U.S. sanctions another big Iranian bank

Posted By Josh Rogin Monday, January 23, 2012 - 5:59 PM

The Treasury Department today designated Iran's third-largest bank, Bank Tejarat, as subject to new sanctions, on the same day the EU announced a complete oil embargo of Iran.

"At a time when banks around the world are cutting off Iran and its currency is depreciating rapidly, today's action against Bank Tejarat strikes at one of Iran's few remaining access points to the international financial system," Treasury Undersecretary for Terrorism and Financial Intelligence David Cohen said in a statement. "Today's sanction against Bank Tejarat will deepen Iran's financial isolation, make its access to hard currency even more tenuous, and further impair Iran's ability to finance its illicit nuclear program."

Bank Tejarat is being sanctioned for providing financial services to Bank Mellat, the Export Development Bank of Iran (EDBI), the Islamic Republic of Iran Shipping Lines (IRISL), and the Ministry of Defense for Armed Forces Logistics (MODAFL), all of which were previously sanctioned for the involvement in the proliferation of weapons of mass destruction.

Treasury also sanctioned Iran's Trade Capital Bank, a Minsk-based subsidiary of Bank Tejarat, bringing the total number of Iranian financial institutions under U.S. sanctions to 23, according to a Treasury Department fact sheet. Because the banks are being sanctioned under the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 (CISADA), any foreign bank that does business with these Iranian banks risks losing access to the U.S. financial system.

In its statement, Treasury accused Bank Tejarat of facilitating the movement of tens of millions of dollars to the Atomic Energy Organization of Iran (AEOI) for the purchase of uranium. Treasury also said the bank has helped other Iranian organizations circumvent sanctions, including the Islamic Revolutionary Guard Corps (IRGC).

"Iran's economic isolation seems to worsen each day as reflected in its plummeting currency, the Iranian rial," a senior Treasury official told reporters in a Monday afternoon briefing."

The official said the Iranian government is going to extraordinary lengths to prop up the rial.

"In recent weeks, the government has tried to ban the sale of Western currency. It reportedly has restricted citizens' ability to communicate by blocking text messages containing the word ‘euro' or ‘dollar.' Plainclothes police officers are reportedly patrolling the currency exchanges to enforce currency restrictions and arrest violators," the official said.

The Treasury and State Departments are also in the process of implementing the Menendez-Kirk sanctions on the Central Bank of Iran, which the official said would cause more pain for the Iranian economy.

"The economic hardship it is currently facing will only increase in the months to come, and will continue to increase as long as Iran refuses to meaningfully engage with the international community regarding its nuclear program," the official said.

A reporter asked the official when Treasury would issue the implementation rules for the new CBI sanctions. Lawmakers are concerned the rules may be crafted in a way to allow some partner countries to avoid cutting off all business with Iran.

"As soon as they are ready," the official said.

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Obama’s Iraq guy leaves government; says Iraq political situation still being sorted out

Posted By Josh Rogin Tuesday, December 20, 2011 - 1:36 PM

Only one day after the last U.S. troops left Iraq, President Barack Obama's main Pentagon advisor on the country, Colin Kahl, left government to return to academia. In an interview today with The Cable, Kahl says he was brought in to help wind down the war, and now that job is done.

"I'm turning back into academic pumpkin after a three-year leave," said Kahl. "I had a timeline for leaving just like the U.S. had a timeline for leaving. It wasn't a coincidence."

Kahl will return to the two jobs he held before joining the Obama administration as one of its first political appointees in February 2009. He will be a professor at Georgetown University's School of Foreign Service and a senior fellow on the Middle East at the Center for a New American Security. The first course he will teach upon returning to Georgetown is called, "Iran and the bomb."

Kahl was initially granted a two-year leave from Georgetown so he "could help oversee the drawdown from Iraq," he said. Last year, then Defense Secretary Robert Gates signed a letter to Georgetown asking it to extend Kahl's leave until the end of 2011. He technically leaves government on Dec. 31, but is already out of the building.

Until a replacement is found, Kahl's shop at the Office of the Secretary of Defense (OSD) will be led by acting Deputy Assistant Secretary Brig. Gen. Mike Minahan, an Air Force officer who was previously the commander of the expeditionary air wing in the United Arab Emirates. A new political appointee should be named by the end of the year.

Kahl's exit leaves another high-level vacancy at OSD. Undersecretary of Defense for Policy Michele Flournoy resigned this month to spend more time with her family. The post of assistant secretary of Defense for Asian and Pacific Affairs has been vacant since April, as the president's nominee, Mark Lippert, is stalled in the Senate. In February, Assistant Secretary of Defense for International Security Affairs Sandy Vershbow will leave the Pentagon to become deputy secretary general of NATO.

Kahl came to the attention of the foreign policy community during Obama's presidential campaign, when he was a key architect of candidate Obama's platform for ending the Iraq war. In July, 2008, Kahl co-authored an article in Foreign Affairs in which he wrote, "Now, the principal impediment to long-term stability in Iraq is the reluctance of Prime Minister Nouri al-Maliki's central government to engage in genuine political accommodation."

Kahl argued for "conditional engagement" with the Iraqi government, whereby the United States would use the threat of abandonment to pressure the Iraqis to work together.

"In the end, this approach may not work. If the Iraqis prove unwilling to move toward accommodation, then no number of U.S. forces will be able to produce sustainable stability, and the strategic costs of maintaining a significant presence will outweigh the benefits," Kahl wrote.

Those words seem especially prescient today, as Maliki has issued arrest warrants for Vice President Tareq al-Hashemi and his aides, causing the main opposition bloc led by former Prime Minister Iyad Allawi to boycott the parliament, in what has become an escalating political crisis.

"The Americans have pulled out without completing the job they should have finished. We have warned them that we don't have a political process which is inclusive of all Iraqis and we don't have a full-blown state in Iraq," Allawi said.

Kahl told The Cable today that the Iraqi political blocs are jostling for power, which is natural, but that the international community should give the situation time to play out while encouraging all sides to engage each other politically and refrain from violence.

"We've seen these crisis pop up every once in a while, people are testing the boundaries of a new Iraq," he said. "We are concerned about what's going on and we communicated to the Iraqis that it's imperative that the process moving forward happen with full transparency and within the rule of law."

Many in Congress blame the Obama administration for not securing a new Status of Forces Agreement with the Iraqi government that would have allowed several thousand U.S. troops to remain in a training mission, which would also have had the effect of preserving greater U.S. influence in Iraq.

"We were willing to have a long term training relationship with the Iraqis, the entire question was how can we shape the relationship in the way that meets the needs of the Iraqis and offers our personnel legal protections," Kahl said, explaining that without legal immunity for U.S. troops approved formally by the Iraqi Council of Representatives (COR), the administration had no choice but to pull out its military personnel.

"At the end of the day, the Iraqis wanted trainers but weren't willing to put the SOFA agreement through the COR for a vote," he said. "Once that decision happened, we had to shape the training through a different model, which is through the Office of Security Cooperation [at the U.S. embassy in Baghdad]. So that's the model we're going with moving forward."

Kahl may be leaving government, but he said the U.S. government is not leaving Iraq. He implied that in the future, more U.S.-Iraqi security cooperation could be in the offing.

"We shouldn't think of the end of this year as the end," he said. "Over the next couple of years, our security relationship will evolve. This is to be continued..."

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Dennis Ross leaving White House

Posted By Josh Rogin Thursday, November 10, 2011 - 2:40 PM

White House advisor Dennis Ross, one of President Barack Obama's lead officials in handling the Middle East peace process and U.S. policy toward Iran, is leaving the administration and returning to the private sector.

"After nearly three years of serving in the administration, I am going to be leaving to return to private life," Ross said in a statement e-mailed to reporters on Thursday. "I do so with mixed feelings. It has been an honor to work in the Obama Administration and to serve this President, particularly during a period of unprecedented change in the broader Middle East."

He will leave the administration is early December. No replacement has yet been announced.

Ross' official title was National Security Council (NSC) senior director for the "central region," which gave him authority over not just the Israeli-Palestinian peace process, but also placed him in charge of NSC officials who worked on Iran, India, and other issues. He said in his statement that he promised his wife he would be in government for only two years.

"We both agreed it is time to act on my promise," Ross said.

Ross actually worked for the Obama administration for almost three years, and resigned two days after Obama was caught on a hot microphone discussing with French President Nicolas Sarkozy their mutual frustration with Israeli Prime Minister Benjamin Netanyahu.

"I cannot stand him. He's a liar," Sarkozy told Obama in what the two leaders thought was a private conversation at the G-20 summit in Cannes.

"You're fed up with him? I have to deal with him every day," Obama responded.

Ross worked on Middle East issues for every administration since Jimmy Carter, except for that of former President George W. Bush, and was often seen as the Obama administration's main interlocutor with the Netanyahu team. He reportedly clashed with members of the administration who focused on other aspects of the administration's Middle East policy, such as former Special Envoy George Mitchell.

He had originally been appointed in February 2009 as special envoy to the Gulf and Southwest Asia, a job located at the State Department and focused on Iran, but was moved to his NSC position in June 2009. While there, he had been working primarily on the Middle East peace process and the U.S.-Israel relationship.

White House Press Secretary Jay Carney praised Ross in a statement e-mailed to reporters on Thursday.

"Dennis Ross has an extraordinary record of public service and has been a critical member of the President's team for nearly three years," Carney said. "In light of the developments in the broader Middle East, the President appreciates his extending that by nearly a year and looks forward to being able to draw on his council periodically going forward."

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Clinton confident on ratification of New START

Posted By Josh Rogin Wednesday, August 11, 2010 - 12:26 PM

Secretary of State Hillary Clinton is confident the Senate will President Obama's strategic nuclear treaty with Russia shortly after the August congressional recess, she said Wednesday morning.

Following a meeting with Senate Foreign Relations Committee chairman John Kerry, D-MA, she said the administration had reassured skeptical senators about their concerns over what the treaty means for missile defense, investment in "nuclear modernization," and verification.

"This treaty in no way will constrain our ability to modernize our nuclear enterprise or develop and deploy the most effective missile defenses for the sake of our security and for our allies and friends," she said.

She also touted the administration's $80 billion proposal for modernizing the nuclear weapons complex, a huge increase in such funding but short of what some GOP senators are calling for.

Clinton took a page from the book of committee ranking Republican Richard Lugar, R-IN, who said last week that the quick ratification of the treaty, known as New START, is a national-security imperative because all monitoring of Russian nuclear activities stopped when the last treaty expired last December.

"There is an urgency to ratify this treaty because we currently lack verification measures with Russia, which only hurts our national security interests," she said. "Our ability to know and understand changes in Russia's nuclear arsenal will erode without the treaty. As time passes, uncertainty will only increase. Ratifying the New START treaty will prevent that outcome."

Although Clinton said all of the senators' questions were being answered, one sticking point is likely to remain even after the recess ends. Several GOP senators are demanding the administration give them the entire negotiating record for New START. The administration has provided a summary, but has indicated several times that it has no intention of handing over the full record.

The administration argues that even though negotiating records have been provided in the past in certain cases, doing so hurts their ability to hold private negotiations with foreign governments in the future.

"It is surprising to see so many former senators in an administration who believe the Senate is a rubber stamp," one senior GOP aide told The Cable. "Until the administration sends up the negotiating record, it is clear that we have not yet reached the end of the beginning of this process."

Kerry has promised a committee vote on the treaty will be held Sept. 15 or 16.

Clinton's full remarks after the jump:

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