A Litmus Test for Biden’s Iran Policy

Related Categories: Democracy and Governance; Economic Sanctions; Human Rights and Humanitarian Issues; International Economics and Trade; Iran; United States

Back in February, Iran's clerical regime marked the 45th anniversary of the Islamic Revolution, the 1979 religious revolt which successfully overthrew the Pahlavi monarchy and installed a radical theocracy in its stead. In commemorative speeches and pronouncements, its officials struck a triumphalist tone. "We see that the system of the Islamic Republic continues to advance with authority and does not recognize any obstacles in its path," Iranian President Ebrahim Raisi said on Feb. 11.

Raisi and his colleagues certainly have a great deal to be happy about.

Economically, Iran is on dramatically firmer footing than it was just a few short years ago. A recent exposé by The Washington Free Beacon found that, since 2021, the Iranian regime earned $90 billion from illicit oil sales to countries like China and India—replenishing badly depleted state coffers in the process.

Regionally, the Iranian regime has been emboldened by a lack of decisive response from Washington to act more assertively—both directly against U.S. allies such as Israel and via proxies against American interests throughout the Middle East.

And at home, Iranian regime officials—who not long ago were on the back foot in the face of sustained grassroots protests—have redoubled their domestic repression, launching a sweeping national plan to enforce restrictions on female dress and conduct.

What accounts for this reversal of fortune? A great deal can be attributed to permissive American policy.

From its first day in office, the Biden administration made a rollback of Trump-era "maximum pressure" against Iran—which had successfully drawn down the Islamic Republic's reserves by more than 95 percent, to a mere $4 billion—a major priority.

Instead, following in the footsteps of the Obama administration, Team Biden has doggedly attempted to reengage Iran's ayatollahs in some sort of diplomatic compromise. In the service of that effort, the White House has rolled back enforcement of existing sanctions and turned a blind eye toward the lion's share of Iran's regional rogue behavior. The end result has been what some have termed a policy of "maximum deference" toward Tehran.

Administration officials deny all this. Senior policymakers such as Secretary of State Antony Blinken have insisted that the White House is doing its utmost to squeeze Iran, and denied they are providing the Islamic Republic with any relief from U.S. pressure. Iran's rising regional profile, however, tells a very different story.

Here, Congress has the ability to weigh in meaningfully. A new bill now under consideration on Capitol Hill would provide new funding—and much-needed teeth—to the governmental agency responsible for enforcing U.S. sanctions by identifying, interdicting, and seizing Iran's illicit oil shipments.

That agency, known as Homeland Security Investigations (HSI), is a bit of a hybrid. While it operates under the auspices of the Department of Homeland Security, its funding is routed through the U.S. Treasury Department. That arrangement has caused no shortage of headaches because the pot of money that currently supplies HSI's operating budget isn't structured to enable the agency to carry out its seizures, which are highly lucrative but require substantial up-front costs. As a result, HSI's operations have been severely curtailed—while Iran's clandestine oil trade has flourished.

Enter the Iran Sanctions Enforcement Act, the brainchild of Senator Joni Ernst (R-Iowa). Introduced in both the Senate and House late last year, the act proposes the creation of a dedicated fund to bankroll HSI's enforcement activities, and allocates $150 million to fully fund them. The money, however, isn't a grant; the agency will need to repay the sum in full within a decade using money generated by the (highly profitable) sale of seized Iranian oil. Moreover, such revenues will also go to fund HSI's future operations, to pay into the U.S. Victims of State Sponsored Terrorism Fund, and even to pay down the national debt.

All this helps explain why the act has garnered significant bipartisan support. (Richard Blumenthal, the Democrat senior senator from Connecticut, is a prominent co-sponsor). It has also received at least a preliminary nod of approval from the Biden administration. In recent testimony, Homeland Security Secretary Alejandro Mayorkas told the Senate that his department "would welcome the additional resources" to enable better enforcement of sanctions against Iran.

The future for the act, in other words, is bright, if Congress makes its passage a priority. It should pass, for both practical and political reasons. For one thing, fully funding HSI's activities would enable the United States to better curtail Iran's illicit oil trade, thereby drawing down the funds available to the Islamic Republic to support international terrorism.

For another reason, the act can serve as a litmus test of sorts for the Biden administration's Iran policy. The White House, after all, insists it is maintaining strict sanctions on Iran, and even recently levied new ones in response to Tehran's escalating regional provocations. But without the necessary resources to enforce them, such measures don't make much practical difference. Asking it to fully fund meaningful sanctions enforcement will help determine whether, when it comes to squeezing Iran, Team Biden is truly prepared to put its money where its mouth is.

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