The plan to change Iran’s plans

The U.S. and their allies are looking at ways to deal with the Iranian threat. Iran is in the midst of developing a nuclear capability, more than likely to have a nuclear bomb(s). The U.S. does not want Iran to reach this point and they would very much prefer not to have to resort to military actions to prevent it from happening. Instead, they want to put sanctions and to have the Iranian economy become weak to the point that the current regime will have no choice but to change its policies.

This is no easy task however, because if a company is doing good business in Iran and has invested in developing that market which is now profitable for them, they may not be very pleased about just closing up shop and moving elsewhere. The only way they will decide to stop conducting business with Iran is if the risk of losing business or money in other places becomes too great.

Enter the Obama Administration, specifically, Stuart Levey, Under Secretary for Terrorism and Financial Intelligence.  As a recent article from Reuters points out (click here to read it), Stuart Levey has been visiting with some of the largest companies in the world and especially the ones with a large foot print in the Iranian economy. With the help of his work, among other factors, companies like Siemens, Royal Dutch Shell and Caterpillar, among others have said they will no longer do business with Iran.

The list of companies that are coming to this same decision is growing, although the Iranian economy does not yet seem to show much of an effect from it. One group says that if 10-20 of the largest multinational companies decide to stop doing business with Iran, then it will put a very serious strain on the Iranian economy and greatly weaken the regime there.

Companies are also looking at two very large financial institutions which recently had to settle with the U.S. government due to their illegal dealings with Iran. Swiss bank, Credit Suisse paid out over half a billion dollars in their settlement and UK-based bank, Lloyds TSB Group paid $350 million. These are very large figures compared to the size of the market in Iran which is relatively small. This type of news makes doing business with Iran a scary thought and it is no wonder that companies are increasingly changing their policies with regards to that country.

It is unclear how much success the U.S. government is having in their quest and how much of it is the companies’ own cost/benefit analysis that is changing their minds. It is even more uncertain that all of this will have any impact the Iranian regime and their nuclear goals. At this point however, it would be a waste not to try while time is still on the United States’ side, even though it probably isn’t much time that is left before Iran will have a nuclear capability.

Stuart Levey says that he is trying to have companies on board with him that will give the intended result of not destroying the Iranian economy completely, especially for the citizens, but instead focus more on companies that are more important to the regime and Iranian Revolutionary Guard Corps. while leaving the citizens as well off as possible. The risk is that if the citizens end up in much worst economic shape then they will rebel against the U.S. and side with their regime, even though they are oppressive. Needless to say that Levey’s job is an incredibly difficult one but everyone should hope that he succeeds in it.