[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
IRAN NUCLEAR DEAL OVERSIGHT: IMPLEMENTATION AND ITS CONSEQUENCES
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HEARING
BEFORE THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 11, 2016
__________
Serial No. 114-143
__________
Printed for the use of the Committee on Foreign Affairs
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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
Mr. John Smith, Acting Director, Office of Foreign Assets
Control, U.S. Department of the Treasury....................... 11
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Stephen D. Mull: Prepared statement................ 7
Mr. John Smith: Prepared statement............................... 13
APPENDIX
Hearing notice................................................... 56
Hearing minutes.................................................. 57
The Honorable Jeff Duncan, a Representative in Congress from the
State of South Carolina: Material submitted for the record..... 59
The Honorable Gerald E. Connolly, a Representative in Congress
from the Commonwealth of Virginia: Prepared statement.......... 64
Written responses from the Honorable Stephen D. Mull to questions
submitted for the record by the Honorable Michael T. McCaul, a
Representative in Congress from the State of Texas............. 66
IRAN NUCLEAR DEAL OVERSIGHT: IMPLEMENTATION AND ITS CONSEQUENCES
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THURSDAY, FEBRUARY 11, 2016
House of Representatives,
Committee on Foreign Affairs,
Washington, DC.
The committee met, pursuant to notice, at 10:04 a.m., in
room 2172 Rayburn House Office Building, Hon. Edward Royce
(chairman of the committee) presiding.
Chairman Royce. This hearing will come to order. This
morning the committee continues our extensive oversight of the
Obama administration's nuclear agreement with Iran, and its
consequences for the national security of the United States,
the consequences also for our allies. As you may know here, I
feel those consequences are quite dire.
January 16th was ``Implementation Day,'' and that marked an
historic turning point in the Middle East because in a snap,
Iran's record was cleared, its pariah status was dropped, and
this reconnected Iran to the international trade and financial
system. Now, with access to $100 billion in unfrozen assets and
sanctions wiped away, Iran has instantly become the dominant
country in the region. The regime has achieved this all without
having to end its aggression against its neighbors. It still
calls for the overthrow of the governments in Bahrain and in
Saudi Arabia and in other regional states. It has done it
without swearing off on its support for terrorism.
And the Iranian economy was, frankly, prior to this
hemorrhaging--hemorrhaging because the sanctions which we had
pushed had worked. The sanctions we pushed in 2010 and 2012 had
led by 2013 to the implosion of the economy there. Now, now
Iran's leaders are predicting swift growth. And they are
probably right, because we see these European countries that
have observed that the sanctions dam is broken, and they are
sprinting into the Iranian market to cut billions in deals and
to invest there, and they are making a mockery of the
administration's claim that sanctions could ``snap back'' if
Iran cheats. You tell me if these companies are going to turn
back when Iran stiffs international inspectors.
The Revolutionary Guards, already Iran's ``most powerful
economic actor''--now those are the words of our Treasury
Department--the ``most powerful economic actor,'' why would
that be the Iranian Guard? Because they are the ones that
nationalized the construction firms and the companies. So they
are only going to grow more powerful with this additional
international investment.
Just hours after the agreement's implementation, the regime
disqualified 2,967 of roughly 3,000 moderate candidates from
running in the parliamentary elections later this month. And
after the administration finally responded to Iran's missile
tests with very minor sanctions, very de minimis sanctions,
Iran's ``moderate'' President, as he is called, ordered the
military to accelerate its intercontinental ballistic missile
program. That is aimed here--at the United States--and it is
designed to carry a nuclear payload. That ICBM program that
they are running where the Ayatollah says it is every
military's mission to help mass produce, and duty to help mass
produce, ICBMs.
Now worse, the administration continues to go out of its
way to appease the Iranian regime, and even thanked Iran after
it recently seized 10 U.S. sailors in a highly provocative act,
if you ask me. I mean when was the last time we have seen U.S.
sailors taken off their ship with their hands behind their
heads, guns trained on them, their ships stripped, photographs
for propaganda purposes taken, photographs of one of these
sailors crying appearing in the Iranian press, and then medals,
medals given to those Iranian agents who took them into
custody.
It appears the administration is determined to protect this
deal at all costs. And just look at how the Obama
administration backed away from a new bipartisan U.S. law
ending visa waiver travel for those who travel to Iran, Iraq,
Syria, after an outcry, after an outcry from the Iranian
regime. And the administration has now decided to basically
ignore the laws--and Iran's ongoing sponsorship of terrorism--
by stretching a narrow national security waiver far beyond
reason. President Obama signed this bill into law, but has
essentially allowed Iran's Supreme Leader to veto it.
And in an unusual move, the State Department settled a
decades-old financial settlement the day after ``implementation
day,'' sending the Iranian regime a check for $1.7 billion. As
you know, Mr. Ambassador, the committee eagerly awaits answers
from the State Department to the many questions surrounding
that surprise payment. The administration had countless
opportunities to seek committee input to this matter in
advance, but purposefully did not do so. That's the conclusion
I have to reach.
Iran has never complied with any, any of its past nuclear-
related agreements. We are watching this to see if this time it
will be different. But even if Iran meets all the
administration's expectations, in a few short years the accord
will leave it the dominant power in the Middle East, and only
steps away from the capability to produce nuclear weapons on an
industrial scale. All the while--and this is the most vexing
part to me--all the while, Iran's leaders continued on Friday
to chant ``Death to America.'' Many of us are struggling to see
how this tilt toward Iran makes us safer.
I now recognize the ranking member for any opening comments
he may have.
Mr. Engel. Thank you, Mr. Chairman. And thank you again for
calling this hearing.
Ambassador Mull, welcome to the Foreign Affairs Committee,
Mr. Smith. I know, Ambassador, your current role is the latest
stop on a distinguished career as an American diplomat. And no
matter whether we supported the Iran deal or opposed it, we are
fortunate to have you as our point person on implementation and
we are grateful for your service.
Mr. Smith, welcome to you. Thank you for your service. Your
office has led the way in cracking down on some of Iran's worst
offenses. In my view, Treasury could be doing even more if we
had an Undersecretary for Terrorism and Financial Intelligence.
But the nomination of Adam Szubin is bogged down in the Senate
Banking Committee, despite the urgent need to cut off Iran,
ISIS, North Korea, and others from their resources. The Senate
should confirm Mr. Szubin immediately.
This is far from the first time the Foreign Affairs
Committee has held a hearing on Iran. We have held many
hearings. We understand exactly what the deal was and is. But
today's hearing is distinctly different from any we have had
before because the Iran deal has been implemented, nuclear-
related sanctions have been lifted, and Iran no longer has
enough fuel to make a nuclear weapon.
Again, no matter what anyone's position was on the Iran
deal--and I strongly opposed the Iran deal--this ship has left
port, and now we need to decide which course to chart. One
option would be to continue bringing up legislation designed to
undermine the deal. The House has passed two bills like this
already, largely along party lines. These are symbolic votes,
none that have become law. In my view, they are not a valuable
use of this committee or Congress' time.
So I don't think we should treat the Iran deal the way we
have dealt with the Affordable Care Act, voting again and again
to repeal it even though it is a settled issue.
Again, I didn't like it. I voted against it but it passed.
So there is another option. And the other option, the one I
support, is to work in a bipartisan manner to hold Iran's feet
to the fire and ensure there are serious consequences with
nefarious behavior. There is a lot we can and should be doing,
and I am confident that we can work across the aisle to find
common ground that we can build on.
Iran remains the world's most active state sponsor of
terror and a chronic human rights abuser. Iran continues to
break into national law with impunity. We don't trust Iran, and
our policies must reflect that. That is why I am glad we
slapped new sanctions on Iran for testing two medium range
ballistic missiles late last year, tests that were a blatant
violation of the U.N. Security Council Resolution governing the
nuclear deal.
And there are other problems we need to address. An Iran
freed from most sanctions can spread more resources to bad
actors throughout the region, strengthening the murderous Assad
regime, reinforcing Hezbollah, boosting the Houthis in Yemen,
and supporting Shia militias in Iraq. As the chairman pointed
out, it really is galling when after we sign an agreement with
Iran, they continue, their leaders continue, to yell ``Death to
America.'' It really is galling.
But we need to work together on new legislation that will
crack down on this other dangerous behavior of Iran and shore
up our allies and partners in the region. So, Ambassador Mull
and Mr. Smith, I look forward to hearing from you about the
implementation of the JCPOA, the monitoring and verification
that Iran is living up to its commitments, and what else we can
be doing with respect to Iran, outside the scope of the nuclear
deal, to help make our country safer and enhance stability in
the region.
Iran had sanctions lifted because of the nuclear agreement.
But there are a lot of things that Iran has not yet done, and
there are a lot of bad things that Iran is doing that I think
will warrant additional sanctions, for instance, Iran's
continued support for terrorism. That is not something we can
turn a blind eye to, and we shouldn't.
So we need to figure out the way we can be most effective,
what we can do in respect to Iran, again outside the scope of
the nuclear deal, because during the nuclear deal we were told,
well, we can't really talk about anything else, we can only
talk about the nuclear deal. And so, again, it is galling when
we look at Iran.
It is, I think the frustration that you heard from the
chairman is, frankly, the frustration that all of us have with
Iran, Iranians and with their bad behavior and with their not
changing at all after they sign an agreement, showing no good
faith whatsoever, poking us in the eye, continuing to walk on
the line and walk over on their own way. We really must hold
their feet to the fire.
So I look forward to your testimony, gentlemen.
Thank you, Mr. Chairman. I yield back.
Chairman Royce. Thank you, Mr. Engel.
So this morning we are joined by a very distinguished
panel. We have Ambassador Mull, who serves as the Lead
Coordinator for Iran Nuclear Implementation at the Department
of State. Prior to this appointment, Ambassador Mull served as
the Ambassador to Poland and as Executive Secretary of the
State Department.
Mr. Smith is the Acting Director of the Office of Foreign
Assets Control at the Treasury Department. Prior to joining
OFAC, Mr. Smith served as an expert at the United Nations al-
Qaeda and Taliban Sanctions Committee and as a trial attorney
at the U.S. Department of Justice.
Without objection, the witnesses' full prepared statements
will be made part of the record. And members here will have 5
calendar days to submit any statements or questions or
extraneous material for the record.
So, if you would, Mr. Ambassador, please summarize your
remarks. We will go to you first.
STATEMENT OF THE HONORABLE STEPHEN D. MULL, LEAD COORDINATOR
FOR IRAN NUCLEAR IMPLEMENTATION, U.S. DEPARTMENT OF STATE
Ambassador Mull. It is a pleasure, Chairman Royce, Ranking
Member Engel, and all the distinguished members of this panel.
I appreciate the opportunity to meet with you today to testify
on the progress we have had on implementing the Joint
Comprehensive Plan of Action, or the JCPOA.
This is a really important deal for America's security, and
that of our friends and allies around the world. And I welcome
Congress' oversight and partnership in making sure we get this
exactly right.
On January 16th, the International Atomic Energy Agency
issued a report verifying that Iran had completed its key
nuclear steps under the JCPOA, thus reaching Implementation
Day. Those commitments signified that Iran had dismantled two-
thirds of its installed centrifuge capacity, including all of
its most advanced centrifuge machines, and drastically rolled
back its enrichment program, which had been growing
exponentially over the past decade.
It shipped out almost all, about 25,000 pounds worth, of
its enriched uranium material. Going forward, Iran can possess
no more than 300 kilograms of up to 3.67 percent enriched
uranium for the next 15 years.
Further, Iran removed the core of its Arak reactor and
rendered it inoperable by filling it with concrete, cutting off
the path by which Iran could have produced significant amounts
of weapons grade plutonium.
Iran placed its nuclear program under an unprecedented and
continuous IAEA verification and monitoring regime, using
modern technologies like electronic seals and online enrichment
monitors that can detect and report cheating. The IAEA also has
oversight of Iran's entire nuclear fuel cycle, from uranium
mills to enrichment facilities and centrifuge production
plants, ensuring that Iran cannot divert nuclear materials to a
potential covert program without detection.
Furthermore, any goods and technology usable for nuclear
purposes must now go through a procurement channel administered
by the United Nations Security Council, creating yet another
layer of transparency, oversight, and monitoring into Iran's
nuclear program.
Iran is now also provisionally applying, as a result of
this agreement, the Additional Protocol to its Comprehensive
Safeguards Agreement with the IAEA. This, along with the
JCPOA's special provisions to address disputes regarding IAEA
access to an undeclared location within a short period of time,
ensures that the IAEA will have all the access it needs to keep
ongoingly verify Iran's commitments.
As a result of these actions, in keeping with the deal, on
January 16th the United States, the European Union, and the
United Nations Security Council lifted nuclear-related
sanctions against Iran, allowing the resumption of some
international commercial and investment activity with Iran. In
keeping with our commitments, we will not try to block
commercial activity that the JCPOA permits. However, we will be
closely monitoring it to be ready to act with the substantial
existing authorities that we still have as a government if that
activity supports goals that are hostile to our interests in
Iran's terrorism or in Iran's ballistic missile program.
All U.S. sanctions on Iran that are not nuclear-related
remain in effect. As evidenced just a few weeks ago when we
designated for sanctions a number of individuals and entities
for supporting Iran's ballistic missile program, the JCPOA in
no way limits our ability, or will, to use these tools to
respond to Iran's other destabilizing activities.
That is precisely why our allies and nations around the
world support this deal: It eliminates the threat of a nuclear-
armed Iran, it gives the international community unprecedented
tools to ensure Iran's nuclear program remains exclusively
peaceful going forward, and it does not limit our ability to
respond to Iran's destabilizing policies and actions. In sort,
it makes the world safer for all of us.
Just a few weeks ago, Israeli Defense Forces Chief of Staff
Lieutenant General Gadi Eisenkot acknowledged that the JCPOA
reduces the immediate Iranian threat to Israel because it
``rolls back Iran's nuclear capability and deepens the
monitoring capabilities'' of the international community into
Tehran's activities. In those same remarks, Eisenkot also said
that he believes that ``Iran will make great efforts to fulfill
their side of the bargain.''
The JCPOA was not built on a prediction of what the future
will bring. It is built on a solid verification regime. And my
team and I will continue working every day to confirm that Iran
is living up to its JCPOA commitments or face the consequences.
The administration looks forward to continuing to engage
with this committee and with the Congress in general on this
important topic. I look forward to answering your questions
today.
Thank you.
[The prepared statement of Ambassador Mull follows:]
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Chairman Royce. Thank you, Ambassador.
Mr. Smith.
STATEMENT OF MR. JOHN SMITH, ACTING DIRECTOR, OFFICE OF FOREIGN
ASSETS CONTROL, U.S. DEPARTMENT OF THE TREASURY
Mr. Smith. Good morning, Chairman Royce, Ranking Member
Engel, and distinguished members of the committee. Thank you
for the invitation to appear today before you to discuss our
actions on Implementation Day of the Joint Comprehensive Plan
of Action, or the JCPOA, and our efforts to enhance and enforce
our Iran-related sanctions going forward.
I will be addressing the key steps that my office, the
Treasury Department's Office of Foreign Assets Control, or
OFAC, took to fulfill the U.S. Government's sanctions-related
commitments on Implementation Day. And I will address the many
Iran-related sanctions authorities that remain in place and how
we approach our responsibilities to enforce those authorities.
The JCPOA is a strong deal that protects the national
security of the United States and our partners and allies
overseas. And Implementation Day was a significant milestone of
the JCPOA. In exchange for Iran verifiably completing its key
nuclear-related commitments under the JCPOA, we lifted nuclear-
related sanctions on Iran.
We took our steps on Implementation Day only after the
International Atomic Energy Agency verified that Iran had
completed its key nuclear commitments under the JCPOA. The deal
gives us the necessary flexibility to respond to Iran if it
fails to comply with its JCPOA commitments, including the
ability to fully snap back international and domestic
sanctions. As the agency tasked with implementing and enforcing
U.S. economic sanctions, we are clear-eyed about the fact that
Iran remains a state sponsor of terrorism and continues to
engage in other destabilizing activities. We believe it is
crucial to continue to implement and enforce the sanctions that
remain in place.
On Implementation Day, the United States took action with
respect to sanctions in two key areas. The first, and most
significant, was to effectuate the lifting of nuclear-related
secondary sanctions, which are sanctions that are directed
toward non-U.S. persons for activity outside of U.S.
jurisdiction.
The second area concerns three relatively narrow exceptions
to our primary embargo on Iran, which remains in place. On
Implementation Day, OFAC issued a Statement of Licensing Policy
establishing a favorable licensing policy with respect to
exports or re-exports to Iran of commercial passenger aircraft
and related parts and services to be used exclusively for
commercial passenger aviation. We also issued a general license
authoring the importation into the United States of Iranian-
origin carpets and foodstuffs, and we issued a general license
authorizing U.S.-owned or -controlled foreign entities to
engage in activities involving Iran that are consistent with
the JCPOA and applicable U.S. laws and regulations.
To assist the public in understanding all the sanctions
modifications effective on Implementation Day, OFAC also
published on our Web site a summary of the actions we took, as
well as hyperlinks to documents that explain in detail the
contours of the sanctions lifting, including a guidance
document that describes in detail the lifting of the nuclear-
related sanctions and the sanctions that remain, a set of more
than 85 frequently asked questions, and information on the
changes that we made to the various sanctions lists.
While we have fulfilled our Implementation Day commitments
to lift the sanctions specified in the JCPOA, OFAC continues to
administer a robust sanctions regime targeting Iran outside of
the nuclear arena, and the range of Iran's troubling
activities. Broadly, the U.S. primary embargo on Iran remains
in place. This means that U.S. persons generally remain
prohibited from engaging in transactions or dealings with Iran
or Iranian entities, unless such transactions are exempt from
regulations or authorized by OFAC.
In addition, secondary sanctions continue to attach to the
more than 200 Iran-related individuals and entities on OFAC's
Specially Designated Nationals and Blocked Persons List, what
we call our SDN List, as well as any such persons we add to the
SDN List in the future. And Treasury remains fully committed to
using our existing sanctions authorities to target Iran's
support for terrorism, its human rights abuses, its ballistic
missile program, and its destabilizing activities in the
region.
Thank you. And I welcome your questions.
[The prepared statement of Mr. Smith follows:]
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Chairman Royce. Thank you, Mr. Smith.
Let me start, Mr. Smith, with the fact that you note in
your testimony that there are still hefty secondary sanctions
available for anyone who is connected to the IRGC or Iran's
support for terrorism. Why then haven't we been able to do more
on Mahan Air, which is the Iranian passenger airline that also
happens to be the favorite with the country's Islamic
Revolutionary Guard Corps?
The IRGC uses this particular company to ferry its weapons
and its personnel into Syria to aid the Syrian regime. And
after Quds Force Commander Soleimani flew to Moscow to enlist
Russian support for a counter-offensive to salvage the Syrian
regime, these flights to Syria actually increased. And so last
year your colleague at Treasury testified that regardless of
the deal, a foreign bank that conducts or facilitates a
significant financial transaction with Iran's Mahan Air will
risk losing its access to U.S. financial systems.
So, instead of more action to ground these planes as part
of a prisoner deal, the White House agreed to lift an Interpol
Red Notice against Mahan's chief executive and a senior manager
whom the U.S. Treasury said was responsible for the airline's
sanctions evasions operations. So if we are serious, we could
take immediate action against those financial institutions that
transact on this Iranian airline's behalf in Asia and Europe
and the Gulf, we should slap heavy fines on European and Asian
ground service companies working with the airlines. Are we
going to do that?
Mr. Smith. Sir, we have been very engaged around the world
on the question of Mahan Air. We have reminded our allies, our
partners and other third countries of the secondary sanctions
that remain with respect to Mahan Air.
We have continued to designate those entities that try to
support Mahan Air around the world. We did some designations
several months ago. We continue to look at those targets.
And we continue to engage with governments around the world
on the need to stop working with Mahan Air. And we are going
after the finances where we can. Yes, indeed.
Chairman Royce. Yes, but I have just got to point out, so
unless those heavy fines--I mean it is one thing to jawbone and
to say this--but in the meantime they are expanding their
operations. And in the meantime they are flying into Syria on a
regular basis. And you see what is happening in Aleppo in terms
of the encirclement of Aleppo. As that support comes in it has
very dire consequences in Syria.
And what I don't see is the push-back.
Let me give you another example. So what is the specific
national security interest that justifies this claimed waiver?
We know what happened. We passed legislation here that said you
don't get an automatic visa waiver. You have got to go through
the regular process so that we can check if you go to Syria or
you go to Iran or you go to Sudan, because those are state
sponsors of terrorism. By what logic does the administration
then do a carve-out? What is this national security interest
that justifies this waiver?
Does the U.S. have a national security interest in
supporting so-called legitimate business in Iran? This is the
argument the administration makes. Legitimate business in Iran,
the reality is, as your Treasury Department says, the
Revolutionary Guard Corps is the most powerful economic actor.
How does this justify going around the law that the President
signed simply because the Iranian's protested this?
Mr. Smith. Sir, I can say that with respect to the Iranian
Revolutionary Guard Corps, secondary sanctions continue to
attach. We continue to enforce those.
With respect to the Visa Waiver Program, I would have to
defer to my colleagues at the State Department.
Chairman Royce. Well, let me expand, explain, Ambassador
and Mr. Smith. What the administration should have told Iran is
stop supporting terrorism and this won't be a problem. Because
the way we wrote it is ``state sponsors of terrorism.'' But the
problem we are having is that Iran has not changed its course.
Iran is still supporting Hezbollah to the hilt, still saying
they are going to transfer 100,000, 100,000 GPS guidance
systems to help missiles and rockets held by Hezbollah--
provided by Iran, by the way--to better target cities inside
Israel.
But instead of doing that, instead of taking that stance,
you created an exception, the administration created an
exception. And, again, the President signed the law. It sounds
harsh, but it sure looks as if the Supreme Leader effectively
vetoed the bill that had been passed and signed.
Ambassador Mull. Mr. Chairman, the administration supported
the law, that legislation as it came through the Congress, to
amend requirements for the Visa Waiver Program as a means of
tightening the security of our borders, which is something very
important to the administration.
That law, the Congress included in that law a waiver
provision to allow waivers for those cases that affected the
national security of the United States. As a government, in
implementing that law we have to develop what the criteria are
for exercising what those waivers will be.
And I can tell you that none of the criteria that we
considered was how to promote greater business engagement with
Iran. It was really aimed at making sure that those people who
carry out important missions to our national security in Iran,
whether it is the IAEA inspectors who need to get into Iran to
verify that Iran is keeping its commitments, or to allow
journalists to go in and report----
Chairman Royce. That, that was not our objection. Our
objection is that the administration turned the concept of a
case by case waiver on its head. Under the law, the proper
question is, why is it in the national security interests of
the United States that this particular person be allowed to
enter the United States without a visa?
But you have boiled that down to, is this person involved
in so-called legitimate business in Iran, at a time when the
IRGC controls all the major businesses in Iran? A broad
category that was expressly discussed and then rejected during
the legislative process.
We had this debate. We had this debate with the
administration. We reached our consensus. This bill was signed
into law and then the Iranians objected. They objected because
they wanted more business with the IRGC and with these other
entities controlled by the mullahs and controlled by the
Iranian Revolutionary Guard Corps.
I should go to Mr. Engel. My time has expired. But thank
you very much, Ambassador and Mr. Smith.
Mr. Engel. Thank you, Mr. Chairman.
I think what you are hearing is the frustration that while
we seem to be in many instances talking tough about Iran, in
reality we are, our actions are far away from our rhetoric. And
that is a worrisome thing. We want to make sure that Iran's
feet are held to the fire. And we don't want loopholes to allow
Iran to wiggle out of the thing, wiggle out of their
obligations.
Let me ask, Ambassador Mull, the administration said that
on Implementation Day Iran would receive around $50 billion.
And the government spokesman in Iran claimed $100 billion was
released. Do we know exactly how much was released and where
the money is going?
Ambassador Mull. Our estimate really throughout this
process has been that Iran had slightly upwards of $100 billion
in frozen assets in international financial institutions around
the world. Of that amount, a significant portion of it, our
understanding is more than $50 billion, is already tied up and
committed to other debts, to trade deals that had stalled
because of those frozen assets. And that, in fact, those assets
really available of that slightly upwards of $100 billion,
about $50 billion would be available. That has remained our
assessment throughout.
Mr. Engel. Thank you.
Mr. Smith, President Rouhani recently toured Europe. And in
doing so, he is seeking to deepen economic ties, particularly
it seems to me between Iran and Italy and Iran and France. He
announced tens of billions of dollars in new economic ventures.
Are we expecting that Europe will hold a hard line on the
deal should Iran cheat, or I should say when Iran cheats? Do we
expect Europe to enforce snap back sanctions if Iran cheats,
when now it is becoming economically beneficial to have some of
the European countries having these deals with Iran? How much
can we count on them if and when Iran cheats--and I suspect
that they will--that Europe will forego some of its ventures
and slap economic sanctions on Iran?
Mr. Smith. Sir, I fully expect that Europe is going to
continue to remain a committed partner with us and our
sanctions programs. We have to remember that Europe had many of
these trade deals before 2010, before 2012, and yet Europe has
gone along with us. They have already sacrificed many of those
deals the first time around and cut those deals off in
compliance with the coordination that we have done and the
secondary sanctions that we have implemented in cooperation
with this Congress.
So I fully expect that Europe will continue to comply with
the deal that we have struck.
Mr. Engel. But the lifting of the arms embargo and the
lifting of the sanction against--sanctions against Iran's
ballistic missile program obviously could further destabilize
the region. When the arms embargo expires, Iran will legally be
able to ship weapons to Assad, to Hamas, to Hezbollah, and
international interdiction efforts will suffer greatly. And
after 8 years, countries will be able to sell Iran components
for its ballistic missile program.
It's galling, because during the entire negotiations we
were told that the only thing that was being negotiated was not
ballistic missile programs, just the nuclear question. And then
suddenly we find this, this clause stuck in which allows and
frees Iran from being banned from purchasing ballistic missiles
in 8 years, and others in 5 years.
So how will U.S. sanctions work to address this issue after
5 years and after 8 years?
Mr. Smith. I think part of the reason that you saw the
difference in what the U.N. would allow after years was the way
that we had all conceived of our sanctions. I think the U.N.
had looked at those sanctions, and those sanctions were imposed
at the U.N. and we got the U.N. consensus because those were
viewed as nuclear-related sanctions. So they were viewed at the
U.N. level as part of the nuclear-related file.
But I will tell you that the U.S. sanctions, our secondary
sanctions, continue with respect to the ballistic missile
program. We have all of the major Iranian components related to
the ballistic missile program on our SDN List. Secondary
sanctions remain on those individuals and entities. Which means
that any European or third country or other actor that deals
with Iran and deals with those entities with respect to the
ballistic missile program, even after 8 years, will still have
to contend with our secondary sanctions.
Mr. Engel. Let me, let me ask you my final question. What
has the response been from our allies in the Middle East since
Implementation Day? That would include Israel and the Sunni
Arab countries. What is the administration doing to reach out
to Israel and our Gulf allies, those who are obviously more
closely affected by the Iran deal, to raise their comfort
level?
Ambassador Mull. Thank you, Ranking Member Engel. In my
current capacity, since taking on this responsibility in
September I have met several times with senior Israeli
officials to hear their concerns. Secretary Kerry also
maintains a regular dialog, not only with the Israeli
leadership but also with our Gulf allies, on a regular basis to
address their concerns.
It is no secret that Israel was opposed to this deal. My
impression since the deal came into force is that they want to
work with us to make sure that it is implemented fully. That is
a partnership and a relationship that I welcome.
I intend to go to Israel in the next few weeks to continue
that dialog. Secretary Kerry most recently was in Riyadh to
meet with his counterparts from the GCC states to hear their
concerns. They have been supportive of the deal as well, but
they also want us to remain focused on Iran's destabilizing
activity in the region. And, of course, we will be.
Mr. Engel. Thank you, gentlemen.
Thank you, Madam Chair.
Ms. Ros-Lehtinen [presiding]. Thank you, Ranking Member
Engel.
In the 1990s previous CIA directors confirmed in
Congressional testimony that North Korea was selling missiles
and technology to Iran. In 2013 former State Department
Official David Asher testified before our committee that a
cooperation agreement signed in 2002 between North Korea and
Iran was the ``keystone''--his phrase--for the North Korea
designated nuclear reactor built by Iran proxy Syria, which was
destroyed in 2007.
And throughout the years there have been a litany of
reports confirming Iran/North Korea collaboration on nuclear
and ballistic missile technology, as well as the presence of
Iranian and North Korean scientists and technicians at the test
of these weapons in their respective countries. The United
States has repeatedly sanctioned North Korean and Iranian
entities for their collaboration on these issues.
Reports now indicate that Iranian scientists were again
present for North Korea's nuclear test in January. So I have
several questions related to that.
Ambassador Mull, what U.S. entities are tasked with
monitoring Iranian/North Korean collaboration on nuclear and
ballistic missile issues?
And if Iran acquires nuclear technical knowledge from North
Korea, and just the expertise, the know-how, the results of the
nuclear test, not actual nuclear-related materials, would Iran
be in violation of the JCPOA or any other sanctions against
itself or North Korea?
And, also, can you confirm if Iranian officials,
scientists, or technicians were present in North Korea for its
latest nuclear detonation on January 6th?
And moving to another topic under the JCPOA's Annex 3, the
civil nuclear cooperation, the U.S. and other P5+1 members are
obligated to cooperate in helping Iran develop its civil
nuclear program. Has the U.S. or any other P5+1 country begun
any transfers to Iran as part of this annex? And what has been
transferred? How do we reconcile some of these transfers with
prohibitions under existing U.S. law?
And, lastly, the U.S. no longer seems to care as much about
Iran's human rights atrocities and its support for terrorism
worldwide because the administration seems solely fixed on
giving Iran a good report card on complying with the nuclear
deal. If you could comment on that as well?
Thank you, gentlemen.
Ambassador Mull. Congresswoman, thank you very much for
those very topical questions which I will be happy to address.
You are right that through the years there have been
connections with Iran with many other parties--North Korea but
others as well--in developing the nuclear program that we find,
have found to be such a great threat against our interests,
interests of Israel and our other friends in the region.
So that is the reason that we took on this deal, to limit
the capacity for that program to pose a threat.
Ms. Ros-Lehtinen. So which are the entities that are tasked
with monitoring this? Which are they?
Ambassador Mull. Yes. So I can assure you, there are few
issues that get as much attention in the U.S. intelligence
community, our diplomatic attention, our military attention
than the nuclear threats from Iran, North Korea and elsewhere.
We will remain very much engaged, in fact, I would say even
more engaged now that we have very specific criteria by which
to judge Iran's compliance with this agreement.
Ms. Ros-Lehtinen. But can you confirm whether Iranian
officials were present in North Korea?
Ambassador Mull. I cannot.
Ms. Ros-Lehtinen. Okay.
Ambassador Mull. I will be happy to look into that.
Ms. Ros-Lehtinen. And if, if they acquire--if Iran gets
from North Korea not the actual materials but a lot of the
expertise, would that be a violation under JCPOA?
Ambassador Mull. The JCPOA spells out very specific
measurable commitments that Iran must meet: The number of
centrifuges, the number of enriched material that it has, the
extent of its reactor program.
Ms. Ros-Lehtinen. But if, if Iran gets know-how, advice, et
cetera, results from tests but not material itself, is that a
violation?
Ambassador Mull. North Korea is not specifically mentioned
in the agreement. However, in the agreement Iran committed to
refraining from all research aimed at developing a nuclear
weapon. If we had reason to believe they were not complying
with that, we have all the full range of our previous----
Ms. Ros-Lehtinen. And then just quickly, have we begun any
transfers to Iran on this, the Annex, the 3rd Annex, the civil
nuclear cooperation?
Ambassador Mull. That annex does not require civil nuclear
cooperation. It allows, as appropriate. The United States has
not provided any material. However, we will be co-chairing a
working group of the P5+1 that will review Iran's development
of a new Arak reactor to make sure that it does not----
Ms. Ros-Lehtinen. Mr. Smith, just one note. You are not
overlooking the human rights record, you're not overlooking
their support for terrorism throughout the region, throughout
the world?
Mr. Smith. No, ma'am. We continue to be very engaged in
Iran's human rights abuses and its support for terrorism. We
have already designated many of the principal actors in Iran,
many of the principal entities that have engaged in human
rights abuses. And we continue to follow the evidence.
Ms. Ros-Lehtinen. Thank you, sir.
Mr. Deutch of Florida.
Mr. Deutch. Thank you very much, Madam Chairman.
I want to touch on three, three different things. Thanks
for being here. I want to talk about the $100 billion in frozen
assets that are now available to Iran.
I want to talk about the secondary sanctions, U.S.
secondary sanctions on ballistic missiles, and sanctions under
the deal.
And, third, I want to talk about non-nuclear sanctions and
in the 300 individuals and entities that were de-listed on
Implementation Day.
So, first, on the issue of the funds, Ambassador Mull, you
explained that the $100 billion, that $50 billion is tied up
elsewhere and then $50 billion is available. Whatever the
ultimate numbers are, what are we doing to actually track that
money as it is released, since any of that money that flows
into the hands of those who are supporting terrorists would
then trigger terrorist sanctions or human rights sanctions?
Ambassador Mull. In this setting I can tell you that we
monitor it very closely, without going into too many details,
where those assets go as they are released. As General Clapper
testified earlier, a few days ago, so far it seems that most of
those funds are going into infrastructure, domestic
infrastructure projects to the extent that they are able to
monitor that.
But we have not seen a substantial change in levels of
support for terrorist actively. However, we remain very closely
focused on that. And through the sanctions that we have
remaining, a very strong toolkit of sanctions, we remain ready
to take appropriate, exact appropriate penalties when required.
Mr. Deutch. Good. I hope that--I appreciate that response
and I hope that we have an opportunity to continue to engage in
this discussion in this setting and in a classified setting.
Secondly, on the issue of ballistic missiles, Mr. Smith,
you talk about U.S. secondary sanctions applying even after 8
years. I am less concerned now about what happens after 8 years
than I am about what is happening right now. And right now Iran
has violated U.N. Security Council resolutions by testing those
ballistic missiles.
We have imposed sanctions. And I commend the administration
for doing so. But the JCPOA, the international component of the
JCPOA is founded upon a Security Council resolution. What, if
anything, can we expect the Security Council to do in response
to the clear violations of existing Security Council
resolutions and the JCPOA that Iran has engaged in by testing
these missiles?
Mr. Smith. So what I can tell you is that we still have
most of the major economic actors in Iran that have engaged in
ballistic missile testing and any of the work on that, we still
have them on our secondary sanctions list.
Mr. Deutch. No, I understand. The Security Council.
Mr. Smith. In terms of the Security Council activity, I
would probably defer to my State colleague.
Ambassador Mull. And that is, will the Security Council
remain focused on----
Mr. Deutch. We took these tests to the Security Council, as
I understand it. The Security Council looked at it. Then it
goes to the Sanctions Committee.
Where does it stand now? How likely is it that we are
actually going to see sanctions on what is a clear violation of
the U.N. Security Council resolution? And, if they don't
sanction when there is a clear violation, what confidence can
we have in their ability to carry out the terms of the JCPOA?
Ambassador Mull. Well, the Security Council, of course, has
a feature that was written into the founding treaty of the
Security Council where permanent members of the Security
Council have a veto. So, and we had raised in days after this
test our strong belief, Ambassador Power condemned this launch
as a violation of U.N. Security Council 1929, which we believe.
The Sanctions Committee agreed with that assessment.
Mr. Deutch. Okay.
Ambassador Mull. The Security Council has not yet won the
full agreement of all five permanent members to take
appropriate actions. But I will tell you, Congressman, we don't
counter the Iranian missile program just by relying on the
Security Council. We have a broad range of tools that we can
use for this.
Mr. Deutch. Ambassador, no, no, I understand that. And I
appreciate that. But it gets back to my main point here which
is under the terms of the JCPOA there is--we wrapped all of
these Security Council resolutions into a new Security Council
resolution that specifically includes the ballistic missile
section, which has now been violated. And, ultimately, we have
been told throughout, including this morning, that our allies
remain committed. Which this, I guess the question is, is that
just simply our closest allies? Is it no longer the P5+1? That
is a concern.
But I only have a little time left. And I would just like
to turn to my last issue which is, the companies that, the 300
individuals and entities that were de-listed on Implementation
Day, we have been told repeatedly that that list is being
scrubbed, and that if any one of those individuals or entities
should be sanctioned for violating either the terrorism--either
because they export terrorism or because they violate human
rights, that they would be sanctioned.
Where are we on the review? Have you identified any who
should be? And when will those sanctions be applied?
Ambassador Mull. Congressman, we, actually even before we
reached Implementation Day, although we have agreed to remove
400 entities from the so-called SDN List because of their being
put there for nuclear reasons, on Implementation Day while
removing them for the nuclear reasons, we added 200 of those
back onto our SDN List because of terrorism and other, other
concerns.
I can ask Mr. Smith to get into the details.
Mr. Smith. So what I can say is that when we took the 400
off, before we did that we did the comprehensive review of all
of them to make sure that we were comfortable with removing
them. But if we saw any support for terrorism, human rights
abuses, ballistic missiles, we kept those entities on.
Since that time we have continued to follow the evidence.
If there is evidence of any kind of activity that would violate
our sanctions that fall within the sanctions that remain, we
will act against those actively.
Mr. Deutch. I understand. But if I can just clarify. So are
you say--because this is, I didn't know this. You are saying
that of the 400 individuals and entities who were listed in the
agreement, 200 of them are still being sanctioned for terrorism
and human rights violations?
Mr. Smith. No. I should clarify this. As we removed 400
from the list because they were not related to terrorism, human
rights abuses, ballistic missiles or others, 200 of those were
marked by the Treasury Department before as Government of Iran
or Iranian financial institution. We still in the United
States, our U.S. persons are still obligated to block and do no
transactions with anyone that is identified as the Government
of Iran or the Iranian financial institution.
So those 200 that we put on a separate list, just a list
for U.S. persons to say these are Government of Iran or Iranian
financial institutions, no terrorism, no human rights abuse.
Mr. Deutch. Which I understand. I just want to know have
you--where are you in scrubbing the list of other names? And
when will you make a determination whether any of those other
individuals or entities should be subject to sanctions for
terrorism or human rights violations?
Mr. Smith. So the plan that we continue to have is that we
review all of the intel and all of the evidence that comes in.
We don't look at every name that is on our--we have 5,000 names
on our SDN List--we don't look at every name. We look at all of
the intel that comes in to see, does that affect any name on
our SDN List? Should we add a name for our SDN List?
So we work with our IC partners and the rest of the U.S.
Government to make sure we collect all the information, and if
it is sanctionable conduct, whether or not you were removed
from our list or you were never on our list, that is when we
take action.
Mr. Deutch. Has any action been taken?
Mr. Smith. We have taken action. We took action the day
after Implementation Day against a number of ballistic missile
supporters. We continue to work. We designated an al-Qaeda-
related entity yesterday.
We are continuing to work across the range of our sanctions
programs.
Mr. Smith of New Jersey [presiding]. The time of the
gentleman has expired. The chair recognizes himself.
My understanding is on the ballistic missile deal, they are
relatively low-level people. Let me ask you with regard to
the--and a simple yes or no would be very helpful--the Iran
Sanctions Act expires, as you know, on December 31st of this
year. Will the administration support legislation simply
extending the Iran Sanctions Act so that nuclear-related
sanctions it provides can be snapped back if Iran cheats?
I know there has been some talk already that talk of that
is premature. I absolutely disagree. We need to set this as
just a straight reauthorization for it.
Secondly, in terms of enriched uranium, exactly what can--
and, Ambassador Mull, this will be to you, of course--what can
5,060 centrifuge machines actually produce? Does it constitute
any threat whatsoever? And if they build more machines, how can
we be sure that that has or has not happened?
You have testified that Iran shipped almost all of its
estimated uranium stockpile out of the country, leaving behind
no more than 300 kilograms over 15 years in Iran. Could you
tell us exactly where Iran's enriched uranium has been shipped?
Who watches it? Who guards it? And is there any potential or
any concern that it could be clandestinely returned to Iran?
And, of course, I have raised this with Secretary Kerry in
the past, are there concerns that North Korea could be
providing such materials to Iran in a clandestine way?
And, finally, on the human rights issue, and I am going to
be chairing in my subcommittee another hearing on human rights
issues in Iran, they are despicable. It is one of the worst
violators of human rights in the entire world. The use of
torture, the use of executions, there are very few parallels.
North Korea comes to mind, and a few other countries. How many
individuals have been designated? Has the top Justice in Iran
been designated?
And we yield for your answers.
Mr. Smith. I will start with the last question on human
rights abuses. We have continued to designate under human
rights authority. But we designated all of the top actors in
Iran almost from the beginning. And so if you go down the list
on human rights, we have got the IRGC, we have got the Iranian
Ministry of Intelligence and Security. We have got all of the
major, the law enforcement forces, the Iranian Cyber Police,
the Center to Investigate Organized Crime. All of the major
actors in Iran that would have any involvement with human
rights abuses, we have designated.
The numbers are about 37 individuals and entities that have
been designated because we went after all of the big, big
actors.
Mr. Smith of New Jersey. How many in the past year?
Mr. Smith. None in the past year because we had already----
Mr. Smith of New Jersey. I see.
Mr. Smith [continuing]. We had already done the major
actors before that time.
Mr. Smith of New Jersey. And what is the consequence of
such a designation in your terms?
Mr. Smith. The assets are frozen in the United States. U.S.
persons are prevented from dealing with them.
But it also carries the secondary sanctions, so we can tell
third country entities, you deal with these individuals or
entities you----
Mr. Smith of New Jersey. And the response of those third
country entities?
Mr. Smith. If Europe tries to deal with any of those that
are designated human rights abusers, I mean I would say that
Europe has many of those actors still remaining on its
sanctions list, so we haven't see that conduct. But we would go
to anyone and say, you will be cut off from the United States
if you continue to deal with those actors.
Mr. Smith of New Jersey. And you are ready to do that. Have
you done that yet?
Mr. Smith. We haven't seen that activity. Those
organizations and individuals are not the ones that anyone is
trying to deal with at this time.
Mr. Smith of New Jersey. Ambassador Mull.
Ambassador Mull. Sir, on your nuclear-related questions,
the 5,060 centrifuges, IR-1 centrifuges that are permitted to
operate, the operational part of the agreement isn't on what
they produce, it is that Iran may not have more than 300
kilograms at any time in the next 15 years of no more than 3.67
percent relatively low enriched uranium. If Iran exceeds that
amount, it will face a response from the Joint Commission which
could feature being declared in violation of the agreement, and
then appropriate snap-back sanctions that could take--that
would be one of the consequences.
Secondly, if Iran builds or employs more than 5,060
centrifuges, they will also be subject to being declared in
violation of the agreement. These enrichment facilities are
under 24/7 monitoring by the IAEA, with cameras, with regular
visits. And we have a good handle on whether or not they will
be keeping those commitments.
In terms of other covert support, because there is full-
time IAEA monitoring of the entire fuel cycle within Iran, it
is impossible to introduce elements into that system without
being detected by the system, by the IAEA. That applies to
whether North Korea supplies material or anyone.
The material that Iran shipped out, that 25,000 pounds of
nuclear, enriched nuclear material, Russia took that under its
control. We obviously have many differences over many years
with Russia, but one of the features of our relationship is
pretty close cooperation on protection of nuclear material. We
do not have concerns that that material----
Mr. Smith of New Jersey. Do we have any on site
accountability? Can we go and verify ourselves or?
Ambassador Mull. We cannot.
Mr. Smith of New Jersey. We cannot. Who does?
Ambassador Mull. Well, we--I mean Russia has tons of
nuclear material and has for many years. Russia is responsible
for maintaining access and controls.
Mr. Smith of New Jersey. What town is it actually being--
where is the repository for it?
Ambassador Mull. I'm sorry?
Mr. Smith of New Jersey. Where has it been put?
Ambassador Mull. It has not been fully, according to our
information it has not yet been decided where exactly Russia
will put this.
Mr. Smith of New Jersey. Because if it has been shipped out
it has gone somewhere. It's not----
Ambassador Mull. It is still in the process of being
delivered in its entirety.
Mr. Smith of New Jersey. So it is not all shipped out yet?
Ambassador Mull. It is all shipped out. It all left Iran on
a ship.
Mr. Smith of New Jersey. But where did it go? I mean it has
to be somewhere.
Ambassador Mull. It is on a Russian ship, in Russian
custody, under Russian control.
Mr. Smith of New Jersey. Actually on the ship right now?
Ambassador Mull. I believe, if it has not arrived yet, it
will very soon. And it will be kept within control of Russian
facilities.
Mr. Smith of New Jersey. But again, we are then trusting
the Russians to say that they have it under their purview, that
they are watching it? I mean they are so close to Iran, they
have double-dealed us and especially the Middle East, the
Syrians, I don't know why we would trust them. Could you tell
us where it is going? I mean that is important. And then I
will----
Ambassador Mull. That is a Russian Government
responsibility to decide where it goes. We do not have concerns
about Russian custody of this material. What is important in
this deal is will it go back to Iran? And I can guarantee there
are sufficient controls in place that if one piece of dust of
that material goes back into Iran we are going to be aware of
it.
Mr. Smith of New Jersey. But again, can the IAEA go to that
ship and verify that it is there and follow it as it goes to
its final resting place?
Ambassador Mull. IAEA has different monitoring arrangements
with each, each country in the world.
Mr. Smith of New Jersey. I would not have confidence that--
I mean it is not even in a place, it is not in any city that
you say. It is not in any, it is not somewhere in Russia that
we could say there it is. We don't even know where it is.
Ambassador Mull. The IAEA verified the loading of all of
this material onto the----
Mr. Smith of New Jersey. But loading and where does it end
up is very important.
Ambassador Mull. That is the Russian Government's
responsibility to decide where it goes.
Mr. Smith of New Jersey. That is a flaw, in my opinion.
And the yes or no on the Iran Sanctions Act?
Ambassador Mull. On the Iran Sanctions Act we are, you
know, we remain ready to work with the committee to decide on
when and if it should be properly reauthorized.
Mr. Smith of New Jersey. I think it is our opinion, many of
us, not everyone, is that if you want snap-back sanctions and
you want to continue the accountability regimen you have got to
have the Iran Sanctions Act. I don't know why it is not a
simple yes. I think we are talking about straight
reauthorization.
Brad Sherman.
Mr. Sherman. The entire country has been captivated by
ISIS. The beheadings on YouTube provoked us all. But the Shiite
extremist alliance based in Tehran is more dangerous and more
evil. They have killed far more Americans, hundreds in the
1980s in Lebanon, hundreds in Iraq and hundreds in Afghanistan,
from Iranian-provided IEDs.
This alliance of Iran, Assad, Hezbollah and the Houthi is
racking up victories in the Middle East now. They are not just
more evil because they kill more--they killed more Americans.
They are responsible for the deaths of 200,000 Syrian
civilians. The difference here is that Assad, supported by
Iran, and by the money that Iran now has available, when ISIS
kills 50 people they put it on YouTube, when Assad kills 100,
kills thousands he has the good taste to deny it.
Now, this nuclear deal was not supposed to be a ``get out
of jail free card'' for everything that Iran does. We have our
Section 301 and Section 302 of the Iran Threat Reduction Act
that I worked with our former and present chairman on. You have
only designated 70 entities under 301. But just as important,
under 302 you have not sanctioned a single business that I can
identify, for doing business with the Iran Revolutionary Guard
Corps, an entity that puts new blood on its hands every day in
Syria.
Mr. Smith, what is the most prominent or well-known company
that has been sanctioned for doing business under Section 302,
for doing business with the Iran Revolutionary Guard Corps.
Mr. Smith. Sir, I am sorry, I would have to get you that
information.
Mr. Sherman. I got the information: Zero point zero.
Mr. Smith. We have done a significant amount of IRGC
designations. IRGC is the----
Mr. Sherman. Designations are nice. What about sanctions?
Mr. Smith. Designations are sanctions, sir. Designations
under this accord----
Mr. Sherman. I am talking about secondary sanctions.
Mr. Smith. So when we designate an IRGC, you have the IRGC
label on our Web site then if we designate that you have that--
--
Mr. Sherman. Okay, look, the IRGC isn't trying to do
business in the United States. The IRGC is getting its supplies
from companies in Europe. Which European companies have you
sanctioned for doing business with the Iran Revolutionary Guard
Corps.
Mr. Smith. When we designate an IRGC and we put an IRGC
tag, that carries secondary sanctions.
Mr. Sherman. Have you imposed these secondary sanctions,
Mr. Smith, or can you just--the filibustering is supposed to go
over on the Senate side.
Mr. Smith. The answer is if they carry secondary
sanctions----
Mr. Sherman. Have you designated, have you imposed a
secondary sanction on any business in Europe?
Mr. Smith. We do not have to because the European actors
have moved away from that business.
Mr. Sherman. And none of them are doing business with the
IRGC?
Mr. Smith. I have not seen evidence of European actors
continuing to deal with the IRGC.
Mr. Sherman. Okay. What about South Asian and East Asian
actors?
Mr. Smith. I haven't seen----
Mr. Sherman. Nobody is doing it? Okay, because the Treasury
Department has announced that the IRGC is this huge economic
monolith. You have only designated 70; there are lot more
fronts for you to designate. But you say it is this huge
economic, and yet you can't find a single East Asian, South
Asian or European company that is doing business with them.
Let me move on to Air Mahan, another designated entity, the
airline of choice for the Iran Revolutionary Guard Corps and
for thugs going to Syria to kill people. They are flying Airbus
aircraft into friendly countries in the Middle East and Europe.
That, those Airbus aircraft have U.S. technology on it. What
have we done to prevent those aircraft from being received in
those friendly cities?
Mr. Smith. A number of agencies of the U.S. Government,
including Treasury, Commerce, State, and others, have been
actively engaged to try to prevent Mahan Air from being able to
fly.
Mr. Sherman. Have we stopped anything or are we just
sending letters?
Mr. Smith. We have stopped.
Mr. Sherman. Where have we stopped Mahan?
Mr. Smith. I don't think I can say in this setting. But I--
--
Mr. Sherman. Can you get that to me confidentially?
Mr. Smith. Yes.
Mr. Sherman. We haven't--let's face it, they are flying
into an awful lot of European and Asian and Middle East
friendly cities. Why haven't we nailed a single bank for doing
business with Mahan? No secondary sanctions on any bank?
Mr. Smith. We continue to try. We continue to do what we
can to follow the----
Mr. Sherman. But we can't find a single bank that is doing
business with Mahan?
Mr. Smith. If we find the evidence, then we will go after
them.
Mr. Sherman. Okay. But you have found zero evidence of
any--I mean we are relying on the Executive Branch to enforce
this deal because you are able to monitor what Iran does. And
here is an example where you can't--you have got a major
airline doing business in dozens of cities, and you can't find
them doing business with a single bank.
Ms. Ros-Lehtinen [presiding]. Thank you, Mr. Sherman. Thank
you. Mr. Rohrabacher.
Mr. Rohrabacher. Thank you very much.
First of all, I would like to associate myself with the
concerns about human rights that Congressman Smith outlined.
And I, I would like to say that there are ways of approaching
the human rights issue that will have an impact for today.
There are other ways, other ways of approaching it that will
have a major impact for the future as well.
Let me just say that we have with us today folks in their
yellow jackets who remind us. They are here as testimony to the
fact that we have a brutal human rights abusing regime in
Tehran. They are here to remind us that they have families and
there are still people, whether it is in Camp Liberty or
whether it is in Iran itself, who are being held and being
tortured and being repressed by this Mullah government that has
the destiny--they have the, how do they say, the blessings of
God for these horrible crimes that they are committing against
their own people, and have been doing so for decades now.
If we are to have a nuclear-free Iran, and what we are
really trying to do is trying to stop this--we recognize now
the Shiite/Sunni split, and the last thing we want to see is a
nuclear exchange between Sunni Muslims and Shiite Muslims. This
is really almost a human--not just for our own national
security--it is almost a humanitarian effort on our part to try
to prevent that weapons system become part of that historic
fight between these two factions of Islam.
But let me just note that just the sanctions for human
rights abuses is not enough. And I don't believe that we are
doing it with the gusto or with the determination that we need
to, although you know more about that than I do, what the
potential use of this is. But that is one part of the human
rights approach.
The other approach is that we need to be supporting those
people, we are not just punishing those people who are
oppressing the population, but supporting those people in the
population who want to bring about a more democratic Iran and
want to, basically, sever the Mullahs from their iron grip that
they have on Iranian society.
Have we done anything, based on the fact that now we have
had this rapprochement on the nuclear issue with the Iranian
agreement, have we in any way stepped up support, direct
support for any group within Iran that is trying to make a more
democratic country?
Ambassador Mull. Congressman, thanks for the question. I am
afraid I will have to take that back for you. In my
responsibilities day to day, my job is focused exclusively on
making sure Iran meets all of its commitments, that it doesn't
get to have a nuclear weapons capability.
We remain gravely concerned about the human situation,
human rights situation in Iran. I think there is probably not
another country in the world who speaks up more often about our
concern and takes action through the international community,
through international organizations, as well as through our own
laws and authorities.
Mr. Rohrabacher. I am sorry, you folks wouldn't understand,
wouldn't know if we had operations going on this part of the
human rights issue, I mean challenging those people who are
challenging human rights and versus helping those people, like
the MEK and others, who are trying to overthrow this Mullah
dictatorship and which would create a better situation for
achieving all of our goals if we had a more democratic
government there.
Let me just say that that is, if we do not do that, if we
do not help those people who are struggling to build a more
democratic Iran, we are just postponing the time when Iran and
the Mullahs will have a nuclear weapon. Because our treaty that
we are talking about, how many years is it before it no longer
applies? Is it a 15-year event?
So instead of postponing, we don't need to postpone that
time. We have already postponed it long enough. We need to
eliminate that eventuality by making sure that we are
supporting the democratic elements, like the MEK and others,
and the Baluchs and the Azaris and others, and the Kurds in
Iran, who want to live a more free society.
So thank you very much, Madam Chairman.
Ms. Ros-Lehtinen. Thank you very much, Mr. Rohrabacher.
Mr. Connolly of Virginia.
Mr. Connolly. Thank you, Madam Chairman.
You know it is really, this is a fascinating hearing
because it is supposed to be on the implementation of the Iran
nuclear deal. And some of the most strident and loud critics of
entering into that deal at all are now focused on airlines and
Revolutionary Guard business activities and sanctions and
closing up banks and rather than the actual elements of the
nuclear agreement, which they were the first to say would never
work. They would cheat. The metrics weren't good enough. This
was enabling nuclear development by Iran.
So, Ambassador Mull, I am going to ask some questions about
the nuclear agreement and its compliance. So any evidence of
Iran cheating so far?
Ambassador Mull. So far, no. I can tell you, Congressman,
that in the 6 months or so I have been working on this in the
run-up to Implementation Day, whenever we detected that there
might be a potential for moving away from the commitments we
have engaged with our Iranian counterparts and they have
addressed those concerns every single time.
Mr. Connolly. Every single time. Okay.
Ambassador Mull. Yes.
Mr. Connolly. We are going to have to run through this real
quickly because I want to try to understand.
Let me see. One of the requirements of the agreement was to
modify the Arak heavy water research reactor so that it could
no longer produce weapons grade plutonium; is that correct?
Ambassador Mull. Yes, that is correct.
Mr. Connolly. And did they do that?
Ambassador Mull. Yes.
Mr. Connolly. What did they do to do that?
Ambassador Mull. They removed the core of the reactor and
filled it with concrete so it could not operate.
Mr. Connolly. Is that reversible?
Ambassador Mull. Not very easily, no.
Mr. Connolly. Is it observable?
Ambassador Mull. Yes, it was observed.
Mr. Connolly. So they complied?
Ambassador Mull. Yes.
Mr. Connolly. Pretty big deal?
Ambassador Mull. Yes.
Mr. Connolly. All right. They had 19,000 estimated
centrifuges. And they were required under the agreement to get
down to 6,104; is that correct?
Ambassador Mull. That is right, sir.
Mr. Connolly. Did they do that?
Ambassador Mull. Yes, sir, they did.
Mr. Connolly. They did?
Ambassador Mull. Yes.
Mr. Connolly. And was that observable?
Ambassador Mull. It was. It was verified by the IAEA.
Mr. Connolly. Oh, my Lord. All right.
They had full enrichment at Natanz and Fordow. What is the
status there?
Ambassador Mull. Natanz, enrichment at Natanz is
proceeding, as allowed by the agreement. All enrichment
operations at Fordow have been observably ceased.
Mr. Connolly. And what was the enrichment level before the
agreement?
Ambassador Mull. The highest amount that they enriched to
was 19.75 percent.
Mr. Connolly. 19.75; and is that weapons grade?
Ambassador Mull. No.
Mr. Connolly. And but they are required to get down to
3.67; is that correct?
Ambassador Mull. Yes, sir.
Mr. Connolly. So from 19 to less than 4?
Ambassador Mull. Yes.
Mr. Connolly. Did they do that?
Ambassador Mull. Yes, sir.
Mr. Connolly. Was that observable?
Ambassador Mull. Yes, it was.
Mr. Connolly. Can they quickly go back to 20 or 19?
Ambassador Mull. Only by breaking elements of the
agreement. And they would have to do so in places that are
under the full-time observation of the IAEA.
Mr. Connolly. Now did I understand you to say that their
stockpile of enriched uranium was in excess of 25,000
kilograms?
Ambassador Mull. 25,000 pounds.
Mr. Connolly. 25,000 pounds. And the agreement says they
can have no more than 300 kilograms; is that correct?
Ambassador Mull. Yes, sir.
Mr. Connolly. From 25,000 pounds to 300 kilograms. Did they
do that?
Ambassador Mull. Yes, sir.
Mr. Connolly. You are kidding?
Ambassador Mull. No.
Mr. Connolly. They complied again?
Ambassador Mull. Yes.
Mr. Connolly. And was that observable?
Ambassador Mull. It was observed and documented by the
IAEA.
Mr. Connolly. Hmmm. Now, they also had to agree that
centrifuge production in the uranium mines and mills would be
subject to IAEA international inspection at any time; is that
correct?
Ambassador Mull. Yes, sir.
Mr. Connolly. Have they complied with that?
Ambassador Mull. Yes, sir.
Mr. Connolly. Huh. So all those predictions of the end of
the world, Armageddon, the fact is we are just enabling the
nuclear development, it sounds to me, Ambassador Mull, that at
least so far we are not dealing with a perfect state, we are
not dealing with perfect behavior, there are lots of other
things we object to vehemently, but with respect to this
agreement so far they have, in fact, abided by it. Not cheated
that we know of. We have a pretty vigorous inspection regime.
We have metrics they have met. And it sounds to me like,
despite predictions to the contrary notwithstanding, they are
further away from a nuclear weapon today than they were before
the agreement. Is that correct? Would that be a fair assessment
from your point of view?
Ambassador Mull. That is undeniably true.
Mr. Connolly. Well, my Lord. So we can, you know, we can
decide we want to pillory the administration in one of the most
important nuclear agreements, in my opinion, in our lifetime. I
happen to draw the opposite conclusion of the Prime Minister of
Israel. The existential threat to Israel would have been
denying this agreement.
It is hard work to make an agreement. It is hard work to
make it implemented. It is hard work to validate it. It is hard
work to stick with it and oversee it. But so far it is working.
And thank God it is.
Ms. Ros-Lehtinen. And it is hard work to say that is
enough, Mr. Connolly.
And now we turn to Mr. Wilson.
Mr. Wilson. Thank you, Madam Chair. And I really appreciate
the extraordinary efforts of Chairman Ed Royce's leadership to
expose the increasing threats to American families by the Iran
deal. Additionally, I am really grateful this is a bipartisan
concern. We have heard it from Ranking Member Engel, Mr.
Deutch, Congressman Sherman.
And Ambassador Smith, Mull and Mr. Smith, I believe your
testimony today confirms American families are at greater risk
than ever, that the terrorists are better financed than ever to
achieve their goal of death to America and death to Israel. And
in fact, Mr. Smith, you admitted that Iran is a state sponsor
of terrorism. How could you not recognize that by releasing
$100 billion to a state sponsor of terrorism that a significant
amount of that money would be used to kill American families?
Mr. Smith. Sir, I think we thought that a state sponsor of
terrorism with a nuclear weapon was a far more dangerous threat
to the international community, its neighbors, and to the
United States. What I can say is that we put, through the
efforts of our sanctions, Iran is in a $\1/2\-trillion hole.
And what we released allows Iran to have about $50 billion,
much of which it needs to stabilize its currency and to have
any foreign trade whatsoever.
Mr. Wilson. And American families are at risk. In fact,
last month in Baghdad it was Iranian-backed terrorists that
kidnaped four Americans. And so they are not stopping. And they
may be kidnapping today.
I have still not forgotten 283 U.S. Marines killed in
Beirut by the Iranian regime. We should not forget that. I had
two sons serve in Iraq. Every day they are at risk of IEDs
provided by Iran. Dismissing this is incredible and putting
American people at risk.
And, Ambassador Mull, you indicate that Israel now supports
the agreement. This is in direct contradiction to every bit of
information that we have received from the Israelis themselves.
And so yes or no, does Israel support this or not?
Ambassador Mull. Congressman, as I said in my testimony,
the Chief of Staff of the Israel Armed Forces has publicly said
that the threat to Israel of a nuclear Iran has declined as a
result of this agreement. Does that mean that the entire
Israeli Government is happy with it? No. It is obvious they
have had serious concerns about it. But at the same time----
Mr. Wilson. Again, yes or no. But it is, hey, in a
democracy you will have, thank God Israel is a democracy so you
will have good people agree and disagree.
And back again to the development of intercontinental
ballistic missiles, Ambassador. There was virtually no response
as Iran continues to do that. There is only one purpose for the
ICBMs, as indicated by Congressman Engel, Congressman Deutch,
and that is to develop a capability of nuclear weapons to
strike America. Is there any other reason for ICBMs?
Ambassador Mull. Well, that is one of the reasons that we
undertook to rid Iran of the ability to attach nuclear payloads
to those missiles. Missiles, ICBM missiles can be used without
nuclear payloads; that is why they are still a threat to us and
our allies and why we are working hard against them.
Mr. Wilson. But, hey, but hey, the real use of an ICBM is
to use with a nuclear capability, not to make some type of
conventional attack. The American people are truly at risk. And
for this to simultaneously occur is extraordinary to me, and
there not be repercussions. And so over and over again we see
the American people at risk.
And then when you identify the IAEA inspections, is it not
true there is not an American on the inspection team?
Ambassador Mull. There are a number of Americans who work
in the IAEA.
Mr. Wilson. But not on this team itself?
Ambassador Mull. Americans do not travel to Iran; that is
correct.
Mr. Wilson. No. And what you have really described, and the
American people need to know this, no Americans, no Canadians.
What you are really describing is self-verification by the
Iranians of their own existence. And so I really am saddened by
what I hear today. And to me it just confirms what Lieutenant
General Michael Flynn, the former Director of the Defense
Intelligence Agency said, ``That the Middle East policy is one
of willful ignorance.'' And it is willful ignorance that I
think is putting the American families at risk. And I hope you
will change course.
There has been over and over again requests for what has
been done to enforce sanctions, to reinstate sanctions. I am
really grateful to be working on legislation with Congressman
Joe Kennedy--it is bipartisan--about zero tolerance for
violations.
I yield back my time.
Ms. Ros-Lehtinen. Thank you, Mr. Wilson.
Mr. Cicillline.
Mr. Cicillline. Thank you, Madam Chair. Thanks for calling
this event.
I thank Ranking Member Engel for at the beginning of this
hearing reminding us that this agreement has been approved and
now we have the responsibility to be certain that it is being
implemented properly and we prevent Iran from becoming a
nuclear power. And I think when you think about it, as you
said, Ambassador Mull, what the consequences would have been in
our efforts to push back on Iran in a number of ways in the
region because of their aggression and ongoing activity, it
would be a very different scenario if we were required to push
back on an Iran with nuclear capability and make, I think make
a difficult situation even more dangerous.
So I have three very specific questions. When the United
States began negotiating with Iran, the breakout time was a few
weeks to a few months, according to most experts. That plant I
would say would have enough enriched uranium to build a nuclear
weapon. How far is Iran from breakout now as a result of this
implementation?
Ambassador Mull. Sir, over the course of the last 3 months
Iran has moved from breakout time of about 2 months to at least
1 year.
Mr. Cicillline. Okay. The International Atomic Energy
Agency is being asked to do some significant work in terms of
compliance with this agreement. And I actually wrote to the
President about this, urging that we be certain that we provide
additional resources to the IAEA to do this work.
I know that the administration's proposal provides a modest
increase. But I think the IAEA has already indicated that it is
not sufficient. Could you speak to the importance of making
certain that we, in a bipartisan way, allocate sufficient
resources, recognizing we don't fund the entire operation but
that we need to financially request of IAEA so they can do the
work that we are asking them or requiring them to do?
Ambassador Mull. Yes, sir. I am in regular contact with the
Director General of the IAEA, Yukiya Amano, to affirm that he
has sufficient resources for his agency to do a very important
job that is vital, vital to our national security interests.
And that he has assured me that in terms of the--its
responsibilities for the nuclear program it is fully funded and
has everything it needs for the rest of this year.
Obviously, we will continue and we very much welcome the
Congress' bipartisan support for making sure that the IAEA is
fully funded.
Mr. Cicillline. Well, and I think the request they made for
Fiscal Year 2017 is an increase of $10.6 million. So I don't
think that is reflected in the administration request, but I
think many of us are very concerned and want to be certain that
they have the resources that they need.
And, finally, I know there has been a lot of discussion
about the snap-back provisions and non-compliance by Iran, for
obviously the behavior of this country and its leaders give us
lots of reason to expect there will be some non-compliance. And
what I am interested in knowing is what work the administration
has done to deal with violations of this agreement?
While some people have argued if there is even the
slightest unintentional violation, the deal is off, that would
obviously result in the deal which will prevent Iran from being
a nuclear power from being abandoned, which doesn't give us the
result we want, to allow Iran to pursue its nuclear ambitions.
So there has to have been some conversation on what is the
administration's position about minor violations of the
agreement. Have we developed a grade of what those kinds of
things were? Have we communicated those to our European allies?
I know there is some discussion of zero tolerance if there is
anything, the deal is completely abandoned.
I would just like to know your thoughts on that, what the
administration is considering and how we should think about
sending a very clear message to the Iranians that any violation
of this comes with a punishment and a consequence, even if it
doesn't ultimately mean we reject the entire deal?
Ambassador Mull. Yes, sir. I can tell you that the JCPOA
allows quite a broad range of potential responses to violations
or contradictions to the agreement that range from a partial
reimposition of sanctions to full imposition of not only
bilateral sanctions, but those from the European Union and the
U.N. Security Council.
I am not sure that it would be helpful for me to speculate
here in terms of what each individual violation or
contradiction to the agreement would provoke because we think
that uncertainty of response is something that is a diplomatic
asset to us as we go forward. But I can tell you that,
generally speaking, the gold standard for us in deciding how to
respond it the breakout time that we talked about a few moments
ago, that if Iran's breakout time diminishes below a year, we
would consider that to be a very serious violation and work
with our allies to have the appropriate response.
Mr. Cicillline. And, of course, communicating to the
Iranians that it is the position of the United States that any
violation will be addressed and punished in an appropriate way.
Ambassador Mull. Yes, sir.
Mr. Cicillline. There is no, you know, death by a thousand
small cuts.
Ambassador Mull. Yes. Yes, sir. And I can assure you we are
in daily contact with IAEA on their evaluation of the situation
in terms of Iran's compliance.
Ms. Ros-Lehtinen. Thank you, Mr. Cicilline.
Mr. Cicillline. I yield back my time.
Ms. Ros-Lehtinen. Mr. Duncan is recognized.
Mr. Duncan. Thank you, Madam Chair.
First off, let me say that I hope history is right and
sides with Mr. Connolly's comments more than history did with
Neville Chamberlain's comments. And we will see. I hope that
Iran continues to comply. I hope that they don't have a nuclear
weapon because the consequences are dire.
I want to talk about the Visa Waiver Program law that was
passed as part of the Omnibus in 2015, December, as it relates
to the JCPOA. And I specifically want to point to negotiations
that went on from November 30th through the passage of the
Omnibus.
These were negotiations between the White House, State
Department, Homeland Security, and Members of the House and
Senate. During--on November 30th, DHS asked for certain waivers
for people to travel to Iran and Iraq in the post-March 2011
forward time frame. And the negotiations went on for quite some
time. On November the 1st--excuse me, December the 1st,
December the 1st, December the 2nd, December the 3rd an
agreement is finally reached. On December the 3rd the White
House notifies the Homeland Security Committee via email that
they support the negotiated text that does not allow visa
waivers for specific groups or categories. Okay? That is
December 3rd.
December 3rd at 10:37 in the morning, White House notifies
CHS, Committee on Homeland Security staff, that the State
Department has no further edits to that text. Okay? President
signed H.R. 2029 into law, which included the Visa Waiver
Program language.
December the 19th Secretary Kerry sends a letter to the
Iranian Foreign Minister stating that the U.S. will implement
the requirements of this law so as not to interfere with the
legitimate business interests of Iran. He ought to be talking
about the legitimate business interests and the national
security interests of the nation of the United States of
America, but that is what he said.
Then on January the 21st Homeland Security announced
implementation plans for the Visa Waiver Program enhancements
with five broad categories of waivers, including category
exemptions that were rejected, specifically rejected during the
negotiations by Congress through December the 2nd.
Are you familiar, sir, Ambassador, with the Visa Waiver
recommendation paper memo, white paper issued by the State
Department?
Ambassador Mull. I have seen many papers that were involved
in discussion of deciding what the administration's policy
would be in implementing case by case waivers. I----
Mr. Duncan. Well let me, let me, I will remind the
committee and you that during the negotiations the Congress and
the administration, including the State Department said they
agreed with the text and the negotiated text through the
passage of the Omnibus. And then shortly thereafter they issued
this white paper which talks about, it actually references a
second white paper called a legal paper within this document. I
have no idea what that is and we don't have our hands on that
yet.
But in this paper it specifically comes up with a rationale
for circumventing the will of Congress, as well outlined during
the negotiations, during the Omnibus and during the Visa Waiver
Program law, signed by the President. Before the ink is even
dry on that bill, they are issuing a white paper on how to
circumvent that with rationale.
I think it points to actually negotiating in bad faith in
December before an Omnibus if the State Department feels like
they are going to go around the will of Congress, to go around
these negotiations and actually allow the issue of waivers,
visa waivers for people that have traveled to Iran from
European countries.
To the simple point that part of it says this is one of the
questions they are going to ask, Madam Chairman, for someone
traveling on business purposes. Simple question: Was your
travel to Iraq--and this was the Iraq portion but I think it
applies to Iran as well--after March 1st, 2011? If yes, was the
travel exclusively for business purposes?
It is a pretty benign question to be asking. I mean there
is not a lot of opportunity for delving into what the business
was related to, who they were talking with. And going back to
Mr. Sherman's comments, as the negotiation--I mean the
conversation with Mr. Smith went on a minute ago about contact
with IRGC. We are talking about European businesses, not
American businesses, European businesses and business men and
women that are traveling to Iran, who may have contact with
Iran Revolutionary Guard, Quds Force, whoever, possibly come
back to their home country in Europe and apply for travel to
the United States under the Visa Waiver Program. And according
to the State Department, they are going to be given a waiver.
That goes against the will of the Congress, sir. We are
going to delve into this more, Madam Chairman. I wanted to say,
Mr. Chairman, I wanted to say all this on the record. And I
would ask that this document be submitted for the record for my
colleagues on both sides of the aisle to delve into this a
little further.
And with that I yield back.
Chairman Royce [presiding]. Without objection.
We go now to Lois Frankel from Florida.
Ms. Frankel. Thank you, Mr. Chair. Thank you, Ranking
Member for this hearing. And thank you, gentlemen, for being
here.
I have two sort of, I think they are sort of related
questions. First has to do with the snapping back the
sanctions. You know, we have read about a lot of economic
activity now with Iran, with other countries. So my first
question is, realistically, let us say we look 2 years ahead
from now or 3 years ahead from now and we had to do a snap-
back, what is the prospect of actually, actually getting back
to where we were before we lifted the sanctions?
That is the first question.
Second question I have is that, you know, we hear talk of
people--I am not going to get political--but there have been
Presidential candidates who have said, Well, if I get elected I
am going to immediately rip up the deal. And I would like to
know what you think the implications of that, of that would be?
Those are my two questions. Thank you.
Ambassador Mull. Thank you very much, Congresswoman.
In terms of a snap-back, if we get to a situation in which
Iran is not complying with the agreement and we decide to snap
back those sanctions, reimposing the secondary sanctions, as my
colleague Mr. Smith mentioned earlier, we have been down this
road before where our European or other partners have an
economic relationship with Iran, companies from those countries
do. But for whatever reason we decided to penalize and to force
those countries and companies to make the choice: Either you do
business with Iran or you do business with us.
Every single time they choose to do business with us
because it is a more profitable relationship. So I have no
doubt that if we decided to snap back sanctions, that we would
be effective in achieving that.
In terms of various interests, as some candidates have
said, that they might rip up the deal on a first day in office
of a new presidency, I would only say that I would advise
whoever the new President and his or her team would be upon
taking office, that to think very carefully about destroying a
deal if Iran has continued to comply, which has reduced its
breakout time, extended it from one, 1 or 2 months, to over a
year. Iran has drastically shrunk the amount of enriched
nuclear material that could lead to a bomb.
I am not, I am not sure I see what the benefit to U.S.
interests would be in freeing Iran from those commitments that
have made our interests much safer.
Ms. Frankel. Mr. Smith, did you want to answer?
Mr. Smith. I would just agree with what Ambassador Mull
said with respect to sanctions snap-back. The world knows what
we can do with our secondary sanctions, and I think they will
follow.
We are all very trained in what the secondary sanctions can
accomplish. And they know the force of U.S. law in this area.
Ms. Frankel. But I guess would it be safe, though, to--I
don't know if the word ``safe'' is correct--but I would assume
that even if you put the sanctions back in place immediately,
you are still not going to--it is still going to take a while
for Iran to actually feel the same impact that they felt before
they went to the table.
Mr. Smith. It may take some time before Iran feels
sanctions if they come back on. But we should remember where we
are today. Iran is in a $\1/2\-trillion hole because of the
sanctions that we have imposed over the course of time. Now
they are facing a drop in oil prices just as the sanctions
relief is coming into play.
What we are talking about is them getting about $50
billion, much of which they need desperately to prop up their
currency, to be able to do any foreign trade. So when you look
at the $50 billion that is relieved that they are getting
versus the $\1/2\-trillion they have, I think it is going to be
a very long time before Iran gets out from under the sanctions
burden that we have imposed.
Ms. Frankel. Thank you.
I yield back, Mr. Chair.
Chairman Royce. We go now to Mr. Perry of Pennsylvania.
Mr. Perry. Thank you, Mr. Chairman. Thank you, gentlemen
for being here.
I will tell you that I appreciated the very direct
questioning of Mr. Connolly and the very direct answers on very
specific items. But I would also tell you that in my view, Iran
has played long ball and we have played--we have been myopic.
And while this, I think it has been early to talk about
cheating on some of the specifics, but I do think in time that
they will get there.
And but I just see them as consolidating their gains in
Syria and Yemen and Iraq, and then using their ballistic
technology, completing that testing in that program over a
series of years to the point where when they are ready to be
nuclear there will be very little that we can do with it. And
that is the long ball and that is the long goal. I see Iran as
the regional hegemon.
But in that, within that context let me ask you,
Ambassador, a question here. The procurement channel in the
United Nations Security Council 2231 allow for nuclear articles
and dual-use articles to be provided to Iran from foreign
suppliers through a dedicated procurement channel. However,
some of the materials on dual-use list that can be supplied
through the dedicated procurement channel are critical for
Iran's ballistic missile program, such as carbon fiber. I know
you are aware.
So this is a simple yes or no question: Would Iran's
acquisition of carbon fiber outside of the dedicated
procurement channel so in here described be a violation of the
agreement and/or the U.N. Security Council resolution?
Ambassador Mull. Congressman Perry, I am sorry I can't give
a yes or no answer because each case would be dependent on what
exactly the intended use of any such materials through that
channel would be.
The United States has a veto in the procurement channel.
And so any time that we believe that an item is going to
improve Iran's ballistic missile program or is going to be
delivered in a way that is not subject to appropriate end use
monitoring, I can't imagine the circumstances in which the
United States would agree to a case like that.
Mr. Perry. Let me make sure I understand your answer. You
said it would be episodic; right? It depends on the, because of
the dual-use proposition. But then you kind of said, I think,
that the United States, understanding and recognizing that,
wouldn't be amenable to their procurement of that. Is that? Did
I characterize that correctly or not?
Ambassador Mull. Well, again, we would examine what is the
good that they are seeking to procure, what is the stated
purpose of its use, will it be monitored in a way that we are
satisfied that it won't be used in a way to harm our interests
across whatever.
Mr. Perry. I mean you know that they can't domestically
produce carbon fiber; right?
Ambassador Mull. As of now, yes.
Mr. Perry. And you know it is critical for their ballistic
missile program, I am sure.
And it is regulated through the procurement channel. So how
would it not be monitored if it is regulated through the
procurement? How would its use not be monitored?
Ambassador Mull. Well, according to the terms of
implementation of the procurement channel, any country that
wants to sell any material that is subject to controls of the
procurement channel, as part of their applying for permission
to proceed with the transaction they must explain how they are
planning to monitor the end, the end use.
I would also add that we have a number of other tools
outside of the procurement channel such as the missile
technology control regime that we will continue to----
Mr. Perry. I don't mean to interrupt but I have a limited
amount of time.
Ambassador Mull. Yes.
Mr. Perry. So Rouhani has already stated that it is their
intention to expand their ballistic missile program and that
they will have to gain access to carbon fiber elsewhere, and it
will not go through the procurement channel. Are you familiar
with that, that he said that?
Ambassador Mull. I am familiar in broad terms with what he
said about how he plans to develop the missile program, yes.
Mr. Perry. So if or when they do buy outside the
procurement channel, which then there is no--because it is
outside you don't know what they are using it for and there is
no inspection paradigm or verification paradigm associated with
that, would the administration consider that a violation of the
agreement and the Security Council resolution?
Ambassador Mull. So, Congressman, the, I mean what is
subject to the control of the procurement channel is a very
specific list of nuclear suppliers with annexes of potential
dual-use material and other essentially controlled nuclear-
related items.
Mr. Perry. Including carbon fiber?
Ambassador Mull. Well, it depends. It depends what exactly
is the use.
Mr. Perry. What does it depend on?
Ambassador Mull. What it would be----
Mr. Perry. They are going to go outside the procurement
channel, as stated by Rouhani.
Ambassador Mull. Sir, I can assure you that we will use
every technique at our, and every tool at our disposal----
Mr. Perry. Including considering it a violation----
Ambassador Mull [continuing]. Whether it is----
Mr. Perry. Including considering it a violation? Yes or no?
Ambassador Mull. Well, a violation would be if Iran
procures something on the nuclear suppliers' group list of
annexes outside of the procurement channel.
Mr. Perry. Including carbon fiber. So the answer would be
``yes.''
With your indulgence, Mr. Chairman.
Ambassador Mull. Yes. Yes, sir, carbon fiber.
Mr. Perry. Okay, thank you. I appreciate your time.
Mr. Chairman, I yield.
Chairman Royce. Thank you, Mr. Perry.
We now go to Mr. Alan Lowenthal of California.
Mr. Lowenthal. Thank you, Mr. Chair. And thank you,
Ambassador Mull and Mr. Smith for being so forthright in
answering questions.
I want to follow up on some of the questions that Mr.
Connolly has addressed. And I think this is really to you,
Ambassador Mull. And you have already, I think, described to us
about the removal of the core of the plutonium reactor. You
have already described to us about the shutting down of the
thousands of centrifuges, the shipping out of the country of
its highly enriched uranium in exchange for lower level nuclear
fuel for its nuclear power plants. I am going to follow up on
these questions.
And I am curious about the extraction of that highly
enriched uranium stockpile. If you can tell us how that was
done; it was sent out of the country? Where it was taken? What
steps we are taking to ensure that it is a permanent transfer
and that the Iranian regime will not be able to get its hands
on that or other highly enriched uranium in the future?
Ambassador Mull. Yes, sir. Thank you, Congressman
Lowenthal.
Iran agreed that it would remove virtually all of its
enriched nuclear material.
Mr. Lowenthal. Right.
Ambassador Mull. To keep that obligation, what it decided
to do was to negotiate with Russia the transfer of that
material out of Iran on a Russian ship into Russian custody,
without any claim of title to that information. So it has
surrendered this material to Russia.
Russia has committed to responsibly safeguard it within the
side, within its entire nuclear program that it has there, a
long history obviously, of maintaining and safeguarding nuclear
materials.
Mr. Lowenthal. Are we able to know, is there some way that
we can follow up on that? Or will we be monitoring and where
the Russ--both the Russians and Iranians are, so that that
enriched plutonium does never return back to Iran?
Ambassador Mull. Yes, sir. I mean we worked with the IAEA
through this agreement to make sure that any possible entry
point of nuclear material like that back into Iran could only
take place under the observation and monitoring of the IAEA. So
if there were some development by which someone tried to do
that, we would be aware of it, and we would consider that a
violation.
Mr. Lowenthal. And approximately how much was delivered to
Russia?
Ambassador Mull. About 25,000 pounds of enriched uranium
material.
Mr. Lowenthal. And what could 25,000 pounds of enriched
uranium do? How much, how much would it take to--of that to
develop nuclear weapons?
Ambassador Mull. None of that material. The highest grade
of enrichment of that material that was removed was at 19.75
percent. Nuclear weapons material, weapons grade uranium really
has to be at the 90 percent level or higher, highly enriched
uranium.
Mr. Lowenthal. I am going to follow up. You know, a lot of
us voted, and I was proud to support the agreement, but we had
concerns about the implementation. So that is why we are so
glad that the two of you are here today. And we are concerned,
as some of these questions have been raised, about Iran's other
non-nuclear trouble making, the security of Israel in the
region. These are all concerns. The Congress wants to stay
abreast of the compliance and any violations.
You know, in the letter in August to my colleagues from New
York, Congressmember--to New York Congressmember Mr. Nadler,
the President allayed many of these concerns and he detailed
his plan, which included committing a highly qualified senior
official with Ambassador rank to monitor them. That is really
your position now that has come up.
What I am interested in is in your role do you have all the
proper access and information that you are going to need? Are
there any things that you are going to need to regularly
report? And how often can we expect those kinds of interactions
with you to follow up on this?
Ambassador Mull. Yes, sir. I am at your disposal and at the
disposal of any Member of Congress to come down here any time
and answer any questions or concerns that you have. I feel
extraordinarily well supported by the entire administration. I
have regular, rich, frequent interactions with various
representatives of our intelligence community. I have access
regularly to Secretary Kerry, other senior officials in the
White House, who are very much focused on the implementation of
this deal.
So I feel very well supported. And I am, and my team and I
are----
Mr. Lowenthal. So you understand this is just a first, we
have just begun this process, and that you are--will be very
much agreeable to be coming back to the committee to reporting
on a regular, because I think it is critically important that
we stay in touch.
Ambassador Mull. Yes. Absolutely, sir, I think this is a
vitally important part of my job because you may raise
questions that I haven't thought of. And this is about the
interests of all of our country. So I very much want to be a
good partner for the committee.
Mr. Lowenthal. Well, I will be calling upon you.
Ambassador Mull. I look forward to it.
Mr. Lowenthal. Thank you. And I yield back.
Chairman Royce. Thank you, Mr. Lowenthal.
Now we go to Mr. Mark Meadows from North Carolina.
Mr. Meadows. Thank you, Mr. Chairman.
Mr. Smith, let me come to you with regards you are talking
about this trillion-dollar hole, that the sanctions have had
great effect. So let me just maybe narrow our focus a bit as it
relates to Hezbollah and the financing of Hezbollah.
I guess I know that you implemented some of these sanctions
in January, the announcement of the sanctions. But my question,
I guess, goes really to the heart of the matter and it is with
regards to Iran and are they financing Hezbollah in your
professional opinion?
Mr. Smith. I think we have seen Iran support Hezbollah over
time, yes.
Mr. Meadows. Are they today?
Mr. Smith. I haven't seen the latest figure. But I would--
--
Mr. Meadows. Well, within the last 6 months wouldn't you
agree----
Mr. Smith. We have seen Iran continue to support Hezbollah.
Mr. Meadows. So at what point would you consider putting
sanctions on Iran, whether it is through the executive order
that is in place or through the new law that the President just
signed into law in December, at what point will you consider
putting sanctions on Iran for supporting Hezbollah?
Mr. Smith. So Iran is already under a government blocking
from here. We----
Mr. Meadows. I am talking about, listen, I understand it. I
am talking about the additional tools that you have, at what
point will you implement additional sanctions as it relates to
Hezbollah and the financing that comes from Iran?
Mr. Smith. I will have to look at the evidence in the
future and see where it takes us. That is what we do, we follow
the evidence, and when we see evidence we continue to develop
targets to add them to our list.
Mr. Meadows. Well, but your testimony is is that the last
intelligence you had was that they are financing Hezbollah.
Let's be intellectually honest. I think we both know that they
are. Is it not true that the greatest benefactor of Iran's
support, or the greatest benefactor for Hezbollah is Iran?
Mr. Smith. That is a statistic that I am not sure that I
have. I don't want to go beyond what I can tell you.
Mr. Meadows. Can you give it to this committee and to the
chairman?
Mr. Smith. I think we could get that to you in perhaps
another setting, a classified setting.
Mr. Meadows. All right. So then under your professional
opinion, who might be a greater financier of Hezbollah other
than perhaps their illegal drug activities? What other state
sponsor could be greater than Iran?
Mr. Smith. Sir, I have already acknowledged that I think
that Iran has continued to do so. I just, I don't want to go
beyond my answer.
Mr. Meadows. The American people see pictures of sailors on
an anniversary today and they are offended. I am offended. And
if we have tools in place that can address it and you are not
using them, would you not believe that that is being
irresponsible?
Mr. Smith. Sir, we are continuing to use our tools. We are
continuing to designate. Virtually every month, every week we
are adding additional designations of terrorists. We did so
yesterday. I think we will continue to do so in the very near
future to oppose terrorism.
Mr. Meadows. But the big black hole here, Mr. Smith, is
Iran. We are going all around it. We have got over 100
individuals--and I agree with you, I have been following the
numbers--we are addressing it. But somehow Iran is getting a
free pass. And that is concerning to the American people.
Mr. Smith. I would disagree with you about Iran getting a
free pass. There are a number of agencies of the Government of
Iran that continue to be designated by the United States for
their support to terrorism, a number of significant individuals
that continue to be designated of the Government of Iran for
their support to terrorism. And those carry secondary sanctions
consequences.
Mr. Meadows. Ambassador Mull, let me come to you and follow
up on a question that actually came up yesterday. Some of your
colleagues behind you were there in a hearing at OGR as it
related to the Visa Waiver Program. Mr. Duncan of South
Carolina mentioned that. Under what, since you are responsible
for making sure that this JCPOA stays in place, was there
language in there that would allow Iran to actually participate
in our Visa Waiver Program, either directly or indirectly?
Because they are participating indirectly now. Was there
language in there that would suggest that they should enjoy
those benefits?
Ambassador Mull. Language in the, I am sorry, in the
legislation or in the----
Mr. Meadows. Well, we know there was in our language.
Ambassador Mull. Not in the legislation, sir.
Mr. Meadows. In the joint agreement. Because Secretary
Kerry came out and----
Ambassador Mull. Yes. Yes.
Mr. Meadows [continuing]. Very quickly said that we are
going to expand it to business-related activities----
Ambassador Mull. Right.
Mr. Meadows [continuing]. Which was not----
Ambassador Mull. Yes. So, Congressman, thank you very much
for the opportunity. I would like to address, I think this is a
critical misunderstanding that I really welcome the opportunity
to clarify.
The JCPOA, in that agreement all of the parties agreed that
they would not attempt to block legitimate business activity in
Iran. When this legislation was passed, the Iranians
immediately complained to me, to Secretary Kerry, accusing us
of violating the JCPOA through this legislation.
That is decidedly not the case. We explained to them that
this legislation was not aimed at disrupting Iran's business
activity, it was aimed at protecting America's borders. And it
was in that context that Secretary Kerry in fact defended the
legislation responding to this untrue charge that the Iranians
had leveled.
Mr. Meadows. I yield back. Thank you, Mr. Chairman.
Chairman Royce. Okay, we are going to go with Mr. William
Keating of Massachusetts.
Mr. Keating. Thank you, Mr. Chairman. I want to thank our
witnesses for being here today and thank you for your direct
answers to questions.
There is one area I just have left because we have covered
so much ground as a committee here this morning, and that is,
those are the issues for violations outside the JCPOA that we
were told during the whole process will be vigorously, you
know, pursued. We talked about some of the areas this morning
where that would be relevant, including support of terrorism,
regional destabilization, human rights abuses, and ballistic
missile programs.
And we do know that Iran tested a precision-guided
ballistic missile capable of delivering a nuclear warhead, in
violation of U.N. agreements. We are aware that the U.S.
sanctioned 11 individuals and entities responsible for
supporting these kind of activities.
Now, my question is this in terms of your oversight, in
terms of our ability as a committee to work with you and
communicate in monitoring this. And I know you can't be very
specific on this because of your leverage is sanctions in the
future.
But in these sanctions outside the JCPOA, can you just shed
a little light on how you work administratively with other
agencies of our Government? Can you just shed some light on the
process where you are determining what you give for sanctions
at a certain level, what factors are going to result in your
reviewing that and changing those sanctions, maybe escalating
them, whether it is continued violations, whether it is
continuing--How, how do you arrive at that?
How is that, how do you function administratively in
reviewing those, setting those, so that we have a better sense
going forward on these very important sanctions that are
outside the agreement?
Mr. Smith. Thank you, sir. I think that is a very important
question. I am happy to try to shed some light on it.
As I sit here today, we have teams of analysts at the
Treasury Department who are pouring through the intelligence
and other information that we have from a variety of sources.
The intelligence community, from the Defense Department, from
all of the agencies of the U.S. Government, they look at the
classified and unclassified information that is available and
they focus on the different sanctions programs that we have.
So I have a team that is working on terrorism, Hezbollah
sanctions, ISIL sanctions, everything in the terrorism realm,
whether it is Iran-related or not Iran-related, we follow the
intel.
We also have teams working on our Syria sanctions,
including any support to Syria, as well as anything dealing
with Yemen, destabilizing activities in the region, and also
teams that focus on the ballistic missile program. We gather
the evidence to see if we see anything that fits within the
sanctions program. And then, if we do, we start to develop a
case on it. We talk to the rest of the interagency so everybody
is on board so they know what we are doing.
We don't want to, for example, interrupt a sensitive
intelligence operation. We don't want to interfere with a law
enforcement operation. So we make sure that what we do we
communicate very well, so that when we roll out we are able to
roll out in the smartest, most effective way.
So basically we start form scratch developing the intel,
building cases, working with the team so that we can roll out
successive sanctions against the greatest threats for our
national security and foreign policy.
Mr. Keating. Yes. And in that process, what triggers
reevaluating things? Without getting into detail, because I
don't want to undercut the leverage you have, but I mean what
are the things that are important that you are looking at and
you say, you know, they are not reacting to these sanctions, we
are going to have to leverage this up? What kind of things are
you looking at?
Mr. Smith. I think we, we continue to look at our
experience across all of our sanctions programs. We have a good
idea of what is impactful. And that is why when we wanted to
have an impact on Iran in many of these other sanctions
programs, for ballistic missiles there are major entities that
do the ballistic missile program: SHIG, and SBIG, and MODAFL,
and all of the big names in Iran that are associated with the
ballistic missile program, we hit those. And then we go after
anyone outside of Iran that we see supporting that program.
So that is why last month we went after a UAE- and China-
based network that we saw that was supporting that program. So,
again, we follow the evidence to see what is going to have an
impact. And the evidence sometimes will suggest different
impacts for different programs. And so we try to get the
networks that are most critical to those bad activities.
Mr. Keating. So it is a dynamic situation, it is not, you
know, something which, that is incremental. Here we go, we are
going to impose this now. Let's see, it is continually being
evaluated; is that correct?
Mr. Smith. Those under sanctions know how to try to
circumvent them. And so we have to continue to evolve.
Mr. Keating. Well, thank you. That will help us as we go
forward. Because this committee is certainly going to be
concerned on these other violations going forward and how the
U.S. reacts. And this will help give us our ability to perform
the oversight function more properly.
So thank you very much. I yield back.
Chairman Royce. Thank you very much, Mr. Keating.
We go to Ted Yoho of Florida.
Mr. Yoho. Thank you, Mr. Chairman. Gentlemen, I appreciate
you being here.
In your opinion, I think we already know the question or
answer to this, Hezbollah they are, we could assume they are a
terrorist organization that carries out proxy work for Iran?
Agreed?
Mr. Smith. Yes.
Mr. Yoho. With Iran offering to put GPS technology on
100,000 missiles, would we assume that is for peaceful purposes
or terrorist purposes?
Mr. Smith. I will just say Iran's development of its
ballistic missile program is something that remains under
sanction by the U.S. Government, and we continue to go after
it.
Mr. Yoho. Okay, good.
So if they are supporting Hezbollah and giving this kind of
technology to over 100,000 missiles, we can assume that is
probably not for good reasons; right? I mean----
Mr. Smith. I am going to continue to follow the evidence.
And----
Mr. Yoho. Well, the evidence points that it is going there.
And, you know, if it walks like a duck, quacks like a duck, it
is a duck. This is, this is not a good thing.
And that brings me to the opening remarks of the chairman.
President Obama in the Rose Garden pledged to remain vigilant
and respond to Iran's continued sponsorship of terrorism, its
support for proxies who destabilize the Middle East, and
threats against American friends and allies.
Iran's destabilizing activity has continued in the wake of
the nuclear deal. Is that not breaching the JCPOA?
Ambassador Mull. Sir, the JCPOA is exclusively focused on
Iran's nuclear program.
Mr. Yoho. I want to take you to measure 28 of the JCPOA
which clearly states that ``Iran and the E3/EU+3 will commit to
implementing the JCPOA in good faith.''
If they are doing terrorist activity, is that in good
faith?
Ambassador Mull. Terrorism is outside the scope of the
JCPOA.
Mr. Yoho. What about the development of ballistic missiles
and the firing of those, are they outside of that?
Ambassador Mull. Yes, sir.
Mr. Yoho. What about breaching U.N. Security Resolutions
1929 or 2231, are they outside of the JCPOA agreement?
Ambassador Mull. Yes, sir. We deal with those problems in
other avenues.
Mr. Yoho. All right. But also, ``in good faith,'' that is a
part of the JCPOA. In good faith and constructive atmosphere,
based on mutual respect, and refraining from any action
inconsistent with the letter, spirit, intent of the JCPOA that
would undermine its successful implementation.
I mean we can argue which side of arming Hezbollah with
100,000 GPS-guided missiles, or firing medium range ballistic
missiles as they did on November 22nd, I think it was, or
November 20th, and then again on October 10th, which was before
the agreement went into place.
The point I want to bring out here, it is pretty clear the
intention of Iran is not to play, you know, abide by the JCPOA.
What they are doing, they are taunting. And for the
administration to release sanctions, I have a letter here that
we wrote that has over 100 U.S. representatives that asked the
President to hold off on sanctions. This was sent December 17th
of 2015 by over 100 members of this body, Republicans and
Democrats, that asked the President to look into this before we
moved further. And there was no response from the President.
And I think this is a travesty to our negotiating. And I
think it has weakened us. As we negotiate, I would only hope
that our Government as we negotiate is from a position of
strength that makes our country stronger.
Do you feel that this has made our country stronger, this
negotiation, and what we have seen the actions of Iran do with
the firing of these missiles, the firing of the missiles real
close to our Navy destroyer, the way they apprehended our
military personnel. And they make fun of them on the world
scene. I mean do you think that has made our country stronger?
Ambassador Mull. No. That activity was outrageous. I am
disgusted by those things.
Mr. Yoho. Okay. All right. So it has not made our country
stronger.
Do you think the Iran nuclear deal has made Iran stronger?
Ambassador Mull. I believe it has constrained Iran's
ability to develop a nuclear weapon and has made us safer as a
result.
Mr. Yoho. What about bringing up their money? You know, Mr.
Smith, you were talking about the $50 million or the 500, $\1/
2\ trillion they are in debt. If a country is a $\1/2\ trillion
in debt and they are screaming for economic release and relief,
would you think a country that is in that dire straits and
suffering that bad would be funding terrorist activity?
Mr. Smith. Iran had continued to fund terrorist activities
during the course of the sanctions programs----
Mr. Yoho. So how bad were they suffering? You know, I heard
that through the JCPOA agreement and I didn't buy it. I didn't
buy it then and I don't buy it now. And I hope what Mr. Duncan
said does not come to fruition. It will either be a Neville
Chamberlain moment or we can look back and say, you know what,
that was a Ronald Reagan moment. And I hope it goes the right
way.
I yield back. Thank you.
Chairman Royce. Thank you very much, Mr. Yoho.
We now go to Grace Meng of New York.
Ms. Meng. Thank you, Mr. Chairman. And thank you to
Ambassador Mull and Mr. Smith for being here and all your hard
work.
Since the JCPOA went into effect, Iran's hardliners have
taken pains to consolidate their economic and political power
and to sideline would-be reformists who are more amenable to a
rapprochement with the West. It was hoped that the openings
created by the JCPOA would engender Iranian moderation but,
instead, extremists have reaped the benefits while tightening
their grip and escalating their malign behavior.
Does the U.S. have a strategy to combat the retrenchment we
see on the part of Khomeini, his allies, and the IRGC?
I will just go through all my questions in the interest of
time.
How have Iran's terrorist activities been affected by the
JCPOA? I know that you mentioned that it was outside the scope
of the deal, but what do you know about if their support for
terrorism has increased or decreased?
Does the U.S. have an estimate of the amount of funding
that Iran provides to groups like Hezbollah? How are the funds
being transferred?
And if we see an Iranian bank transfer of funds for the
benefit of groups like Hezbollah, will the U.S. immediately
sanction that bank?
And if we are to go beyond sanctions, is the administration
pursuing any actions beyond sanctions to confront any of Iran's
problematic behavior in the region? And, if so, what are these
actions?
Ambassador Mull. Thank you very much, Congresswoman. In
terms of the impact of the JCPOA in the internal Iranian
political situation, you are right, many people have expressed
various views and hopes and aspirations and the impact that it
would have. But the principal reason for the administration to
pursue this has really been to diminish Iran's ability to build
a nuclear weapon. And in that so far we have exceeded
demonstrably by increasing Iran's breakout time to at least a
year.
So it wouldn't be appropriate for me to speculate. We are
not really implementing this deal to have a political impact on
Iran. It is all about protecting us from a nuclear Iran. And as
I said, in that we have succeeded.
In terms of penalizing Iran's destabilizing activity in the
region, we have a rich set of tools that we can use. And we, as
Mr. Smith has been describing, and I will let him address in
more detail, we have shown a readiness to do that. We have
penalized, most recently on January 17th, Iran's missile,
ballistic missile program. In the past few weeks we have
continued to sanction Hezbollah activities and people linked to
Hezbollah. And we will continue to do that at this point.
Mr. Smith. I would just add and say, Congresswoman, I don't
have the exact amount that Iran uses to fund terrorism. We can
go back and see. I think the intelligence community probably
has the best number working with the Treasury Department. But
that would be more of a classified figure that we would have to
provide in a different setting.
In terms of sanctioning Iranian banks for bad behavior in
support of terrorism, we have done it. We have sanctioned Bank
Saderat in the past for its support for terrorism. We will
continue to follow the evidence of support for terrorism,
ballistic missile support, destabilizing activities. And we
will develop packages and targets when we see the evidence.
Ms. Meng. And finally, but can we tell if the support for
terrorist activities and groups have increased or decreased and
the amounts?
Ambassador Mull. Again, Congresswoman, I think Mr. Smith is
right that I think we would be happy to go into more detail in
a different setting. But I do note that General Clapper
recently testified in the past few days that he has not seen an
appreciable change in Iranian level of support since the
implementation of this deal.
Ms. Meng. Okay.
Ambassador Mull. Support for terrorism.
Ms. Meng. Thank you. I yield back.
Chairman Royce. Thank you, Congresswoman Grace Meng.
Ambassador, Ranking Member Engel and I both mentioned
Iran's horrible behavior in the neighborhood. And that includes
Iranian-backed forces that threaten those at Camp Ashraf. The
committee raised this with Ambassador McGurk yesterday.
And I pass these concerns on to you. These individuals need
protection. The U.S. Government needs to guarantee that
protection. And we have seen what has happened of late in terms
of loss of human life there at the camp. So I would, I would
convey to you what I conveyed to him yesterday, to the
Ambassador yesterday, which is this needs to be a priority.
We appreciate the time of both of you as witnesses here
today before the committee. You heard the deep concerns that
many of our members have about Iran policy and how it is being
carried out. So I know that you will want to continue to be in
touch with members of this committee as we move forward.
And at this time we will adjourn the hearing. Thank you
again for your appearance.
[Whereupon, at 12:15 p.m., the committee was adjourned.]
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