How To Punish Iran

A potent package of financial sanctions coupled with greater diplomatic isolation and robust support for Iran’s democratic opposition could yet force Iran’s clerical leadership to soften its policies. In late October, David S. Cohen, the Treasury Department’s undersecretary for terrorism and financial intelligence, took a whirlwind tour of Paris, London, Berlin, and Rome in a diplomatic push to convince European capitals to ratchet up their pressure on Iran, in part by isolating Iran’s financial institutions.

The most important target should be the Central Bank of Iran, which enables the bulk of Iran’s international trade and energy transactions. To his credit, President Obama implemented strong Iran energy sanctions in 2010, and the 27-member EU largely replicated them. But the Obama administration has not yet used its economic muscle to compel the EU into disrupting the CBI’s operation. The EU and United States have sanctioned a number of Iranian banks—Melli, EIH, and Saderat—for their involvement in the country’s nuclear weapons and ballistic missile programs. Banks Melli and Saderat are subsidiaries of the CBI.

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