Elliott Abrams

Pressure Points

Abrams gives his take on U.S. foreign policy, with special focus on the Middle East and democracy and human rights issues.

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Iran’s Central Bank: a Lesson

by Elliott Abrams
January 3, 2012

In 2011 Congress forced a reluctant Obama Administration into tougher sanctions against Iran than it desired. One of the toughest required U.S. sanctions against Iran’s Central Bank.

This is an old story, for the Bush Administration also declined to take that tough step. Largely at the insistence of then-Treasury Secretary Hank Paulson, it was agreed that sanctioning a central bank was going too far and could endanger the U.S. or European economy. Paulson was wrong, the Bush Administration was wrong, and the Obama Administration was wrong. Now we know. The sanctions are in place and here is what the Washington Post reports:

Iran’s ailing currency took a steep slide Monday, losing 12 percent against foreign currencies after President Obama on Saturday signed a bill that places the Islamic republic’s central bank under unilateral sanctions….the slide of the rial is a huge blow to Iran’s leaders, who have been claiming that the sanctions aren’t hurting the country. The currency drop feeds increasing worries that the government is running out of funds. The Central Bank of Iran had said Sunday that the United States had become the laughingstock of the world after Obama signed the latest round of sanctions aimed at the institution, Iran’s key axis for oil transactions. But Monday afternoon, the bank held an emergency meeting over the sliding rial…

There are some lessons here. One is that whenever the Iranian regime defiantly says it isn’t afraid of something and that thing will backfire–whether it be moving more U.S. aircraft carriers to the Gulf or sanctions against the central bank–we ought to see quickly through their propaganda and go ahead with it. Indeed the more defiantly the ayatollahs say they are not afraid, the more afraid they most likely are. Another lesson is that tough sanctions can indeed damage the Iranian economy and do so very quickly. A third is that predictions about damage to our economy from making such moves should be reviewed carefully before they are believed. Today we see the immediate impact of central bank sanctions on Iran’s financial and economic situation, and of course none on ours. It is a pity that this step was not taken four years ago.

Post a Comment 15 Comments

  • Posted by Mohammad Alireza

    As an Iranian living in Iran it is obvious that the sanctioning of Iran’s Central Bank has forced today’s threat against the return of USS Stennis to the Persian Gulf.

    Is that what you mean Mr. Abram’s, that an act of war should have taken place four years ago?

  • Posted by Hannibal Khan

    Mohammad Alireza – the act of war was declared years ago when your President vowed to wipe an American ally off the map and even before began sending personnel and weaponry to kill American soldiers.

    Nobody forced Iran’s hand in developing nuclear weapons or attacking Americans, and your regime is reaping what they have sown from decades of reckless behavior with no regard for the lives of the Iranian people (such as the extension of the Iran-Iraq war).

  • Posted by Charles Burris


    Watch this powerful presentation, Faking It: How the Media Manipulates the World into War,
    which cuts through the lies and duplicity governments have used to deceive their citizens.

  • Posted by Mohammad Alireza

    Hannibal Khan,

    You have obviously been reading the neo-con corporate warmongering press too much because anybody that is at all informed about the issues knows that Ahmadinejad was referring to the end of Zionism and not the destruction of Israel.

    Second, not once did any solid evidence get presented that Iran directly caused the death of any American personal in Iraq or Afghanistan.

    And furthermore, there is no evidence that Iran is developing nuclear weapons.

    As far as extending the Iran-Iraq war, yes, our stubborn and fanatical “leader” at the time did just that and ended up causing massive suffering.

    But the issue is the sanctioning of Iran’s central bank which Mr. Abrams thinks is a good thing even though it is an act of war. So, it is not Iran that is triggering confrontation but American politicians who are in the pockets of the Israeli lobby and the military industrial complex.

    Why do your think the GOP candidates are talking about bombing Iran? Because they are after the support of the Jewish voters and the money that comes with it.

    And finally, Ahmadinejad is not my president but a puppet of the Revolutionry Guard, who have steadily come to power so as to counteract the threats from Israel and America.

  • Posted by Hannibal Khan

    Mohammad, to address your points sequentially:

    1) Without Zionism there is no Israel. Your argument is blatant obfuscation and in any case meaningless. If Israel said it vowed to wipe the Iranian regime off the map the inevitable implication is a declaration of war, much as Germany’s vow to wipe communism out of existence was an implicit declaration of war against the USSR. How else would Iran vow to wipe Israel off the map? Wishful thinking? It’s certainly done more than that by supplying Hezbollah and Hamas in their wars against Israel.

    2) You claim there is no “solid evidence” of an Iranian nuclear weapons program but of course that’s purely subjective. I am personally satisfied by assessing the IAEA Report, among many other documents by international observers investigating the matter, that the Iranian nuclear program is based on weaponization. I do wonder what your standard of proof would be for such matters.

    3) Once again we are relying on a standard of proof issue regarding attacks by Iran. It is certainly believed by those in the US government that Iranian weaponry caused the deaths of American soldiers, as has been repeated for 6 years. See, for example http://articles.latimes.com/2011/jul/11/world/la-fg-iraq-panetta-20110711

    4) Sanctions are not acts of war. This is the justification the Japanese used to initiate belligerency against the USA in WWII. It’s a pretext for armed conflict which Iran is seeking for its own purposes. Indeed, the sanctions are a means to avoid war and could easily be avoided had Iran given in to American demands re: its nuclear program more than half a decade ago. Iran is acting as if its hand is forced, but this is not the case and indeed it is driving events.

    5) You act as if threats from Israel and America and Jews and whoever else Iran regards as its enemies are all beyond Iran’s control. Let’s look at this simply. Before Khomeini came to power, Israel and the USA were allies of the Shah. Iran is the party that took over an American embassy, funded Hezbollah (which attacked both Israel and the USA directly) and then bombed Jewish community centers around the world. Which party started this pointless aggression? Iran.

    Before you go blaming Iran’s enemies, perhaps you should neutralize the source of this conflict- the regime in Iran which unnecessarily provoked and attacked countries with which it has no border and was previously allied with.

  • Posted by Mohammad Alireza

    First of all I am not a supporter of the regime in Iran and consider their rule a disaster for Iran especially given that they are partly responsilbe for the current crisis.

    Being anti-war and a defender of Iran has become almost impossible these days thanks to those that are pushing for war; mostly the same bunch that pushed for the war on Iraq.

    Bombs do not distinquish between the regime and ordinary Iranians.

    Anything I write will not alter your entrenched views, so all I can do is suggest you get better informed and a good place to start is at the link below which at least provides a wide set of articles which are fact based.


  • Posted by Hannibal Khan

    Mohammad, bombs today distinguish much better than they did between German civilians and the Nazi Regime, yet it was still a war worth fighting then. Certainly the welfare of Iranians held hostage by their regime today should not outweigh the welfare of the entire world threatened by a belligerent Iran under a nuclear umbrella. In any case, the measures advocated by Abrams are exactly those that avoid bombings, and ones that should be advocated by those who oppose war.

    As for the argument that it is difficult to support a noble cause (such as preventing nuclear proliferation) because it means agreeing with those one does not traditionally agree with, I think you are making a major mistake. For instance, here you are opposing a measure which could potentially prevent war by hindering the Iranian nuclear weapons program simply because of the motives you impute to others who support it. I think it’s wrong-headed to abandon sound solutions because you disagree with others who advocate for it, especially as you are assuming that their motives differ from yours.

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  • Posted by alireza

    Mr. Abrams
    In Iran , there is a clear massage for world , his friends and his enemies. may be you can not hear that but the massage is there.
    massage : Who Is With GOD , GOD Is With Him Too.
    can you understand and analys this massage ?

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  • Posted by uk dissertations

    For instance, here you are opposing a measure which could potentially prevent war by hindering the Iranian nuclear weapons program simply because of the motives you impute to others who support it.

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