08 June 2001

Atlantic Council Report Calls on U.S. to Relax Economic Sanctions on Iran

Private sector engagement will advance U.S. goals sooner

By Jane Morse
Washington File Staff Writer

The Atlantic Council of the United States released on June 8 a report calling for the United States to unilaterally relax all economic sanction on Iran.

The policy paper "Thinking Beyond the Stalemate in U.S.-Iranian Relations" is the product of a working group chaired by: former Chairman of the House Foreign Affairs Committee Lee H. Hamilton; former National Security Advisor to President George Bush Brent Scowcroft; and former U.S. Secretary of Defense and Secretary of Energy James Schlesinger. Ambassador Roscoe Suddarth is the principal policy advisor to the working group and the former president of The Middle East Institute.

The U.S. government maintains that Iran is a major state sponsor of numerous terrorist organizations and an active opponent of the Middle East peace process. Yet after twenty years of adversarial relations, according to the report, both sides are interested in breaking the stalemate. Relaxing economic sanctions on Iran, the report says, is a way to achieve this.

"Iran has an important role to play in meeting growing U.S. and worldwide energy demands," the reports say. "The 1995-96 U.S. sanctions on Iran were imposed during a period of global oil surplus, but the world is now entering a period of global energy scarcity. Iran currently accounts for 5 percent of worldwide oil production and is the second largest oil exporter in OPEC (Organization of Petroleum Exporting Countries)."

Yet Iran needs significantly increased capital investment to maintain its current level of production and to develop new fields for future demand, the report says.

"Regardless of the direct U.S. role, Iran will play an increasingly important role among the world's leading suppliers of oil and natural gas," the report says. "In the meantime, U.S. companies are losing opportunities to their European and Asian competitors. U.S. jobs and tax revenues are also being lost because of U.S. restrictions on participation in Iran's economy."

According to the report, U.S. sanctions have had "little discernible effect" on Iran's behavior, because Iran has found alternative investors and suppliers.

The report urges the United States to "de-link interests that can be pursued directly (geopolitical, energy, and economic) from those parts of its security interests (weapons of mass destruction, terrorism) that can be more effectively pursued multilaterally."

Strengthening private sector engagement will better enable the United States to achieve its immediate and longer-term geopolitical, economic and energy security interests in the region, the report says.

"Eventually, better and increased engagement with Iran should help with difficult security issues," the report says.

The report acknowledges that moving beyond the current stalemate will be difficult, but it argues that no substantial improvement in relations between the two nations can take place without the United States taking the first unilateral steps.

The full report is available the Council's website -- http://www.acus.org/ -- under "New Publications."

The Atlantic Council of the United States is a non-partisan, educational, tax-exempt organization. The Council was formally established in 1961 when former Secretaries of State Christian Herter and Dean Acheson, with Will Clayton, William Foster, Theodore Achilles and other distinguished Americans recommended the consolidation of the U.S. citizens groups supporting the Atlantic Alliance into the Atlantic Council of the United States..

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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