[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
IRAN NUCLEAR DEAL OVERSIGHT:
IMPLEMENTATION AND ITS CONSEQUENCES
(PART II)
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
MAY 25, 2016
__________
Serial No. 114-190
__________
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COMMITTEE ON FOREIGN AFFAIRS
EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida BRAD SHERMAN, California
DANA ROHRABACHER, California GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio ALBIO SIRES, New Jersey
JOE WILSON, South Carolina GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas THEODORE E. DEUTCH, Florida
TED POE, Texas BRIAN HIGGINS, New York
MATT SALMON, Arizona KAREN BASS, California
DARRELL E. ISSA, California WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina ALAN GRAYSON, Florida
MO BROOKS, Alabama AMI BERA, California
PAUL COOK, California ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas GRACE MENG, New York
SCOTT PERRY, Pennsylvania LOIS FRANKEL, Florida
RON DeSANTIS, Florida TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina JOAQUIN CASTRO, Texas
TED S. YOHO, Florida ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida BRENDAN F. BOYLE, Pennsylvania
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
DANIEL DONOVAN, New York
Amy Porter, Chief of Staff Thomas Sheehy, Staff Director
Jason Steinbaum, Democratic Staff Director
C O N T E N T S
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Page
WITNESSES
The Honorable Stephen D. Mull, Lead Coordinator for Iran Nuclear
Implementation, U.S. Department of State....................... 4
The Honorable Thomas M. Countryman, Assistant Secretary, Bureau
of International Security and Nonproliferation, U.S. Department
of State....................................................... 10
Mr. Adam J. Szubin, Acting Under Secretary, Office of Terrorism
and Financial Intelligence, U.S. Department of the Treasury.... 20
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Stephen D. Mull: Prepared statement................ 6
The Honorable Thomas M. Countryman: Prepared statement........... 12
Mr. Adam J. Szubin: Prepared statement........................... 22
APPENDIX
Hearing notice................................................... 56
Hearing minutes.................................................. 57
The Honorable Mark Meadows, a Representative in Congress from the
State of North Carolina: Letter submitted for the record....... 59
The Honorable Gerald E. Connolly, a Representative in Congress
from the Commonwealth of Virginia: Prepared statement.......... 62
Questions submitted for the record by the Honorable Ileana Ros-
Lehtinen, a Representative in Congress from the State of
Florida, and written responses from:
The Honorable Stephen D. Mull.................................. 64
The Honorable Thomas M. Countryman............................. 65
IRAN NUCLEAR DEAL OVERSIGHT:
IMPLEMENTATION AND ITS CONSEQUENCES
(PART II)
----------
WEDNESDAY, MAY 25, 2016
House of Representatives,
Committee on Foreign Affairs,
Washington, DC.
The committee met, pursuant to notice, at 10:08 a.m., in
room 2172, Rayburn House Office Building, Hon. Ed Royce
(chairman of the committee) presiding.
Chairman Royce. This hearing will come to order.
Last week, a commander in Iran's Islamic Revolutionary
Guard Corps made headlines around the world for boasting that
Iran could wipe out Israel ``in less than 8 minutes.'' And,
remember, this is the same Iran that Secretary Kerry is
promoting as open for business.
Sadly, in the 4 months since the nuclear agreement with
Iran was implemented, few things have surprised me. I expected
Iran to continue full speed ahead with its intercontinental
ballistic missile program, and it has, testing two ICBMs. And,
remember, as the Secretary of Defense says,
``intercontinental'' means able to reach from there to here. We
have also seen the testing of ballistic missiles, and in case
we misconstrue their intent, on the side of these ballistic
missiles were the words ``Israel must be destroyed,'' in Farsi
but also in Hebrew.
It is no surprise that Iran's abysmal human rights record
continues, the executions continue, the torturing at Evin
Prison continues. Two more Americans have now been taken
hostage. And it is no surprise that the agreement with $100
billion-plus is strengthening the Revolutionary Guards and
others responsible for these abuses.
I am not all that surprised that Iran may hold its nuclear
program to the letter of the agreement. After all, it was this
committee that exposed the agreement's central flaw, and that
central flaw is the sunset clause. With its nuclear
infrastructure kept intact and key restrictions that expire,
Iran does not have to cheat to get the bomb. Instead, it just
simply must wait out the clock to get the bomb.
But what is astonishing, and that is the reason for this
hearing, what is astonishing is the length the Obama
administration has gone to accommodate Iran. It is bad enough
that the administration essentially rewrote counterterrorism
laws through executive action or that it has hardly responded
to Iran's missile test. The administration told us that
sanctions on Iran's terrorism, on their human rights, on their
ballistic missiles would be fully enforced after the agreement,
yet it now says that non-nuclear sanctions would undermine the
Iran agreement.
So what has happened is that the White House's Iran's
policy now amounts to walking on eggshells. And in another odd
twist, the Obama administration is going beyond the agreement
to purchase material used in the production of nuclear weapons
from Iran. As one prominent expert summed up, ``We shouldn't be
paying them for something they shouldn't be producing in the
first place.''
But the State Department has taken its advocacy for Tehran
to a new and disturbing level by trying to persuade major non-
U.S. banks that doing Iran-related business is not only
permitted but is actually encouraged. As one witness told the
committee earlier this month, we are acting as the ``business
development and trade promotion authority of the Islamic
Republic of Iran.''
International businesses must deal with the reality of an
Iran whose Islamic Revolutionary Guard Corps controls the
broadest of sectors across the Iranian economy, not the
administration's fantasy in which Iran's behavior can be
ignored and investment can be pushed into the country. They
hear the warnings of the Financial Action Task Force, which
sets the global anti-money-laundering standards. As Stuart
Levey, the former Treasury official who was responsible--as we,
in a bipartisan way, passed legislation over the years in this
committee for sanctions on Iran, that former Treasury official
in both administrations was responsible for much the sanctions
architecture that squeezed Iran. As he wrote in the Wall Street
Journal, ``Why is Washington pushing non-U.S. banks to do what
is still illegal for American bankers to do'' and, I will just
add to that, what the international Financial Action Task Force
says no banks, no banks should be doing?
Last week, Secretary Kerry went so far as to say that
European leaders are looking at ways to subsidize investments
into Iran. Where does it stop? And Iran is still pushing for
access to the U.S. dollar, the world's top currency. Given the
administration's lack of any resolve to stand up to the Supreme
Leader, we are right to pursue legislation to prevent that from
happening.
And I now turn to the ranking member for any opening
comments he may have.
Mr. Engel. Thank you, Mr. Chairman.
Thank you for calling this hearing.
To our witnesses, welcome to the Foreign Affairs Committee.
I am grateful that the administration has kept Congress up to
speed on the Iran nuclear deal throughout the process. I know
there are many areas where we can continue to work together on
this issue.
Ambassador Mull, it is good to see you again.
Assistant Secretary Countryman, we are glad to have your
voice in the mix as well, although we miss you in the Balkans.
And Acting Under Secretary Szubin, you are doing great
work, despite the fact that you have to do your job with one
hand tied behind your back. We hear a lot of talk on Capitol
Hill about how we need to do all we can to curb rogue regimes
and terrorist groups. Well, one easy thing for our Senate
colleagues to do would be to bring your nomination up for a
vote. It has been too long, and it should happen.
Commentary and analysis about the Iran deal has become the
latest for the cottage industry in foreign policy circles. I am
sure that at this point most of you know my refrain: I opposed
the deal. I voted against it. I thought we could have done
better. But now that it is in place, we need to ensure it is
implemented to the letter and continue to hold Iran's feet to
the fire with respect to the regime's other dangerous and
destabilizing activities.
Today, I hope our witnesses, who are on the front lines of
implementation, can help us cut through speculation and
political noisemaking around the deal and give us a clear
picture of how things are moving forward. For example, we keep
hearing that because Iran hasn't yet realized the anticipated
windfall from sanctions relief, the administration is going
around the world trying to drum up business for Iran. Now, in
my experience, when something sounds like a political attack,
it is usually because it is.
I don't think we should be making any concessions to Iran
beyond the scope of what is in the deal, but it is perfectly
reasonable for the United States to clarify for businesses what
kind of transactions are now in bounds and what remains against
the law. In my view, at the end of the day, if businesses
continue to shy away from investing in Iran, Iran's leaders
have no one to blame but themselves. After all, with its
history of corruption, money laundering, support for terrorism,
human rights abuses, and an illegal ballistic missiles program,
Iran doesn't exactly seem like a smart bet for investing. That
is why the Financial Action Task Force, FATF, continues to
designate Iran as a high-risk jurisdiction.
So, hopefully, our witnesses can shed more light on why
sanctions relief has only led to a trickle rather than a surge
for Iran and how the United States has responded as this aspect
of the deal has unfolded.
I would also like to hear about what we are doing and what
we plan to do to pressure Iran on other areas of concern. As
President Obama wrote during the consideration of the Iran
deal, he ``made sure that the United States reserved the right
to maintain and enforce existing sanctions and even to deploy
new sanctions to address those continuing concerns, which we
fully intend to do when circumstances warrant.'' I don't think
we should be shy about slapping new sanctions on Iran, again,
if the situation and circumstances warrant.
After Iran's ballistic missile test late last year, the
administration did impose new sanctions. That was the right
thing to do. The test was a clear violation of the U.N.
Security Council resolution governing the nuclear deal. But
Iranian money continues to flow to Hamas to rebuild its network
of terror tunnels. Hezbollah has stockpiled thousands of
rockets, courtesy of Iran's generosity. It is fair to say that
Hezbollah would not exist if it wasn't for Iran. The Assad
regime, Iran supports them. Hezbollah has propped up that Assad
regime. It couldn't do it without Iranian help. Shia militants
in Iraq and Houthi fighters in Yemen can still count on Iran's
support. And we have intercepted ship after ship carrying
Iranian weapons.
So what is the plan to deal with all these problems? How
will the administration use the authorities it already has?
What can Congress do to make sure this administration and
future administrations have all the tools they need? How can we
and our allies compel Iran to change its behavior?
I look forward to hearing our witnesses' thoughts on these
areas.
I thank you all again for your service and your testimony.
Thank you, Mr. Chairman. I yield back.
Chairman Royce. Thank you Mr. Engel.
We are pleased to be joined by a very distinguished panel
this morning.
Mr. Connolly. Mr. Chairman, I have a unanimous consent
request. I just ask unanimous consent that the IAEA report of
January on implementation be entered into the record.
Chairman Royce. Without objection.
Mr. Connolly. I thank the chairman. Forgive me for the
interruption.
Chairman Royce. Thank you, Mr. Connolly.
We are joined by Ambassador Stephen Mull. He serves as the
Lead Coordinator for Iran Nuclear Implementation at the
Department of State. And prior to his appointment, Ambassador
Mull served as the Ambassador to Poland and as Executive
Secretary of the State Department.
And we have Mr. Thomas Countryman. He is Assistant
Secretary of the Bureau of International Security and
Nonproliferation. He is a career member of the Senior Foreign
Service. And Mr. Countryman most recently served as the Deputy
Assistant Secretary for European Affairs.
Mr. Adam J. Szubin is Acting Under Secretary for the Office
of Terrorism and Financial Intelligence at the Department of
Treasury. He previously served as Director of Treasury's Office
of Foreign Assets Control.
We welcome all three of our witnesses back to the
committee.
And, without objection, all the full prepared statements of
these witnesses will be made part of the record.
Members here will have 5 calendar days to submit any
statements or questions or any other extraneous material for
the record.
And so I will ask the Ambassadors if they would please
summarize their remarks.
And we will start with Ambassador Mull.
STATEMENT OF THE HONORABLE STEPHEN D. MULL, LEAD COORDINATOR
FOR IRAN NUCLEAR IMPLEMENTATION, U.S. DEPARTMENT OF STATE
Ambassador Mull. Thank you very much, Mr. Chairman, Ranking
Member Engel, and all the members of this committee. It is
great to be back here with you again today to talk about where
we are in implementing what remains one of the highest
priorities of the Obama administration, the Joint Comprehensive
Plan of Action.
I am happy to report today that, so far, the JCPOA has been
fully implemented by all of its participants according to its
terms. I think it is important to recognize what an
accomplishment that is toward advancing not only our national
security, but that of our closest friends and allies,
particularly those in the Middle East. Because of our efforts
to date and our success in this agreement, the security of the
United States and our partners has been enhanced, and in
conversation with allies and partners around the world, we
regularly hear support from our closest friends for this deal.
As of implementation day in January under the JCPOA, Iran
had completed dozens of the specific actions to limit, freeze,
or roll back its nuclear program and subject it to greater
transparency by the IAEA; that included shipping out 25,000
pounds, 98 percent of Iran's supply of enriched nuclear
material; cutting its centrifuge enrichment program by more
than two-thirds and subjecting itself to very tight controls
going forward; and destroying the core of the Arak heavy-water
reactor, which would have permitted the production of weapons-
grade plutonium. And Iran's implementation together of all of
these commitments increased the time it would take to produce
enough fissile material for a nuclear weapon, the so-called
breakout time, from roughly 2 months to more than a year. These
actions were complemented by the historically comprehensive
verification and monitoring measures specified in the JCPOA.
Iran is now subject to the greatest monitoring and
verification regime in the history of nuclear power. Providing
us with confidence that if Iran should seek to break out of its
commitments, such an attempt would be detected, and we would
have ample time to respond. At the same time, in this deal we
have preserved our ability to snap back penalties that made
this deal possible in the first place. As of now, we have not
had to implement or take those measures of snapping back the
penalties because Iran is fully compliant with the terms of the
deal, as the IAEA verified in February and as I expect it will
again in its next report in the coming weeks.
In exchange for Iran's meeting its nuclear commitments
under the JCPOA, we met ours by lifting the so-called secondary
sanctions on Iran. In an effort to provide greater clarity to
the public and private sectors of what sanctions were lifted
and what non-nuclear sanctions remain in place, we have been
participating in outreach with the public and private sectors
at the request of our foreign partners and foreign governments
in order to explain U.S. commitments under the JCPOA. As long
as Iran continues to meet its nuclear commitments, we will
continue to meet our commitments on sanctions.
While we are encouraged by Iran's implementation of its
nuclear commitments thus far, we have always recognized that
the JCPOA would not resolve all of our concerns with Iran, and
in fact, those concerns are still very much active.
Instead, the JCPOA was specifically aimed at addressing the
most urgent issue of verifiably ensuring that Iran does not
have a nuclear weapon. Thanks to our efforts to date, we have
made significant progress toward that goal, and the United
States and our partners remain safer because of those efforts.
I look forward to your questions later on in the hearing.
Thank you.
[The prepared statement of Ambassador Mull follows:]
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Chairman Royce. Thank you, Ambassador.
Mr. Countryman.
STATEMENT OF THE HONORABLE THOMAS M. COUNTRYMAN, ASSISTANT
SECRETARY, BUREAU OF INTERNATIONAL SECURITY AND
NONPROLIFERATION, U.S. DEPARTMENT OF STATE
Mr. Countryman. Chairman Royce, Ranking Member Engel,
members of the committee, I want to thank you for your service
and in particular for this invitation. It is always an honor
for me.
Ambassador Mull has laid out our progress in the successful
implementation of the Joint Comprehensive Plan of Action. My
bureau is focused upon giving full support to those
implementation activities. And among a number of functions, I
would emphasize helping to assure that the International Atomic
Energy Agency has the independence, the expertise, and, above
all, the resources needed for full implementation of the JCPOA.
And thanks to the support of Congress, I am happy to say that
the IAEA in fact has sufficient resources and expertise to do
this mission.
In the future, besides the Iran mission, the IAEA does a
number of other functions that are central to U.S. national
security. And I look not only to this administration and
Congress but to future administrations and Congresses to ensure
that the IAEA continues to have those important resources, both
for implementation of this agreement and for the full range of
its functions.
And in the interest of diligent, scrupulous implementation
of the JCPOA, it would be extremely valuable for the Senate to
confirm a highly qualified individual, Laura Holgate, to be our
full-time confirmed Ambassador to the U.N. missions in Vienna.
While the threat of a nuclear-armed Iran has been addressed
through implementation of this agreement, we recognize that,
like every previous arms control agreement negotiated by any
administration, an arms control agreement does not change the
full range of behavior of the partner or adversary with whom we
are negotiating. And so there remains a need, as both the
chairman and ranking member have noted, to address the full
range of serious misbehavior by the Iranian regime.
The particular responsibility of my bureau is to address
the ballistic missile program of Iran as well as a number of
other proliferation-related efforts in the conventional field
as well. We do this through the rigorous implementation of
sanctions; that is, by designating, in partnership with the
Department of the Treasury, those entities in Iran responsible
for the weapons program. And we have designated every major
entity in Iran associated with the ballistic missiles program.
We will continue to do so as new information becomes available.
At the same time, I will give you my personal opinion that
it is not U.N. resolutions, or designations, or sanctions that
cause Iran to change its calculus and its interest in the
ballistic missile program. But what we can do to slow and deter
and make their missile choices painfully expensive to the
Iranian regime is rigorous enforcement of strategic trade
control. And we do that not only in partnership with a wide
range of U.S. agencies but in partnership with more than 40
countries under the Missile Technology Control Regime, with
more than 100 partner countries under the Proliferation
Security Initiative, and as a result, all the legally binding
restrictions on missile technology for Iran that are contained
in U.N. resolutions are successfully implemented, not to the
point--and I admit this first--of preventing Iran from a
continued interest in these programs. But I can assure you of
our continued diligence in using not just declaratory
statements but actual tools of interdiction and export control
to slow Iran's progress.
And, of course, beyond my bureau's purview, we work closely
with our regional partners, including the Gulf Cooperation
Council and Israel, to bolster their defenses against a
continuing military threat from Iran. We have no intention of
reducing our focus on Iran's other programs, even as we
continue with the successful implementation of the JCPOA.
Thank you. And I look forward to your questions.
[The prepared statement of Mr. Countryman follows:]
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Chairman Royce. Thank you, Mr. Secretary.
STATEMENT OF MR. ADAM J. SZUBIN, ACTING UNDER SECRETARY, OFFICE
OF TERRORISM AND FINANCIAL INTELLIGENCE, U.S. DEPARTMENT OF THE
TREASURY
Mr. Szubin. Chairman Royce, Ranking Member Engel, and
members of the committee, thank you for inviting me to appear
today to discuss our implementation of the Joint Comprehensive
Plan of Action, the JCPOA.
Very soon after I joined the Treasury Department in 2004,
we saw with alarm the progress that Iran was making in its
covert nuclear program and understood that this was a national
security threat of the highest order. From that time, the
talented women and men in my office have devoted literally tens
of thousands of hours to address this threat. It has been an
effort like nothing I have ever seen: Working with the
intelligence community to identify and track Iranian front
companies and their movements of funds through hidden accounts;
working with the private sector here and abroad to strengthen
the vigilance with respect to Iran; working with law
enforcement and regulators to hold sanctions violators
accountable; working with our diplomats and with foreign
counterparts to make clear to Iran that the price of their
nuclear program was complete isolation from the international
community; and working with you in Congress, particularly here
in this committee, in a bipartisan effort to sharpen our
sanctions tools, deepen their impact, and bring Iran to the
table.
After nearly a decade, the accumulated pressure had its
intended effect. The Iranian people rejected the course that
their government had charted and elected President Rouhani to
ease the pressure and obtain a better economy and a brighter
future for the Iranian people.
The JCPOA was a tremendous breakthrough. It represents a
peaceful solution to what had been one of the world's most
serious national security threats. Iran was a few months from
having enough fissile material for a potential nuclear weapon,
and it was advancing. Now, Iran's breakout time has been
extended to beyond a year, and we are safer because of it.
Since Iran has kept its end of the deal, we must uphold
ours. It is in our national security interest to ensure that
the JCPOA works as intended and stands the test of time. It is,
therefore, important that we fulfill all of the commitments we
made in the deal.
Iran is already seeing benefits under this deal. It has
been able to open new banks accounts. It has been able to gain
access to billions of dollars in reserves. And its oil exports
to Europe have recovered to about one half of their pre-
sanctions levels.
That said, some companies and banks around the world
continue to have concerns about doing business in Iran. Some
are concerned about their financial transparency, the
designation of Iran is a high-risk jurisdiction by FATF, the
Financial Action Task Force, the world's standard setting body
for anti-money-laundering and counterterrorist financing.
Others are noting concern about corruption as well as
regulatory and other obstacles to conducting business in Iran,
and still others cite Iran's provocative behavior outside the
nuclear file, including its active support for terrorism and
its ballistic missile testing.
As President Obama said recently, Iran has to understand
what every country in the world understands, which is
businesses want to go where they feel safe, where they don't
see massive controversy, where they can be confident that
transactions are going to operate normally.
As Iran pursues more business, it is incumbent on Iran to
address such problems to undertake meaningful reforms and
create an environment in which businesses feel secure.
I have talked a bit about the sanctions relief that we have
delivered, but I also want to be clear about what this deal
does not mean. First, with certain limited exceptions, the
primary U.S. embargo on Iran remains in place, including the
prohibitions on U.S. persons investing in Iran and the
prohibitions on Iran accessing U.S. markets and banks. Along
these lines, let me say clearly that we have not promised nor
do we have any intent to give Iran access to the U.S. financial
system or reinstate what is known as the U-turn authorization.
Additionally, we have maintained all of our sanctions
designed to counter Iran's malign activities outside of the
nuclear file. Iran continues to be the world's leading sponsor
of terrorism and to play a significant and negative role in
destabilizing the region. Under our current sanctions regime,
we have designated more than 200 Iranian-linked firms and
individuals on non-nuclear grounds; that includes the IRGC, the
Quds Force, their subsidiaries, their senior officials, their
front companies and agents, all of whom we are continuing to
target and expose. That also includes major Iranian defense and
missile entities, as noted by Assistant Secretary Countryman,
which are behind Iran's current ballistic missile work.
Indeed, since the implementation of JCPOA, we have
continued to target new Iranian actors, including key
supporters of their ballistic missile program, agents of Mahan
Air, the Quds Force support airline, and central Hezbollah
money-laundering individuals. Indeed, I can tell you that,
after many years of targeting Hezbollah, today the group is in
its worst financial shape in decades.
Ultimately, we have been and will remain clear eyed about
the nature of the threat posed by Iran. And we will continue to
combat these threats using the range of tools at our disposal,
including our sanctions and by designating new targets, as
appropriate.
I want to thank this committee again for inviting me to
appear today. And I look forward to our continued work with
your committee and to your questions.
[The prepared statement of Mr. Szubin follows:]
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Chairman Royce. Thank you, Mr. Szubin. And I do appreciate
your work in terms of targeting Hezbollah. The legislation that
I and Eliot Engel passed and the committee passed in December
to the President's desk, and your implementation of that is
appreciated.
But you noted in your testimony that the United States has,
in your words, ``no plans to give Iran access to the U.S.
financial system.'' I appreciate that clarification. However,
that hasn't been the source of our concern.
Let me be specific here. Does the United States have any
plans to offer Iran the ability to access offshore dollar-
clearing facilities to allow for dollar-denominated
transactions and ease Iran's ability to trade internationally,
or are there plans for the administration to allow the Iranians
to conduct large-scale dollar-denominated transactions and
dollar clearing in any form?
And your testimony, as I heard it, studiously avoided that
question, so let me put that to you.
Mr. Szubin. Thank you, Mr. Chairman, for the question. And
I welcome the chance to clarify an area that I think has been
the subject of a lot of confusion and concern.
Our sanctions, our primary sanctions in the U.S., control
what U.S. actors can do and what they cannot do. It governs the
conduct of U.S. actors anywhere they reside in the world. So,
for example, a branch of a U.S. bank in Europe, in East Asia
has to behave like a U.S. person here in Washington or here in
New York.
Our sanctions, on the other hand, do not control the
actions of non-U.S. persons, whether or not the currency they
are using is the dollar, euro, pound, or the yen. To be very
specific, every foreign bank in the world has U.S. dollars in
their possession. It is, thankfully, the international currency
of choice for international trade. That means banks in Europe,
Japan, and China all hold dollars in their vaults. Our
sanctions don't extend to those dollar bills. And foreign
actors aren't under our jurisdiction if they chose to give
those to any actor, including an Iranian actor.
So I just want to be clear as to the contours of our
jurisdiction in response to offshore dollar clearing. That is
something that is beyond our jurisdiction.
Chairman Royce. But that seems to have a different intent
than the response the Treasury Secretary gave me when I asked
him in the Financial Services Committee. I asked the Treasury
Secretary--I think it was 2 months ago--if he stood by his
testimony during the agreement's consideration in which we were
assured they would not have access. Instead of shutting the
door right there, Secretary Lew said his focus was on making
sure Iran gets relief. And 2 months since, the President still
has not responded to my letter on this question.
So there has been ample time for the administration to
bring absolute clarity to this question. And the concern is
that while Iran wouldn't be allowed direct access to the
dollar, you could structure a scheme offshore that would have
similar impact. So I just remind you it is the Treasury
yourself--it is your department--that has declared the entire
territory of Iran as a primary money-laundering concern, and
that means that any financial transaction with Iran or any
offshore scheme that is set up risks supporting the regime's
ongoing illicit activities, including ballistic missile
activities or anything else.
Let me go to a question for Assistant Secretary Countryman.
Mr. Szubin. May I be able to clarify something?
Chairman Royce. Yes. You can clarify it, but Iran is
pushing this, right? I read the translations of the Iranian
papers. I see what they are pushing for, but go ahead.
Mr. Szubin. Yes. Thank you for the opportunity.
I just wanted to clarify that Secretary Lew has made
himself clear on the record in public, and of course, we look
forward to responding to your letter to be clear in writing as
well. But he has said exactly what I have said here today, and
I know he was looking forward to me being here to be able to
relay his views on this. Iran will not have access to our
financial system.
Chairman Royce. Perfectly fair, but when I asked him the
question, the focus was on making sure Iran gets relief.
So let me go to the next question, and this is to Assistant
Secretary Countryman, the last question I will ask here. In
your testimony, you put stock in the new U.N. Security Council
Resolution 2231 and its provisions related to Iran's ballistic
missile program.
Now it is well documented that, before the deal, Iran was
legally bound by U.N. Security Council Resolutions not to test
ballistic missiles. Now here is the problem in a negotiation--
the first problem, one that the members of the committee are
already aware of, and that is that the administration agreed to
a change. Instead of saying ``shall not,'' the change was
``Iran shall be called upon not to.'' So that was watered down.
But there is other language in there, new language that
focuses on Iranian missiles designed--and this is something
that, frankly, I missed--designed to be capable of delivering
nuclear weapons, while it previously focused on missiles
capable of delivering nuclear weapons. Okay? So what was the
rationale for using the words ``missile designed to be capable
of'' instead of simply ``missiles capable of''? If I could ask
that.
Mr. Countryman. I don't know the answer. I was not involved
in the negotiations. I will get you an answer if I can. I would
note that the new Resolution 2231 does not change the
substantive prohibition on provision of any kind of ballistic
missile technology to Iran.
Chairman Royce. Well, wait, but you have the Iranian
Foreign Minister saying that that word in these negotiations,
``designed''--he said: ``It took me 7 months to negotiate.'' So
everybody knew what it meant.
And so what they are saying now is with the changed ``Iran
shall be called upon not to'' rather than ``not to,'' that they
can go forward full speed with their ICBM program, and that is
what they are doing. As we sit here, that is what they are
doing. And it is not as though they are hiding the intent. They
combined that with the rhetoric ``death to America, death to
Israel.''
I just think we have a situation--well, let me let you
respond.
Mr. Countryman. I don't believe Iran has ever hidden its
intent to continue developing ballistic missiles nor has it
slowed down doing so, no matter what administration took what
steps.
Chairman Royce. But here is what we have: We have a
situation now where the Security Council--I mean, what can we
point to where we can say the Security Council now is taking
action against Iran's missile program? None that I can see.
Mr. Countryman. I understand we have fewer rhetorical
points to make. I don't focus on the rhetoric. I focus on the
active effort to deny the export of technology from advanced
countries to Iran. I understand that Iran's interpretation is
different from ours.
Chairman Royce. But our difficulty here is that we have now
given Russia or we have given Beijing the ability to interpret
this differently. We have forever now a less effective
constraint on Iran's missile program than we had before. And on
top of that, we now see Iran asserting this in the
international community, and we don't see the pushback from the
United States. This is the point I wanted to make to you.
My time has expired. I will go to our ranking member, Mr.
Engel of New York, for his questions,
Mr. Engel. Thank you, Mr. Chairman.
Mr. Szubin, let me ask you this: When Congress was
considering whether to oppose a nuclear deal with Iran, we
heard various statements from administration officials that
Iran's non-nuclear behavior, which is, of course, supporting
the terrorists, human rights violations, advancing their
ballistic missile program; that those things would be outside
of the scope of the deal. Yet, since implementation to today,
we have heard a different message: No new sanctions. We have
heard that from the administration: No new sanctions, even if
they are outside the scope of the deal.
So can you clarify the administration's position, because I
thought that we were told that, in their support, Iran's
support, for terrorism, that we could slap additional sanctions
on it, and it would not violate the JCPOA, if Iran had launched
missiles, ballistic missiles, and we wanted to penalize them,
that that would not butt heads with the JCPOA? But, now, we
hear differently, so would the administration veto new non-
nuclear sanctions against Iran if the new sanctions are not
intended to relist delisted entities?
Mr. Szubin. Thank you Ranking Member Engel.
Mr. Engel. Let me also say--I am sorry--let me also say,
when you are giving the answer, would the imposition of non-
nuclear sanctions violate our obligations under the JCPOA?
Mr. Szubin. I appreciate the opportunity to clarify the
administration's views on this. And I would also offer
Ambassador Mull, if he wants to come in when I conclude----
Mr. Engel. Certainly.
Mr. Szubin [continuing]. To provide his view from the State
Department. Our view has not been no new sanctions since
implementation day. In fact, to the contrary, you have seen the
administration announce multiple rounds of new sanctions
designations in exactly the areas you are talking about: Iran's
support for terrorism, their ballistic missile program,
Hezbollah, Mahan Air.
We have been continuing on our path to knock out the key
proxies that these companies are using to procure materials and
to move money. So we have been very consistent on that from
exactly, as you said, our statements announcing the deal and on
throughout, including, less than 2 months ago, new designations
of the Quds Force affiliated airline, Mahan Air, and new
designations against the liquid propellant missile companies
within Iran that work under SHIG, the Shahid Hemmat Industrial
Group.
With respect to new legislation, I think the
administration's view consistently has been there is no
inconsistency with the JCPOA if it is outside the nuclear space
so long as it doesn't undermine and interfere with our
commitment to fulfill what we committed to fulfill in the deal.
Then the question becomes very much what specific
legislation looks at and what are the details.
Mr. Engel. Well, because I think that while the President
has the authority under existing law to sanction Iran, and the
President has, which I support, I think it is not so terrible
to have Congress come up with new sanctions if we feel Iran is
violating its agreements.
Certainly, in the launching of the ballistic missiles, the
chairman spoke about that, with ``Death to Israel'' on it. To
me that is provocation. And when they continue to support
terrorists, that is a provocation. And I think that sometimes
it is important for the Congress to speak out on these things.
We have been having a lot of hearings on Iran and the
implementation of JCPOA, and in some of our previous hearings,
some of our witnesses have said: Well, if the Congress were to
come out with new sanctions, it would give it that little extra
edge. It would really send a message to Iran that we are aware
of what they are doing and we are not tolerating it.
It is true that the President could implement and has the
authority to implement new sanctions without the Congress
acting, but I really think it is important that the Congress
act. So I would hope that the administration would seem to
lessen its objection to Congress coming forward with new
sanctions because, after all, when the JCPOA was put in front
of the Congress, we were told specifically that it would not
affect further sanctions against Iran for things other than
their nuclear program, which would be terrorism and ballistic
missiles and some other stuff.
Mr. Szubin. Yeah, and that continues to be our view. I do
want to point out, though, that Congress' sanctions
contribution continues to be very potent right now. I neglected
to mention this, so I am glad I have the opportunity.
When we announced new designations in the terrorism, human
rights, ballistic missile, Syria, Yemen space that have to do
with Iranian actors, thanks to Congress and thanks to your
efforts, those sanctions do not just touch U.S. actors. Those
sanctions have secondary or extraterritorial effects around the
world, which means that if a financial institution in East
Asia, Africa, Europe, or the Gulf engages in transactions with
any of the IRGC, the missile actors, the human rights
designated actors, thanks to Congress, they face these
secondary sanctions, namely a cutoff, a potential cutoff, from
the U.S. financial system. Those are, sort of, if you will,
supercharged sanctions, and that is only thanks to Congress'
efforts. And so those stand behind every designation that we
issue, even since implementation.
Mr. Engel. Well, that is a good point, and that is why the
chairman and I both feel so strongly that Congress needs to
continue to be involved and that, if we need to, issue further
sanctions. It does not violate our obligations under the JCPOA
to do so. I just want to see quickly if Ambassador Mull has
anything to add to it.
Ambassador Mull. No, thank you so much Ranking Member
Engel. Acting Under Secretary Szubin stated very clearly and
succinctly that new sanctions on Iran's behavior outside the
scope of the nuclear agreement would not be a violation of
JCPOA. We have been very clear about that publicly as well as
directly with our Iranian counterparts when they tried to make
that argument.
We have been very clear throughout the negotiations and as
recently as my last meetings with the Iranians last week that
sanctions on things such as missile launches, which are
inconsistent with U.N. Security Council Resolution 2231,
weapons proliferation, destabilization, support for terrorism
will continue to have consequences from the United States
Government. There is no doubt about that in the administration.
Mr. Engel. Thank you.
Thank you, Mr. Chairman.
Chairman Royce. Thank you, Mr. Engel.
We go to Mr. Chris Smith of New Jersey.
Mr. Smith. Thank you very much, Mr. Chairman. Thank you
again very much for your vigorous oversight of the Iranian
deal, you and the ranking member.
Let me just say a couple of points, and then I will ask a
question or two.
This week, as we all know, our Nobel Peace Prize winning
President lifted the lethal arms embargo on a cruel
dictatorship in Vietnam, a nation that has crushed dissent from
journalists, bloggers, and religious believers. The New York
Times had asked him not to do it, as did other editorials. He
did it anyway and made a statement. Words are cheap in
Washington. They are cheap in Hanoi as well. We asked for
deeds.
Two weeks ago, I had a hearing right here with Mrs. Vu Minh
Khanh, the wife of Nguyen Van Dai, a human rights defender I
had met in 2005, a tremendous man, he, like so many others, is
fighting for fundamental human rights. He is in prison. Many of
us said: Mr. President, if you are going to give something,
please ask very specifically for the release of these prisoners
and not just give all and get nothing in return.
Administration officials have repeatedly testified that the
deal in no way would impact our pressing Iran on human rights,
yet the administration has only sanctioned one Iranian official
for human rights abuses since they started negotiations. Iran,
like Vietnam, is a cruel dictatorship that uses torture to hurt
and even kill dissidents. Why is that the case? Why is there
not a more robust effort on human rights?
Secondly, credibility and messaging, even if it is clever
and aggressive, needs to be honest. A May 5th New York Times
article by David Samuels paints a highly disturbing insight
into the administration's selling of the Iranian deal to the
press, to the Congress, to the American people. The New York
Times Magazine piece notes that the narrative that Ben Rhodes
shaped, the story of an Iran deal that began in 2013 with a
moderate faction inside led by Iranian regime that beat
hardliners, the Times points out that that was actively
misleading. It was to convey an impression that then people
would follow up and say: Oh, things have changed.
Mr. Rhodes brags in the article that we ``created an echo
chamber,'' an onslaught of freshly minted experts cheerleading
for the deal. Rhodes said: ``They were saying things that
validated what we had given them to say.''
He also points out that he was able to spoon-feed 27-year-
old reporters who knew nothing about this foreign policy and
then they, with these so-called experts, constantly doing the
echo chamber.
Gentlemen, that is not the way to do a deal. It ought to be
honest. It should be transparent. When you do things like this,
you are duping the chairman or duping our ranking member
because I, too, felt the sense of, are we missing something
here? And the more we look at the deal, the more realize it.
So, on the human rights piece, if you could speak to that, what
is your view of the New York Times Magazine piece?
And, finally, Ambassador Mull, the last time you were here,
I asked you a very specific question about the Iranian
material. You said it had been taken out, put on a Russian
boat, vessel, and that we didn't know where it went. Do we know
where it is now? Has there been a U.S. validation as to its
whereabouts and whether or not it is under lock and key? All
three of those questions.
Ambassador Mull. Thank you very much, Congressman Smith,
for those very good questions.
On human rights, there has been no doubt about the strength
of U.S. feeling about this very disturbing human rights
situation in Iran. We have made that very clear publicly in
repeated reports, whether on our religious freedom report or
human rights report. I can affirm to you that in every meeting
in which I have participated with Secretary Kerry with Iranian
counterparts, we have made very clear our concerns. In fact, it
was those concerns that really motivated our effort to get--
every human rights violation is a serious one. We are most
concerned when the human rights of Americans are violated. So
our concern about that motivated our very hard work to win the
release of American detainees in Iran earlier this year.
And I pledge to you, although human rights is outside the
scope of the nuclear amendment, I know Secretary Kerry feels
passionately about these issues and will continue to remain
engaged.
As opposed to the transparency of the negotiation of the
agreement, I can tell you I worked in the Foreign Service for
more than 34 years now. I have never seen an international
agreement that has had greater transparency than the Iran
nuclear deal. It was released in full to the public on the very
day----
Mr. Smith. I am almost out of time. We couldn't read the
IAEA inspection protocol? I don't know what they are doing. We
take them at their word. They are a good group. But
transparency, that needs to have a little asterisk on it I
would suggest.
Ambassador Mull. The IAEA has continued to report and will
continue to do so. We have briefed the Congress dozens of times
throughout the negotiations and since then, and we are
available in open and closed session to do so.
Finally, your question about the enriched material that was
removed from Iran to Russia, I was in Russia last month and in
fact can confirm that that material is secure in Russia. There
is no risk of its further proliferation. I would be very
pleased to brief you in a closed session in more details if you
would like, sir.
Chairman Royce. Okay. We are going to go to Mr. Brad
Sherman of California.
Mr. Sherman. People in this country want us to get along
with everyone around the world. We long for peace, and there
are those who say sanctions contradict that. But when you look
at what Iran has done in Syria, hundreds of thousands, perhaps
1 million people killed by Assad with funds provided, weapons
provided, thugs provided by the Iranian Government. When you
see people killed by barrel bombs and sarin gas, we realize
that the right response to the Iranian regime cannot be
Kumbaya.
This House was divided on the Iran deal, but we were united
in one thing: Sanctions work. And, Mr. Szubin, thanks to you
and your predecessors, you proved they work by working hard to
make sure that they work. Some believe that the sanctions got
us a good deal. Some believe the sanctions would have gotten us
a better deal. The only agreement was that sanctions work.
I join with the ranking member in saying that we ought to
have new sanctions. And, Ambassador Mull, I thank you for
clarifying that that will happen. I know that the Department of
Treasury does additional designations, so you are doing your
job. We need to do our job by passing statutes.
Ambassador Mull, is it correct to stay that the
administration's view is that simply reauthorizing and
extending the Iran Sanctions Act would in no way violate the
JCPOA?
Ambassador Mull. To be honest, Congressman, we are aware of
interest in this House, and throughout the Congress in general,
to reauthorize the ISA. We don't believe that we need to act on
it now because it is valid through the end of this year. But we
are certainly open to working with----
Mr. Sherman. Well, sometimes Congress likes to get our work
done. I didn't ask you, you know, the House schedule. We might
want to get our work done sooner rather than later. Is it a
violation of the JCPOA to simply keep our statute going the way
it was the day the JCPOA was signed?
Ambassador Mull. Sir, I would be hesitant to speculate
because I know, under previous efforts to re-extend it, there
have been other things added onto that.
Mr. Sherman. Again, if it were published in the exact
language that existed on the day the JCPOA was signed, would
that be a violation of the JCPOA?
Ambassador Mull. Well, again, sir, we would have to look at
what was actually published.
Mr. Sherman. You know what was published. You don't want to
answer the question.
Mr. Szubin, a technical legal question. You talked about
branches of U.S. banks. Does that apply equally to
subsidiaries, or does it depend on how it is legally
authorized?
Mr. Szubin. It does depend.
Mr. Sherman. So do you need legislation saying that the
U.S. bank that owns a subsidiary would be subject to penalties
if it allowed its subsidiary to do what its branch could not
do?
Mr. Szubin. So the distinction does exist, and that is not
unique to Iran. That cuts across all of our sanctions programs.
But I can tell you, in practice, I don't know of a single
subsidiary of a U.S. financial institution that is considering
doing this business. Given their global platforms, I think it
would be all but impossible.
Mr. Sherman. I am not aware of a problem either, but new
legislation, I think, would be helpful.
You have referred to Mahan Air as the Quds Force airline.
Congressman McHenry and I sent a letter to EU Ambassador,
joined by the chairman and the ranking member and many members
of this committee, saying that you should designate Mahan Air
under U.N. antiterrorism sanctions. Mahan Air cannot fly to
Europe or Asia without ground service. It is not getting ground
service from, for example, two companies, Airport Handling,
which is based in Italy, and AHS Group, which is based in
Germany. Now these same service companies also serve as U.S.
airlines. Put aside the terrorist risk of having the same
handlers do both, and would the Treasury Department consider
listing these two airport handling companies for doing business
with Iran?
Mr. Szubin. Thank you very much for your focus on this
issue. We don't comment on who we might designate in the
future, but I want to say the continued ability of Mahan Air to
fly around the world as if it was a legitimate airline is
something I have raised in every capital that I visited. And I
don't think it should be treated as a regular airline.
Mr. Sherman. Well, the way to do it would be to designate
these handlers. And you maybe won't mention their names, but I
just did. And I would point out that our friends in the Ukraine
ask us for so much, you would think that they would have
listened to you when you made that point and as we make that
point here.
We have three major auto manufacturers, including Fiat
Chrysler and Mercedes, investing in auto manufacturing in Iran.
It is only a matter of time before the products of these
investments, which are also being made by Volvo, will be used
by the IRGC. Would investing in auto factories that are
producing transportation for the IRGC be sanctionable?
Mr. Szubin. Any type of material support to the IRGC would
be sanctionable. The IRGC----
Mr. Sherman. What if you build an auto factory that sells
its trucks to the IRGC?
Mr. Szubin. Typically, what we are looking for if we are
going to be designating a company is to see that it is witting
or colluding--a witting partner or colluding with the
designated terrorist group. Investment in a firm that creates
cars that then are subsequently appropriated by the IRGC would
typically be a little bit too attenuated----
Mr. Sherman. Well, no, not appropriated, just sold. I mean,
you can't say you are not cooperating with the--my auto dealer
cooperates with me. I take my car in service. He is a very
cooperative guy. Are you saying that auto manufacturing
facilities that sell trucks to the IRGC are going to be
uncooperative?
Mr. Szubin. No. Although, I might need to get the name of
your auto dealer because I don't have that experience. What I
am saying is that what we are looking for in going after new
designation targets is those who are working with the
designated entity. If we see companies that are propping up the
IRGC, whether with autos, whether with funds, whether with
weapons, whether with experience and support, that is what we
would target.
Mr. Sherman. I would ask you to look at these investments.
I would ask you also--in addition to sanctioning those who do
the wrong thing, warning those who are thinking of doing the
wrong thing, whether you choose to do it publicly or privately.
And I look forward to giving you the address of Fiat Chrysler,
Volvo, and Mercedes.
I yield back.
Chairman Royce. Mr. Sherman, thank you.
I think Mr. Sherman's point is that more banks, more
ticketing agents, and more ground service providers and other
companies that are providing support for Mahan Air should be
sanctioned.
We go now to Mr. Dana Rohrabacher of California.
Mr. Rohrabacher. Thank you very much, Mr. Chairman.
And, again, I would like to thank you and the ranking
member for taking very seriously the responsibility that we
have to oversee what we disagreed on with you in terms of the
Congress disagreed with you--many of us did--on this agreement
with the mullah regime in Iran. The JCPOA was--the purpose, I
take it was and that is what we were told, was to basically
prevent Iran from at some point obtaining the capability of
mass destruction on the governments that it considered to be
under the command of the Great Satan, meaning Israel, the
United States, and anybody else who disagrees with them. So we
did not want them to have this right to obliterate their
enemies, or at least, not the right but the capability. And
this agreement was supposed to prevent that, and today, we have
three witnesses who are basically saying that it was a good
agreement and it has brought us to a safer world.
And what is concerning to me is when we go back and, as the
chairman has pointed out, that the agreement itself has flaws
and perhaps some intentional flaws. And one flaw would be that
it expires after a certain length of time, and so we can see
Iran moving toward that goal unimpeded now to get themselves to
a point, after expiration, they will be able to then have the
power and force what they want.
But even more disconcerting to me is that the flaw is that
the treaty may well have contained what I call weasel words. I
was a journalist for a number of years, and it is very easy to
find out when someone really is trying to lie to you without
lying to you. What they do is they put something in--they word
something in a way that it appears to be accomplishing
something that it is not accomplishing.
And as the chairman just pointed out in his questioning,
the actual words were changed to make them less enforceable.
Now shouldn't that be a warning sign to anybody who takes this
treaty seriously? And how do you explain that? The chairman had
two or three examples where, for example--all right. Let's just
go directly to the one I will ask you about. Basically, we have
a situation where a rocket is designed, and as long as it is
not designed to carry a nuclear weapon, the Iranians now,
because we have changed--there is a weasel word put into the
treaty--that they now can work and obtain that nuclear weapons
delivery system as long as it wasn't designed to be a nuclear
weapons delivery system. And that was changed to the point
where, before, they would not have been permitted that. Why was
that changed?
Mr. Countryman. As I noted, I was not involved in the
negotiation of that word in that resolution. I do not agree
that this is a dramatic difference in the effect of the
resolution with Iran----
Mr. Rohrabacher. Okay. Let's--okay. Like I was saying
before, it is not a dramatic difference. In one wording, it
absolutely prohibited them from getting a rocket that could
deliver a nuclear weapon system. After the wording, it now
permits them to have it, because the strict definition of what
the wording was, they now have an opening to possess a nuclear
weapons delivery system. That is not dramatic? That is huge.
Except it is being hidden with weasel words. Okay----
Mr. Countryman [continuing]. Permission of Iran obtaining
intercontinental or nuclear capable ballistic missiles. There
remains an absolute prohibition in that resolution of anyone
providing that technology.
Mr. Rohrabacher. The missiles that were designed to deliver
nuclear weapons, not technology that could achieve that goal. I
mean, the fact is, if it can carry a nuclear weapon, even if it
is not designed to do so--maybe it is designed to put up
satellites. No, we don't want them to have that if that,
indeed, will permit them to drop a nuclear weapon in
Washington, DC, with a missile using it as a delivery system.
You don't call that dramatic? That is very dramatic, and I
think that people of the United States have been disserved--
there has been a disservice to us and our security by this type
of--and I say weasel words again, deception. A weasel word is a
deception to make people think that you are actually
accomplishing something that you are not accomplishing.
Let me tell you, this is not a problem of interpretation.
This is a problem with actually a negotiation failure that we
have obviously reached an agreement with them, meaning the
mullah regime which murders their own people, that we have
actually reached an agreement with them which they know will
permit them to achieve their objective. This was not a good
treaty to begin with. I appreciate your testimony, but
obviously, I disagree with it.
Chairman Royce. We go to Mr. Gerry Connolly of Virginia.
Mr. Connolly. Thank you, Mr. Chairman.
And welcome to our panel.
Ambassador Mull, the Iran agreement addressed their support
to Hezbollah, right?
Ambassador Mull. No.
Mr. Connolly. They addressed--well, certainly, it addressed
the issue of money laundering?
Ambassador Mull. No.
Mr. Connolly. Syrian Assad support?
Ambassador Mull. No.
Mr. Connolly. Terrorism in Mahan Air?
Ambassador Mull. No, sir.
Mr. Connolly. Yemen?
Ambassador Mull. No, sir.
Mr. Connolly. Banning any further expression of death to
America, or death to Israel? Surely, we addressed that in the
agreement?
Ambassador Mull. No, sir.
Mr. Connolly. What did the agreement address?
Ambassador Mull. Sir, the agreement addressed limiting
Iran's capability to develop fissile material to build a
nuclear weapon.
Mr. Connolly. Well, that is a unique approach. Surely, in
the Cold War with the Soviet Union, we had a different model.
We addressed every negative behavior the Soviets were engaged
in in every agreement we approached, including in my colleague,
Dana Rohrabacher's administration, the Reagan administration.
Is that not correct? We addressed every aspect of Soviet
behavior, unlike this agreement?
Ambassador Mull. No, sir, that is not correct.
Mr. Connolly. Oh. Well, let's get to this agreement. Did
this agreement require Iran to modify the Iraq heavy water
research reactor and to fill the reactor calandria with
concrete?
Ambassador Mull. Yes, sir.
Mr. Connolly. Did they do that?
Ambassador Mull. Yes, sir, they did.
Mr. Connolly. Oh, my lord.
Did it require the reduction of installed centrifuges from
19,000 to 6,104?
Ambassador Mull. Yes, sir. That is true.
Mr. Connolly. And did they achieve that?
Ambassador Mull. Yes, sir, they did.
Mr. Connolly. Did it require that uranium enrichment be
reduced to a level of 3.67 percent?
Ambassador Mull. Yes, sir.
Mr. Connolly. And did they achieve that?
Ambassador Mull. Yes, sir.
Mr. Connolly. Did it also require that their stockpile be
reduced to 300 kilograms and the rest of it shipped out of the
country?
Ambassador Mull. Yes, sir.
Mr. Connolly. And did they do that?
Ambassador Mull. Yes, sir, they did.
Mr. Connolly. And you witnessed in Russia where it is being
stored?
Ambassador Mull. I confirmed in Russia where it is being
stored.
Mr. Connolly. Did they agree to allow the inspection and
limitation on centrifuge production and uranium mines and mills
under surveillance by international auspices?
Ambassador Mull. Yes, sir.
Mr. Connolly. And have they complied with that?
Ambassador Mull. They are in full compliance.
Mr. Connolly. And has the International Atomic Energy
Agency verified this?
Ambassador Mull. Yes, sir they have.
Mr. Connolly. And have we verified this, our Government?
Ambassador Mull. Yes, sir, we have.
Mr. Connolly. Really? Well, I have to admit, I find--here
is the second hearing. We had over 30 hearings in this, and,
oh, my gosh, I tell you, I was worried. I had trouble sleeping.
When I listened to my colleagues predict cheating, stealing,
subterfuge, evasion, and I hear you, Ambassador Mull, tell me,
well, maybe they wanted to do that, but they didn't.
And so now that we are having hearings on compliance, we
are talking about everything but compliance. We are talking
about other behavior, which is to be condemned. I condemn it. I
voted for sanctions on the other behavior.
And, by the way, did the agreement prohibit any further
U.S. sanctions for any purpose?
Ambassador Mull. In----
Mr. Connolly. Are we prohibited under this agreement for
looking at new sanctions on unrelated behavior, that is to say,
unrelated to the nuclear agreement?
Ambassador Mull. Yes, that is correct, sir.
Mr. Connolly. So we are not prohibited?
Ambassador Mull. We are not.
Mr. Connolly. We are not prohibited. We could entertain
other sanctions for their support for Hezbollah, for example?
Ambassador Mull. Yes, absolutely, sir.
Mr. Connolly. Or putting sanctions on Mahan Air?
Ambassador Mull. Yes, sir.
Mr. Connolly. Okay.
Mr. Rohrabacher. The gentleman asked a question early on in
your questions. Would you like an answer to that, or----
Mr. Connolly. Well, if my friend would----
Chairman Royce. The gentleman will withhold, the time
belongs to----
Mr. Connolly. Because I only have 58 seconds, otherwise I
would. If the chairman will give me time, that is great.
These arguments are, you know, to me, a smokescreen for not
addressing the main issue. And the other argument used, which
is clever but still flawed, which is perfect is the enemy of
good. The fact that it is not in perpetuity. That we couldn't
achieve Iran forever forswearing any nuclear ambition means
this is flawed. Was that ever in the cards, Ambassador Mull? I
mean, I thought we hadn't even talked to them for almost 30
years. So to get them to agree to this and comply seems to be,
I don't know, to me, some kind of achievement. And why don't
you comment, because my time is up.
Ambassador Mull. Yes, sir. We believe it is an achievement.
We believe that we and our allies in the region are
considerably safer because of the achievements and full
implementation of this agreement.
In terms of whether it ever sunsets, while it is true
certain restrictions on Iran's capability--its stockpile and so
forth expire after certain periods--Iran's commitment and full
access to the International Atomic Energy Agency is in
perpetuity. And so whenever the IAEA believes that Iran is
moving to develop a military application for its nuclear
program, it will report as such, regardless of when that
happens. And we have every capability, through law and through
previous executive orders, to respond immediately to put back
in place the very pressures that brought about this deal in the
first place.
So we are very confident that we have the tools to make
sure that the security from this deal is long lasting, and if
it is not, we can turn the tables and go back to the status quo
ante.
Chairman Royce. Mr. Joe Wilson of South Carolina.
Mr. Wilson. Thank you, Mr. Chairman. And I yield 10 seconds
to my colleague from California, Mr. Rohrabacher.
Mr. Rohrabacher. Just to answer Mr. Connolly's point, which
was, yes, in the Reagan administration, it was different. The
fact is that in the Reagan administration, our goal was to
bring down the Soviet Union. And even as we negotiated with
them on various treaties, we had efforts all across the globe
to bring down that government, which is exactly what we should
be doing with the mullah regime, and we are not doing.
Mr. Wilson. And, again, thank you very much, Chairman
Royce. And I want to thank also, Congressman, the ranking
member, Eliot Engel. I was grateful to actually vote with both
of them opposing this dangerous deal. And, sadly, as we hear
more and more about it, it becomes more dangerous. And it is so
sad that we have a mullah regime, which is suppressing the
dynamic people of Iran. They continue, as was cited, to
proclaim death to America, death to Israel. That has not
changed. I just find it incredible.
And then my concerns, Ambassador Mull, have been verified
due to the IAEA report, and that is in early March, the head of
the International Atomic Energy Agency disclosed that certain
agreements reached under the dangerous deal limit inspectors
from publicly reporting on potential violations by the mullah
regime. The Director General Amano, of the IAEA, which is
responsible for ensuring Iran complies with the agreement, told
reporters that his agency is no longer permitted to release
details about Iran's nuclear program in compliance with the
deal.
The recent reports are devoid of details about critical
implementation issues, including the amounts of low-enriched
uranium in Iran, the nature of centrifuge rotor and bellows
manufacturing, and advanced centrifuge research and development
activities. Why would the administration agree to limit IAEA
reporting? Why has the IAEA reporting on Iran been constrained?
What specific component of the deal or U.N. Security Council
resolution that implemented it, limits the IAEA reporting, and
are there any Americans or Canadians who are serving as
inspectors?
Ambassador Mull. All right. Congressman, thanks for those
questions.
Last week, you know, I was in Vienna, and I met with the
director general of the IAEA, Mr. Amano. I believe those press
comments attributed to him are inaccurate and misinterpreted.
It is quite clear that the IAEA will be reporting every 3
months on the status of implementation.
Now, in terms of the level of detail, I agree with you that
in the last report there was less detail than in previous
reports. That is because the Iranian nuclear program is
significantly smaller than what it was as a result of this
deal.
The IAEA confirmed that Iran was within all of the
numerical limits to which it committed. Director General Amano
assured me last week that the IAEA would continue to address in
its forthcoming report whether or not Iran is complying with
every element of the deal. So I think you can count on a full
reporting to continue from the IAEA.
Mr. Wilson. But, clearly, it was stated that it is devoid
of details by critical implementation issues. And whether it is
low or not, it can say low or nonexistent, including the
amounts of low-enriched uranium in Iran, the nature of
centrifuge rotor and bellows manufacturing and advanced
centrifuge research and development activities. That should be,
really, easy to say yes or no.
And then, Mr. Countryman, the development of missile
technology and testing, to me, it is incredible. It is very
revealing. There was only one reason that you would be
developing an intercontinental ballistic missile capability,
and that is to deliver a nuclear weapon, and it would be
against American families.
In the past month, we have had the spectacle of Iran
testing a missile, which in Hebrew, so people who would be
affected understand, as cited by Mr. Sherman, and that is that
in Hebrew, it stated that Israel be wiped off the map. This was
on a test. How can we possibly trust such a regime that makes
such defiance in the aftermath of this dangerous deal?
Mr. Countryman. I don't trust them further than I can spit.
Mr. Wilson. Well, great. And then what measures are there?
And I am grateful that I work with Congressman Seth Moulton. In
the NDAA, we have a requirement that there be a response to
missile testing and identification missile testing. Is there
anything in place to let the American people know what is going
on?
Mr. Countryman. I am sorry. What is going on on----
Mr. Wilson. To identify a missile test and what is the
implication of the missile test by Iran?
Mr. Countryman. Yeah. There is a lot of information, some
of which is not appropriate for this forum, but we are always
prepared to brief members on the full range of information that
we have about Iranian missile tests.
Mr. Wilson. Well, American families are at risk. They need
to know.
I yield the balance of my time.
Chairman Royce. Go to Mr. David Cicilline of Rhode Island.
Mr. Cicilline. Thank you, Mr. Chairman.
Thank you to our witnesses.
I appreciate the testimony with respect to the compliance.
And I think many of us who, in fact, supported this deal, we
are pleased that in fact compliance with the requirements have
been met--or that Iran has taken the steps that are required.
I think part of the challenge for us, though, is that we
were told during this process that getting the nuclear issue
off the table was so critical, and that we actually could
expect Iran would engage in additional destabilizing activity.
And, in fact, people suggested some of the resources that they
would have access to, and some of the political needs that the
regime would have would have caused them to be worse in that
area, in terrorism, in human rights, and other areas.
And so we were assured that this would give us an
opportunity to push back hard in these other areas, because the
danger of a nuclear Iran would be off the table. And I was
persuaded by that. So I am very interested to hear the
administration's efforts with respect to pushing back hard. And
I want to begin in the area of human rights.
What has the administration done since the signing of the
JCPOA with regard to imposing sanctions on human rights
violators in Iran? By all accounts there has been an increase
in human rights violations, I think, in part, as the regime
intends to show that they are still in charge. Despite this
agreement, we have seen an increase in human rights violations.
What has the administration done since the signing of the JCPOA
with respect to human rights violations in Iran, if anything?
Ambassador Mull. Congressman Cicilline, thanks for the
question. As I mentioned earlier to Congressman Smith, the
Obama administration is deeply concerned about the human rights
situation in Iran. And in confronting that situation, we have a
variety of tools available at our disposal. Sanctions are
certainly one important part of it.
Mr. Cicilline. Sorry to interrupt you. I probably should
have been more precise with the question. I know you said you
raised it in meetings. Has the administration done anything
with respect to the imposition of sanctions on any individual
or entity since the signing of the JCPOA with respect to human
rights violations?
Ambassador Mull. There has not been a specific sanction on
a human rights case----
Mr. Cicilline. Not one?
Ambassador Mull [continuing]. Since the signing of it.
Mr. Cicilline. Not one?
Ambassador Mull. But we have managed to address human
rights concerns, for example, by getting Americans out of the--
--
Mr. Cicilline. I appreciate that. I congratulate on that.
But just my point is, the existing sanctions regime has not
caused the administration to impose a single imposition of
sanction for human rights.
Second question is, there has been a lot of discussion
about additional sanctions. I think everyone acknowledges the
JCPOA deals with nuclear sanctions and that non-nuclear
sanctions, obviously, remain a tool. And so I would ask
Ambassador--actually, Mr. Szubin, you recently expressed some
concerns about the overuse of sanctions, and, you know, that
the imposition of sanctions can impose costs. Are there
circumstances in which you think we should be imposing
additional sanctions on Iran, particularly in the context of
the ballistic missile testing?
It appears as if it is not a violation of JCPOA according
to the administration, but clearly a violation of Security
Council Resolution 2231. And if additional sanctions are not a
useful tool, what do you suggest we do to dissuade or put
pressure on Iran not to engage in this very nefarious activity
with respect to ballistic missiles?
Mr. Szubin. Thank you, Congressman. And I do want to
clarify the quote you are referencing about the potential
overuse of sanctions was made in a broader discussion about
this tool as we move, potentially, into--well, for certain into
a new administration and how to use this tool, the tool of
sanctions both on the congressional side and on the executive
branch side in a judicious way that would preserve its
influence. It was not made with respect to----
Mr. Cicilline. No. No, I understand.
Mr. Szubin. With respect to their ballistic missile
program, I think sanctions are a key piece. I think we do need
to keep the pressure on. And I find particularly important
those brokers and procurement agents who are helping to mask
the ultimate end user, and that is who the SHIG group that I
mentioned earlier, the SPIG group, that is who Iran's missile
agencies are using to get the parts that they need in violation
of U.N. Security Council resolution.
The more we can expose those actors, both the individuals
involved and the companies, the better, and the more we see it
frustrate them. But I do want to say that that public effort is
not the only thing we have going. Obviously, there are
strategic interdictions that are going on at sea, some of which
you would see in the papers, some of which you would not. And
we have our own version of that in a financial sense, which is
payments that are being made to broker procurement of dual-use
items. We are sometimes able to block those payments mid-
transfer, which not only causes real damage to the procurement
efforts, but also can sometimes spark a lot of useful
intelligence from the effective individual.
Mr. Cicilline. But am I correct in assuming that it would
be useful in terms of sending a message to the Iranians that
Congress and the United States is serious about stopping their
ballistic missile system, and stopping their gross violations
of human rights, by enacting additional sanctions in the non-
nuclear sphere as an expression of Congress and ultimately the
American people's strong condemnation of ballistic missiles or
human rights violations?
That it would actually strengthen your hand as the
administration for the Iranians to know there are Members of
Congress that feel very strongly about this reflecting the
sentiments of the American people, and we are committed to
using all the tools at our disposal outside the JCPOA, not
involving any of the nuclear sanctions to really effectively
dissuade them, and persuade them, and impose costs on them for
engaging in ballistic missiles testing or human rights
violation?
Mr. Szubin. No. I think the focus of this body of Congress
on these non-nuclear threats has been and remains essential.
And, frankly, the fact that it has been a bipartisan focus has
been extremely powerful, and it does give us leverage in
talking to the Iranians and talking to our international
allies.
With respect to the enactment of new sanctions legislation,
I will repeat what I said to the chairman, which is, as a
technical matter, the deal is talking about nuclear sanctions.
As a practical matter, if legislation were to undermine the
deal by taking off the table commitments that we had put on the
table, that would be a problem. And, obviously, we don't want
to see new legislation interfere with our fulfillment of the
JCPOA.
Mr. Cicilline. Understood. Thank you very much.
I yield back, Mr. Chairman.
Chairman Royce. Mr. Randy Weber of Texas.
Mr. Weber. Thank you, Chairman.
Ambassador Mull, you said in your opening comments, the
JCPOA has been successfully implemented, cutting its missile
program by more than two-thirds, increasing the breakout time
of 2 months to more than a year. So it is your estimation,
then, that it went from 2 months to 12 months, in your opinion
we gained 10 months?
Ambassador Mull. Yes, sir----
Mr. Weber. Okay. That is math. You also said we have
preserved our abilities to snap back penalties. And you further
said that at the request of our foreign friends--and I am
paraphrasing on this--we have been explaining the lifting of
our sanctions. So the explaining of the lifting of those
sanctions, that discussion time--is that going to take a month
or two?
Ambassador Mull. We tried to be responsive, Congressman, to
whenever our international partners express questions about
U.S. law and U.S. procedures, not just on Iran but on anything.
Since the implementation day was reached in the agreement
back in January, there has been a flood of requests, mostly
from the world financial centers in Asia and Europe.
Mr. Weber. So that really is my answer. A flood of requests
from around the world. In the event that Iran would get very
aggressive and start doing things again that we felt like a
snapback sanction was in order here, it would take time, would
it not, to explain to our friends around the world as to why we
think they violated it and why we think an action is necessary?
Ambassador Mull. I don't think it would take that much time
if Iran----
Mr. Weber. How much time do you think it would take?
Ambassador Mull. To notify the world of Iran violation?
Mr. Weber. No. To explain why snapback sanction--well,
that, and then to explain and to get their buy-in on why
snapback sanctions were necessary.
Ambassador Mull. Well, I think--I mean, certainly, if we
decided to snap back, we would make it an instant announcement
of that. I couldn't speculate if there are questions from our
allies----
Mr. Weber. It would take a month or two. I am going to
leave it at that, because I am going to run short on time. It
is not going to be instantaneous. I think snap back is the
wrong word there. Okay?
Mr. Countryman, you said it is not sanctions or U.N.
resolutions that cause Iran to change its pursuit of weapons--
it is not sanctions or U.N. resolutions but trade control. And
I notice you didn't read from your remarks. You pretty much
spoke from the heart, I guess, as it were.
So if trade control was really the force du jour there that
we needed, didn't we have them going in the right direction?
Did sanctions have them going in the right direction? They were
hurting.
Mr. Countryman. Well, if you will give me just a moment. I
make a distinction between sanctions that are intended to
impose an economic cost and change behavior, and that is
something that my colleague, Mr. Szubin, especially specializes
in, and strategic trade control, which is how the United States
cooperates with countries around the world to ensure that
states of concern and non-state actors don't get their hands on
dual-use technology, whether it is nuclear, missile related, or
anything else.
Mr. Weber. Okay. So you are say the force behind the
sanctions was the trade control of all of our friends
Ambassador Mull and I were talking about?
Mr. Countryman. Well, there have been a number of
institutions in place for years. The missile technology control
regime, 40 most advanced countries in the world on ballistic
missile technology, that cooperate against providing that kind
of technology to countries like Iran. The proliferation
security initiatives started under the Bush administration, and
they are back----
Mr. Weber. I get what you meant. The denial of access to
our monetary system being somewhere up there in the upper
echelon of one of those sanctions, agreed?
Mr. Countryman. Yeah. I would put that, again--I am not
trying to make fine distinctions, but I would say that is more
in the category of economic sanctions and trade control.
Mr. Weber. Okay. Well, I want to go with Mr. Szubin on
this, because he did say super-charged sanctions could be used.
Describe for us, if you would, the difference between, you
know, normal sanctions, lesser sanctions, and super-charged
sanctions.
Mr. Szubin. I would be happy to. And I did not mean to coin
a new term and certainly not that term.
Mr. Weber. When I was in high school, super charging meant
something different but go ahead.
Mr. Szubin. What I meant was to refer to the reach of a
targeted sanction. So just to give you a very specific example.
If we target a human rights actor in the Democratic Republic of
the Congo, we add them to the OFAC sanctions list, that binds
the actions of U.S. banks, U.S. companies. Foreign actors are
still permitted without any fear of U.S. consequences, to do
business, as long as they keep their transactions out of the
U.S. So they can't be routing those transfers through the U.S.,
but if they want to do it in local currency, fine.
When it comes to Iran, what Congress did was say no, anyone
who does business anywhere around the world in whatever
currency with an Iranian actor that is on the OFAC blacklist,
faces a potential cut off from the U.S. financial system. That
is what I was referring to as these greatly augmented sanctions
designations.
Mr. Weber. Okay. Thank you for that distinction.
Mr. Chairman, I yield back.
Chairman Royce. Mr. Meadows of North Carolina, who was
instrumental in the Hezbollah sanctions legislation we
referenced earlier. As a matter of fact, he was the driving
force, the driver behind the bill that this committee put out
on Hezbollah sanctions.
Mr. Meadows.
Mr. Meadows. I thank you, Mr. Chairman. I thank you for
your leadership on that particular effort.
So, Mr. Szubin, let me come to you. Is it all these
sanctions, and as we talk about this, it gets very confusing.
And so we have removed some sanctions; we have left some in
place.
To the average elected official, do we have, really, the
intellectual discernment to decide which sanction is which and
when it should be applied and when it should not be applied? Is
that easily done?
Mr. Szubin. I sure hope we have that capability. I mean,
that is what my office is there to do.
Mr. Meadows. That is what your office is--but it is not
necessarily what my office or other elected officials' offices,
in terms of figuring out sanctions and how they should apply
and if they apply in every case; is that correct? So if we have
questions, you are the go-to person to figure out whether we
are complying; is that correct?
Mr. Szubin. We would be happy to provide any consultation
on that that is sought.
Mr. Meadows. All right. Since we are talking today about
compliance, and we are talking about centrifuges and all kinds
of other things, Ambassador Mull, can you tell me why, when we
look at the JCPOA--we are talking about centrifuges, and they
were ``to be made inoperable,'' and you have changed the
language to be disabled, and most of those centrifuges from
what I understand, have been turned off and put in a storage
place in Iran. Is that correct?
Ambassador Mull. Sir, the centrifuges that have been
dismantled had all of the equipment----
Mr. Meadows. All of them?
Ambassador Mull. And they are allowed----
Mr. Meadows [continuing]. Are disassembled is what you are
saying?
Ambassador Mull. They are allowed, certainly, 5,060 to be
operating at this time.
Mr. Meadows. No. But I am talking about of the 19,000. You
disassembled all of them, and they can't be put back into place
very quickly----
Ambassador Mull. That is correct.
Mr. Meadows [continuing]. This is your sworn testimony?
Ambassador Mull. That is correct.
Mr. Meadows. Are they being stored in Iran?
Ambassador Mull. Yes, sir.
Mr. Meadows. So how long would it take them to get them out
of storage and put them back in operation if they decided to do
that today?
Ambassador Mull. If they decided to do so, it would depend.
Some of them are stored in----
Mr. Meadows. Well, I know they got rid of some of them that
weren't actually in use. So--but what I am talking about is the
ones that they were supposed to dismantle, how long would it
take them to take them from storage and get them back in----
Ambassador Mull. Well, this all factors into our
calculation of breakout time. It would certainly be a matter of
several months----
Mr. Meadows. That is not my question. That is a great
answer to a question I didn't ask. How long would it take to
take the centrifuge from the storage and actually get it back
in place again and flick on the switch?
Ambassador Mull. Well, it--again, it depends on the
centrifuge; it depends on the location. All of this--the
storage is completely, sir, under monitoring full time by the
IAEA.
Mr. Meadows. I didn't ask that. That is two answers to
questions I didn't ask. I asked you, how quickly from the
storage could they be back in place? A month?
Ambassador Mull. Which centrifuge and from which location
do you mean? It depends.
Mr. Meadows. All right. Let's take some of the centrifuges
of the 19,000 that we put in storage. What would be the fastest
time that they could get one of them that is most operable and
put it back in place, the fastest time?
Ambassador Mull. Sir, I don't have an immediate answer for
you. I would have to consult with our technical----
Mr. Meadows. Can you give me a range? Seven days?
Ambassador Mull. I would have to check with our technical
engineers to get the----
Mr. Meadows. All right. Well, let me tell you the reason I
asked. I have a letter here that went to Governor Pat McCrory
from you, which by many descriptions is a pro-Iranian marketing
material suggesting that we ought to do more business with
Iran. And it says when we need to check on sanctions, and asks
the Governor to do that, of which they don't have the
expertise. They have asked me about the expertise in terms of
compliance.
Why would you send a pro-Iranian marketing letter to my
Governor?
Ambassador Mull. Sir, I----
Mr. Meadows. Who instructed you to do that?
Ambassador Mull. Well, with respect, I disagree that is a
pro-Iranian----
Mr. Meadows. Well, some have described it that way. And you
can disagree, so we will disagree on that.
Who instructed you to do that?
Ambassador Mull. In the agreement, the United States
Government committed to inform State and local authorities
about changes in the nuclear situation in Iran----
Mr. Meadows. So you sent a letter like this to all 50
States?
Ambassador Mull. That is right, because the United States
Government committed to do that.
Mr. Meadows. So in doing that, you went to great lengths, a
number of paragraphs, to talk about how great this is and all
that and selling--instead of just saying that you need to look
at changing your laws as it relates to that.
Why was it in such a pro-Iranian manner?
Ambassador Mull. Sir, I disagree that it was in a pro-
Iranian manner. It described----
Mr. Meadows. We will give it to the press and let them
opine on it.
Obviously, is this something that you released to the press
so they know all about it?
Ambassador Mull. I did not release it to the press.
Mr. Meadows. Okay. Well, we will let them do that.
I guess the other question is, since we have our ally,
Israel, and many of them are under attack by a BDS movement, is
the State Department going to send out a similar letter saying
that States should not actually embark on a BDS movement for
all 50 States for our ally, Israel?
Ambassador Mull. I am sorry, sir. BDS movement, I am not
sure----
Mr. Meadows. Boycott investment----
Ambassador Mull [continuing]. Investment sanction.
Sir, our relation----
Mr. Meadows. It is troubling that you wouldn't know what
that is.
I will yield back.
Chairman Royce. Mr. Scott DesJarlais of Tennessee.
Mr. DesJarlais. Thank you, Mr. Chairman.
Mr. Countryman, did I hear you say it was your belief that
Iran never intended to slow its testing of ballistic missiles?
Mr. Countryman. I don't know about never, and it is
difficult to talk about intent, but the record shows that they
have had a consistent, steady program of ballistic missile
development for missiles of various range, similar to that of
other countries in the region and beyond the Middle East.
Mr. DesJarlais. And it is your job to apply sanctions for
violations?
Mr. Countryman. It is my job with the support of a number
of agencies, both to apply strategic trade controls to inhibit
Iran acquiring the technology and in cooperation with the
Treasury and others to apply sanctions to entities in Iran and
outside Iran that violate those restrictions.
Mr. DesJarlais. Okay. And you stated in your written
testimony that all the sanction authorities we need are already
in place, and we have repeatedly used our own domestic
authorities to sanction those involved in Iran's ballistic
missile program and will continue to do so as warranted.
I mean, you can say that you have the authorities to deal
with it, but that rings hollow. The Iran, North Korean, and
Syria Nonproliferation Act of 2006, which levies U.S. sanctions
on entities connected with Iran ballistic activity, is
implemented by your office. But the GAO study commissioned by
this committee, from last year, shows the State Department to
be completely delinquent in applying these sanctions.
The report that triggers designation for sanctions for 2011
showed up in December 2014, 36 months late. The last report sat
on the Deputy Secretary's desk for more than a year, according
to GAO. And the State Department needs to comply within its 6-
month reporting cycle and minimize the delays and its ability
to impose sanctions. Would you agree?
Mr. Countryman. I read the GAO report. It is a good one. I
agree that we have been slow. I would not say delinquent. I
think the report did a good job of stating the important
verification process that we have to go through in a complex
interagency process. I am determined to do better.
Mr. DesJarlais. Well, they also stated that political
concerns such as international negotiations with countries
involving transfers can delay State implementing the process.
Would you agree with that?
Mr. Countryman. No.
Mr. DesJarlais. So the Ben Rhodes' comment and all that has
nothing to do with protecting the President's legacy in your
opinion?
Mr. Countryman. I don't know which comment you are
referring to.
Mr. DesJarlais. Well, the echo chamber, the fact that they
were trying to hide the fact that this was not really a good
deal. But you said that you don't think you are completely
delinquent. Do you not think that 36 months behind on a 6-month
window is completely delinquent?
Mr. Countryman. I think if you wanted a report every 6
months, you would get an inadequate report. I think that we
have to do better and faster, but I----
Mr. DesJarlais. Okay. We agree there are missiles that
have--Israel needs to be abolished, and you are saying that we
have all the people in place to apply these sanctions. That is
not very comforting when we are looking at two 3-year delays in
a program where we have a deal that is designed to curtail the
development of nuclear weapons, but a ballistic missile is the
essential component to delivering these not only to Israel but
to our allies in the United States.
And you say you have to do better. It doesn't give me much
comfort.
Where are the delinquent reports right now? Where are they
in the process?
Mr. Countryman. Well, first, I would note that INKSNA is
not our only tool. It is a congressionally mandated tool, and
we take that very seriously, and we want it to be a good
decision process and one that can be justified and explained
fully to you when it is delivered.
But we have other tools available if we need them in order
to move against individual entities.
In terms of where we are in the report, I am hopeful that
you will get the 2013 report in the very near future. The 2014
report is well in preparation. And as I said, we are trying
to----
Mr. DesJarlais. Do we know whose desks they are on now? Do
you know where they are at? I mean, we are talking about
reports from 3 years ago on a 6-month window, again. And you
are saying we need to do better. Do you know where they are at?
Mr. Countryman. Yes.
Mr. DesJarlais. Who has them?
Mr. Countryman. They are in the process, and I think they
will be completed shortly.
Mr. DesJarlais. You are not going to tell me who has them.
You are just going to tell us, we are going to do better; we
are 3 years behind; they are shooting missiles; we are in the
middle of a deal that Secretary Kerry all but admitted it is
not a matter of if it fails, it is more when it fails, which
could be a year, 2 years, 3 years.
So you are applying sanctions from reports from 2 to 3
years ago for things that are happening now. Is that what you
are telling us?
Mr. Countryman. I am saying that we have sanctioned the
primary entities involved in Iran's missile program. And if we
rush this to you any sooner, it will not make a dramatic change
in the entities that are already sanctioned.
Mr. DesJarlais. Or the President may look bad?
Mr. Countryman. Pardon me?
Mr. DesJarlais. I said or the President may look bad, as
the GAO reported that is the reason for these delays.
Chairman Royce. The gentleman's time has expired.
Mr. Countryman. The GAO is not correct on that point.
Chairman Royce. We are now going to Mr. Lee Zeldin of New
York.
Mr. Zeldin. Thank you, Mr. Chairman.
Ambassador Mull, you referenced earlier historic
verification and monitoring regime. Have you yet read the
verification regime outlined in the side deals between the IAEA
and Iran?
Ambassador Mull. I am not aware of any side deals between--
which side deal do you mean?
Mr. Zeldin. I am referencing the deals between the IAEA and
Iran to decide how the JCPOA is going to be implemented, what
governs the verification of the Iran nuclear deal?
Ambassador Mull. Iran and the IAEA have a confidential
safeguards agreement just like every member of the IAEA has
done.
Mr. Zeldin. We are talking about the same exact thing. Have
you read that?
Ambassador Mull. No, sir, I have not.
Mr. Zeldin. Okay. I would just offer up for you and for
Secretary Kerry, who was here a few months ago, it is difficult
to vouch for a historic verification and monitoring regime when
you don't know what the historic verification and monitoring
regime is. All you know is what is contained in the JCPOA, but
you don't know what is included in the agreement between the
IAEA and Iran, especially as we read Associated Press reports
about how Iran might be collecting some of their own soil
samples, responsible for inspecting some of their own nuclear
sites.
As we read what the Associated Press reports, as far as the
verification of the JCPOA, if you haven't yet read it, it is
impossible to say that is a historic verification and
monitoring regime, because you don't know what it is. The
administration has said the deal is not built on trust; it is
built on verification.
Why didn't the Obama administration ask the Iranians to
sign the JCPOA?
Ambassador Mull. Why did we ask them to sign it?
Mr. Zeldin. Why didn't we ask them to sign it?
Ambassador Mull. Well, the JCPOA is a political agreement,
and that evolved that way in the course of negotiations that,
in order to preserve our ability to exact the kind of penalties
and the kind of nimble ability and agility that we would have
to exact penalties if the agreement were not implemented
correctly. We believe it served our interests best to have this
as a political agreement.
Mr. Zeldin. Well, I would assume that if you have bought
cars in your life, you have bought houses in your life, you
have signed many agreements. You have signed your name on all
sorts of things. I would imagine if there was an example we
need to come up with of something where you should get a
signature, that the JCPOA is a great example of something where
you ask the Iranians, would you mind signing it. The
administration decided not to.
Ambassador Mull. Yeah, the----
Mr. Zeldin. Now, what is a political commitment? Secretary
Kerry has referred to the JCPOA not as a treaty. And the reason
is he said because he wouldn't be able to get it passed. That
is what he said right here. The reason why this isn't a treaty
is because he wouldn't have been able to get it passed.
Ridiculous answer, but moving on. He says it is not an
executive agreement; it is a political commitment.
What is a political commitment as defined by the Obama
administration?
Ambassador Mull. A political commitment is one that is the
official policy of the United States Government that we are
fully committed as a government to implementing the deal on its
terms. As a political commitment, we or any future government,
is free to withdraw from that agreement with a minimum of legal
difficulty. We have decided that----
Mr. Zeldin. I am sorry. You said you are allowed to
withdraw from the political commitment without legal
difficulty?
Ambassador Mull. That is right, yes.
Mr. Zeldin. Okay. That is what we are defining the JCPOA as
something that you can withdraw from without legal difficulty?
Ambassador Mull. Well, if other parties, namely Iran,
decide to withdraw from it, there are going to be very serious
consequences for that. We have preserved by establishing this
as a political agreement, our freedom of action, in ensuring
there are dramatic consequences to withdraw from that
agreement.
Mr. Zeldin. Okay. So should the Iran Sanctions Act be
extended as is?
Ambassador Mull. I know it is in place until December of
this year. We are ready to work with the Congress in addressing
that question right up to December.
Mr. Zeldin. What is the administration's position on Iran
Sanctions Act? Should it be extended as is?
Ambassador Mull. Our position is is that we are willing to
talk with the Congress, congressional leadership, about that.
Mr. Zeldin. Okay. When do you plan on coming up with a
position on the Iran Sanctions Act?
Ambassador Mull. Again, we are open to work with Congress
on this. We are at your disposal.
Mr. Zeldin. Well, I have a position, the Iran Sanctions Act
should be extended as is. What say you?
Ambassador Mull. Well, let's sit down and talk about what
that means. And during further----
Mr. Zeldin. What does that mean? It means the Iran
Sanctions Act, as is, should be extended as is.
Ambassador Mull. But in previous efforts to extend the act,
there have been efforts, suggestions to change the----
Mr. Zeldin. I am not suggesting changing it. Extending as
is.
Ambassador Mull. But there are voices in Congress who would
like to amend it. So we need to have a conversation about it.
Mr. Zeldin. Okay. Well, the Obama administration needs to--
I know there is a whole thing about legacy and turning over to
the next administration that Iran never acquired a nuclear
weapon, but many of you all need to pray to God that the next
administration cleans up your mess.
I yield back.
Chairman Royce. The gentleman's time has expired.
We go to Mr. Scott Perry of Pennsylvania.
Mr. Perry. Thank you, Mr. Chairman.
Mr. Countryman, good morning.
You started with the administration in September 2011? Is
that correct?
Mr. Countryman. I have been a foreign service officer since
1982. I have been in my current post since 2011.
Mr. Perry. You started this position 2011, right?
Mr. Countryman. Yes.
Mr. Perry. Did you have any participation in the
negotiations/agreement that we are speaking of, the JCPOA?
Mr. Countryman. I was not a member of the negotiating team.
Mr. Perry. Okay. What was your involvement? You are the
Assistant Secretary for the Bureau of International Security
and Nonproliferation and I would think that this would fall
under the nonproliferation moniker, if you would. So what were
your duties regarding this program, the negotiations, the deal,
et cetera?
Mr. Countryman. As you know, the negotiating team was small
and worked very well. I provided a couple of my experts for
technical support.
Mr. Perry. Okay. So you are fully aware of what was
happening and who was doing it, even though you weren't there,
you provided the experts that you knew when things were
happening, who was talking to whom those types of things? Yes?
Mr. Countryman. Yes, sir. I knew when people were talking
to each other. I did not know a lot about the substance of what
was being discussed in the negotiations.
Mr. Perry. Okay. So you knew when people were talking to
each other. And so then you knew when Ben Rhodes made the claim
that we were dealing with moderates in Iran, that that was
completely false? That was a fraudulent statement? You knew
that, because you knew the timeline, right? You started in
2011, and you provided expertise and then you would have known
that negotiations actually started in mid-2012?
Mr. Countryman. I know when negotiations began under the
previous Iranian presidency. I know when negotiations began
under President Rouhani's presidency. I did not know the
substance of it.
Mr. Perry. I didn't ask you. But you knew when that
happened, right? So when Ben Rhodes said that we were dealing
with--and sold this to the American people and the rubes up
here in Congress, right, us primitive people up here in
Congress that questioned the timeline, but you knew at that
time that that was a falsehood, right? I mean, you knew,
because you knew that it started in 2012 and Rouhani wasn't
elected until June 2013. So you knew that, right?
Mr. Countryman. I do not believe it was a falsehood. And
no, I did not know.
Mr. Perry. You did not know that?
Mr. Countryman. And there is no secret, there was nothing
concealed here. At the time of the preliminary agreement signed
in 2013----
Mr. Perry. You knew that negotiations started in 2012,
right? Did you know that?
Mr. Countryman. Did I know the instant they began? No.
Mr. Perry. Did you--okay. So around sometime mid 2012,
maybe December 2012--but some time in 2012, right, you knew
that, because you were providing material as well, right?
Mr. Countryman. I was providing an expert who gave advice
to the negotiation team.
Mr. Perry. But did you know or didn't know?
Mr. Countryman. Did I know what, sir?
Mr. Perry. When negotiations started generally speaking
based on that? When did you provide the individuals that
helped?
Mr. Countryman. Generally speaking, I knew.
Mr. Perry. Generally speaking, you knew. So, and you also
knew, I am thinking, that Rouhani wasn't elected until June
2013? Right? Right?
Mr. Countryman. Yes, sir.
Mr. Perry. Okay. So then when Ben Rhodes made the statement
that we were dealing with the moderate in Rouhani----
Mr. Countryman. At what time did he make this statement?
Mr. Perry. He made the statement throughout the
negotiation, because that was what we were supposed to accept
here, even though many of us did not and questioned that.
Did you know then?
Mr. Countryman. In 2013, when the JCPOA, the interim
agreement with Iran was concluded, there was extensive briefing
to Congress and to the press about the history of contacts
between Iran and the United States.
Mr. Perry. Leading up to that, we had questions about that,
and the word was that we were all supposed to accept it that
these were moderates and this is where the negotiation began.
And I am not saying you came to Congress and said that, but you
knew that that was not necessarily the case?
Mr. Countryman. I strongly disagree, sir.
Mr. Perry. You did not know that?
Mr. Countryman. I have not heard false statements from the
White House. I have heard a lot of statements during the
discussion of this agreement, but not false ones from the White
House.
Mr. Perry. Did you make any statements in support of the
claim that this administration was negotiating with moderates
from Iran on this deal? Did you make any of those statements?
Did you support----
Mr. Countryman. Not that I recall.
Mr. Perry. Did you support any of those statements in any
of the statements that you made? Did you support that?
Mr. Countryman. Not that I recall.
Mr. Perry. Not that you recall.
Mr. Countryman. My focus has been on the substance of the
agreement and having done nonproliferation for 5 years, I see
an agreement that is the most detailed of any kind of arms
control agreement verification----
Mr. Perry. Well, Mr. Countryman, understand that while the
last questioner just outlined the fact that we are 36 months
late on triggers designation for sanctions, we have a trust
issue here. We have a trust issue between Congress and the
administration who objectively falsified the timeline when many
of us here knew it. And I think you could have said something
but you chose not to. For whatever reason, that is your
business.
Mr. Countryman. I have not seen a false timeline. I have
not seen----
Mr. Perry. Mr. Chairman, I yield back.
Chairman Royce. We thank the witnesses. We thank General
Scott Perry and the other members of the committee here for
their participation as well, and we will continue the dialogue
on this issue.
Thank you very much. I appreciate your attendance.
Mr. Szubin. Thank you.
Chairman Royce. We stand adjourned.
[Whereupon, at 11:58 a.m., the committee was adjourned.]
A P P E N D I X
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