• 19 October 2011
  • Posted By Sina Kashefipour
  • Human Rights in Iran, Neo-Con Agenda, Sanctions, US-Iran War

The nuclear option: central bank sanctions

Last August, a letter pushed by AIPAC from Mark Kirk (R-IL), Chuck Schumer (D-NY), 92 Senators called for the White House to impose sanctions on Iran’s central bank, Bank Markazi.

Though the Wall Street Journal reported that such action could be considered an act of war, Kirk posed an ultimatum to the Obama Administration–either issue sanctions or we’ll pass legislation to force your hand:

“The administration will face a choice of whether it wants to lead this effort or be forced to act,” Mr. Kirk said.

Now, in the aftermath of the alleged assasination plot, the White House is signaling that it may be going forward with the central bank sanctions.

Such sanctions–if heeded by the international community–would destabilize the rial, Iran’s currency, and make it nearly impossible for Iranians to to import and access basic foodstuffs and medical supplies.

It is clear that the Iranian government, as it is now, receives little to no legitimacy from democratic consent. Yet the strategy going forth is to actively punish the population with sanctions on Bank Markazi, Iran Air, Mahan Air et al and not the government with the expectation that punishing the people is holding the government responsible for its failings and violence.

Kirk says that if we can impose enough punishment on ordinary Iranians, it will spark a revolution that would topple Iran’s government.  Such arguments are not supported by the evidence.  Look at the sanctions in place against North Korea, where the population today is starving.  Or the sanctions against Saddam–some of the most stringent, economically devastating sanctions imaginable against Iraq’s oil exports and banking system.  They did nothing to displace Saddam’s regime, which managed to deflect all of the suffering onto the population.  Ultimately those measures killed half a million ordinary Iraqis and ultimately paved a path to a disastrous war.

Such a step is effectively collective punishment of the people of Iran.  But literally starving average Iranians is just fine according to Kirk, who moonlights as a human rights supporter (as long as supporting human rights means ratcheting up hawkish Middle East policies, not actually protecting human rights).

Imposing crippling sanctions on Iran’s central banking would involve placing the central bank on the Specially Designated National and Blocked Persons List (SDN) administered by the Department of Treasury’s Office of Foreign Assets Control (OFAC).  As Erich Ferrari, a well regarded attorney and Iran sanctions expert wrote on his blog:

“If strictly interpreted this designation could be used to block every transaction in which rials are or have been used that passes through U.S. jurisdiction. This is because once an OFAC blocking of a target party occurs then any transaction in which they have interest is required to be blocked. Central Bank of Iran controls the currency of the rial; therefore, if given a very strict interpretation, they have an interest in every transaction in rials. As such, those transactions could all be blocked. Again, this is a very strict interpretation and its unclear whether OFAC or the U.S. government would take that aggressive of a position in enforcing such a measure.”

Let’s take a step back and think what it means to impose sanctions on Bank Markazi from the perspective of the global economy, strategy and human rights.  Sanctioning Iran’s central bank would wreak untold havoc on the Iranian economy and introduce a high degree of uncertainty to oil and gas markets. While the price of oil and gas going up around the whorl would be the most commonly considered effect of sanctioning Iran’s central bank, the less obvious effects might be the more costly in the long term for the region.

Iran, despite crippling sanctions, is an economic hub, sitting between the Arab world, Turkey, and key markets in Central Asia like Afghanistan and Pakistan.   Sanctioning Bank Markazi would cripple Iran’s ability to be an important economic partner in countries where the United States has key interests in specifically first in Iraq and Afghanistan, then in more developed countries like Turkey and Pakistan.  It is very much in the United States’ interests for Iraq and Afghanistan to be reconstructed; Turkey and Pakistan to be economically stable and productive.

There is a better way forth that involves persistent, robust diplomacy and standing with the people of Iran NOT a strategy that would imperil the global economy, alienate the Iranian people, and place the United States on the path to war. Remember the definition of insanity is to repeat the same thing but expect a different result.

Updated October 20, 2011

Posted By Sina Kashefipour

    3 Responses to “The nuclear option: central bank sanctions”

  1. Pirouz says:

    Sina, how do you reconcile your statement:

    “It is clear that the Iranian government, as it is now, receives little to no legitimacy from democratic consent”

    with these public opinion polls…




    Or the 85% voter turnout in the 2009 election?

    Where exactly do you derive your “clear” indications of “little to no legitimacy from democratic consent”? Or is this your own personal opinion?

  2. Pirouz says:

    Sina, how do you reconcile your statement:

    “It is clear that the Iranian government, as it is now, receives little to no legitimacy from democratic consent”

    with these public opinion polls…

    www [dot] worldpublicopinion [dot] org/pipa/articles/brmiddleeastnafricara/652.php?lb=brme&pnt=652&nid=&id=


    www [dot] docstoc [dot] com/docs/65872019/Iran-Public-Opinion-2010

    Or the 85% voter turnout in the 2009 election?

    Where exactly do you derive your “clear” indications of “little to no legitimacy from democratic consent”?

  3. ragged_soul says:

    Do you truly think Russia, and in particular, China, would adhere to Iranian CB sanctions simply because a group of men indebted to Israel say so?


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Tell Google: Stop playing Persian Gulf name games!

May 14, 2012
Larry Page
Chief Executive Officer
Google Inc.
1600 Amphitheatre Parkway
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Dear Mr. Page:

It has come to our attention that Google has begun omitting the title of the Persian Gulf from its Google Maps application. This is a disconcerting development given the undisputed historic and geographic precedent of the name Persian Gulf, and the more recent history of opening up the name to political, ethnic, and territorial disputes. However unintentionally, in adopting this practice, Google is participating in a dangerous effort to foment tensions and ethnic divisions in the Middle East by politicizing the region’s geographic nomenclature. Members of the Iranian-American community are overwhelmingly opposed to such efforts, particularly at a time when regional tensions already have been pushed to the brink and threaten to spill over into conflict. As the largest grassroots organization in the Iranian-American community, the National Iranian American Council (NIAC) calls on Google to not allow its products to become propaganda tools and to immediately reinstate the historically accurate, apolitical title of “Persian Gulf” in all of its informational products, including Google Maps.

Historically, the name “Persian Gulf” is undisputed. The Greek geographer and astronomer Ptolemy referencing in his writings the “Aquarius Persico.” The Romans referred to the "Mare Persicum." The Arabs historically call the body of water, "Bahr al-Farsia." The legal precedent of this nomenclature is also indisputable, with both the United Nations and the United States Board of Geographic Names confirming the sole legitimacy of the term “Persian Gulf.” Agreement on this matter has also been codified by the signatures of all six bordering Arab countries on United Nations directives declaring this body of water to be the Persian Gulf.

But in the past century, and particularly at times of escalating tensions, there have been efforts to exploit the name of the Persian Gulf as a political tool to foment ethnic division. From colonial interests to Arab interests to Iranian interests, the opening of debate regarding the name of the Persian Gulf has been a recent phenomenon that has been exploited for political gain by all sides. Google should not enable these politicized efforts.

In the 1930s, British adviser to Bahrain Sir Charles Belgrave proposed to rename the Persian Gulf, “Arabian Gulf,” a proposal that was rejected by the British Colonial and Foreign offices. Two decades later, the Anglo-Iranian Oil Company resurrected the term during its dispute with Mohammad Mossadegh, the Iranian Prime Minister whose battle with British oil interests would end in a U.S.-sponsored coup d'état that continues to haunt U.S.-Iran relations. In the 1960s, the title “Arabian Gulf” became central to propaganda efforts during the Pan-Arabism era aimed at exploiting ethnic divisions in the region to unite Arabs against non-Arabs, namely Iranians and Israelis. The term was later employed by Saddam Hussein to justify his aims at territorial expansion. Osama Bin Laden even adopted the phrase in an attempt to rally Arab populations by emphasizing ethnic rivalries in the Middle East.

We have serious concerns that Google is now playing into these efforts of geographic politicization. Unfortunately, this is not the first time Google has stirred controversy on this topic. In 2008, Google Earth began including the term “Arabian Gulf” in addition to Persian Gulf as the name for the body of water. NIAC and others called on you then to stop using this ethnically divisive propaganda term, but to no avail. Instead of following the example of organizations like the National Geographic Society, which in 2004 used term “Arabian Gulf” in its maps but recognized the error and corrected it, Google has apparently decided to allow its informational products to become politicized.

Google should rectify this situation and immediately include the proper name for the Persian Gulf in Google Maps and all of its informational products. The exclusion of the title of the Persian Gulf diminishes your applications as informational tools, and raises questions about the integrity and accuracy of information provided by Google.

We strongly urge you to stay true to Google’s mission – “to organize the world’s information and make it universally accessible and useful” – without distorting or politicizing that information. We look forward to an explanation from you regarding the recent removal of the Persian Gulf name from Google Maps and call on you to immediately correct this mistake.



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