Foreign Relations of the United States, 1977–1980, Volume XI, Part 1, Iran: Hostage Crisis, November 1979–September 1980

152. Summary of Conclusions of a Special Coordination Committee Meeting¹

Washington, January 16, 1980, 9–9:40 a.m.

SUBJECT

• Iran and Pakistan

PARTICIPANTS

• State

  • Secretary Cyrus Vance
  • David Newsom
  • Dean Hinton

• Defense

  • Secretary Harold Brown
  • Graham Claytor

• CIA

  • Frank Carlucci

• JCS

  • General David Jones
  • General John Pustay

• Treasury

  • Secretary William Miller
  • Robert Carswell

• Energy

  • John Sawhill

• Justice

  • John Shenefield

• Agriculture

  • James Williams (Deputy Secretary)

• White House

  • Jody Powell
  • Lloyd Cutler
  • Hedley Donovan
  • Zbigniew Brzezinski

• NSC

  • William Odom
  • Gary Sick
  • Thomas Thornton

SUMMARY OF CONCLUSIONS

1. Iran Sanctions. The President approved the recommendations of the SCC on January 14 to issue a declaration on U.S. sanctions to be adopted against Iran, drawing authority both from the UNSC vote and the emergency economic powers.² Treasury said they were prepared to issue the regulations immediately, but had held up at Mr. Christopher’s request that the regulations not be issued until after his return from Europe this evening. The SCC agreed that it would review the regulations and the declaration at the meeting tomorrow, probably for issuance later in the day. The one remaining issue of contention within the government is the extent of extraterritoriality to be built into the regulations.³ (C)

2. Iranian Assets. The President also approved the SCC recommendation that Treasury be permitted to immunize from attachment new Iranian funds brought into the country to cover the obligations of companies such as Iran Air, NIOC and the Iranian Shipping Company. Treasury will proceed.⁴ (U)

3. Economic Warfare. Dr. Brzezinski noted that he had asked Henry Owen to head a small group to examine what is required to carry out the kind of economic warfare in which we are increasingly engaged. The group will be asked to make its initial report to the SCC on Friday.⁵ (S)

4. Cooperation by Allies. Secretary Vance circulated a spread sheet showing the various actions in the economic sphere which we have taken, what we have requested of our allies, and what their response has been. The paper is attached.⁶ At this time, the foreign response must be treated as preliminary since it does not have the benefit of Warren Christopher’s talks in Europe except for the indications we have received from message reporting. (S)

Dr. Brzezinski wondered if the U.S. should do something more dramatic to galvanize the allies into action. Secretary Brown observed that, in his view, the Europeans might take actions together but not separately. Their public opinion was out ahead of the governments themselves, and we could perhaps shame them into doing more. He cautioned, however, that taking some public action without an assurance of results could hurt more than it helps by dramatizing the absence of European cooperation. This could then be exploited by the Soviets. Dr. Brzezinski agreed that this should be the number one item⁷ on the agenda of the SCC tomorrow, once we have the benefit of Mr. Christopher’s report. (S)

Dr. Brzezinski added that the French are uncharacteristically apologetic about their position, while the British seem prepared to be cooperative on the Soviet issue. Secretary Brown wondered if we could ask their cooperation on Indian Ocean security measures. Secretary Vance noted that we have had some indications of interest, but that the British would not wish to make any decisions on this until Lord Carrington returns from his visit to the Gulf. (S)

Secretary Vance felt that nothing which was currently under way on the negotiating front should prohibit us from pressing ahead with economic sanctions. He noted that a recent message from Bruce Laingen via one of the ambassadors in Tehran argued the same way.⁸ It was the judgment of the group that there was merit in keeping up the pressure on the economic side. However, Secretary Miller noted that the Iranian Central Bank has now gotten its house in order and is being punctilious in its interest payments, so the prospects of loan default provisions have, in fact, been overcome. The Iranians need no new credits because of their substantial oil revenues, so our pressure on credits is also having little or no effect. We must be realistic in understanding that our own embargo efforts will have very little practical effect unless we get the cooperation of at least the major industrialized states. Secretary Vance said that we had understood from the outset that the psychological impact of sanctions would be more important than the economic impact. Secretary Miller observed that the psychological impact is likely to be reversed if and when the story gets out that Iran is proceeding on a business-as-usual basis. (S)

Dr. Brzezinski reported the President’s comment on the notes of yesterday’s meeting that we should be aggressive and that the Europeans need U.S. pressure.⁹ Secretary Miller noted that he will be meeting with five of the European finance ministers in the near future, but it was only a high, political-level decision which would have any real effect. Dr. Brzezinski observed that, on the basis of some talks he had yesterday, the one thing which seems to get their attention is the risk of U.S. unilateral action. We can also publicize instances in which U.S. companies and perhaps other countries are evading or circumventing our policy. He noted that the President had concurred with the SCC recommendation to authorize the Secretary of Agriculture to publicize offenders, noting that we should “block other sources if possible” on grain transfers. Mr. Cutler noted that Luther Hodges was conducting a survey of major U.S. companies to see what their overseas operations were likely to be and to make our policy position clear. Secretary Miller felt that we would find most American companies already in compliance with the policy and prepared to be cooperative. Secretary Vance cautioned that we should be very careful about publicizing unhelpful actions by other countries since we could create the impression that our policy is not working. (S)

5. Implementation Group. Dr. Brzezinski noted that much of the effort of the SCC recently had been occupied with questions of implementation of economic policies. It was essential to have close coordination on these issues, but in the meantime we should also be thinking about our longer term strategy and next steps. He proposed that a separate Implementation Coordination Group be formed which would meet in parallel with the SCC. This group could look at public posture, the nature of the sanctions, and how to put teeth into our efforts. The group should include State (Warren Christopher), Defense (Graham Claytor), Treasury, CIA, and NSC (Henry Owen). Secretary Miller offered to host the meetings at Treasury. (It was subsequently decided that the first meeting should be held at the White House.)¹⁰ (C)

[Omitted here is material unrelated to Iran.]

1. Source: Carter Library, Plains File, Box 10. Secret. The meeting took place in the White House Situation Room. Carter wrote “Zbig, J” in the upper right corner.
2. The Summary of Conclusions is in Carter Library, National Security Affairs, Staff Material, Middle East File, Box 98, Meetings File, 1/14/80 SCC re Iran. Reference is to the International Emergency Economic Powers Act, passed on October 28, 1977.
3. In the left margin, Carter wrote: “Europeans a disappointment on Iran & Afghanistan—We must maintain leadership. We should push in every case to the limit that is practical. Even if allies are discomfited.”
4. In the left margin, Carter wrote: “What about Japan? See NY Times p. 1 & W. Post A19.” The articles covered Japan’s decision to oppose the imposition of economic sanctions against Iran and the USSR, and its fear of retaliatory oil cuts if it sided with the United States. (Reference is presumably to Henry Scott Stokes, “Japan Indicates It Would Not Join In Trade Curbs on Iran and Soviet,” New York Times, January 17, 1980, p. A1, and Dusko Doder, “Europe, Japan Warned By Iran About Sanctions,” Washington Post, January 17, 1980, p. A18)
5. January 18.
6. The spreadsheet, “Economic Measures Related to Iran and Afghanistan: Draft #2—January 15, 1980 PM,” is attached but not printed. For Draft #1, see footnote 2, Document 148.
7. Carter underlined the phrase “number one item” and wrote in the left margin: “I agree.”
8. A January 15 message from the British Embassy in Washington transmitted the text of telegram 3 from Tehran, January 14, for passage to the Iran Task Force at the Operations Center. Telegram 3 is the text of a message given by Laingen to Lang “for transmission to Iran Working Party.” (Department of State, Records of David D. Newsom, Under Secretary of State for Political Affairs, Subject Files, 1978–1981, Lot 81D154, Swiss Channel) In a memorandum to Vance, Brzezinski wrote that after reading this telegram, Carter agreed “on the importance, psychologically as well as tactically, of moving promptly with unilateral sanctions with the broadest possible allied support.” (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 30, Iran 1/11/80–1/31/80)
9. See footnote 3, Document 148.
10. At their first meeting, the group discussed their mandate, whether the SCC would take economic decisions without the guidance of the Implementation/Coordination Group, and economic issues related to Iran and Pakistan. (Minutes of SCC Implementation/Coordination Group meeting, January 18; Carter Library, National Security Council, NSC Institutional Files (H–Files), Box 108)