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tv   Key Capitol Hill Hearings  CSPAN  July 31, 2015 12:00am-2:01am EDT

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last monday and at that moment iran sondos letter refuting the ability to use snap backs. the same letter outlines that extension of current sanctions would be in violation of the agreement. i know we had exchanged the other day where was asked if we had sanctions that are rolling off in 2016, and we just extended those of you would be something to snap back to. i know senator menendez has made a strong point about this. that itself would be in violation and iran would
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reconsider any imposition of new sanctions with any. >> translator: identical or similar to those that were in place prior to the implementation date irrespective of whether new sanctions are introduced on nuclear or other grounds. we have a number of very powerful sanctions that are being alleviated. most of us have felt that if for some of for some other reason iran was on the border we could reapply those sanctions against terrorism and human rights and other activities. i think there's a major debate over where that could happen and as a a matter of fact iran has said that occurred and i i will also say our partners in the west very strongly told me the same thing. recently they have been backing off of that little bit so i don't know exactly where that stands. those statements, the agreement itself and the lack of clarity from our demonstrations have left senators with unresolved questions. those include questions about the efficacy of u.s. secondary
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sanctions of congress reveals an important factor for us to be considering and they are bringing questions about whether the u.s. can we impose sanctions listed in the agreement should we need to use them for terrorism purposes. i am very honestly surprised to say that there are remaining questions about whether and not extending the iran sanctions would constitute a violation of agreement as i mentioned earlier. i see no reason why simply extending existing authority which could need a way in violation of the agreement the secretary lew and the iranians seem to think otherwise. i hope our witnesses will address these questions as well as expand on what you might see as a climate for doing business in iran. both of you spent time at the companies affected by the sanctions and if you could i would appreciate hearing any valuable takeaways. it's important to note that the sanctions this congress put in place are responsible for bringing iran to the negotiating table. in exchange for the suspension
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of virtually all of our economic leverage iran will over time get to develop an industrial scale internationally legitimate nuclear program. while this agreement is not intended to address terrorism many of us worry the agreement will prevent the u.s. from using economic tools to counter iranian regional aggression. our witnesses have extensive experience in both economic coercion and cohn-bendit and terrorism. i would appreciate your perspective on how this agreement could affect their ability to use sanctions in response to terrorism. secretary kerry said last week we are free to adopt additional sanctions as long as they are not a phony excuse for just taking the whole pot of past ones and putting them back. i worry that iran will not agree with our definition of phony and through this agreement the administration could inadvertently be hampering its own ability to combat iranian terrorism.
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in september we will have the opportunity to vote to approve or disapprove of the agreement. at its core that choice is whether this agreement merits congress voting to lift sanctions. thank you very much for appearing before committing their turn to our distinguished ranking member for his comments and look forward to a very good hearing. >> mr. chairman thank you for arranging this hearing. the deal with the sanction aspects of up of the joint jcp l.a. and i think -- thank our two experts in this area for sharing their thoughts and engaging our committee and the discussion so we can better understand the impact of the jcp l.a. as it relates to sanctions. yesterday we had about a helpful hearing that dealt with the overall effects of the agreement. i think we spent a good deal of time looking at the alternatives and if congress effectively rejects the jcpoa what would be
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the consequences. in that discussion we did talk about sanctions. i'm sure we will get back to the same impact today but i think today we want to concentrate on the sanction aspects of the agreement. ultimately the members of this committee be numbers in the united states senate and congress are going to make a decision on whether the benefits of the agreement outweigh the risks or whether the risk of the agreement outweigh the benefits to prevent iran from ever becoming a nuclear weapons state he that is our test in the sanctions have a major impact on our valuation of those issues. and let me first deal with an issue that i have raced since day one that the chairman raised again in his opening comments and i hope it will get your views on this. and that is it has been stated very clearly by this administration that we are not taking off sanctions as it relates to terrorism and human
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rights and their missile program. it's also been stated and i asked a direct question at the hearing last thursday if we have credible information that iran is violating our policies on terrorism. can we reimpose sanctions on specific organizations that have received relief under this jcpoa or the economic sectors that were affected such as the crude oil sales by iran. could we reimpose those types of sanctions and secretary lew said fairly directly the answer is yes depending on the circumstances if we can demonstrate the fact that it's related to terrorism. mr. chairman i asked similar chair -- questions to the representative of your office because we know it's going to require ultimately five of the eight votes in the commission that oversights this and their
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response was similar to what secretary lew said. in all fairness i'm relaying what the witness said to me but i am tempered by the language that the jcpoa. after all that is what we agree to. i've said frequently i'm more interested in what the jcpoa then there are preemie and say or for that matter are that matter our own illustrations words because we are bound by the language and be jcpoa as we go forward with it. it is says the e.u. section 29 the e.u. and its member states the united states consistent with respect of law specifically intended to directly and adversely affect the normalization of trade and economic relations with iran. then it says in paragraph 30 the e3 e.u. plus three will not apply sanctions or restrictive measures to entities engaging in activities covered by the lifting of sanctions provided for in this jcpoa and then there
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are some qualifications in the jcpoa. i'm not suggesting that so what i hope we will get into a discussion today on, would we be out of compliance with jcpoa if we reimpose sanctions for non-nuclear activities of entities or economic activities that were relieved of sanctions under the jcpoa and secondly what type of pressure would there be on the united states if we wanted to go forward? would there be international pressure for us not to be as aggressive as perhaps the congress or the administration wants to be and we were told yesterday by both of our witnesses that we should be very aggressive in holding iran to high standards if this agreement goes forward. what type of pressure would there be on us effectively being able to impose the types of sanctions to prevent iran from their nonnuclear various
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activities? does one set of questions i hope we can get into today. the second is how effective would snap back sanctions be during the period of time before they are repealed if any of the negotiating partners felt that there's a material -- and takes it to the point of snapping back all or part of the sanctions that were relieved under the u.n., e.u. and/or united states? how effective and how quickly can we reimpose sanctions that will require iran to rethink its behavior and i would be interested in your views in that regard. and then the last point i would like to have a response to, and
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that is if we do not approve the agreement, if we reject it and the united states sanctions remain in place how effective will those sanctions be if we do not have the support of the international community to cooperate with us in the sanction regime? i think these are important questions for the members of the congress to understand and i look forward to our discussion today. >> before introduce i.d. want to say again i think, no one i met with our western partners they were very explicit in agreeing with iran. they did get back with us since that time and since there may have been some reach out from the administration that they moderated their views much in line with what you may be seeing and i want to say the chairman and the ranking member and i asked mr. romano to testify before us today this week, next week. just so we could get an
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understanding of the issues that we have been concerned about is whether we did have a classified setting or someplace else. we have been turned down so i do want to make people aware of that. obviously there are a lot of concerns about the agreement that we haven't seen. but we do know about it i think we all know is that is very questionable so i'm sorry to say we are not going to have the benefits of their testimony to help clear up some of the concerns that we have. with that we have two outstanding witnesses today that will be very helpful. effort were -- first witnesses the honorable juan zarate chairman of the federal sanctions and illicit commands at the foundation for defense and democracies. mr. zarate previously served as deputy assistant to the president and national security adviser for combating terrorism. in addition mr. zarate was first-ever assistant secretary of the treasury for terrorist
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financing and financial crimes. you have been very successful in that regard and we thank you. our second witness today is mr. richard nephew program director for the economic statecraft sanctions and energy markets at the center for global energy policy. previously mr. nephew served as principle coordinators for sanctions policy at the department of state in relief sanctions expert for the u.s. team negotiating with iran. he has also served as a director for iran on the national security staff. thank you both for being here. we are excited about you being here and if you would appreciate your comments. we'll have lots of questions in your written testimony without any opposition will be made part of the record. thank you both and then you can start it whichever order you wish. >> thanks richard. mr. chairman thank you for that kind introduction. ranking member card and distinguished members of this distinguished committee thank you for this privilege to
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opportunity to speak about the sanctions implications of the jcpoa. i'm honored and privileged so thank you very much and i'm grateful to be here next to richard nephew. i'm going to pass a difficult question to him but i want to thank him for his service to the u.s. government the state department and the issues related to sanctions. i take this responsibility incredibly seriously given the implications of this agreement. i appreciate the questions you have posed which are nuanced and important and i'm happy to answer any other questions you pose but i come to this issue with views born from experience dealing with iran from the treasury department and the national security council. and now that all involved have been working incredibly hard toward a peaceful solution to the iranian nuke program through painstaking strategies of course in sanctions and diplomacy. indeed the financial and economic restriction campaign build methodically over the course of decades helped bring
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iran to the table. in the words of president rohan in the sanctions threatened to drive iran back into the stone age. these efforts have also been designed to constrain and isolate rogue iranian behavior to support terrorism the assad regime proliferation of human rights abuses and dangerous activities. as well as to protect integrity of the u.s. and international financial systems. based on your invitation i will focus my testimony on the sanctions relief remark of the jcpoa. mr. chairman i will tell you the framework and the jcpoa is flawed. the relief is too front-loaded. does not account for the increased risk stemming from iranian financial activity and the jcpoa as you have alluded to broadly constrains the u.s. government's ability to use effective financial power against iranian nonnuclear national security risks. there are structural problems to
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the jcpoa that undermine the ability of the u.s. to use these powers to affect iranian behavior. the snapback framework itself proves problematic in a blunt instrument. it will only be applied of the most egregious violations can be proven openly and convincingly to all parties. if new contracts signed or are grandfathered as is suggested in some of the text to the u.n. discussions around the jcpoa the snapback loses its real-world effect to ensure compliance. instead it has the potential to create a gold rush incentive for commercial actors to get into the iranian market with. the iranians maintain a veto on any ram position of nuclear sanctions and can simply walk away from the agreement. but the appellate hospices and the u.s. sanction or related action to which iran objects would be subject to review by the other parties including iran china russia creating a home the paradigm for how the u.s.
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reviews and issues its sanctions. the jcpoa unwinds sanctions broadly encompassing issues of proliferation and weaponization without addressing the underlying conduct. this creates real risks and it does damage to the ability to use the very same tools against iranian individuals and entities in the future. this proves highly problematic with the delisting of iranian banks for example the central bank of iran and transport companies which have been used not just to facilitate the nuclear program but also for proliferation and sanctions evasion. the nonnuclear sanctions were supposedly off the table the spirit and letter of the agreement i actually did or u.s. ability to leverage one of its most powerful tools. the normalization of economic
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relations with iran which is embedded in paragraph 29 of the preface to jcpoa and further ensconced in the need u.n. security council resolution does great damage to that ability in those powers. mr. chairman from the start of negotiations as you know the iranians wanted the most was the ability to do business again unfettered and plugged back into the global financial and commercial system. with a commitment to their integration of the iranian economy on the back of the nuclear deal the administration effectively put all sanctions on the table. to understand this one needs to appreciate why these financial and commercial measures were so effective in the first instance. these were not the sanctions of old. the financial constriction campaign which began against iran in 2005 has proven effective over the past decade not because iran was hermetically sealed with naval blockade sort trade embargoes but because it was unplugged
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from the elements of local willful financial and commercial order. the regime has needed access to banking, shipping insurance new technologies and connectivity to the oil and global economic markets to maintain and sustain a regime. that is what they lost over the past decade. that appears to be what they have gained and guaranteed in this deal. now mr. chairman in addition the united states will need to amplify its use of financial measures aggressively against key elements of the iranian economy to deal with increased risks based not just on this deal but also iranian foreign-policy. it's not at all clear to me that this is well understood by all parties are part of our strategy the risks from iran are real and will increase. iran will get a massive infusion of capital from initial sanctions relief to some estimates up to $150 billion. no doubt some of this will
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support militant groups from the goal line to yemen. with the allowance nuclear program the deal will likely increase not decrease the risk of proliferation proliferation. the regime loses control of the economy not only to further enrich itself at suppress internal position brutally and is not his role. the concerns over human rights abuses and hypocrisy will grow and the reality in risk is the iranian sanctions it give asians money-laundering and other financial crime will increase not decrease over time. the united states will need to use the same types of financial strategies and campaigns to isolate rogue iranian activities which will necessarily affect the trade commerce and economy of iran. mr. chairman i think there are three critical principles for congress to demand related to sanctions and the jcpoa. congress i think should ensure there is clarity in the jcpoa and the execution of any sanctions unwinding plan or
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framework traded should ensure that the united states maintain as much financial and economic power and leverage as possible. congress should as well mitigate the risks intended to embolden regimes in tehran. these principles then could help form the basis of any strategy to to address the real and dangerous risk stemming i'm iran. the u.s. should adopt a financial constriction campaign focusing on the irgc quds force in core elements of the regime that engage in proliferation of weapons and nuclear technology and support to militias. this could include the use of secondary sanctions. there should be a recommitment to the elements of the nonproliferation regime and a dedicated strategy focusing on the proliferation risks attendant to any deal with iran. this would include tighter export enforcement interdictions and financial restrictions tied to suspect iranian actors and activities including iranian
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banks. the elements of the patriot act section 311 next against iran in the central bank of iran should be reiterated and reinforced with the decimation of primary money laundering concern against the transactions involving any iranian bank. this mr. chairman to be amplified with a program perhaps led by the european union to create a monitoring system through swift the bank messaging system akin to what the ultimate terrorist financing trapping program to track and analyze suspect iranian bank transactions. mr. card in the global human rights accountability act could be used extensively to target finances and holding iranian regime and those involved in gross human rights violations on its behalf. senator i know this is the deep concern and an issue for you. mr. chairman these are just some of the measures that could be taken to confront the risks from iran but of course undertaking these types of steps in whatever form of a abc and by diplomats
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from whatever country is interfering with it jcpoa or any deal for that matter. instead they should be seen as a necessary step to enable any nuclear deal temper market enthusiasm for doing business with a dangerous regime and preserve a key element of american power lead against iran and other rogues. mr. chairman with the iranians came back to the table after president rouhani's election to negotiate over the nuclear agreement one western diplomat based in tehran told me in confidence you have won the war using economic sanctions and financial pressure but he then asked can you win the peace? i think and hope we can still win the peace but it will require using them leveraging the very same powers and authorities that help wring the regime to the table. we must ensure that the g. -- jcpoa has not empower the regime
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in tehran about taking one of america's most potent powers off the table. thank you mr. chairman. >> mr. nephew. >> thank you chairman corker ranking member card and another distinguished members of this committee for inviting me to speak today. it's a privilege and an honor to speak to about a subject to which i dedicate my professional life iranian nuclear program and sanctions and is one who has pioneered a lot of the work we will discuss a payday like to begin by extending my personal gratitude to the members of the negotiating table regardless of how one evaluates the steel where all the most fortunate that this country produces diplomats civil servants an expert like those who work on this deal. in my opinion the deal that they negotiated is a good one especially compared to the most realistic alternatives and any negative consequences can be managed. it satisfies the two most important objectives for iran's nuke program.
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first lengthening the time iran would need to produce enough nuclear material for one nuclear weapon and second insuring any such attempt could be quickly detected. in doing so it creates a 10 to 15 year band of time in which fears of an iranian group and will be reduced by some may argue key provisions renders a deal unacceptable. the argument against sunset presupposes either that there is no point in time in which iran could be trusted with nuclear program requiring regime change or that negotiations could possibly have delivered a longer sunset. having been in that room i believe this is achievable. in any event after projections left the united states has made clear that iran's nuclear program are made to concern. getting international support to do something about it will require effective diplomacy but it's an option for a future president to the principle
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complaint and the main subject for stays on the nature of sanctions relief in the deal. some have argued they provide iran with far too much in the practical effect of increasing trade with iran will render snapback and effective. it's a blunt reality that iran was not going to accept major restrictions and invasive monitoring. demonstration of the raping and leveraging sanctions relief for maximum earlier nuclear steps. iran is now under every incentive to take the steps required us to this puzzle which the iaea will verify before iran gets an extra dollar. of course the sanctions relief provided by the states does not equate with unilateral sanctions disarmament. united states retains number of sanctions authorities and will continue to exact consequences for iranian violations of human rights and damage iran's ability to engage in terrorism finance. if though i believe the extended new iranian spending are overblown and according to the "l.a. times" so does the cia.
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four months of our tools includes secondary sanctions. the niceties will be able to pressure banks and companies into not doing business with the irgc quds force at iran's military forces as well as to facilitate their business. even if the e.u. and the u.n. removes some of these from their list these bad actors and iran generally will find business by made until they correct their own behavior in the eyes of united states. this is due to the direct risk of u.s. sanctions and improvement and international backing since 9/11. a bipartisan effort begun under george bush and continued under barack obama. united states will retain its ability to impose sanctions on those trading with iran as well as with respect to ballistic missiles even after u.n. restrictions lapse. united states can traverse snapback of existing sanctions or even one jcpoa produce a bank
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can trigger it a review and a vote to continue with relief. u.s. veto power gives us the ultimate freehand to impose sanctions and snapback can be less draconian to deal with lesser violations as as secretary violations as secretary for test drive. this with political cost. many skeptics will point to these causes many know such snapback would be triggered by an international to u.s. actions will always depend on the context. if the rest of her days as credible the site -- chances for success. they will die with the costs and benefits of the course of action that threatens the integrity of the nuclear deal. these costs will grow as iran's economy grows. i see it as iran having more to lose. a critic once referred to the deal as a marshall plan for iran while the analogy is very far from perfect it's interesting.
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the marshall plan was intended in part to prevent the spread of radicalism in europe after the second world war in recognition of the affected our sanctions had on politics in the 20s and 30s and low pricing benefits of trade and growth. in fact they refuse to participate fearing it the dash whatever preparation. one potential benefit of the deals a possible transformation of iranian society in overtime government policies. this may not happen but at a minimum iran's leaders will have to wrestle with the benefits of economic openness the risk of losing control as a result of this deal as well as a threat of returning sanctions if they break its terms. these will be a challenge for the impossibly existential. to conclude though it is not a perfect deal i believe the nuclear deal reached by the united states as p5+1 partners reserves or options and possibly lays the path to better a better
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future and i urge the congress to make the right choice. thank you sir. >> thank you both and we can see from these two witnesses like this is a difficult decision for people to make so we thank you so much. so that i can reserve my time for various interjections along the way and not dominate any way i'm going to turn to our ranking member for questions and then move down the line. >> let me join the chairman and thinking you both for your presence here today and for your testimony. so let me give you a hypothetical. it's a year from now, and ayn rand complied with all of the preliminaries required and there are for seed the relief a few months earlier than not from both the united states, the wafers being exercised by the administration on sanctions as well as the u.n. and europe. we get clear evidence that iran
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has used crude oil sales to directly finance terrorist activities in lebanon and yemen and they have done it through the central bank of iran with clear evidence of that paid united states congress passes the statute that says it will impose sanctions against iran for their support of terrorist them against the single bank of iran and crude oil sales. a are we in compliance with the jcpoa and secondly what pressure would there be on the administration to implement such a statute if congress were to pass it? any thoughts?
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subject to u.s. sanctions so it certainly would be within the congress is right and i would argue certainly should be a focus of the administration to go after the financial conduits that the iranian regime or any other state sponsor uses to support the stabilizing activities or supporting terrorist groups anywhere around the world so it would be wholly justified. richards pointed the context of any action taken in the jcp o. a context it would depend on what information and evidence we have. the problem i have with the jcpoa framework as i laid out in my submitted testimony and this morning is that we have now established ourselves and placed ourselves into a framework where we ourselves are going to have to submit or at least potentially have to answer to other parties why we are justifying the use of u.s.
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national power with respect to the other types of challenges and risks. so under the agreement the iranians for example could object, could threaten to walk away and perhaps even in the view of some legitimately say you are simply trying to impose sanctions that were just lifted under another name. of course the administration is saying and we would argue all of us that these are different sanctions than they should be imposed and they can be imposed but there would be a question in the context of jcpoa and probably a process triggered if it were significant enough action it would call into question whether or not we could take the action. ultimately may prevail but it would put us into completely new venue and a new process to have to explain ourselves, demonstrate evidence to parties like the chinese and russians and ultimately justify our actions in the contours of the jcpoa. i just don't think that's
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acceptable outcome. >> thank you senator. i would agree with much of what juan said that i would add two caveats or conditions. first we have always had to justify and explain our secondary sanctions. you have to bear in mind the sanctions you are referring to govern the trade activities of foreigners with foreigners and to get them to do things we have to explain why and in what context is appropriate. i think going after the hypothetical that you brought up would be complicated because the chinese for instance or other importers of iranian oil would say we have known for a long time that iran supports these groups and that's a given and it was a given moment of writing this jcpoa. i think this points to the second problem. the hypothetical you brought up what happened because oil is a primary revenue stream for iran and the primary way in which they support groups we believe our terrace engages terrace.
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the bigger question to my mind is that the most effective way of curtailing iranian terrorism? we have had crushing oil sanctions in iran for the last two years and have supported assad and supported hezbollah because the scope and scale of that support doesn't have to be oil revenue worthy. it can be much smaller in something their ratings believe and strongly so but argued that rather than go for an oil embargo sanctions we have to think of a better policy response to do with the terrorist issue we have identified. >> my concern is do we have the flexibility to do that? you may very well be right we may choose other ways and the reason i use that example as they were lifted by the sanctions side absolutely. here i guess is the question. yesterday we heard from both witnesses that the u.s. should be aggressive and make sure iran complies with the letter of everything that is set in the agreement and be prepared to take action. iran's activities show that they
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tried to push them both as far as they can so they will interpret some of the jcpoa differently than we do and do things we think are wrong. how aggressive should bp and can we get our partners to agree with us on less than major violations? will we be able to do that? >> what i would argue is in another context break if we go with a good case and we are able to justify away we are doing it we can be very effective as we were from 2011 to 2013 with respect to the oil embargo. on the other hand if we are seen as at a capriciously in the rain responses to say we are walking away from a nuclear deal that will be a challenge and i think ultimately we need to be aggressive but we also need to be mindful the nuclear deal in my view is something that is worth preserving. i don't think that precludes their use of sanctions tools and a very aggressive way but just
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like we have party done we are going to have to be careful about the unintended consequences of those acts. >> leslie have point out if we have a snapback and we had to take the international community and maybe exercise their veto how quickly can they fight strong enough to affect iranian behavior? >> senator if we are able to get snapback and the context is conducive to people imposing swift sanctions we can start winding the iranian economy quickly. the oil embargo had dramatic economic effects within two or three months in january 2012 so with the right context and cooperation we can start to have an impact on the iranian economy. >> though it went out you weren't consistent on oil. you said at one time it would not need effective but now you
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are saying it could quickly. >> what i would say is i'm not saying it wouldn't fight the economy. fighting the economy does not preclude iranian support for terrorism so you can have damaging impact on the iranian economy but will that translate into stopping iranian terrorism? in my view history suggests not. the reality is at the end of the day the tools are the ones that prove to be the most effective and as i said in my testimony i think the risks to the
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international financial system go up with this dealer any other deal with respect to iranian activity so we will have to if we are honest about what's happening in the commercial order crackdown on quds force funded companies contracts run by the ministry of intelligence. that's the nature of the iranian economy in the way they do business and they have reached. precisely what we have cut off that harm that some might say you have asked an astute set of questions because at the heart of it is that we given up too much of our power to deal with all of these other risks that iran presents that will go up over time? >> thank you mr. chairman. >> before a move to senator flake i wonder if we could get consensus that it would be fair to say on the other hand in nine months when the sanctions most people believe all of the sanctions will be gone and iran has heard the clear stuff that
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some will be somewhat reticent to put sanctions in place if iran achieves because of the things you are saying. iran does have the ability to say at the moment that we are on the program so both of you are shaking your head up and down but that does creative dilemma. >> i will take that as a yes. >> senator flake, thank you. >> i want to thank the chairman of the ranking minority member for putting these hearings together and hearing your testimony today meet someone cited this in terms of will they favor the grim it or not. i think it demonstrates the only thing that is certain is this is no easy call and for those who stand and say that it is i think they haven't examined the agreement or the broader foreign-policy context in which this is going to be implemented.
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so i appreciate the testimony and the way you have gone about it and i appreciate the question from the ranking minority member and i think all of us will have some variant of the same kind of russians because we have asked administration witnesses that we have not diminished our toolkit that we can distinguish between nuclear and nonnuclear sanctions , but when you read the plain text of the agreement, that seems to conflict with the assurances we have received. and let me just turn to the financial sanctions. i couldn't agree more and i have always felt that is what really finally bit because it's more difficult with these tertiary or secondary sanctions for the russians the chinese are others to help iran gave aid which is easier to do it just crude oil sanctions or other petroleum sanctions.
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but if we find iran is linked directly to terrorism and we wanted punish and go in when i look at the agreement it seems difficult to do that but on the financial sanctions if we decide to do so, how effective will that the if our european allies are not with us? i would like your assessment and i hear conflicting testimony and discussion from others about whether or not we can lead on that and our european partners will eventually have to follow or if they can go there very way and we are left with unilateral sanctions. what is your assessment on the financial sanctions? is this something we can lead our partners to be with us click to they have to be with those given the nature of the
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sanctions whether people choose to do business with a 17 trillion-dollar economy or a chilean dollar economy what do you make of that mr. zarate? >> senator a very astute question. the financial sanctions have been led by the u.s. has the u.s. is the dominant economic and financial center of the world. the u.s. dollar is the reserve currently and we have the moral and strategic suasion to be able to affect what others do for government and the private sector. i want to emphasize the last point. i do think we shouldn't undervalue or undercut the power of our u.s. financial sanctions. in many ways u.s. unilateral sanctions that affect the financial community in iranian banks are global by definition. there is no unilateral u.s. financial sanction. with the u.s. says in terms of how to interact with u.s. financial institutions and markets is a global standard and the fact is applied by the
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private sector. one of the interesting things here and this goes to a time dimension of this issue. one of the adjusting things here is i think there is still an opportunity to shape the environment and the risk calculus of the private sector. the major non-american banks around the world art de-risking enormously. they're making decisions not to do business any longer perhaps not to do business in cuba regardless of our sanctions policy is going almost in the opposite direction. but congress says with the u.s. treasury may put out in advisories or designations has an enormous power and capability to shape the market. i don't want anything i say here to undercut that reality but in the context of the steel that diminishes over time because the international sanctions architecture and the e.u. directives does enable countries that may not a quite as enthusiastic about this risk
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calculus to participate but i would say if we wanted to affect the global financial system if we want to isolate iranian banks based on legitimate concerns that are demonstrable that we put out in registry that we can put out and go to our allies that has enormous power and capability to isolate the iranians. would that be accepted by the iranians based on the reading of the deal? probably not but that's why i'm so concerned about the constraint on our power based on the agreement. >> mr. nephew? >> senator would agree with a lot that one had to say. the only thing i would add is this concept of the context matters. if we are going after an iranian bank gives clear evidence for terrorism than i think our ability to go european countries and is say will be quite strong. if on the other hand we are seen
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as rich as i don't think that will have the same kind of impact. that doesn't mean we won't have financial companies are financial institutions cooperate in this is an important point i want to know. it may be where able to influence banks and company behavior if their governments are not supported and this is frankly but we did in 2005 until 2010 in europe but the danger of that is you start to have european government or japanese government or anybody else have laws that say you are not allowed to comply with u.s. sanctions. i think there is still unilateral power used in the financial sector but with the power comes the responsibility to wield effectively and carefully lest we challenge ourselves to the wto was and so on and so forth. the concern that we have is that the leverage point goes to iran.
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if we find they are engaged in various activities that we want to impose sanctions on and given a multilateral nature of this agreement and the fact that we would have to submit to the body that we believe iran has violated good behavior and we want to impose sanctions. given the interlocking nature of these financial sanctions and how it affects banks by companies and governments it might be more difficult to get them to agree to allow us to impose those sanctions if that's what we have to do. if we go to loan that's a whole different can of worms. anyway my time is done but i appreciate the answers and i'm sure this will be touched on later so thank you mr. chairman. >> before going to senator mendez there's another question that senator flake asked in a previous session that i will use part of my time to follow-up on.
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the sonata nine page summary of 13 documents to help everybody understand quickly what the deal was and in that we talked about the contracts entered into. in other words if you lift sanctions contracts you are entered into the way we read it if those contracts are grandfathered in other words you can continue to do business under those even if sanctions are put in place after a bit pushbacks and obviously we don't want to be accused of sending something out so we asked the white house for red line so we never got then we start to send out something to qualify and i think we did that candidly as we sat down and talked with the experts that we typically rely upon for these kinds of things they are telling us in fact we were right in the first place that contracts that are entered into when sanctions are lifted her grandfather. could you give us some clarification as to whether there is or is not the case
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mr. zarate? >> mr. chairman it's a great question. i read paragraph 14 to create some sort of grandfather provision. this is not a typical paragraph for the sanctions regimes. this is related to snap back provision which is not usual in these types of regimes anyway but i read that to open the door for some sort of grandfather position. you could read it in a way to say there is no application of the snap that to contracts that are signed between the lifting of the sanctions and the snap that. that creates it attentive goldrush of that i talked about. if you read this to say what contracts that don't have anything to do with prior sanctions then you say if there there's a contract with the irgc or some other element that has relisted that has to be
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mollified perhaps but i would say in the interpretation of the sanctions whether they related to iran or north korea there has always been slippage of interpretation especially when talking to the chinese or russians about with some of these provisions mean. i would imagine at a minimum they would be a fight both diplomatically over what this provision means and what contracts with chinese banks russian banks rushing companies would ultimately mean. i would say mr. chairman it's interesting russians are a part of this in part because they are under the sanctions regime with the u.s. and the european union so they will have every interest in undermining the capability of thwarting commercial relations that affect their economies will >> could i get you again to try to reach a degree of agreement that's what you say at a minimum and is highly unusual that a clause like that with the in
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agreement like this one typically is very clear that there is no ambiguity. it's an unusual qualm to an agreement like this. >> i think this is an unusual name and south wouldn't necessarily call that provision the most unusual. i would disagree with the i.t. of that this immunizes long-term contracts. the intent here is basically to assure people if that they invest in iran's fatback is triggered will not impose sanctions for the point for the business that was conducted. the intent is to say that business will not be sanctioned but that doesn't stop us from saying you now have to stop or forming the business under the contract. it's less of an issue doesn't know if i contracts but the performance of the contract the snap back for what similar to what we do with the rule.
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>> if bp built a billion-dollar facility to produce oil in iran and they invested that though in dollars and so they are performing under that contract and producing x girls a day and they did that after the sanctions were lifted could they continue under that contract or not? >> senator mind standing is no. the moment snapback is triggered whatever financing is going on or whatever tactic assistance is going on has to be stopped. united the united states government will not sanction them for having built the plant in the first place. >> do you agree with that mr. zarate? >> this is a question of how it's executed and who is interpreting it. this can be affected by the nature of the snapback and if it's a tailored snapback it could be impacted by the nature
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of the contract itself. it could be special-purpose vehicles created to contend with this provision and make sure there could be continuity of the action. i think you could have parties arguing that as long as we continue activities aren't furthering the goodies that are sanctioned if you can assure that they are cleaned or productive they shouldn't fall under this provision. senator mendez. >> thank you mr. chairman and before i get to the issue that our witnesses are here for i want to comment on your request to the iaea and i am deeply deeply disappointed up there unwillingness to come in and he he -- and a session to have a discussion. this whole agreement rests upon if you supported, the concepts
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of inspection and verification by the iaea. we are putting an enormous part of the national security of united states and our allies in the region in the iaea. a u.n. organization for which we pay membership dues for us not to be able to and maybe their fear is the question was the question which they can allege and take a position that is private and we are not going to talk about that but the in tire spectrum regime and the entire verification regime depends on the iaea and not be able to question the iaea about how they're going to go about it, but their ability to do so about the budgetary realities that they may need in order to accomplish what we want them to accomplish i don't know how one can come to an occlusion -- conclusion without understanding
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the agency that is involved the most critical element of this agreement is them. forget about the sanctions because sanctions only come into play if they are not performing. we have to know whether they're performing in the implementation and subsequently if they are performing afterwards. i would hope that we would find a mechanism and whether that is a letter and they applaud you for having done that every member this committee whether that's a resolution of the united states senate that could be could be passed calling upon the iaea to engage in consultations with the senate. you cannot advise and consent to something for which you are going on pure faith without knowing the wherewithal as to how that agency essential to the agreement if one believes in it is going to do its job and for
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which we are going to depend upon our interests. it's amazing to me. i would urge the chair and ranking member and i would be happy and i'm sure other members would read to engage review in any way possible to bring that about and if it doesn't that's a critical material issue for me so i just wanted to speak to that raid let me thank both of you for not only her testimony but your service to our country. it has been exceptional. you know i look at this whole question of sanctions vis-à-vis incrementalism and it's a very poignant question. why? how did iran get to where we are today? because through incrementalism through deceit, deception, delay , through notwithstanding u.n. security council resolutions in the world saying
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you cannot, you shall not, which they did and each step of the way we were collectively reticent to do what was necessary to stop them until it got to a certain point that both the world and to berate honest the congress drove some of the most critical elements despite the opposition of administrations. and so, when i think about the context of potential violations and looking at the agreement and thinking about what is substantial and not substantial ica history. if you go by the archives building here in washington over its portal it says what is past is prologue and you have a 20 year history here of getting to the point of being a threshold nuclear state by everything that i ranted so you give it a little
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bit because you want or serve the agreement and you don't ask some of our witnesses yesterday including those who supported give it a quick say no no, no this agreement is not free to play with. we are we are not going to give you a little bit and give you a little bit more. we are going to come down having now but i'm concerned based on other iterations of our unwillingness at times doing gauge in these types of sanctions regimes that are necessary. i look at how hard it's been to get people listed. i look how hard it is despite congressional legislation signed into law on venezuela. i look at how hard it is and russia and the ukraine to pursue additional sanctions to get them to deter their actions. i look how difficult it is as it relates to syria where we haven't gotten a chemical weapons and so the concern for me is if you want to deal so bad
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and you hope it won't work so well that you are willing to overlook elements that may seem small at the time but against to grow collectively and collectively the point in time would you say oh my god which is where we are at right now. so i think that those are critical questions. mr. zarate i want to understand something. i am pretty convinced of that but i want to make sure that i haven't just convinced myself because i want to be convinced. on page 26 of the raiment it says the united states administration acting consistent with respect to role of the president and the congress will refrain from reintroducing or reimposing the sanctions specified in annex two which is basically the congressionally mandated sanctions that it is ceased supplying the joint conference of plan of action without register dispute resolution so i tried to get
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from secretary lew a clear definitive view. you either have the right to reimpose isa sanctions that expire next year or you don't. you can maybe argue about the timing that you either have it in writing or you don't. i did not get a clear answer from him. if anything i suggested it sounds like you want the sanctions to expire. he did not oppose that view and didn't say yes that's what i want but he didn't say no i was absolutely wrong and when i pursued why shouldn't we reauthorize those sanctions so if deterrence is safe part by virtue of consequences which is that there are isn't actual -- actionable consequence to an activity you taken a violation of the agreement which is a lot avoided discussion was shouldn't be at the sanctions in place with all the same provisions of
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the president's waiver options and secondly do you read this agreement to suggest that we cannot do that or will be in violation of the u.n.? >> senator i think i mckalip emet with you that it appears reimposition with what is in violation of the jacey p.o. eight or at a minimum would suggest any action by congress and that regard to reimpose iran sanctions act. ..
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>> >> but the burden of proof
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seems to shift. but about the long term when iran is a board significant? that you will use potential will be a lot harder than under the present circumstances. is that a fair statement? >> you are absolutely right. what i suggest that is one of the fundamentals besides the sanctions issue. if iran suddenly becomes an equal partner in the framework but now they look with that burden of
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persuasion and approve now iran is the suspect. that is the problem of the process with a different flavor of reference. >> what i grapple with that came to me again that you are responding to of to one of the questions as the iranians enter into a deal that changes the course of their country's conduct, but the hope as i see it come was the ayatollah thinking
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is how do i preserve the regime and the revolution? but to think they're entering into a an agreement that is the end. i don't take that is their intent and hopefully it all passes as the consequence. of thinking this will end of the revolution or the regime >> mr. chairman i would like to read -- lead to a quick question this has been very helpful today to. so far this committee has addressed this issue as the security of our country and the world but this will
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ensure that the probe is peaceful that it reaffirms will they ever see it develop or acquire this will allow iran to move forward with a program i just have one question. in the beginning and allowed them to have in richmond. -- in richmond. in the non-proliferation treaty there are 32 countries that have peaceful nuclear programs that only 18 but 10 have been enriched there are only 14 countries that have a combination five
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have similar programs that are not allowed lake and burbank and japan so look at this historically. we did this before it did not work out so well we may have been naive but the problem still looking at a measured way it does not preclude iran to become another state even this morning you said talking about the sun sets it gives them the opportunity to have a nuclear weapon. sova we have a false choice. it is for or or. to allow them to go that way in my mind that violates the issue that we have the
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indigenous nuclear program that is to require the enrichment and i challenge that. in this agreement they are allowed to gingrich. so i am trying to understand. i am outside of the process so if you look at the financial industry the energy industry and you sanction that is the start to sanction businesses, we don't need any other sanctions to have a dramatic impact. we know from recent history when they -- and it brought them to the table. but my question is do we have an alternative to the
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war or the deal as it is? ltd. is a very important question i don't know if you will like my answer. >> why would you say that? >> at the end of the day it is true for our rand to have the enrich program there is nothing to delay that the way we could mount the pressure and the sanctions on iran after years of cheating. >> that we need to have a rich red because we cannot secure the flow of materials so i do push back a little bit. >> but for sure they're not subject acted -- subjected.
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>> but not its regime either. >> but the history in which we attempt to strangle throughout the 1990's the i read your perspective that did not enshrine their ability to have the nuclear energy program would not have then my preference going into this conversation i started as a guy going after the iranian enrichment effort. >> is there an alternative? we have to consider that if we don't agree to -- agree with the deal? >> they will build more centrifuge then we're
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dealing with 30,000. >> what sanctions unilaterally have impact. >> i do not u.s. sanctions would stop the enrichment program. >> i think it would have an impact would it stop the nuclear program? i don't think so i know this has to be part of the of broader strategy to get them to stop i'm sorry you are experts in this but to they believe they have to have enrichment capability? >> absolutely not. >> but to raise an interesting point has a confession and the other
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problem we navy conceding the most favored nations status we now allow them a process said the vehicle and by the way we put into the context of the chinese and the russian better not in favor of power to have a voice and a vote so that very structure is the other issues that we care about so how leaky the mass of most favored nation status. >> i about of time that i am very troubled i know day are deals that are directly done between individual countries
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but this is not normal practice and is soon as we are a part of the deal but in this document they are not rigid did i am troubled we cannot get the best from those people dead and know-how to make the decision i would put more pressure on the iaea to come forward to explain that when i hear what will be done with what is not even mentioned in the document by a very troubled. >> google's everything that has occurred in this committee as chairman and ended as was chairman we will kraft a letter for everyone if they wish to
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sign that will be crafted hoping not to affect the sensibilities asking them to reconsider to come before us next week that is under way right now serenaded freddie has the opportunity to sign that if they wish. >> i would also request a confidential classified briefing from our intelligence agencies. >> we will do that. i appreciate that. >> they key for the spirit in which you are conducting the hearing previously about the iaea and the enforcement of our understanding and wholesale and capabilities that is central to the understanding of this agreement.
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you have said disagreement as long as they are not explicitly in violation does that mean you're not subject to sanctions for having entered into an agreement? who decides and how does that outcome? i have gotten both dancers from senior the level both current and former but is a multilateral agreement and inevitably there will be disputes and it raises the larger question to the extent we can rely on our allies with dispute resolution so mr. nephew in a previous exchange you were
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saying a certain proposal was not a policy response to undergo iranian support for hezbollah or others. i think there is a legitimate concern by all allies sanction relief will lead to a significant flow of funds for those that we view as a terrorist'' would be ideal policy response to queue were in a position to advise the administration? gimmicky if we go alone and reject the deal and seek to renegotiate tougher terms what are the consequences the chinese have made persistent efforts that our
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central role the fact the vast majority should be lessened or we can -- weekend can reuse added service leverage to sustained over time? and dodd the impact those flows will have they will have to restore their own oil and gas sector so how would that influence their ability of the enduring commitment to promoting terrorism to be a destabilizing force. gentlemen?
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>> of the issue '02 grandfather the decision whether or not to impose sanctions if nations can be imposed but that does not mean we will have a response from our partners if we had a number of other different institutions we could expect that but i imagine there will be an engagement to deal with any action as well as the broader interest that doesn't mean we could curtail those activities which we did with the accountability act but my view is we will have an
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effect i don't think it will be nearly as strong particularly out of europe but long term i am very concerned over use of sanctions it gives the idea for the alternative system so as well as your or other circumstances those that don't have to involve us. but they will use a lot of those on domestic i do think he was elected on the basis and reelected in the iranian system does not want to have conflict and insight they're very concerned about the color revolution and the
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arabs pray and. -- spring then very quickly on the best policy response from the region but to have targeted sanctions but also that needs to do the support with the cooperation of partners of terrorist groups but it simply cannot be choked up called iranian money and the problem goes away. >> as it becomes the arbiter that is how it is set up but that becomes up to discourse and debate.
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>> this is an important point for the congress for what this all means. how will this work? but some of the fundamental questions as we move into the agreement because it gets harder overtime i think we are in the most effective position to determine how this goes that you create that doctor and to explain how this will be applied otherwise you create an incentive as i held to chase down his assets that once you're in that context between the winners and losers so you have the
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potential half the selection of other europeans on the ground to have a vested commercial interest to make sure it is interpreted the right way. but it has to be multifaceted with financial measures to the proxy on the ground. if we go alone overtime the regime will melt away. there are potential long-term consequences says they're clearly trying to have the alternate platform with currency arrangements
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and don the margins to say this is marginally relevant there are other factors which through love lot more capital markets. all those things matter more. we should take the iranians at their word. to put that with the oil purposes to impact the ability to support has the law -- hezbollah this is the exhortations -- exhortation of the secretary-general of hezbollah to receive more funding.
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>> thank you for your service. >> even though there may have ben some groundwork on the way in advance it will take place 5:00 on monday. >> thank-you to the chairman and of the witnesses just to clarify on a the iaea? >> yes. and in any form and again again, based on what we know , all of us i know the agreements are between the
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iaea that we are in new territory here all together so we will write a letter for all of us to participate >> but to set up with the chairman and the staff how we will proceed during their review period, we know that that information will be critically important to the iaea so from the beginning for us to get direct communications with the iaea rigo there is confidentiality with iaea rigo that and that is shared at times in a confidential setting. with a separation of bridges it becomes a little more
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complicated we don't know how much of that is under control there are two documents between iran and iaea for us to see and review it is not just direct contact with the iaea but to believe in a confidential setting because of the information you have to get but it is an independent agency not a control of u.s. government. >> the key for making sure these are successfully completed. i cannot imagine anybody that they would be opposed i
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think that is important but in the meantime perhaps if iaea is unavailable we can hear from the deputy head know he has testified in the house i believe one of the colleagues mentioned in the comments he made about the agreement. >> we have experts in and out to nonstop / understand it is problematic. >> thank you for that. with the terms of the nuclear agreement lead of the company's was designated in 2013 which is a group of countries with the
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investment arm of the bank that is run on the stock exchange. it was is originally listed that was not a nuclear related sanction to except those financial practices to the financial system the west treasury designated the subsidiary stating to have a the massive off the books investment loss of talk about the amount of money freed up that has bank characterize up as much as 150 billions we talked last week how it could be around $55 billion.
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but what is the purpose to do delist these from the studies we've already $5 billion that is coming off of the list. the $52 billion of real-estate portfolio so should that $95 billion the included in the $56 billion figure up front? >> you raise the great question because the other elements of the first listing to present a risk and the challenge that they may have had elements to support the nuclear program
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some of that may have thank captured via executive order but making them subject to the sanctions and other preventive measures given the risk to the financial system and a fundamental challenge of how we constructed the unwinding we give up that underlying conduct in terms of these entities are able to do and unfortunately what i see is part and parcel is the normalization of the trade and economy with iran. i don't want to be perceived as throwing stones at this
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this is the most comprehensive regime out there but we have thrown them into a wide to without having them content with the underlying conduct that is still at risk this is why we have given and iran a get out of jail free cards and i have been critical of my coated penetration of and i was ted treasury at the white house in 2005 led up to early with financial coverage with north korea not that they couldn't deal with the underlying conduct and with commercial isolation on the back of a nuclear deal was a mistake i have written about that and
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i still think so. i don't think we should ignore that underlying conduct that still shows a risk. >> and one of the businesses to control this group to read german factory dead dual-use machinery for a the construction of this interferes. is that correct? >> that's right. given how we define the unwinding of a we have elements of proliferation and even then missile trade that is still a concern. so there is a broad definition of nuclear sanctions that is the
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implementation of the rest of the deal. >> senator udall. >> mr. chairman thank you to those witnesses for your testimony today. assume that deal was approved what does the u.s. need to do to make sure that snapback action - - option how can we work with them to make sure we have a bye and -- in. >> but senator i believe with tough purification and interrogation of the violations of the terms of the deal. to have a dispute process through the joint commission even a modern setback to
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redress the of a broader issue. to understand to continuously monitoring the program for wedding is consistent with the terms of the deal. you have to do that with rigorous enforcement. >> congress has a role to play and put in place measures of the private sector. for those that are potentially brought to bear with the elvis hit iranian activity so aware that congress shapes the environment where they made
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to business with the intelligence and that could be incredibly helpful. to have clarity on that is very important and will shape the market. to enforce the elements of the ideal quickly. >> one of the things of your testimony highlights there definitely is a role for congress to play in order to strengthen to bring transparency that we don't think will be there. would you agree? >> absolutely. if you don't agree with the deal but congress has the role to clarify to deal with their risk with the "deal or
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no deal". >> there have been concerns at year's 10, 15, 20 what are your thoughts on the sunset provisions that that is reason enough to reject a deal? >> i don't believe there is any arms control arrangement that does not include the original sunset. oh after demonstrating it had been working for so long so the idea that it would voluntarily renounced a nuclear program, i think one element of that sunset provision is problematic that does not match the 50 your time table is chapter
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seven and scrutiny at year number 10 i am a bit more skeptical to be ill intent to incrementally push what they are able to do. so that it itself is problematic but in this case we are dealing with high-risk for those that assumed they are suspect. >> thank you, mr. chairman. >> as a clarification have cattery understand the
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grandfather issue? as we talk with people of we have various opinions how would reinvest the clarify that issue what the true meaning of the grandfather clause means in the advance of voting? >> so i have to think out loud a little bit if that is okay. so if congress can lay out what you think it is to push back to reshape that definition so what it deems to be has an open reaction to ask it in writing the interpretation from the
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various parties so how do they interpret this deal and how will they enforce it? >> i would suggest the treasury department will have to have rolled to clarify how this will play out because there will have to put out interpreted nodes -- notes so in that context the administration will have to be incredibly clear that is three things off the top of my head that could help. >> i appreciate that you raise this with iaea i agree with you entirely. but i was a real-estate broker over 33 years and ran for office 70 times it gets
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to appoint there is a front-runner in the challenger. but to challenge to a debate at the end of the campaign you try to negotiate your position whether sitting or standing or anything else. the error is wiggle room they to do nefarious things if they wanted to. with that problem as it constructs i am understand but if somebody challenges the iranians to inspection inspection, a first ball they can question if they
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want to they can interrogate or put in the sanctions and keep to the joint commission which bay sit on. is that correct? >> yes, sir. >> not only with the time of diligence there is the additional way to do rope a dope? >> yes senator also richard could comment on this as well it means more than the 24 days and of course, to negotiate at the end the
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room -- iran has the right to walk away. so to call that hecklers veto they get to start a nuclear program if they like it. >> as the preamble the rivers of path to get to that position with that step -- strict interpretation either way that is combined with of rigo room -- wiggle room to have a nuclear weapon which is why it turned into a war weary to
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reclaim this agreement the iranians have negotiated a something pops up. paragraph 29 receptor it says the united states of america will refrain many policies specifically with the normalization with the amendment with their rand with the implementation of the teeeighteen but it seems to have any snapback if we suspect that.
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is it correct? >> the reason i highlight that paragraph it reinforces the intent of the deal. it makes sense to make global order but what i am arguing that the sanctions are so effective their subjects to sanctions over three decades because there were unplugged from the global and financial and commercial system. my point is if you plan to preserve the power of a we have negotiated away that measure. >> that is my point. it is not that they like us or respect as -- us but when
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they got to the table on page number one to be a coequal so that is what concerns me so much so to see exactly what they promised on the preamble. thank you very much. >> senator? >>. >> thanks to the witnesses. i have not finished it but i do enjoy reading the book he has written about the
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significant events of treasury if sanctions are applied the right way. a wonderful book. i agree with the comments of senator mendez with their situation with the agreements they have made with iran or how they inspect but i don't want to leave with the inaccurate impression if they don't know what they're doing. to remind everybody of the painful history iaea issued an opinion to have no evidence of vindication that
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was march 2003 the administration at that time really comes out trashed the iaea said they were wrong to initiate a war that was proven highly costly to american lives and instability in the region. they do have a program of mass destruction we have to worry about the motion cloud but iaea was right united states was wrong. and there was a significant consequence of that. so i completely get the notion to what they will do i go into the for the impression they had not been
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perfect either they're with us with the number three and negotiation but to go back to add the additional protocol don't leave the impression and the iaea does not know what it is doing because when it was critical for aid as a nation in our history we with trash their conclusions they were right and we were wrong. actually not you but do they have a the wherewithal financially? the agreement said the train
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130 and 150 inspectors so they have the financial ability to do that. >> is the unstated point and i want to do that. but i was intrigued to understand the status quo and tied -- anti-but to look at the speech that netanyahu gave he had a quotation was interesting seven years of sanctions and hurt the economy but did not stop their nuclear program. i think the evidence suggest to hurt their economy to get them to the table search of
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a those sanctions and also in international sanctions however the prime minister, if you look at the data to suggest it does not stop in some way with that mentality so i iranian enrichment not to focus on the plutonium reactor but i am curious did sanctions slowdown the nuclear program? >> i do think they have an impact for them to buy if you look at the end of 2011 at the end of 2013 with
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those oil prices but there always a means to an end probably was not the end but putting under significant restraint but you are right those sanctions are not the silver bullet and would not ever be but we need multiple points of leverage for multiple purposes for what our country is trying to do trying to act but the reality is but there were
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also facing the demographics not conducive to stability to crush in its infancy of internal instability to drove president rouhani back to the table will they do that but sanctions were necessary to get him to the table. >> your thoughts about the prime minister's statement in a very complicated one with a predictable upside and downside one of those alternatives to contemplate and we think reimposing
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sanctions for them to go along will lead to a better deal it could lead to a better deal also the same kind of a celebration. they said they are just months away to cross the threshold. even some of the critics acknowledge it has moved to the needle but sanctions could lead to the iranian nuclear program to put us into a worse position the din dealing with the upside risk and that is a complicated analysis.
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>> thank you for the line of questioning. to get that comparison to take place in other places and by far this is the best we have never had. it is a much better inspection regime. he twisted it around to indicate we had eyes on the ground and the ability to go anywhere and that is all the
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more reason to understand at least those elements from march 14 anywhere anytime that is very different. >> but repurchased those inspections with a war. we got those as a you results so with the war to get a slightly better inspections regime. >> i don't know. senator rubio? >> un the one hand with international sanctions with
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those capabilities and the threat but that was on the table that the u.s. would do that if necessary that argues that it will slow them down if bias 10 years of time. assuming everybody complies but here's my problem. that in eight or 10 years that sounds like a long time if we are optimistic they will be in a much stronger position or there will be immune from international pressure compared to today because they will use those sanctions for the billions of dollars said it will free
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up. i don't believe social services to win the next election. i don't think they are worried about that too modernized the enrichment capabilities to the 21st century. that falls right in line with the mandate don't agree to anything that is irreversible. so there will be better and modernized which is the hardest part of any nuclear program. but here's what else they will continue to build their capability could potentially drive us out of the persian gulf.
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if the stakes are too high. they could add these swift votes that threat in the aircraft carrier. why are you building that long-range rocket? to target the continental united states to say yes they have a long-range rocket but it will hit somewhere that alone makes north korea of urine and they will continue to build up in the region that i will argue even now has given tremendous leverage. as an example and has laid out the red line to hold back the militia they will agree to hold them back if we don't cross a certain
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redline. for starters they don't want to see combat troops in iraq if we make any move to a permanent presence in the future we will be attacked at the gm militia order no concrete steps to remove aside from power if they see that we will be hit by the surrogate groups in the region including hezbollah. if we try to put in place the iraqi government to unify the country that is a puppet of iran not to mention to be tossed out to their ambitions they will attack us so they already have leverage. that is not between eight and 10 years from now or when hezbollah and a couple of years now they have guided missiles not just somewhere but exactly what they want to hit so imagine a world in 12 years where
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they decide we will build a nuclear weapon because we think someone else will threaten us. then to reimpose sanctions is not an option at that point because all the companies are deeply invested will not let their nation and do anything about that we have seen that with the europeans but what is the price to go after their systems? it is worse after north korea now we have the options today to target their program? >> we do not because the price going after their program the price is tokyo and hawaii. imagine and iran if they decide to break out would be washington d.c. or televisa for jerusalem where anybody
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in the region. my argument is what i think we have done is walked right into the situation they wanted to lay out. they do not want a nuclear weapon next week. . .


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