U.S. Intelligence "Trolling" Through Iranian Financial Holdings Abroad

Economic warfare, in the form of sanctions that may drive up the cost of oil worldwide, are being put into place against the Islamic Republic of Iran.

U.S. intelligence agencies have spent months trolling through the personal accounts of Iranian leaders in foreign banks, analyzing Iranian financial systems and transactions and assessing how the government does its banking. They have calculated the amount of foreign investment at stake and even which charities have connections to the Tehran government...

The plan is designed to curtail the financial freedom of every Iranian official, individual and entity the Bush administration considers connected not only to nuclear enrichment efforts but to terrorism, government corruption, suppression of religious or democratic freedom, and violence in Iraq, Lebanon, Israel and the Palestinian territories. It would restrict the Tehran government's access to foreign currency and global markets, shut its overseas accounts and freeze assets held in Europe and Asia.

The United States, which has imposed unilateral sanctions on Iran for nearly three decades, would shoulder few of the costs of its ambitious new proposal. But internal U.S. assessments suggest that the sanctions could not hurt Tehran without causing significant economic pain for Washington's friends. That calculation has made the plan a difficult sell, especially in capitals such as Rome and Tokyo, which import significant quantities of Iranian oil.

In an effort to minimize financial risks, the plan does not include oil or trade embargoes. But, according to a Treasury Department assessment, it could jolt world oil prices nonetheless if Iran responds by limiting exports. The internal assessment also predicts additional economic repercussions for Western allies, such as trade loss, and adverse effects for the Iranian people as their government is squeezed out of global markets and foreign banks stop taking their business...

(T)he impact on U.S. allies could be steep as well. A Treasury Department memo recently predicted that Britain, which does not import Iranian oil, faces a low level of financial risk if it agrees to implement the sanctions plan. Germany, which imports 1 percent of its oil from Iran, and France, which gets 6 percent, are deemed at medium financial risk, whereas Italy and Japan would be taking the largest risks. The assessment is considered internally "an initial -- first blush -- estimate based on each country's overall volume of exports to Iran, dependence on Iranian oil and degree of investment in Iran oil projects," according to the Treasury memo.

The tendency of U.S. punitive initiatives abroad to backfire on the American people is unrecognized only by the administration in Washington.

If (more likely, when) the Iran economic and military gambit blows up in the face of U.S. interests, Bush and his enablers will stand there with a straight face and tell everyone that nobody thought [enter ensuing catastrophe] could happen.