FILE ID:96081602.GWE

(Reprint from the International Herald Tribune 8/15/96) (880)
By Amir Taheri

(NOTE: Permission obtained covering republication/translation of the
text by USIS/press outside the U.S. On title page, credit author,
source, and carry:
Copyright (c) 1996 The International Herald Tribune/NYTSS)

LONDON -- Ten days after President Bill Clinton signed a bill to
impose additional sanctions on Iran it is interesting to note a few

Oil prices have risen, helping Iran earn an extra $1 billion ($1,000
million) over the next 12 months. After an initial slide, Iran's
currency, the rial, has rallied against the dollar. Three European
states have announced reviews of rules under which they have denied
Iran credit guarantees for years. Turkey's new prime minister,
Necmettin Erbakan, has rushed to Teheran with the offer of a $20
billion ($20,000 million) contract to buy natural gas from Iran.

An unusual chorus of support for Iran as the supposed victim of
superpower bullying has been formed not only in Europe, where residual
anti-Americanism still has a constituency, but also in the Gulf
countries supposed to be most directly threatened by the revolutionary
mullah! Inside Teheran, the factions have suspended their zoological
struggle for power to unite against the American "Great Satan."

A French car-making firm has suddenly received a $120 million check in
settlement of old claims against Iran. Iran's ambassador in Bonn has
promised German firms at least $25 billion ($25,000 million) in trade
with Iran over the next five years because of Bonn's opposition to the
new U.S. move. Italy is to get a major shipbuilding contract in Bandar

The rift between the United States and its principal allies, coming
soon after the Paris conference on terrorism, casts doubt on the
possibility of effective cooperation against what Mr. Clinton has
called "the scourge of the age."

But what is the new law, the so called D'Amato act, all about?

It seeks to punish foreign firms investing $40 million or more in
Iran's energy industries. This is entirely hypothetical, as there are
no plans for any foreign firm to undertake such investment. The French
state-controlled oil company Total has picked up a $600 million
contract, dropped by Conoco last year, to develop offshore fields. But
the investment will take place over a decade, and most of it will come
from Iran in the form of advances on future oil deliveries. In any
case, the U.S. law does not apply to existing contracts.

One might wonder what all the fuss is about. The law is important for
reasons of political semiology. It strongly signals Washington's
impatience with aspects of Iran's foreign policy.

Also, it puts the issue of Iran's role in sponsoring terrorism high on
the international agenda, to the displeasure of Germany and France,
which have tried to keep it on a back burner.

The French-German position is that a "critical dialogue" with Iran
would achieve all the goals that the American initiative ostensibly
espouses. One favorite joke in Teheran, however, describes "critical
dialogue" as an exercise in which the Europeans invite the mullahs to
tea so that they can criticize the Americans together.

If the new U.S. law looks like a failure, the European "critical
dialogue," devised by Hans-Dietrich Genscher in 1980, has a 15-year
history of failure. During that period more than 100 citizens of six
European states have been kidnapped and held hostage in Iran or by
Teheran-backed groups in Lebanon. Despite solemn pledges by the
Iranian government not to sponsor acts of violence in the European
Union, more than 60 Iranian dissidents have been murdered in nine EU
nations. A total of 33 Iranian citizens are in jail in seven European
countries on charges of terrorism.

The American stick and the European carrot, used separately, don't
work. The Cold War-style game of playing one power bloc against
another could help the mullahs plod along for years.

A sense of frustration is already aired in Washington, where the
option of military action against Iran is creeping out of diplomatic
salon into newspaper columns. But even such action, taken in
isolation, would not help persuade Iran to review its policies.

In 1987, a U.S. task force, sent to the Gulf to protect Kuwaiti oil
tankers that had been re-flagged to carry the Stars and Stripes, sank
half the Iranian fleet. The U.S. force also destroyed several Iranian
offshore oil platforms. In the confusion, an Iranian jetliner was shot
down by American fire by mistake, with the death of almost 300 people.

The mullahs swallowed their pride, decided to save face and kept most
of the incidents quiet. A few weeks later they were back to their old

If the objective is to persuade Teheran to change some of its
policies, a unified strategy by the United States, the European Union,
Russia and Japan is of vital importance. The D'Amato act gives
President Clinton 90 days in which to consult with U.S. allies to
coordinate efforts. That time should not be wasted on transoceanic
diplomatic rows.

The writer, an lranian journalist abroad, contributed this comment to
the International Herald Tribune.