Iran Sanctions: Time For A New “Jackson-Vanik” Bill

History repeats itself, but never the same way. The President and the Congress are at odds over placing sanctions on Iran. For the administration it is a complex issue involving not only trying to change Iran’s behavior but also the White House’s commitment to collective action. For Congress, it is the perception that the Obama strategy of engagement has failed and time is running out to stop Iran from acquiring nuclear weapons. In response, both houses passed versions of the Comprehensive Iran Sanctions, Accountability, and Divestment Act that essentially threatens to cut off Iran’s access to gasoline and prevent foreign investments or assistance to Iran’s energy sector. For the first time they would also include foreign-owned subsidiaries of U.S. companies doing business in Iran’s energy sector. There is the bizarre situation of the administration preferring the weaker sanctions proposed by the United Nations to the stronger proposal being pushed in the U.S. Congress for fear of offending some countries. Somehow the administration believes that unanimity of the international community around weak sanctions is a more powerful signal to Iran than the solidarity of the like-minded, righteous nations willing to take the bold move of targeting the heart of the Iranian economy and the power of its theocracy.

The last time Congress went crosswise to an administration like this was during the depths of the Cold War. The Ford Administration was pushing a strategy of detente, which amounted to appeasing Soviet aggression abroad and casting a blind eye towards that country’s domestic repression of dissidents and minorities. Two members of Congress, the great Senator Henry “Scoop” Jackson and Representative Charles Vanik, added the eponymous amendment to the 1974 Trade Act. Still in effect today, the Jackson-Vanik amendment denies most favored nation status to certain countries with non-market economies that restrict emigration, which was defined as a human right. Normal trade relations could be extended to a country subject to the law only if the President determines that it complies with the freedom of emigration requirements of the amendment.

Jackson-Vanik achieved its two intended effects. First, it placed the Ford Administration on notice that it could not conduct its policy of accommodation with Moscow without consequences. Secretary of State Henry Kissinger railed against Congressional interference in foreign policy, itself a sign that the amendment was having an effect. Second, it put pressure on the regime in Moscow, highlighted the issue of Soviet oppression of those who sought to emigrate and helped their situation, according to testimony from former dissidents.

The threat of Congressional sanctions is already having an effect. International companies are slowing, canceling or not renewing energy deals with Iran. The passage of the Comprehensive Iran Sanctions, Accountability, and Divestment Act would accelerate this process as well as give the administration a powerful tool for negotiating with reluctant countries such as Russia and China. It is another version of the good President, bad Congress game that negotiators have used with great effect for decades.

The Obama Administration has asked the authors of the present bill to add a provision that would allow the sanctions to be waived for companies from “cooperating countries.” Under Jackson-Vanik, the President has the authority to grant a yearly waiver to its provisions and such waivers were granted to the People’s Republic of China starting in the late 1970s. This put further pressure on the intended target, the Soviet Union. The ability to waive the provision of the Iran sanctions is not the issue. What is at issue are the criteria by which the administration would seek to exercise that waiver. The administration wants to be able to issue blanket waivers for firms from “cooperating countries” without setting a standard for cooperation or being able to differentiate between firms in those countries. This is clearly a sop to China and similar countries that want to avoid serious sanctions on Iran.

Congress needs to resist efforts by the administration to water down its Iran sanctions legislation. Time is running out for this country to stop Iran’s nuclear program. So far, it has not been demonstrated to the leaders in Teheran that its policies will have severe consequences. Watching international investment in their oil industry dry up may be just the message they need to receive. Let’s hope today’s members of Congress have the strength of character of Scoop Jackson and Charlie Vanik.