Commentary Magazine


Topic: Petit-Couronne refinery

Exemptions Are the Rule on Iran Sanctions

President Obama’s apologists continue to trumpet the notion that his reliance on diplomacy and sanctions is the best route to stopping Iran’s drive to obtain nuclear weapons. Though the partial oil embargo is making the lives of ordinary Iranians a bit more difficult, the sanctions are so riddled with holes that they are not proving much of a deterrent to the Iranian oil industry’s plans for foreign ventures let alone being enough to force Tehran to give up its nuclear ambition. As the Wall Street Journal reported earlier this month, the West’s “crippling sanctions” are not stopping an Iranian energy company from making a bid on a French oil refinery.

Iran’s Tadbir Energy is being allowed to bid on the Petit-Couronne refinery, which supplies fuel to Paris. According to the Journal it refines approximately ten percent of the country’s energy. But since Tadbir is not owned by the Iranian government it may wind up taking control of the refinery whose previous Swiss owner has gone belly up. The Imam Khomeini Foundation controls Tadbir, one of Iran’s biggest philanthropies whose close ties with the Islamist regime can easily be imagined. Though the financial restrictions on dealing with Iran and its central bank will complicate Tadbir’s administration of the plant, France’s government, which has been an ardent advocate of sanctions, is not blocking the bid. While this potential transaction is not as significant as the exemptions granted by the Obama administration to China and India to go on purchasing Iranian oil, it is one more sign not only of the widespread evasion of the sanctions but that the Iranians believe they can be waited out.

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President Obama’s apologists continue to trumpet the notion that his reliance on diplomacy and sanctions is the best route to stopping Iran’s drive to obtain nuclear weapons. Though the partial oil embargo is making the lives of ordinary Iranians a bit more difficult, the sanctions are so riddled with holes that they are not proving much of a deterrent to the Iranian oil industry’s plans for foreign ventures let alone being enough to force Tehran to give up its nuclear ambition. As the Wall Street Journal reported earlier this month, the West’s “crippling sanctions” are not stopping an Iranian energy company from making a bid on a French oil refinery.

Iran’s Tadbir Energy is being allowed to bid on the Petit-Couronne refinery, which supplies fuel to Paris. According to the Journal it refines approximately ten percent of the country’s energy. But since Tadbir is not owned by the Iranian government it may wind up taking control of the refinery whose previous Swiss owner has gone belly up. The Imam Khomeini Foundation controls Tadbir, one of Iran’s biggest philanthropies whose close ties with the Islamist regime can easily be imagined. Though the financial restrictions on dealing with Iran and its central bank will complicate Tadbir’s administration of the plant, France’s government, which has been an ardent advocate of sanctions, is not blocking the bid. While this potential transaction is not as significant as the exemptions granted by the Obama administration to China and India to go on purchasing Iranian oil, it is one more sign not only of the widespread evasion of the sanctions but that the Iranians believe they can be waited out.

As the Journal points out, the interesting thing about the bid is not so much the ability of a major Iranian financial player to acquire such an important Western asset in the midst of the international community’s allegedly fearsome sanctions plan but that they believe the restrictions will soon be dropped. Tadbir and its Islamist owners are not just betting that they’ll be allowed to become the source of the fuel that makes the city of light twinkle but that the sanctions will be dropped before they have to worry about dealing with the details.

That’s a calculation based on a belief that both the Obama administration and the European nations that pushed for sanctions will tire of the effort and that the booming business between Iran and the West will soon be back on track. Given the fact that the Treasury Department has already issued thousands of exemptions to companies that wish to deal with Iran and that President Obama has assured China and India that the U.S. will not prevent their ongoing oil trading with Tehran, why shouldn’t the ayatollahs think that after the presidential election they may be dealing with a president who thinks he has the “flexibility” to make their problems disappear. That may not be an accurate reading of President Obama’s intentions but at this point there is little doubt that the Iranians believe it is so.

All of this illustrates that diplomacy and sanctions are proving to be a dead end that will do nothing to stop Iran. Though the administration is determined to kick the can down the road until after November — and is even applauded by some purveyors of mainstream opinion for doing so — if the United States is serious about dealing with this threat, either the loopholes in sanctions must be sealed up or Washington is going to have to start talking more about the use of force.

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