Audit doubts Iran sanction efficacy

“US officials and experts report that US sanctions have specific impacts on Iran; however, the extent of such impacts is difficult to determine,” the report by the non-partisan Government Accountability Office (GAO), which was obtained by Reuters on Tuesday before its release later this week, said.

  

“Other evidence raises questions about the extent of reported economic impacts,” it added.

 

Call for assessment

      

Foreign ministers from the permanent members of the UN Security Council as well as Germany are expected to meet in Berlin next Tuesday to iron out differences over new sanctions with most objections coming from Russia and China.

  

Bush has pressed for tough measures against Iran during a trip to the Middle East over the past week, trying to further isolate Tehran and telling Arab allies Iran’s nuclear programme is a major threat to world peace.

   

The GAO urged Bush’s national security council to do a “baseline assessment” of sanctions against Iran and to report those results to the US congress.

   

“Without an overall assessment of the sanctions’ impact and subsequent reviews on a periodic basis, the congress and the administration will continue to lack important information for developing effective strategies to influence Iran‘s behaviour,” said the report.

   

In a written response to the GAO, Stuart Levey, senior treasury department official, said Iran was experiencing “increased economic, financial and political isolation” because of US and international sanctions.

   

He said Iran‘s state-owned banks were becoming increasingly isolated and their viability threatened, adding that an estimated 25,000 transactions with Iranian entities worth over $5bn had been rejected since 1997.

 

No details were given of the kind of transactions or where these figures came from.

 

Huge contracts

   

But since 2003, the Iranian government had signed contracts worth about $20bn with foreign firms to develop its energy resources, the report said, adding that it was unclear if all those deals would be fulfiled.

   

It also said strict US sanctions on state-owned Iranian banks could be circumvented if those banks turned to other financial institutions or funded their activities in other currencies than the US dollar.

    

A US national intelligence estimate last month said Iran had given up its nuclear weapons programme in 2003 but it was still continuing to acquire advanced weapons components, to enrich uranium and support terrorism, the GAO said.

   

“Iran‘s global trade ties and leading role in energy production make it difficult for the United States to isolate Iran and pressure it to reduce proliferation activities and support for terrorism,” the report said.

    

Increased oil demand, high oil prices and Iran‘s huge reserves, helped Iran get more than $50bn in oil revenues in 2006, the report said.

   

From 1987 through 2006, Iran‘s exports grew from $8.5bn to $70bn, while Iran‘s imports grew from $7bn to $46bn, it added.