Daily Israel Report

On Iran, The US 'Knows Who We're Dealing With'

US Secretary of Treasury defends Obama Administration policy at AIPAC conference - to a cautious reception.
By Ari Soffer
First Publish: 3/3/2014, 3:43 AM

Bushehr nuclear power plant
Bushehr nuclear power plant
AFP photo

The Obama administration has received plenty of criticism for its diplomacy over Iran’s nuclear program, with Israeli officials and many Americans particularly wary of last November’s Geneva deal, which is seen by many as letting the Islamic Republic off lightly, and rolling back sanctions without any meaningful concessions.

The White House has also faced-down pressure from both Republicans and some Democrats in Congress to prepare a new tranche of sanctions against Tehran.

Speaking at AIPAC’s annual policy conference, US Secretary of Treasury Jacob J. Lew lay out the administration’s case for why it rejected that criticism, and why he felt that current US policy on Iran was actually a success story.

But whilst comments acknowledging the danger of an Iranian nuclear program were greeted enthusiastically by the thousands of supporters of Israel who flocked to Washington on Sunday, his defense of the Obama administration’s policy decisions were less enthusiastically received.

The administration recognizes that the prospect of a nuclear Iran is “one of the most pressing security concerns for not only Israel but US,” Lew said.

And he insisted that far from granting Tehran “the deal of the century”, as suggested by Israeli Prime Minister Netanyahu, President Obama’s diplomatic efforts had been effective in forming an unprecedented international consensus against Iran’s pursuit of nuclear weapons. Lew noted that existing sanctions against the Islamic Republic were the stiffest ever leveled against any country, and had forced the Iran to the negotiating table “fully aware that to get relief it had to take concrete steps to curtail its nuclear program.”

Geneva was merely a “six-month diplomatic window to hammer out a comprehensive resolution,” which left most sanctions in place, he added, echoing a familiar line by administration officials, and continuing to emphasize that were that window to close without a comprehensive deal “we have sent a clear message to Tehran that we are prepared to level additional sanctions and that all options remain on the table.”

That position received only cautious applause from the audience, even as Lew assured the 14,000 AIPAC attendees that “we are under no illusions who we are dealing with.”

“But it is our responsibility to do as much as we reasonably can to reserve force as a last resort,” he cautioned, explaining that the international consensus on the issue was dependent on “proving that we have given diplomacy a chance.”

Moreover, “the existing sanctions are working,” he insisted, and the limited relief granted in Geneva represented a mere “drop in the ocean”. Specifically, the bulk of that relief simply involved the unfreezing of a mere fraction of the $100 billion of frozen Iranian assets, which itself “will only flow if Iran proves its commitment” to upholding its side of the deal.

But the most crucial economic sanctions, particularly on the oil industry – which has seen a more than 60% drop in revenue in the last 10 years – remained intact, he assured. Last year alone the Iranian economy shrunk by 10%, and has a staggering inflation rate of 30% – one of the highest in the world.

Addressing concerns that the easing of sanctions was opening the floodgates to private investors to do business with the regime and undo years of economic sanctions, Lew assured the audience that “Iran is not ‘open for business.’”

Talking was fine, but the option of circumventing restrictions on business with Iranian entities was a red line, he warned. “Anyone who violates our sanctions will face severe penalties.”

“This is not a case of ‘trust and verify’, but ‘verify everything’,” he quipped.