Washington, DC – US and international sanctions are “dramatically isolating Iran financially and commercially,” according to US Under Secretary of the Treasury Stuart Levey. Speaking before the Center for Strategic and International Studies on Monday, Levey outlined the administrations belief that sanctions will give the international community more leverage for a negotiated solution to the Iranian nuclear program. “Even at this early stage, as pressure is mounting, the strategy is beginning to give US the leverage we seek. It is already working.”

Undersecretary Levey is top official at the US Treasury responsible for implementing financial sanctions aimed at isolating Iran internationally. His speech coincided with increasing efforts by Obama Administration officials to highlight the success of recently imposed Iran sanctions.

Addressing concerns about the negative impacts sanctions are having on ordinary Iranians, Levey asserted, “The goal of the sanctions is not to harm the people of Iran. It is to influence the calculations of Iran’s leaders,” said Levey. Sanctions “can and will create crucial leverage for our diplomacy,” because they will “create a cost-benefit analysis that can make a change.”

But critics of the recently imposed sanctions have argued that the administration has not lived up to its commitment to avoid broad sanctions that would punish innocent Iranians. They have noted that the unintended consequences of the new sanctions, such as the suspension of standardized testing for Iranian students and dramatic increases in prices for staple goods for Iranians could portend further harmful effects, including new hurdles for humanitarian goods to be sent to Iran.

Responding to these concerns, Levey said that it is “generally our policy that we are not going to cut off humanitarian trade,” and “there are humanitarian exemptions built into US sanctions.” However, he later went on to add that, “inevitably there are some unintended consequences,” and “It is never going to be an entirely perfect enterprise.”

Continuing on this point, he said that, “[Iran’s] young population realizes that, ‘look our leadership is failing us, they are unable to create opportunities for us in the future’. We’re seeing young people leaving, especially educated young people, for precisely this reason.” The US government, said Levey, hopes that new financial pressure “starts to create tension within Iran because in the long run the leadership realizes that this is not going to work for our economy.” But Levey expressed his hope that those affected by the sanctions understand that the Iranian government is ultimately responsible for any hardship.

When asked whether there was a contradiction between a punitive sanctions regime that isolates Iran economically and diplomatic efforts offering to bring the country closer to the international community, Levey insisted that diplomacy remained the administration’s policy. “President Obama came into office and he made his offer of engagement, without preconditions, but Iran did not take the offer,” he said. “But it is our policy, and remains the policy, that there is not a contradiction between engagement and pressure. You can do both at the same time.”

“Of course you could have had engagement with the administration under conditions that are less pressurized,” Levey acknowledged. “But there is no indication right now that we are withdrawing this offer of engagement.”