White House sanctions position questioned as currency stabilization boosts Iran economy, countries scramble to co-develop energy

  • White House sanctions position questioned as currency stabilization boosts Iran economy, countries scramble to co-develop energy
  • Nearly 500 dead in Syrian regime's "barrel bomb assault" on Aleppo
  • Deadly sniper shooting latest attack in Palestinian terror spike
  • WSJ reveals Pentagon probing defense firm for Iran sanctions violations, setting up potential enforcement controversy


What we’re watching today:


  • News reports from yesterday have deepened concerns that both of the Obama administration's central claims about sanctions relief provided to Iran under the Joint Plan of Action (JPA) - specifically, that the relief would be worth only $7 billion and that so-called "core sanctions" would still be effective - may prove difficult to sustain. Skeptics have long questioned both claims, arguing that the actual value of the relief is much higher and that the sanctions regime will be substantially eroded as companies and states scramble to rush back into Iranian markets. Regarding the $7 billion figure, reports indicate that U.S. officials have already acknowledged that $20 billion worth of relief - a number originally worked out by Mark Dubowitz, the executive director of Foundation for Defense of Democracies (FDD) - is closer to the correct value. In calculating its $7 billion figure, the Obama administration appears to have neglected basic economic considerations, including multiplier effects and the benefits of currency stabilization. The Washington Post yesterday published analysis describing renewed UAE-Iranian trade ties, noting that 'a rebound in the value of Iran’s currency, the rial, is returning the flow of goods to pre-sanctions levels' and that a 15% increase in the rial since Rouhani's election has 'return[ed] some of the spending power of Iranian consumers that had been decimated by the weakened currency.' Regarding the robustness of the overall sanctions regime, skeptics had almost immediately worried that eroding the psychology of sanctions - under which corporations and states stayed on the sidelines to steer clear of sanctions violations - would trigger a feeding frenzy during which no one would want to be the last to reenter Iran. Reuters yesterday revealed that Qatar is positioning itself to help Iran advance its energy sector 'amid signs that western sanctions might ease after [Iran] signed a deal in November.' Evaluating the story, Dubowitz commented that the "[m]arket is shifting from fear to greed."


  • The Syrian army's ongoing assault on Aleppo - which over the course of a week has killed nearly 500 people, among them scores of children - has drawn attention to a relatively new and cheap improvised explosive device being deployed by forces loyal to the Bashar al-Assad regime. The Telegraph described the campaign as the "Syrian regime's barrel bomb assault on Aleppo," and quoted one activist describing the last nine days of sustained fighting as "the most violent in the whole of the Syrian revolution." Journalists and doctors first began documenting the Syrian air force's use of so-called barrel bombs - drums packed with explosives and shrapnel, and literally rolled out of helicopters onto people and buildings - in August 2012. Since then the weapons have been refined, until now the Syrian air force is able to use a single bomb to level entire buildings. The shrapnel packed inside the devices leaves those who aren't killed maimed and disabled. CNN spoke to Dr. Ammar Zakaria, who described himself as having "lost count of the amputations" necessary to save many of the bombing victims. The outlet described images taken by the doctor as showing 'a mangled ambulance stopped in its path and doctors operating in pools of blood, watching children cling to their last breath through a breathing tube.' U.N. Secretary-General Ban Ki-moon announced yesterday that preparations for the January 22 Geneva II conference, in which the Assad regime and its backers will attempt to present terms for an end to the bloodshed, are "on track." Brookings Institute senior fellow Michael Doran yesterday echoed concerns that the talks - which will be attended by pro- and anti-Assad groups and by international parties - are "more about Assad-Western reconciliation than Assad-Syrian opposition negotiation."


  • The Associated Press this morning reported on what the outlet described as "the latest in a string of Palestinian attacks on Israeli targets in recent days," after a Palestinian sniper shot and killed an Israeli Bedouin defense contractor who was working on the border fence separating Israel from the Hamas-controlled Gaza Strip. The shooting occurred Tuesday morning. On Monday a Palestinian terrorist stabbed an Israeli policeman in the West Bank. On Sunday another Palestinian terrorist left a pipe bomb on an Israeli bus near Tel Aviv. Last month another Palestinian terrorist stabbed to death an Israeli soldier who was sleeping on a bus. The wave of violence has been linked to among other things the reemergence of regular incitement by top Palestinian officials in both the Gaza Strip and West Bank. Israeli Prime Minister Benjamin Netanyahu declared after the shooting that Jerusalem will not tolerate a "drizzle" of terror attacks from the Gaza Strip. The Israeli military deployed assets from its air force, Armored Corps, and infantry to strike six Gaza Strip targets, among them training sites, weapons manufacturing facilities, and a concealed rocket launcher. The Jerusalem Post reported this evening that, despite the recent spike in terror attacks, Israel is still expected to release a group of convicted Palestinian terrorists - the third of four such groups - in an effort to boost U.S.-backed peace talks.


  • The Wall Street Journal this morning reported that that the Pentagon's criminal investigation arm is probing allegations that Anham FZCO, a Dubai- and Virginia-based company awarded an estimated $8.1 billion contract to supply troops inside Afghanistan, has been moving some of its supplies through Iran. The investigation was triggered by a previous Journal article, published in September, which revealed that the company had 'used Iran's Bandar Abbas seaport last year to land equipment and building materials that were then transported across Iran.' The company's actions, per Obama administration officials cited in this morning's Journal scoop, 'may have violated strict U.S. sanctions laws that prohibit American entities from conducting trade with Iran or Iranian companies by moving materials through the country.' The possible violations are likely to be read against ongoing policy debates regarding the costs and benefits of Senate legislation revealed last week by a bipartisan group of twenty-six lawmakers. The bill would impose new sanctions on Iran should the Islamic republic either violate the terms of the Joint Plan of Action (JPA) during an upcoming six-month negotiation period or refuse, at the end of that period, to put its nuclear program beyond use for weaponization. The White House has threatened to veto the legislation, insisting that new sanctions are unnecessary, partly because it committed to enforcing existing sanctions. The administration will likely be pressured to meet those commitments should Anham be found to have violated U.S. restrictions.

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