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Lieberman warns China not to undermine South Korean sanctions

The South Korean government announced a series of sanctions against Iran on Tuesday after intensive lobbying from the Obama administration. The new measures, which target Iran’s energy and banking sectors as well as specific Iranian bad actors, follow similar moves by Japan last week. They are also in line with measures imposed by the European ...

The South Korean government announced a series of sanctions against Iran on Tuesday after intensive lobbying from the Obama administration.

The new measures, which target Iran's energy and banking sectors as well as specific Iranian bad actors, follow similar moves by Japan last week. They are also in line with measures imposed by the European Union last month, though not quite as extensive as the administration had proposed to Seoul.

Regardless, the administration and members of Congress who are pushing for countries to put more pressure on Iran hailed the announcement, noting that South Korea moved forward despite the potential cost to its domestic industries.

The South Korean government announced a series of sanctions against Iran on Tuesday after intensive lobbying from the Obama administration.

The new measures, which target Iran’s energy and banking sectors as well as specific Iranian bad actors, follow similar moves by Japan last week. They are also in line with measures imposed by the European Union last month, though not quite as extensive as the administration had proposed to Seoul.

Regardless, the administration and members of Congress who are pushing for countries to put more pressure on Iran hailed the announcement, noting that South Korea moved forward despite the potential cost to its domestic industries.

"I know that this was not an easy or cost-free decision for the ROK government, either politically or economically. But it is precisely Seoul’s willingness to shoulder rather than shirk its international responsibilities that confirms the Republic of Korea’s emergence as a global leader," said Sen. Joseph Lieberman, I-CT, in a statement.

Japan has the third largest economy in the world, South Korea ranks as the eleventh largest, and both countries have major business interests in Iran — especially in the energy sector. The new measures would prevent the initiation of any new joint business ventures but allow existing projects to continue.

For the administration and its allies in Congress, the South Korean and Japanese sanctions announcements reaffirm their strategy of using the U.N. Security Council resolution against Iran, which was passed on June 9, as a framework for taking additional steps aimed at convincing Iran to address the international community’s concerns about its nuclear program.

The coordination is a positive sign of cooperation between Washington and its two most important East Asian allies. At the same time, Iran watchers note that Beijing stands to profit if Chinese companies move to fill the demand gap created by the South Korean and Japanese sanctions.

Lieberman is warning that if Beijing undermines the new sanctions, Congress will move to enforce sanctions against Chinese companies using authorities provided in the recent U.S. sanctions legislation.

"Chinese companies have unfortunately in the past been allowed by their government to pursue their commercial self-interest in Iran, exploiting the restraint of other countries," Lieberman said. "If this trend continues, China will isolate itself from the responsible international community in Asia and around the world."

Behind the scenes, State Department and Treasury officials had been working hard to encourage the South Korean and Japanese governments to adoptthe strongest measures possible. This effort has been led by Stuart Levey, the under secretary of the Treasury for terrorism and financial intelligence, and Robert Einhorn, the State Department’s special advisor for nonproliferation and arms control.

Einhorn and the NSC’s Daniel Glaser traveled to Tokyo and Seoul last month, and a Congressional staff delegation visiting Seoul and Tokyo last week also was partially focused on the push for strong sanctions language.

National Economic Council chairman Larry Summers, the NSC’s Tom Donilon, Asia Senior Director Jeffrey Bader, and Assistant Secretary of State Kurt Campbell were in Beijing last weekend and the topic of Iran sanctions was also on their agenda.

The main hub of Iranian financial activity in South Korea is the Seoul branch of Bank Mellat, a Tehran-based bank that has already been targeted by both the United States and the European Union. South Korea only agreed to a 60-day suspension of Korean dealings with Bank Mellat Seoul, with a promise to reevaluate after. Washington had wanted a total freeze.

Iran watchers on Capitol Hill said the temporary suspension would have the desired effect by making it clear to investors they should not do business with Bank Mellat in Seoul.

"The fact is they are taking action against Bank Mellat and they are embedding this action within a broad framework of other actions," said one GOP Senate aide. "It’s very possible that everybody and their brother is going to run for the exits… that bank is going to be kryptonite."

Levey and Einhorn have also been working hard on the recently announced new U.S. sanctions on North Korea, a topic in which both Japan and South Korea have a vital interest. Aides said that, while the two efforts weren’t directly linked, there are indirect links in that Iran and North Korea are involved in some of the same illicit activities.

"There is a tie in the sense that North Korea and Iran actively cooperate on a range of illicit proliferation-related activities," said one Congressional staffer close to the issue. "That’s a linkage that both the Koreans and the Japanese recognize and appreciate."

UPDATE: Sen. John McCain (R-AZ) also praised the new sanctions and saw them as a message to China. He tweeted, "Korea adopted strong new sanctions on Iran today. Japan did the same last week. China should follow their good example of global leadership."

Josh Rogin covers national security and foreign policy and writes the daily Web column The Cable. His column appears bi-weekly in the print edition of The Washington Post. He can be reached for comments or tips at josh.rogin@foreignpolicy.com.

Previously, Josh covered defense and foreign policy as a staff writer for Congressional Quarterly, writing extensively on Iraq, Afghanistan, Guantánamo Bay, U.S.-Asia relations, defense budgeting and appropriations, and the defense lobbying and contracting industries. Prior to that, he covered military modernization, cyber warfare, space, and missile defense for Federal Computer Week Magazine. He has also served as Pentagon Staff Reporter for the Asahi Shimbun, Japan's leading daily newspaper, in its Washington, D.C., bureau, where he reported on U.S.-Japan relations, Chinese military modernization, the North Korean nuclear crisis, and more.

A graduate of George Washington University's Elliott School of International Affairs, Josh lived in Yokohama, Japan, and studied at Tokyo's Sophia University. He speaks conversational Japanese and has reported from the region. He has also worked at the House International Relations Committee, the Embassy of Japan, and the Brookings Institution.

Josh's reporting has been featured on CNN, MSNBC, C-Span, CBS, ABC, NPR, WTOP, and several other outlets. He was a 2008-2009 National Press Foundation's Paul Miller Washington Reporting Fellow, 2009 military reporting fellow with the Knight Center for Specialized Journalism and the 2011 recipient of the InterAction Award for Excellence in International Reporting. He hails from Philadelphia and lives in Washington, D.C. Twitter: @joshrogin

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