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Source: http://www.foreignpolicy.com/articles/2010/02/10/the_sanctions_on_iran_are_working
The Sanctions on Iran Are Working
(Foreign Policy) Mark Dubowitz - The Obama administration has finally moved to punish Iran for failing to come clean about its suspicious nuclear program. The U.S. Treasury Department announced Wednesday that it has designated for sanctions the four subsidiaries of a major engineering and construction firm, as well as the firm's commander, Islamic Revolutionary Guard Corps (IRGC) Gen. Rostam Qasemi. The firm in question, Gharargah Sazandegi-ye Khatam al-Anbia, or Ghorb, which was first designated by the Treasury Department in 2007 because of its role in supporting the proliferation of weapons of mass destruction (WMD) and terrorism, is a major player in the Iranian economy, including in its energy sector. In 2006, Ghorb received more than $7 billion in contracts. Since 2006, under the guidance of sanctions chief Stuart Levey, Treasury has designated more than 40 Iranian entities involved in supporting the regime's WMD-related and terrorist activities, including state-owned banks. The more than 80 foreign financial institutions that terminated or reduced their business with Iran over the past three years were not legally bound to comply with U.S. sanctions. But after Treasury revealed Iran's extensive use of deceptive financial practices and front companies, foreign bankers did so anyway. The benefits of their Iranian business were outweighed by the costs of being linked to bad actors, as well as the real risk of losing access to U.S. financial markets. The mere possibility of sanctions has already persuaded three companies (BP, Glencore, and Reliance) to terminate their direct sales of gasoline to Iran. Most banks have rescinded the lines of credit they had previously offered to finance Iran's gasoline deliveries. The Iran Refined Petroleum Sanctions Act, nearing final passage in Congress, would complicate the business dealings of the remaining companies. In the end, "smart" sanctions are those that can cripple the Iranian energy sector - the lifeblood of the men who rule Iran. The writer is executive director of the Foundation for Defense of Democracies.