U.S. Sanctions Delay Could Open Door for Iranian Weapons Violations

U.S. backpedaling over sanctions related to Iran's ballistic missile program just a day after they were reported could send a dangerous signal, effectively inviting Tehran to test the boundaries of what violations it can get away with.

Iran had threatened retaliation over the planned sanctions, which would have been the first imposed since the international deal on its nuclear program was announced in July. The measures were intended to show Washington's willingness to hold Tehran accountable for illicit conduct. Iran tested a new ballistic missile in October. A United Nations panel concluded in December that the Emad rocket was capable of carrying a nuclear warhead, a violation of UN Security Council Resolution 1929. Tough sanctions targeting elements of the Iranian defense industry involved in ballistic missile testing and production remain in place under the nuclear deal, as one U.S. Treasury official noted in a speech in September.

To Iran, it didn't matter that the measures did not undermine the major sanctions relief it stands to gain through the nuclear deal or that they were limited to a small number of individuals and companies. A spokesman for Iran's foreign ministry called the sanctions "unilateral, arbitrary and illegal." President Hassan Rouhani denounced them and instructed his defense minister to expedite the ballistic missile program.

And U.S. wavering in the face of such Iranian pushback opens the door to future violations.

This is particularly worrisome because once the nuclear deal is fully implemented, the UN Security Council ban on Iranian ballistic missile tests will be replaced by weaker language from Security Council Resolution 2231. That "calls upon" Tehran not to undertake any ballistic missiles work designed to deliver nuclear weapons for as long as eight years.

Iran has insisted that it will not accept restrictions on its missile program. The text of the nuclear agreement enshrines this position: "Iran has stated that if sanctions are reinstated in whole or in part, Iran will treat that as grounds to cease performing its commitments under the JCPOA in whole or in part."

Sanctions also underscore the risks to investors of entering the Iranian market. So long as Iranian officials engage in illicit conduct and leverage front companies and cutouts to cover their tracks, doing business in Iran exposes investors to potential responses from global financial entities. If the U.S. backs down before implementing any measures, Iran can see that threatened actions are less a shot across the bow than a random shot in the dark.

The Obama administration has maintained that it intends to hold Iran accountable for illicit actions. Treasury Secretary Jack Lew said in April, while the deal was being negotiated, "Make no mistake: deal or no deal, we will continue to use all our available tools, including sanctions, to counter Iran's menacing behavior."

Many U.S. allies in the Middle East and a share of the U.S. public have been skeptical that the Obama administration would risk undermining the nuclear agreement by sanctioning Iranian entities over support for terrorism, human rights abuses, or ballistic missile activities. "Unequivocal commitment to enforcement is critical" during implementation, former Treasury official Chip Poncy said in September. "There is no question that Washington possesses the tools, relationships, and leverage to hold Iran accountable; the question is whether it will use them."

By backing off sanctions over Iran's ballistic missile test -- and fairly insignificant sanctions at that -- the Obama administration has left the impression that, contrary to its repeated pledges, it may not enforce current sanctions or impose new ones should Tehran violate UN Security Council resolutions or the nuclear deal. Iran's actions to date make clear that its leaders will interpret such dithering as weakness, and an invitation to further test the boundaries of their international obligations.

Matthew Levitt is the Fromer-Wexler Fellow and director of the Stein Program on Counterterrorism and Intelligence at The Washington Institute. This article originally appeared on the Wall Street Journal blog "Think Tank."