A Bad Iran Investment

Stretching appeasement to the breaking point, Washington is working overtime to convince global institutions, nations, banks and companies to dismiss their well-founded concerns and do business with the America-hating, terror-sponsoring, nuclear weapons-pursuing regime in Tehran.

Washington’s efforts – which are coming despite no discernable change in Iranian behavior – extend a familiar script of recent years, in which the Obama administration kowtows to the regime, ignores the concerns of America’s regional allies and breaks its promises to monitor Iranian activities closely and act accordingly.

It’s an embarrassing spectacle that diminishes U.S. leadership and credibility in the region and beyond.

Nevertheless, the U.S. effort is having an impact. The Paris-based Financial Action Task Force, which sets global standards for fighting money laundering and terror financing, responded to U.S. pressure by deciding last week to suspend for a year its measures to combat Iranian terror sponsorship because Iran has adopted a plan to address the problem – even though Tehran hasn’t actually implemented it. And the plan is meaningless to begin with because it excludes from “terrorism” any group that Iran says is “attempting to end foreign occupation, colonialism, and racism,” as Iran surely would say of its terrorist proxies Hezbollah and Hamas.

The Financial Action Task Force has long labeled Iran and North Korea “high-risk or uncooperative jurisdictions” and urged other countries to take “counter-measures” to protect their financial systems. As recently as February, it said it was “particularly and exceptionally concerned about Iran’s failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system.”

Whether the group’s change of heart will generate much new business for Iran, however, remains unclear. “Practically speaking,” the Foundation for Defense of Democracies, a Washington, D.C. think tank, has noted, “there is no change since, given the continued concerns over Iran’s illicit conduct, financial institutions will continue to voluntarily implement strict countermeasures … Businesses considering ties to Iran will have to conduct enhanced due diligence that will prove a nightmare for them.”

That’s because Iran’s Islamic Revolutionary Guard Corp controls nearly a third of Iran’s economy, many of Iran’s companies hide their ties to the guard, the country ranked 130 out of 168 countries on Transparency International’s Corruption Perceptions Index, and it continues to bolster Bashar Assad, Syria’s brutal dictator, and to support Hezbollah, Hamas and other terrorist groups.

“Most large banks that care about long-term protection of their assets,” the Foundation for Defense of Democracies wrote, “are not rushing back into Iran because they understand it has a long way to go before it’s safe to do business there. Ultimately they are looking to avoid the massive sanctions, money-laundering, and corruption risk Iran poses to their stakeholders.”

On the other hand, Boeing recently announced that it will sell 100 jets to Iran Air in a $25 billion deal that the State Department said it “welcomes,” adding that Boeing was in “close contact” with the department on the deal. To facilitate it, the administration dropped the sanctions that it had slapped on Iran Air in 2011 for using its passenger and cargo planes to send rockets and missiles to Syria, disguising those shipments as medicine or spare parts, and enabling the Revolutionary Guard to control some of the flights.

Whether pressuring the Financial Action Task Force, facilitating Boeing or promoting Iran as a place to do business, the administration admits that it’s going well beyond its obligations under the U.S.-led global nuclear deal with Iran.

“I have personally gone beyond the absolute requirements of the lifting of sanctions,” Secretary of State John Kerry said recently, “to personally engage with banks and businesses and others who have a natural reluctance after several years of sanctions to move without fully understanding what they are allowed to do and what they are not allowed to do.”

Administration officials say they’re driven by two motives. First, President Barack Obama is doubling down on his hopes that – whether through the $100 billion-plus in sanctions relief provided under the nuclear deal, or because of U.S. promotion of Iran as a place for business – Iran’s economic progress will convince the regime to abandon its militancy and become a responsible global actor.

Second, by expanding U.S. ties to and investment in Iran, Obama hopes to make it harder for his successor to undo his nuclear deal, which he considers among his top achievements. To achieve this goal, in his remaining months in office, he’s reportedly pushing for such additional steps as Iranian entry into the World Trade Organization and facilitating Iranian access to the dollar.

But U.S. efforts to nourish Iran’s economy have prompted no change in Iranian behavior. Unless they eventually do, a more prosperous Tehran will pose greater risks for the United States on the world stage.

A president focused on his legacy, however, doesn’t seem to worry.

Lawrence J. Haas, a senior fellow at the American Foreign Policy Council, is the author of the new book Harry and Arthur: Truman, Vandenberg, and the Partnership That Created the Free World.

http://www.usnews.com/opinion/articles/2016-06-29/the-obama-administration-is-making-a-bad-economic-investment-in-iran