OxFan: "Important UN provisions, but unlikely to increase direct pressure on the Iranian regime..."

OXFAN: Excerpts:

"... If the resolution is passed, its real significance will be seen not in the specific provisions that it contains, but rather in what it symbolises in terms of international agreement and the measures that individual countries and companies may subsequently undertake.....

Nine votes are required to pass the resolution. Brazil and Turkey will not support it, and Lebanon's backing is also uncertain. Washington hopes it can rely on Uganda, Nigeria and Bosnia, but the former's support is not guaranteed, and Bosnia may abstain. Yet even without unanimous support, the ability to muster consensus among the P5 still represents a positive diplomatic result for Washington.

Measures. The measures proposed in the new draft resolution build on those in the three previous rounds. The resolution:

• calls for greater scrutiny of Iranian financial activity as well as Iranian cargo;
• prohibits the sale of certain weapons to Iran; and
• expands the list of individuals and companies affiliated with the Iranian Revolutionary Guard Corps (IRGC) subject to asset seizures and travel restrictions....

In order to secure P5 consensus, the provisions do not include some of the more punitive measures proposed during negotiations, such as targeting Iran's energy sector or blacklisting its Central Bank. Both are mentioned in the preamble as areas where companies and governments should exercise vigilance, possibly giving justification to those states wishing to target these areas (particularly through unilateral sanctions) but not enforcing such measures on unwilling states. Moreover, many of its terms include potential loopholes and stop short of calling for unconditional implementation. On its own, the package is no more likely to prompt Iran to change its position than previous sanctions.

Implications.

Its real significance lies outside of its written terms. .........the resolution is significant for its potential impact on the development of separate US and European sanctions and the attitude of individual companies......

Key here is the role of the United States, which has in recent years pursued its own financial 'smart sanctions' and encouraged the private sector to abandon the Iranian market. While US unilateral sanctions have not always been enforced on non-US companies, firms wishing to expand their US business may choose to scale back their Iranian operations, as was probably the case with India's Reliance. Likewise, the abandonment of a project by Russia's Lukoil in March may have been influenced by its stronger US connections than some other Russian companies.

This decision to act beyond specific UN demands (or to implement them strictly, despite potential loopholes) is likely to be key to determining the effect on Iran. For example, despite Western objections to Russia's construction of the Bushehr reactor, previous sanctions resolutions exempt light-water nuclear reactors, including Bushehr. Nevertheless, EU directives on implementing UN sanctions do not exempt Bushehr, and diplomats reported yesterday that Germany has arrested several men on charges of buying dual-use technology for the project.

Impact on Iran. The regime and the IRGC have played down the significance of the proposal:

• IRGC figures are likely to find ways to circumvent financial restrictions, as they have in the past.
• Militarily, the measures fall short of an outright embargo -- and it is not yet clear whether Russia will cancel its promised sale of an S-300 missile system to Iran, since it was agreed before the sanctions....
• Crucial areas such as the country's oil and gas sectors have not been penalised -- a likely result of Chinese resistance, as well as concerns about hurting the wider population. Key countries, such as Russia and China, are likely to continue their trade and investment.

Yet, should the new sanctions lead directly or indirectly to increased disengagement by international companies and a fall in investment, Tehran could face some deepening concerns..... Nevertheless, even these difficulties are unlikely in the short term to be enough to precipitate a reversal of position by the Iranian government over its nuclear programme.... (Also,) it is aware that the acquiescence of China and Russia necessitated significant weakening of the sanctions resolution, and Tehran will look to exploit cleavages within the P5 in the future.

At home, the fact that the proposal came after Tehran agreed to a fuel swap will strengthen the regime's presentation of itself as a victim who has tried to be cooperative. The regime's support among the security apparatus, including the IRGC, is likely to be strengthened ....The package is likely to be passed in June, but its provisions in themselves are unlikely to increase direct pressure on the Iranian regime..."