The business of Iranian sanctions

The United States and European countries have been using carrots and sticks with Iran over its nuclear plans; the carrot being the promise of easier trade, the stick a toughening of sanctions.

The two together have now produced a tentative deal whereby Iran ships some of its nuclear fuel to Russia to be processed into a non-military form.

Iran has weathered sanctions since the Iranian revolution in 1979. Currently, the toughest measure imposed by the US is against Iranian banks which can't, accordingly, deal with American banks, so stifling trade - but not killing it completely.

At the moment, sanctions are largely a stick wielded by the United States, though the UN and European Union does have specific blocks on dealing in nuclear technology and material.

The two main blocks to tougher sanctions are Russia and China. Russia's economy is entwined with that of Iran, and China has invested heavily in Iranian oil and gas, so it needs Iranian help to tap those reserves and move the fuel to China.

All the same, the discovery of a hitherto unknown nuclear site in Iran a month ago cranked up the heat in Washington, prompting those who advocate taking a tough line with Iran - to get tougher.

Mark Dubowitz is director of the Foundation for the Defence of Democracies which was founded after 9/11 to lobby for tougher action to counter Islamist extremism.

First broadcast on Business Daily