Please permit me to say a few words about financial penalties as a counter-terrorism technique. I draw upon my experience as an international economist with the IMF and World Bank and by 20 years of research on the Middle East, the region in which can be found five of the seven state sponsors of terrorism. I will particularly address the Iranian case, since the Islamic Republic of Iran is the world's principal state sponsor of terrorism. Let me offer three theses.
Financial penalties can discourage state sponsorship of terrorism.
Countries like Iran, Cuba, or North Korea sponsor terrorism as a means to advance their state interests, not out of spite or blind ideology. They are quite good at calculating the costs and benefits from their behavior. Iran is particularly sensitive to the price it must pay for its terrorism. Clear evidence about this was provided by the 1997 verdict of a German court in the Mykonos case, holding Iran's leaders responsible for the murder of four Iranian Kurds in a Berlin restaurant. In the aftermath of the court's verdict, all the European Union governments withdrew their ambassadors from Iran.