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Last month's negotiations between Iran and the five permanent members of the U.N. Security Council and Germany (the "P5+1") in Almaty, Kazakhstan suggested that the sanctions haven't been enough to decisively change the Islamic Republic's calculus. Iran offered little more than a temporary suspension of 20 percent enrichment, as well as some increased IAEA monitoring, in exchange for significant sanctions relief (Iranian state media viewed the negotiations as a success). The P5+1 proposal of lifting sanctions on Iranian gold purchases are especially troubling, according to Mark Dubowitz, the executive director of the Foundation for Defense of Democracies and an expert on Iran sanctions. "The gold concessions could blow a hole in the entire sanctions regime," the point of which is to "is to deny [Iran] of hard currency."
The U.S. Congress has carefully calibrated its response. A bill currently before the House of Representatives attempts to prevent companies from converting foreign currency to Euros on behalf of Iranian businesses. But it only does this through a non-binding "sense of the Congress," and despite reports to the contrary, the sanctions currently under consideration on Capitol Hill are deliberately non-coercive. "It's to pressure the Europeans into coming up with made-in E.U. solutions," says Dubowitz. Similarly, the House bill nominates a number of Iranian companies for the Treasury Department's Specially Designated Nationals list, but Dubowitz points out that the executive branch has a great deal of flexibility in terms of implementation. "The administration can calibrate the enforcement of that provision with whatever's happening on the diplomatic front," he says.
The House bill hints at later action while actually changing very little -- at least for the time being. "Congress provides the hammer, and the administration turns the hammer into a scalpel," Dubowitz says of the process of fashioning sanctions against Iran. "It's a well coordinated, well-executed strategy between Congress, the administration and our allies." India, which is finding it harder to trade with Iran despite being given waivers under U.S. law, is arguably a case in point.
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