Family Fight Over Iran

The United States may be heading toward a nasty confrontation with its European allies that will benefit no one. At issue is a contract signed by the French oil company Total to invest $2 billion to develop Iran’s vast natural gas deposits. A year-old U.S. law requires the president to impose sanctions on any foreign company that invests more than $20 million a year in the energy industries of Iran or Libya, countries the State Department lists as sponsors of terrorism. France, supported by the European Union, dismisses this as an arrogant attempt to impose U.S. law on others, contrary to international law. If Washington pushes the issue, some in the EU warn, the transatlantic relationship could be seriously damaged.

The Iran-Libya Sanctions Act is an ill-conceived law in pursuit of a desirable goal. Since energy exports are the main revenue source for Iran and Libya, that presumably makes oil and gas revenues the chief means for financing terrorism. If foreign investment in energy development could be discouraged, Iran and Libya would have less to spend on terrorism and the world would be a safer place. But it’s hard to see how the simplistic approach taken by the 1996 sanctions law furthers that aim. As the Total case shows, the threat of sanctions turns out to be essentially impractical when larger issues of political and strategic complexity are at stake.

What’s needed is not a feud among partners over an issue of secondary importance but a committed effort to devise a more cooperative policy for dealing with Iran, a country that, whoever governs it, is simply too important to ignore or try to isolate. The sanctions policy long pursued by Washington has not been notably successful in encouraging changes in Iranian behavior. Neither has the conciliatory “critical dialogue” more recently tried by the Europeans.

The election last summer of the relatively moderate President Mohammad Khatami signaled a deep desire among Iranians for a shift away from oppressive theocratic government. It might also, in time, help produce a more conciliatory foreign policy. In any case, an approach toward Iran based on consensus between the United States and its European friends would be the most effective policy the West could adopt.

The sanctions law does not tie President Clinton’s hands. If he determines that the national interest requires it, he can decide to take no punitive action. In this case, given what’s at stake, the national interest seems clear.