Editor’s Note: Samantha Vinograd is a CNN National Security Analyst. She served on President Obama’s National Security Council from 2009-2013 and at the Treasury Department under President Bush. Follow her @sam_vinograd. The views expressed in this commentary are her own. View more opinion articles on CNN.
Every week, I offer a glimpse of the kind of intelligence assessments that are likely to come across the desk of the President of the United States. Modeled on the President’s Daily Briefing, or PDB, which the director of national intelligence prepares for the President almost daily, my Presidential Weekly Briefing focuses on the topics and issues the President needs to know to make informed decisions.
Here’s this week’s briefing:
Iran: Riding solo
You may feel like it’s Groundhog Day because you are preparing to reimpose the same old sanctions against the same old rogue regime, Iran. But, while the sanctions are the same, it’s a whole new day.
Unlike the first time around, when you impose these sanctions you will be almost universally isolated from other countries who are strongly opposed to your efforts. There is no international coalition at your side. Aside from Israel and Saudi Arabia, for example, we assess that most countries are against your moves to punish Iran because they see Iran’s continued implementation of the Iran nuclear deal.
Iran is trying to mitigate the impact of the US sanctions, which go back into effect on Monday. We assess that it is concurrently pursuing a strategy to get you to cancel, postpone or at least water down sanctions against Iran’s energy sector, which you are set to reimpose in November.
Iran’s strategy will likely involve continued lobbying in foreign capitals to urge other countries to get energy sector waivers from the US Treasury, publicly criticizing you in part to deflect criticism of its own economic mismanagement, and displaying physical force, intended to send a clear message that it has the capability to strike back if push comes to shove.
While the regime will protest your actions, we don’t think it will do anything that would make it look deserving of punishment. Iran wants to continue to look wrongly punished by you so it can continue doing business with other countries and sell energy abroad.
Iran knows this first set of sanctions is going to sting, but it will probably remain focused on trying to avoid looking like it deserves to be sanctioned any further in November.
President Hassan Rouhani has said Iran will take time to decide how to respond to the US withdrawal from the Joint Comprehensive Plan of Action, and he has reportedly ordered the country’s “atomic industry organization” to be prepared to “start our industrial (uranium) enrichment without limitations.”
The lifting of energy sector sanctions was good for the Iranian economy. After contracting by 1.6% in 2015, the Iranian economy grew at an annual rate of 12.5% in 2016. What’s more, inflation dropped into the single digits in 2016, and oil production was strong.
We assess that the regime is deeply concerned about the effect that the reimposition of any and all US sanctions will have on an Iranian economy that is already under pressure. This concern is heightened by your administration’s public statements that it will enforce secondary sanctions against non-US companies engaging in sanctioned activity with Iran. This will impact the ability of European companies, for example, to keep doing business with Iran.
The EU, for instance, saw a 66% increase in exports to Iran from 2015 - 2017 (about 100 times larger than US exports to Iran the same year) and major European firms who signed contracts with Iran after the nuclear deal was signed – like Airbus and Volkswagen – know they may face consequences if they continue to do business with Iran going forward, likely leading them to divest from Iran.
Oil sales are a big source of revenue for the regime, and with Asian countries accounting for two-thirds of Iranian energy exports, secondary sanctions against Asian companies working with Iran’s energy sector could have a significant impact.
We anticipate that investment flows into Iran, an important lifeline for the economy, will run drier, particularly if firms like France’s Total can’t get a waiver from upcoming US energy sanctions.
US sanctions aside, the regime has grossly mismanaged the Iranian economy for decades, which is why many of the protests currently underway in Iran are against the regime, and not the United States. We should anticipate that Rouhani will try to shift blame for economic malaise further onto you because of the government’s inability to quell domestic discontent and the economic downturn.
We do expect a lukewarm effort by at least two key signatories – Russia and China (Iran’s largest crude oil customer) – to enforce sanctions.
When these sanctions were originally imposed, before the Iran nuclear deal, there was widespread consensus against Iran and its illegal nuclear program.
Today, because you are largely isolated from other countries and riding virtually solo when it comes to the basis for reimposing sanctions – others question their applicability in light of Iran’s continued implementation of the terms of the nuclear deal – you cannot expect the same level of effort to prevent sanctions evasion, particularly by Russia and China, who have demonstrably helped evade sanctions in other places like North Korea.
North Korea: Superbad
Building on your administration’s recent statements that financial pressure on North Korea will remain in place while denuclearization negotiations are ongoing, we are providing you with an update on the efficacy of your maximum pressure campaign. On all fronts, the pressure is off.
The unprecedented level of financial sanctions that were imposed on North Korea have been mitigated by consistent sanctions evasion by the North Koreans with help from other countries. They have exploited the sanctions regime and found ways to illegally export and import banned commodities and to engage in banned activities.
Their transgressions are hiding in plain sight; there is now reporting that indicates North Korea is successfully using a variety of sanctions evasions tools to illegally import oil. There is now also new public information that North Korea is trying to sell weapons to the Houthis in Yemen
Additionally, there are reports that some North Koreans are violating UN restrictions by entering countries like Russia to work (these workers are another source of revenue for Kim Jong Un’s regime). There are also reports that North Korea is illegally entering into joint ventures with Russian companies as a means of flouting financial sanctions that the UN has described as “some of the most poorly implemented and actively evaded measures of the sanctions regime.”
Ongoing sanctions evasion on all these fronts means that it is a low-pressure environment for North Korea. Because the pressure is not where you want it to be, this could leave the country with less of a sense of urgency when it comes to negotiating with you in good faith to get actual sanctions relief.
While North Korea actively violates international law with its ongoing, illegal weapons programs and sanctions violations, China and Russia aren’t stepping up and helping to enforce UN resolutions against North Korea. Instead, they continue to urge you to reward North Korea’s ongoing bad behavior and to ease or lift sanctions, citing the need for a phased or step-by-step approach to denuclearization.
So, while UN Ambassador Nikki Haley and Secretary of State Mike Pompeo have publicly criticized sanctions evasion and even called out Russia and China for helping North Korea on this front, we do not anticipate that either the Russians or Chinese will move swiftly to curb North Korea’s illegal activity because they aren’t strong supporters of continuing sanctions in the first place.
So, North Korea will probably just try to run out the clock: It will evade sanctions with help from other countries, let China and Russia carry its diplomatic water and urge sanctions relief, and keep proliferating.
We also want to flag for you what we assess is an active strategy by North Korea to isolate you from your team. Last week on the margins of the ASEAN Summit, attended by Pompeo, the North Korean foreign minister criticized moves by the United States and contrasted them with your “intentions.”
This is reminiscent of when the North Koreans called Pompeo’s demands “gangster-like” during his last visit to Pyongyang and said he was trying to destroy the agreement you and Kim forged in Singapore.
Kim and his cronies are trying to play you off your own team and to sow divisions among you, probably because they think you may prioritize keeping up a veneer of negotiations and goodwill between you and Kim, even if it risks delaying real moves to punish North Korea for continued illegal activity.
Nicaragua: Point break
In light of your ongoing focus on countering illegal immigration to the United States, we want to update you on the ongoing violence in Nicaragua, which could reach a breaking point and lead to Nicaraguans fleeing north toward our southern border.
Before protests broke out in April over President Daniel Ortega’s planned social security overhaul, Nicaragua had a low crime rate relative to countries in Central America’s Northern Triangle – El Salvador, Guatemala and Honduras. Despite this, Nicaragua is the second poorest country in the Western Hemisphere, after Haiti, and its dire economic conditions will likely encourage people to leave.
Since Ortega’s cancellation of the social security overhaul that initially sparked peaceful protests in April, the White House has stated that he and members of his regime, including Nicaraguan parapolice, continue to engage in indiscriminate violence against protesters. The Ortega regime says these demonstrators are “coup-mongers” and “terrorists,” and many of them are now calling for his resignation.
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The death toll has reached 488 by some accounts and Ortega has rejected the blame for this bloodshed. In addition to these fatalities, the Department of State has warned about looting, vandalism, arson and increased levels of violent crime, such as sexual assault and armed robbery.
This state-sanctioned violence will probably continue, despite widespread condemnation by the international community and targeted sanctions against the regime. Ortega has survived difficult periods in Nicaragua before, including the Nicaraguan Civil War, and may think he can weather this period of unrest.
In addition to the negative impact on human rights, democratization, and the rule of law in Nicaragua, we assess that sustained violence in Nicaragua could lead to enhanced migration flows as Nicaraguans flee an increasingly insecure environment.
