Total sanctions might stop Iran

Wall Street Journal -- As the Iranian regime races to fulfill its nuclear ambitions, the world faces a stark choice. Our near future carries the risk of a military conflict with Iran, or a nuclear arms race in the already-volatile Middle East. It is still possible to avoid these outcomes, but only if like-minded nations act immediately to deliver a potentially decisive economic blow to the regime.

It is still in Iran's interest to change course and address international concerns regarding possible military aspects of its nuclear program. Our rationale is based on strong empirical evidence from the last few months that sanctions are having a tangible impact. For example, the value of Iran's currency, the rial, is currently in free fall.

Two actions that were long advocated by United Against Nuclear Iran have been enacted and have struck at the heart of Iran's economic system. First, the United States and the European Union passed financial sanctions against Iran's central bank and pressured Swift, the international banking consortium, to deny access to Iranian banks. The ripple effect has been staggering.

Second was the decision by countries to ban or significantly curtail oil imports from Iran. The EU joined the U.S. in enacting an outright ban on imports of Iranian oil, while other countries, like Japan, also took significant steps.

With these measures in place, now is the time for the international community to truly isolate the regime. This means passing the most robust sanctions against Iran in history. We propose decisive action in four key areas.

First, Iran must be fully denied access to the international banking system. Current sanctions and Swift's action have made a difference, but they did not include all Iranian institutions. By designating all Iranian banks for sanctions, the global community can fully sever Iran from the international financial system.

Second, companies should be required to disclose any and all investments and business transactions in Iran. This can be accomplished by changing the rules of the U.S. Securities and Exchange Commission, the U.K.'s Financial Services Authority, and similar counterparts overseas. The moment companies are required to disclose their irresponsible business activities in Iran is the moment they end such business for risk of reputational harm.

Third, the world must deny Iran's access to international shipping, a move that would severely affect the regime given its dependence on global trade and seaborne crude oil exports. Aligned nations should prohibit international cargo shippers that service Iranian ports or do business with the Tidewater Middle East Co. (which handles 90% of Iran's container traffic) from shipping to the U.S., EU and elsewhere.

The U.S. and EU should introduce laws requiring all tankers and general cargo vessels arriving in ports to certify that they have not docked at an Iranian port, and that they have not carried Iranian crude oil or downstream petrochemical products, in the preceding 36 months. Any that have should be banned for the next 10 years.

Fourth, insurance and reinsurance companies that operate in Iran should be identified and prohibited from doing business in the U.S. and the EU, and they should be precluded from entering into insurance and reinsurance agreements with any entities in the U.S. or EU. Insurers and reinsurers must also disclose all substantial investments in Iran. There are inherent risks associated with doing business in Iran, and if institutions are forced to assume the full ramifications of those risks, the allure of doing business in Iran will diminish significantly.

Some critics will say that these measures are too stringent and detrimental to the Iranian people. Others will say that no amount of economic pressure can prevent Iran from acquiring a nuclear weapon, and so the only option is a military one.

To the first group, we respond by saying that Iran's economy is widely controlled by the regime (specifically the Islamic Revolutionary Guard Corps), which profits at the expense of the Iranian people. History has made clear that the regime will never change course due to half-measures; only serious steps like we've outlined have a chance of success. With Iran finally feeling real impact from international sanctions, now is the time to increase the pressure.

As for the other argument, we cannot state with certainty that sanctions and pressure will compel the Iranian regime to change course. But it's common sense that before undertaking military action against a country, we should first try to dissuade it from its current course by applying decisive economic pressure. Doing so will show the regime that the world is serious and committed, willing to do whatever it takes to stop Iran's pursuit of nuclear weapons.

Messrs. Dagan, Hanning and Woolsey are former heads of the intelligence services of Israel, Germany and the U.S., respectively. Gen. Guthrie is a former chief of staff of the British armed forces. Ms. Silverberg is a former U.S. ambassador to the EU. Mr. Wallace is a former U.S. ambassador to the United Nations for management and reform. They are members of a new initiative of the U.S.-based group United Against Nuclear Iran and the U.K.-based Institute for Strategic Dialogue.