a working nuclear weapon.

Today in the Jerusalem Post, via AP:

A state-owned Chinese refiner plans to ship 30,000 metric tons of gasoline to Iran after European traders halted shipments ahead of possible new UN sanctions, according to Singapore ship brokers.

[...]

A deputy Chinese foreign minister, Cui Tiankai, said Tuesday that China is ready to discuss all ideas that UN Security Council members put forward to deal with Iran’s nuclear program. But he said any agreement on Iran must involve all parties, not just one or two countries.

Cui said Iran’s legitimate right to have energy trade with other countries should not be undermined as the world pursues a settlement of the nuclear standoff.

Your mission, should you decide to accept it, is explain how today’s actions by China reconcile with the claim Obama made yesterday.

~McQ

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Brazil says “no” to Iranian sanctions

So far this South American swing has been a real tour de force for Hillary Clinton – first she manages to anger one of our more stalwart allies by giving false Argentine claims legitimacy and now Ms. Clinton has managed to get Brazil to publicly refuse our attempt to increase sanctions on Iran.

Brazil.

We can’t even get Brazil to go along with us:

Brazilian President Luiz Inacio Lula da Silva pre-empted Clinton even before she could make the case for new United Nations Security Council penalties. Silva is an outspoken opponent of sanctions, and his country currently sits on the Security Council, which will be asked to approve its toughest-ever penalties on Iran later this year.

“It is not prudent to push Iran against a wall,” Silva told reporters hours before meeting with Clinton. “The prudent thing is to establish negotiations.”

Clinton told a news conference she respects Brazil’s position but thinks if there is any possibility of negotiating with Iran, it would happen only after a new round of sanctions.

So that’s at least one no vote on the UN’s Security Council. China and Russia are no fans of the idea. That could mean up to 3 no votes. Yup, this sanctions thing is really taking off.

The U.S. officials said that despite clear differences at the moment, the Brazilians assured Clinton their current position was not “etched in stone.”

The officials spoke on condition of anonymity to discuss the private diplomatic exchange.

That’s diplo speech for “yeah, had a great time and I promise I’ll call you tomorrow”.

~McQ

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Russia: How’s that “reset button” working?

The push for international support for tougher sanctions against Iran seem to be going well with our good friends in Russia:

Russia will not support “crippling” sanctions against Iran, including any that may be slapped on the Islamic Republic’s banking or energy sectors, a senior Russian diplomat said Wednesday.

[...]

“We are not got going to work on sanctions or measures which could lead to the political or economic or financial isolation of this country,” Oleg Rozhkov, deputy director of the security affairs and disarmament department at Russia’s Foreign Ministry, told reporters.

“What relation to non-proliferation is there in forbidding banking activities with Iran? This is a financial blockade. And oil and gas. These sanctions are aimed only at paralyzing the country and paralyzing the regime.”

Well, yeah – that’s sort of the point of sanctions. Short of that, there are few options left to force Iran to comply with the will of the international community – such that it is. And this is one of the failings of the Obama administration’s approach.

You have to sort of root around to find that approach spelled out, but the clearest indication of how the administration approaches foreign policy is actually found in the DoD’s recently released Quarterly Defense Review. One sentence tells it all:

“America’s interests are inextricably linked to the integrity and resilience of the international system.”

In the past, US presidents have realized that, “the integrity of the international system depends upon the resilience of American power.”

The Obama administration (and this explains much of his world apology tour) has flipped that now putting “American power” second to the will and “integrity” of the “international system”.  As the article cited notes, Obama wants a “quiet world” so he can concentrate on his domestic agenda.  One way to do that is cede the US’s leadership role.

You can see how well that approach is working. Russia has just demonstrated the “integrity” of the “international system” by saying “no”. I wonder if Obama will call them obstructionists and “the country of ‘no’.”

Seriously though, this is quite a step back from the American leadership of the past, and it will have consequences. That statement in the QDR cedes our former position as the supposed leader of the free world to organizations like the UN. That has been a dream of the liberal left for decades. And as you read through the article I’ve cited for the QDR quote, look at the analysis that says that the plan reduces the American role in world by “disarming” us and structuring our military for a lesser role.

Russia is just the first of many nations which are going to defy the US’s attempts at pushing its foreign policy throughout the world because, essentially, there is no down side to doing so. We’re a weakened debtor nation (Putin recently consoled EU economic basket case Greece by pointing out the US is in the same boat) that has made it pretty clear that it won’t act without clear consensus from the “international system” this administration seems to love. Russia is obviously a part of that system and doesn’t mind at all stepping up and saying no. And China? Well, if Russia is this blatant and blunt about denying what the US wants, you can imagine China’s position.

Like I said, 2009 was the year of taking this administration’s measure on the foreign policy front. 2010 is the year that those sensing a power/leadership vacuum inherent in this US pullback attempt to fill it. Russia’s just the first to step up to the plate. We’ll hear from China soon.

~McQ

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Iranian Sanctions: Russia Makes A U-Turn

Not that some of us are at all surprised (for the umpteenth time, “Russia is not our friend”):

“At the current stage, all forces should be thrown at supporting the negotiating process,” he said. “Threats, sanctions and threats of pressure in the current situation, we are convinced, would be counterproductive.”

With that, Russian Foreign Minister Sergey V. Lavrov effectively killed any US hopes found in Russian President Dmitri A. Medvedev statement that “in some cases, sanctions are inevitable” of three weeks ago. As was predicted by many, the unilateral withdrawal of plans to base a missile defense in eastern Europe, an obvious attempt to better relations with Russia, yielded nothing.

Russia’s support is key to getting U.N. Security Council approval of any sanctions, but the country has traditionally been cautious on confronting Iran, a key trading partner and neighbor. In recent years, however, Russia has grown increasingly concerned about indications that Iran could be developing nuclear weapons, analysts say. Iran insists that its program is aimed only at producing energy.

Lavrov told reporters that Russia wants to focus on negotiations for now — particularly the concessions made by Iran this month, after the revelation that it had built a secret nuclear facility near Qom. Under heavy international pressure, the Islamic republic agreed to admit inspectors and send much of its uranium to Russia for enrichment.

Also key to any UNSC approval of sanctions is China – and they’re not at all sold on sanctions either.

However, as noted in the paragraph above, it is Iran which is in the driver’s seat here, not the US. Iran has again outmaneuvered everyone by officially revealing its “secret” nuclear facility near Qom and agreeing to allow it to be inspected. That move has effectively given the Russians the wiggle room they need to back away from imposing sanctions.  Iran has years of experience manipulating this process and has once again had its way.

Meanwhile, as Marty Peretz says, Hillary Clinton’s team was engaged in trying to make a “cupcake out of a turd”:

Senior administration officials said that the differences are tactical rather than substantive. Both sides agreed that Iran would face sanctions if it failed to carry out its obligations, a State Department official said, speaking on the condition of anonymity.

Which, of course means that nothing of substance came out of the talks. Such an agreement is the same agreement they had going into the talks. In essence, Russia turned the clock back on this process. And again, a reminder that China, a country whose support would be critical if sanctions are to be imposed, is nowhere on the playing field at the moment.

Anyway, to claim that differences are “tactical rather than substantive” is to try to hand wave away the fact that Russia is not presently on board to increase sanctions anytime soon when everyone was led to believe, just three weeks ago, that it was. I think that truly does represent a “reset”, but not in the way the Obama administration had hoped.

~McQ

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Iran Ready To Build Nuclear Bomb?

That’s what the UK Times is reporting:

Iran has perfected the technology to create and detonate a nuclear warhead and is merely awaiting the word from its Supreme Leader, Ayatollah Ali Khamenei, to produce its first bomb, Western intelligence sources have told The Times.

The sources said that Iran completed a research programme to create weaponised uranium in the summer of 2003 and that it could feasibly make a bomb within a year of an order from its Supreme Leader.

Of course, what we don’t know about Iran’s capability could fill a book. We’ve seen it variously reported that they a year away to ten years away – a good indicator that for the most part intelligence agencies haven’t a clue in reality.

However, as we know, nuclear bombs are old technology. The genie has been out of the bottle way too long to believe that Iran can’t build a bomb if it dedicates the time and resources to do so. And it certainly seems to have done both.

So now what?

That’s the salient question now. Let’s assume Iran has a bomb by this time next year – then what?

Well here’s the apparent game plan:

If Iran’s leader does decide to build a bomb, he will have two choices, intelligence sources said. One would be to take the high-risk approach of kicking out the international inspectors and making a sprint to complete Iran’s first bomb, as the country weathered international sanctions or possible air strikes in the ensuing crisis. The other would be to covertly develop the materials needed for an arsenal in secret desert facilities.

Last week, during a series of high-level US visits to Israel, officials outlined Washington’s plans to step up sanctions on Iran, should Tehran fail to agree on talks. Robert Gates, the Defence Secretary, and General James Jones, the National Security Adviser, said that Iran had until the end of next month, when the UN General Assembly is to meet, to make a positive move towards engagement.

If Tehran fails to respond, Washington aims to build a tough international coalition to impose harsh sanctions focusing on petroleum products — an area where Iran is particularly vulnerable because it sends almost all of its crude abroad for refinement.

The feeling, of course, is if these sorts of sanctions can be imposed, it will hurt the regime even further by adding more unrest among a population already not happy with the election outcome. And, per the Times, hit directly at the Revolutionary Guards Council, which is the main exporter of terrorism through its surrogates in various parts of the world.

Of course what isn’t mentioned by the Times is the one big fly in the ointment of getting this done – China. No China, no sanctions. And China has developed a pretty close relationship with Iran based on petroleum trade. In 2004 it signed two huge oil and gas deals with Iran. Presently 45% of China’s crude imports come from the Middle East and that’s expected to rise to 70% by 2015. In 2008, China finalized a $70 billion deal to develop Iran’s Yadavaran oil field in exchange for the supply of liquefied natural gas. And much, much more.

So China is not going to be keen to cripple a nation which it has invested so much time and money in developing a relationship with – especially if it wants to maintain its own economy (and keep its own internal unrest to a simmer) during recessionary times.

Bottom line? My guess is a lot of tough talk and fist shaking at Iran, but in the end, nothing much happens and Iran ends up with its nuke. The play will be made in the UN where China has a seat on the Security Council and I’d almost bet the house that nothing comes out of that organization with any teeth whatsoever or China won’t vote for it.

Bottom bottom line – Israel, who we seem bound and determined to have worse relations with, is probably going to have to find a way to destroy the capability on their own. Militarily they’ve been quietly developing the strike capability for some time. And Saudi Arabia, which is very worried about an Iranian nuke and what it would do to the balance of power in the region, has given Israel a subtle nod that it would turn its back should the Israelis fly over their territory to strike Iran – unprecedented in the history of the region and an indication of the depth of fear the Saudis harbor.

But reliance on the UN and “sanctions”? I just don’t see that happening.

~McQ