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Thursday, January 17, 2013

Iran: U.S. Concerns and Policy Responses

Kenneth Katzman
Specialist in Middle Eastern Affairs

A priority of Obama Administration policy has been to address the perceived threat posed to a broad range of U.S. interests by Iran, in particular by Iran’s advancing nuclear enrichment program. The as yet unchecked Iranian advances have caused the government of Israel to assert that it might take unilateral military action against Iran’s nuclear facilities unless the United States provides assurances that it will act, militarily if necessary, to prevent Iran from taking the final steps toward developing a nuclear weapon. Aside from the nuclear issue, the United States has long seen Iran’s support for militant groups in the Middle East and in Iraq and Afghanistan as efforts to undermine U.S. interests and allies. U.S. officials also accuse Iran of helping Syria’s leadership try to defeat a growing popular opposition movement and of taking advantage of Shiite majority unrest against the Sunni-led, pro-U.S. government of Bahrain.

The Obama Administration has orchestrated broad international economic pressure on Iran, while also offering Iran sustained engagement and some sanctions relief if it verifiably demonstrates to the international community that its nuclear program is peaceful. The three most recent rounds of multilateral talks with Iran (April, May, and June 2012) yielded no breakthroughs but did explore a potential compromise under which Iran might end uranium enrichment to 20% purity (a level not technically far from weapons grade) in exchange for some sanctions relief. Subsequent technical talks produced no immediate progress, but appear to have set the stage for more talks in early 2013.

The Administration asserts that there is time for accumulated international sanctions to compel Iran’s leaders to compromise before U.S. military action is considered. Since the beginning of 2012, as significant multilateral sanctions have been added on Iran’s oil exports—including an oil purchase embargo by the European Union that went into full effect on July 1, 2012—the regime has begun to acknowledge significant economic pressure. That pressure led to a virtual collapse in the market value of Iran’s currency, the rial, in early October 2012. Since late 2011, both Britain and Canada have closed their embassies in Iran. Some reports suggest that the Administration is open to bilateral talks with Iran if doing so could head off confrontation.

The Administration and many outside experts also perceive that the legitimacy and popularity of Iran’s regime is in decline, although not to the point where the regime’s grip on power is threatened. There are few signs that the opposition in Iran or in exile has gained traction against the regime, even though international sanctions are causing clear public frustration. The reformist boycott of the March 2, 2012, parliamentary elections rendered the election a contest between factions supporting either President Mahmoud Ahmadinejad or Supreme Leader Ali Khamene’i. Khamene’i supporters were elected overwhelmingly. It is likely that only hardliners will be significant candidates in the next presidential election, to be held on June 14, 2013.

The 112
th Congress has supported additional economic sanctions against Iran, most recently with enactment of the Iran Threat Reduction and Syria Human Rights Act of 2012 (H.R. 1905, P.L. 112-158), which expands sanctions against companies that conduct energy and financial transactions with Iran. Additional sanctions were imposed by the European Union in mid- October, and a Senate amendment to an FY2013 defense authorization bill would sanction trade with Iran in key economic sectors and in precious metals. For further information, see CRS Report RS20871, Iran Sanctions, and CRS Report R40094, Iran’s Nuclear Program: Tehran’s Compliance with International Obligations, by Paul K. Kerr.

Date of Report: December 19, 2012
Number of Pages: 86
Order Number: RL32048
Price: $29.95

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