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The loose noose of Iran sanctions

Posted: Oct 12, 2011 10:37 PM by Jill Dougherty - CNN Foreign Affairs Correspondent

WASHINGTON, DC - Intent on punishing Iran for a brazen alleged plot to kill the Saudi ambassador on U.S. soil, the Obama administration is in diplomatic overdrive, urging countries around the world to cut whatever ties they still have with Tehran and "isolate" it from the international community.

"We will work with our international partners to increase Iran's isolation and the pressure on its government. And we call upon other nations to join us in condemning this threat to international peace and security," a steely Secretary of State Hillary Clinton said Wednesday.

Soon after American authorities detailed the allegations and tied the plot to elements of Iran's military, the Treasury Department invoked new economic sanctions against top members of the Quds Force, the part of Iran's Islamic Revolutionary Guard Corps that allegedly directed the assassination plot. Treasury says a top member of the Quds approved up to $5 million to pay for the plot.

The department followed that move Wednesday with an announcement that it was sanctioning an Iranian airline company that it says transports weapons and funds for the Quds Force.

But the administration's headlong press for more sanctions raises a question: If sanctions work, why didn't they stop Iran from allegedly making a down payment on the plot to assassinate the Saudi ambassador?

The Justice Department complaint alleged that one of the key plotters, Manssor Arbabsiar, a naturalized U.S. citizen currently in U.S. custody, was able to transfer a total of $100,000 from Iran to a financial institution in an unnamed country. From there, according to the complaint, the money moved to a bank in New York and, finally, into an account secretly monitored by the FBI.

One expert on Iran told CNN that could be done despite sanctions.

"There are banking sanctions in place against Iran and also very broad sanctions. You can use other fund companies and individuals to transfer relatively small sums of money to the United States," Alireza Nader of the RAND Corporation said.

David Cohen, Treasury's under secretary for terrorism and financial intelligence, speaking with CNN's Wolf Blitzer on "The Situation Room," admitted that, by laundering money through a third country, Iran was able to circumvent existing sanctions.

"The particular transmission network is something we are continuing to unravel," Cohen said.

A Treasury Department official, not authorized to speak on the record, told CNN the Treasury Department does not believe the third-country bank knew it was dealing with money for an assassination plot.

On "The Situation Room," Cohen raised a red flag for financial institutions that still are dealing with Iran: "It really points up the risk that any bank that is involved in financial transactions with Iran runs," he said. "If you are going to expose yourself to the Iranian financial market you can find yourself unwittingly involved in Iranian behavior, whether it's state-sponsored terrorism or support for their nuclear program or other sorts of nefarious behavior."

That's a message the Obama administration is driving home to other countries. It wants countries that already have sanctions against Iran to vigorously enforce them.

Wednesday morning, Deputy Secretary of State William Burns briefed the Washington diplomatic corps at the State Department, telling ambassadors from countries around the world details of the alleged plot and urging them to join the United States in increasing pressure on Iran.

Secretary Clinton worked the phones, talking with foreign ministers of Saudi Arabia, Mexico and Russia.

The administration is holding classified briefings with the Congress.

Thursday, Wendy Sherman, under secretary of state for political affairs, the number three official at the State Department, will be on Capitol Hill.

At the United Nations, U.S. Ambassador Susan Rice is consulting individually with all members of the Security Council.

U.S. Ambassadors around the world have been directed to brief the governments of the countries in which they are stationed about the alleged plot and to urge those governments to join the United States to turn the screws on Iran.

State Department spokeswoman Victoria Nuland told reporters Wednesday, "We believe that all countries should look hard at how they can tighten sanctions, how they can enforce sanctions and whether sanctions are well-enforced."

Topics: Tehran, Iran, President Obama