tv U.S. Withdrawal From Iran Nuclear Deal CSPAN May 18, 2018 7:34am-9:01am EDT
well if it was while lead. the european union ambassador to the u.s. it talked about the trump administration decision to withdraw from the nuclear agreement. this event in washington dc also includes a discussion about iran. this is an hour and a half. i'm really delighted that we are bringing together all of our work at the atlantic council under the iran source. i suggest all of you look at the source. and you can also tweet today's event.
were not quite sure what. we are going to look at sanctions and aspects in particular what it's going to mean for sanctions. the last minute addition to our experts in that as the ambassador david o'sullivan is going to make some keynote remarks. with our penile penal true after experts. let me just briefs fully introduce them.
she is a veteran of the treasury department. we also have a new speaker here. they followed the negotiations that led to the jcp '08 in great detail another veteran of state department where he worked on developing the sanctions that are now going to be returning. he promises to have a very interesting hour and half.
with that man ask you to silence your cell phones and let me invite ambassador sullivan to come make some pulmonary remarks. thank you very much. good morning and good afternoon. it's just seven minutes past 12:00. is no longer the morning. i will not hide from you that it's with a slightly heavy heart that i take the stage this morning. this was never where we hoped we would be. maybe we shouldn't be entirely surprised but it does not stop me from being extremely sad about where we are.
maybe we should be entirely surprised by all that is said. but something we feel puts us in a very difficult situation. the iran nuclear deal as many of you will know. by the broader international community as a strategic agreement. it is the result of international unity endorsed by the united nations security council and most importantly and this is hugely important to say and to repeat again and again. in other words to make the world a safer place. it did not promise nor set out to solve all of the problems of the international community with iran. and certainly not the problems that we as a european union continue to have with iran.
but the strategic decision was taken that the single most important issue in our relations with iran was a looming threat that it could become a nuclear weapon power. it was the most important thing which needed to be stopped. that's exactly what this agreement set out to do does in in our view will continue to do. and much more importantly. has in place robust verification system.
they've issued ten reports that also defy that they are complying. i have noticed in multiple appearances. that is also the view of the u.s. motility --dash make military. i know none of this is new to you into the outcomes of inspections we continue to believe. it's a vital element of our national european security. it is probably the single most impressive piece of nuclear in that sense it is the most
important working and not all. let me just deal with that. it is absolutely untrue. it is true that there are elements of this deal and certain restrictions on the peaceful nuclear activity of iran which is subject to certain caps and ceilings over a. of time. iran commits itself formally and solemnly by international treaty never to acquire or
develop nuclear weapons ever. in the international community is equipped with the right to monitor for -- monitor and verify that in perpetuity through the additional inspections. this is actually a treaty which is forever and it's the definitive annunciation of the right to acquire or develop nuclear weapons at any time. yes they could. but then they would be in breach of the agreement. if they conduct activities which are not compatible. the full right to reimpose all of the measures which we think our necessary in order to enforce the purposes of this agreement. somehow for the europeans that was all about money and trade with iran. it was european sanctions.
we took some of the toughest economic hits. we traded 15 times more with russia than we do with the united states. so when we introduce these sanctions we took the economic hit. we were absolutely convinced enforceable and effective. it was only at that moment that we agree that indeed the quid pro quo of this situation. and any international negotiation involves an element of that. it was to feel like they would
get some economic benefit out of accepting this considerably and unprecedented intrusive inspection system of their nuclear activities. and yet it is true that it's natural. that the europeans who previously have a more economic ties with iran would go back to more economic dealings. with no monopoly on that. i think there's only been a very limited amount of economic benefit for iran. and the ones that will commit to that for a lifetime. we want the dividends to be felt by the people of iran and we believe that that will be ultimately one of the main drivers of future reform in that country.
in the spirit and on the back of that obligation. we think it's absolutely vital not to permit the development of nuclear weapons by iran. well had to consider how to address the negative impacts that may be reintroduced by the united states that will affect european firms. and will work on will work on options to protect operators for the possible territories of reimpose u.s. sanctions. the gc poa is a long-term international agreement and we count we count on the continued unity of the international community to preserve that. it's predictability and maintenance of agreement over time. it will maintain its commitment to the gc poa as long as iran does the same. they responded immediately on behalf of the european union.
in the message was clear. our commitment to the jcp away in the determination to act with a security interest. we do not they have not suggested a credible alternative nor before. and we wait to hear how this administration thinks. we met with administration on the implications in the coming days we will have that situation with our partners. they have convened a meeting. tomorrow followed by a meeting with the iranian minister they
will discuss iran at an informal dinner on wednesday evening in the margins of the summits in when they said in the remarks on the eighth of may this deal belongs to each and everyone every one of us. we expect the international community to continue to do its part to guarantee that the deal continues to be fully implement and for the sake of our own security i want to return to my initial statement. it's a very heavy heart that i do this today. i hope we can find a way through. but we are to face some going to face some pretty difficult discussions i fear. [applause]. [inaudible conversations]
thank you. for your remarks. but what do you think is the likelihood of rehab for cement or issue of blocking our regulations. even if blocking regulations are used given the lack of strong european investment why would they now invest in the iranian economy given the threat of secondary sanctions. i understand the question. today i'm not in that position to give you detailed answers. we are engaged with conversations to understand how this is going to unfold from the u.s. perspective so that we understand what were dealing with. we will be discussing that elsewhere this week how we can possibly respond to that.
on the other point i want to make is that this is not just about the ability to do business . and russia to do business with iran. the whole point about the previous situation was that we had built and an and unprecedented coalition of china, russia and that meant the sanctions truly had impact i doubt it is going to be possible to reinstate anything like that. and in those circumstances we should not forget that other people will be perfectly able to continue to do business with iran. it is not a closed circuit
there is a gentleman here in the front i will take my prerogative as a moderator and ask you a question. >> how see mike how much damage have this decision done to u.s. decisions in the context of that withdrawal from the paris claimant accord. over aluminum and steel. i don't want to get into a quantification we've have disagreements in the past. with a strong atlantic.
i'm sure we will try to work our way through this. this is a moment of great difficulty on this issue we are clearly not on the same page. i asked the same question. your is to enact legislation. is the enter the same a few months ago. we are still studying exactly what would be the issues which arise from the matter in which the united states will put back in at sanctions and implications for european companies. that may be opens up the possibility of a certain flexibility in the way in which we can approach this. when we better understand exactly how this will be
managed we will decide how best we respond. from the issue of our country but also to protect the legitimate expectations of continued renewed economic activity as a result of their respect for this deal. i wish an interesting panel discussion. [applause]. have a lot to get through. if that's okay. as somebody who has followed the negotiations i wanted to
come to you in terms of two things. what does this mean for any possibility of reconciliation between the united states and iran and secondly, do you think that i read well actually be able to stay within this agreement absent u.s. precipitate -- participation. in terms of long-term applications it's obviously difficult to predict but if you put it in the context of at least the past year and half i would argue that for the first time following iran for many years i'm seen enmity towards united states which was always a tough top-down process. for the first time i see western educated iranians who
don't understand why the u.s. is doing this to them. it's not just the nuclear issue by the way is a broader context of calling the persian gulf the iranian place. you must pronounce that. an answer that the fact that the license for civilian airlines which again is something directly related to the quality of life and safety. all of this combined together has given them that for years and years. it's not just against the system it's against the iranian people. it can play the role of a regional leader.
they even put the leadership at the moment the prime minister trusted the united states. and they started negotiations with the united states. the axis of evil. and has delivered 100 percent. i see for the first time that that idea is gaining that within the society. and also taking into account we are talking about a very young population. almost no experience with the revolutionary war. not a go to go back to your first question if you would allow me. i would like to look at this in two different levels.
they are determining the outcome of this process. one is the additional -- international brain game. there plan b was to make sure that they could win the international blame game. this comes out of the experience of the section there. and the only reason that they were so effective was that iran was seen as the inflexible party at fault. they said never again. we have to make sure that this will not happen again and we are not isolated and secured and seen as the national peace in stability. we to act as if we are really delivering our end of the bargain. i think, they have managed to
create the consensus around this idea that they have to stay in the deal intake this as far as possible to demonstrate that iran is not the inflexible party. it came out a few days ago and supported this idea. i would say when it gets to the strategic direction i think they will stick to the deal waiting to see what happens in the negotiations with the people. obviously the people plus one. has a much better arrangement for them. now, there is also the domestic blame game that is at play here. and here the position is different because there are debates about whether they can
deliver there. giving more to the europeans may be on banking reform. and in return ask for more from the europeans or whether they should accept that. without the u.s. the dividend would be less than they were before. this is my question. we will talk about it with the whole panel. if the europeans despite the brave words are not really able to protect their companies to stay in iran. and it reoriented it almost entirely towards asia. they can't thrive without that.
and the reason is and this gets to the second part of my argument that if you look at the milestone. there's always the prospect of the supreme leader and the secession living in the horizon. there is a lot at stake. it will deftly be determined by the next supreme leader. and a lot of vested interest in the economy. there is an opportunity for those to monopolize the economy. that's why i think if i ran he fails as a last ditch resort. i doubt he would be able to maintain the deal.
i think they want quiet diplomacy for less effort evere the deal work. i think they were mindful that any open statement on more confrontational measures could derail those negotiations. the other thing, the of the reason for that though is that it would look at plan b, it's not too tempting. there is no silver bullet for protecting european investment in iran even though there are a number of options on the table. each of those options, i think as most people in europe see it there either technically or very politically complicated. if we look, for instance, on the blocking regulations, there are too many question marks how that would play out. it sounds a good theoretically that the eu would enact protections for rent but if you look at how that would play out,
it's a very technically complicated process. and in particular for private sector, i'm not sure it would give them the confidence they need that they will have continued access to the iranian market. i'm afraid i'm becoming more and more pessimistic that there are concrete measures that you could take at this point. >> what about the state owned, state run into these? i read i think in your own paper you put out for european leadership networks that the european investment bank, for example, might be able to extend guarantees. there are other banks that have heavy government involvement in their credit agencies and so on. or did not pick up some of the slack? >> thank you for reading my paper, i'm glad somebody did. >> that's why you are here. >> there are two points to question but let's start with the european investment bank.
they're going through a long process at the moment in which they gradually are moving iran to the list of countries where the eid could operate. so that's a process that is ongoing it will take another few months. once that is done though it is time for european negotiators to throw up a framework agreement with their counterparts in iran. this is likely to be a pretty drawn out, complicated process. the real significance of that right now rather than tactical i think is political. it's showing a commitment from the eu particularly to the private sector but also to iran that we are continuing business with iran. that's the first thing. the other thing is setting up the protected credit lines. we've already seen a few of these initiatives, happening in france, italy, denmark and so on. essentially what it would do is
you would have work with credit export agencies and banks to establish credit lines to iran denominated the euro rather than u.s. dollars that theoretically you would circumvent the reach of u.s. sanctions. it will have some impact i think but the problem is when i talk to businesses about iran and once as we are interested in this market with huge potential to we want to do business. the problem is the banks. the banks simply say we would love to do this but the risk is simply too high. we can't take the risk. and then of course shared european policymakers say we encourage it. if you are a big bank, you're really rely on access to his cal markets, like on having the
ability to process national payment in the u.s. dollar. the hesitation and the risk aversion among the big banks will simply continue to chill effect. having said that i think what these measures could do is you would encourage investments by smaller companies and smaller banks to keep some economic activity going with iran, and i think hope among policymakers in europe is this will be enough to tell iran that look, you're better off staying with the deal with us than you were under the sanctions regime. >> elizabeth, this is a good segue to you. i'm going to ask you again the china question that asked ali. china because of the size of its economy and so one seems to be very well-placed to create new entities that could trade with iran and invest in a man without any reference to the u.s. dollar. do you anticipate that this is
what is going to happen? we had some experience of this overdue during the period of heavy as sanctions we had an international consensus. china was still buying iranian oil and a don't believe it was reducing its imports of iranian oil very much. >> that's a rich set of questions. thank you very much, barbara. i'm glad to be here with you all for this important conversation. i'm glad for the opportunity focus on china and east asia because it's appropriate to talk about european companies and political leadership will respond not merely because they have lay down some markers and public statements. it's not necessarily president she's style to offer the same declaratory policy or set of offers of protection for chinese companies but that doesn't mean
at all we should neglect the fact they may be doing so and quite actively in private. it's a good question. what can't iran sustain economically if it only trades with china? but if it only trades with china, china is an enormous purchase of iranian crude picket purchases about 600,000 barrels per day now but it has spiked up to 800, 900,000 in the past couple of months. >> nearly half of what iran exports. >> right. it's possible they could find ways not to diminish that purchased even if there is some on the service plan to significantly reduce, let me put in a pin in that and come back to talk what that means come just to say under the prior intensive period of sanctions on them and there was requirement for countries to purchasing iran to his indifferently reduce within 180 days, last some other
banks are dealing with iran, central-bank and other financial institutions be sanctioned. we will come back to that if you want to talk to those details. but about china in particular there is an opportunity to continue, including in a manner similar to what happened up until 2012 when it was highlighted by sanctions by the kremlin who was processing oil payments for china in violation of the sanctions and then continue to do so afterwards. there are other independent traders who purchased iranian oil, that they did in various ways including through the gulf and it was an intensive effort, maybe you remember this, to get after loopholes and evaders end quote omani crude blends.
traders have noted that before last week new blends of cargo is on the market that are not armani crude. people dusted off that playbook and it's already started. china has this enormous amount of leverage to comply and little, to comply a lot, to comply not at all. that's the biggest challenge for the united states if visually a power struggle to occur between foreign purchasers of iranian oil or foreign commercial actors doing business with iran. and that would be the site of the real showdown, not with european leaders as you were just mentioning, and i want to just briefly say something about president trump's twitter indications about zte, the chinese telecom company. you may think this is unrelated but it is not. it's a massive chinese telecom
company that was against which sanctions enforcement actions were taken for its violation of iran sanctions and north korea sanctions, too. when president trump indicated he would work with president xi to alleviate some of the economic arm for this major chinese company and the jobs lost because of these enforcement actions, directly undercutting the threat of u.s. imposition of the iran sanctions when he just told china that if your president comes and makes nice with me then we will figure out way to lessen the pain. what exactly does that mean about the plan here for imposing these iran sanctions? what does it signal about how you may build a get out from under certain things if your political leader, your head of state is savvy enough to try to do deal with president trump? i feared that this confuses and muddies the water for many people trying to do right by
this, this set of sanctions, which is to say, i should say approach a legal path forward. it opens new opportunities for people who want to strategically contemplate the nation, avoidance, or political negotiation to go around them. >> david, you were an architect of the sanctions. you know how hard it was to put them all in place. how hard will it be to bring them all back? and in particular coming off of what liz just said, there are so many negotiations going on now on multilateral and bilateral basis. with god aluminum, steel. we have -- we have got -- president trump said he'll bring back all the sanctions and more in his comments last week pickup looks as though he might be willing to perhaps have a carveout here or a carveout
there. i'm thinking of the only major european oil company that's going into iran, invested $90 million in the big gas field. can you envision that there would be these kinds of deals that would be done? how much more does that muddy the whole picture for people ct figure out whether they should indeed wind down their business by next november? >> thanks, barbara. you potentially have two big questions in there, which is the first being how do you put the sanctions back in place, can it be done quite easily? i think again. it's a lot of work for lawyers in the government but we've already seen some pretty extensive guidance out of opec about how the sanctions are going to come back into play. it's pretty clear they will simply roll everything back in that was in place in 2015 going into the jpo way.
what is not clear in their is how that all plays out. how is resuscitating the state of your slot in 2015 bring us to the goal the present but added speech last tuesday for better negotiated deal with iran? because we can see, we can see what's happening though is the statements from europe about remaining in the deal, remaining committed to the jcpoa as a boy knows is not the entire story. what's going to happen is there are some pretty clear consequences such as revoking and reinstating prohibitions on foreign subs of u.s. companies. that's pretty clear how that's going to play out. the secondary sanctions i think is a tougher question but at the end of the day for most companies, even though the actual imposition of sanctions
is not a common event, usually preceded by visit undiscovered. the rally is that the reputational and commercial risk of infringing on u.s. policy interest in the ran from those companies will not be worth the price of admission. i share the skepticism that there may be any actual legal step that your can take to ensure that iran continues to receive the commercial benefit promised to it from european companies. the reality is blocking statute in the '90s was largely apolitical signal from europe. it was never enforced against any company. how do you force a company to go and to visit and a or cuba? the biggest difference in the '90s was you had a crisis in
transatlantic relations that was created and imposed on an administration that was concerned about the relationship with europe, and as a result came to a diplomatic solution. obviously that's less of the case today. i think the reality is what we'll see from companies over the next six months is a pretty rapid winding down and respect for what those sanctions are. there are two open questions for others on the panel here, which is, number one, how does that get us from a to b, especially if were going to start issuing carveouts with exceptions? i completely agree the statement on zte sends a very mixed message about old u.s. sanctions. and number two is i think what i have addressed is at the end of that six-month wind down. it will be a collision not just
between the united states and commercial, private sector interests, between the united states and foreign governments over the purchase of oil. i'll leave those open. >> i will give you one follow-up and this is something that is of great concern and a colleague of ours wrote about this this morning on his website. that is the whole question of humanitarian trade with iran, food, medicine, medical devices. these items are not supposed to be sanctions it. they had not been sanctioned, i believe is back in 1999 that the clinton administration lifted all prohibitions on this kind of trade, even with countries like iran, cuba and those that were under sanction. understand now that under the measures that the trump administration is taking, every iranian bank will now be on a designated list, will be on in
fdem list, if i'm not mistaken, which means that it will be almost impossible for iran to finance duchesses we and corn and mri machines and pharmaceuticals from the united states and possibly even for europe. if you can shed any light on this, is there a need for a fact to come out with some clarifying guidance on this issue in order to prevent ordinary iranians from once again suffering the impact of these sanctions in a really dramatic and directly? >> i think i've got good news and bad news for you on that front. the good news is that the rolling back of the sanctions listed on the jcpoa will not affect the licenses that are currently in place to export of food, medicine and medical devices to iran. those have always been issues, a
statute that required the licensing of such exports and, in fact, i think in 2012 opec converts a specific licenses to a license that appears in regulations and any person can use that general license to export medicine and food to iran subject to the conditions therein. there's no expectation that license will be withdrawn or altered anyway as a result of it jcpoa, particularly as that general license issued at the time when we were considering a dual track of building up sanction also trying to indicate to the rainy people that were not against them, we're trying to give them access to view matching items. that's the good news. the bad news is that what is very likely to happen is we end up in a situation following that general license, which is it
still can be incredible challenging to find banks are willing to do business with iran. i will leave you, well, and to reply directly to question about iranian banks, every major iranian bank -- >> private and state. >> right. will be placed back on the fdm list. that's when we got can we make the change in 2015 is essentially any major arena bank had made its way off the list so that would be the case against. >> let's might add one fdn refers to speak is those a specially designated nationals and blocked persons, okay. >> maybe i could finish with somewhat of a speculative silver lining which is over the past two years a number of financial institutions around the world have found access to the rainy market. it is true most major european
banks have not gone in to rate over the past years because of the compliance risk and cost. but there have been avenues open up over the last few years with some banks you legal but creative mechanisms and perhaps there's a chance despite the negative direction of u.s. sanctions, perhaps that creativity can now deal help with this exports that remain legal. >> if you want, i see what you add something to this but of wanted also to, well, do you have anything to add to this point on humanitarian trade? >> i think you covered it. just to say the implication of all those things going on, the fdm list is they can then be part of the something the trade
and iran come just to be expletive but point. that's why the necessity for all this creativity. but what a state would be living in a more specific arena for the living and, if the only way to get insulin drugs is to creatively engineered it with small regional south east asian banks. >> and a do what as both of you, what happens to the procedure for electronically doing these transaction with iran? does that now become in applicable to iran or is that not clear? >> this is a very good question. i can't tell you how many conversations i've had in the last 48 hours, as people digest the first of implications about these measures and then realize, oh, , my god, what does this men as a more technical, more technical way to think about
iran's financial connectivity to the global financial system and swift is a europe-based financial payment messaging system and it is, it basically is virtually the corner on the market now because it is very good at what it does. it's secure, very efficient. it has the benefit everyone in the world will understand how it works which is tremendously valuable commodity in this world. and so what those of you, i think it was, ambassador o'sullivan who think it was a european sanctions that were so forceful initially. one of the things when you make this point is the mechanism that implement of what we think of as swift sanctions were europeans, not americans. it was to be in all fairness it
was urged along in europe by pressure specifically from the u.s. congress, but a coordinated discussions on u.s. administration and congress. europe got ahead of that. i think fortune for everyone and the clarity of the global financial system by taking its own action. the united states can try and cut off these iranian banks on the sanctions list, in various ways to try and forcibly sever their connectivity to global financial system in europe doesn't get vital have to do so tivoli than occurred before because if europe doesn't instruct swift to dump these same banks some use of its financial payment messaging system, then the united states want to look to other ideas. in the leading idea that urged on the europeans to do this themselves back in 2011, going
into 2012, was the u.s. should name all the swift directed. basically the head of every global financial institution. that is the architecture of the entire global financial system. and because of the outrageous potential implications of that, other avenues were sought. >> you mean designate them? >> correct. >> sanction of them? >> yes. one thing that the experience of russia sanctions meant that everyone in this space is that the maybe a new way to name these people insulate the sanctions affect just to them and not to do everything they own and control, like naming the head of gazprom but not having that attach to the entire company. there's really no shortage to creativity in the way ofac could approach you. to take what is the use of
administration love to do it on its own, presumably, and that that could have some pretty significant implications. >> axle, i'm going to ask you to think europe will protect swift? do you think that is one thing they could do? >> yes. >> okay. go ahead. >> i share about our co-panelists about what you can do, and i think skepticism is warranted but fatalism is not. i give you a few reasons. first, europe by definition and i can afford to say this as a non-european, does not take the right action until push comes to shove, till they get into vertical territory. if you can afford to muddle through, that is the best option that they will pursue. now we are in critical territory anything they europeans realize this.
i draw your attention to the remarks of the french finance minister last week which really unprecedented. this is like rhetoric we have heard from france since 2003. french finance minister talk about the u.s. considering europeans as a vassal state and that they are not going to fall in line only because the use president has decided to take certain actions, or that europe should put together a ofac because what is ofac dictating what should happen in the global financial system? or your should create specific challenges which are immune to u.s. sanctions. two weeks ago this was impossible to imagine but now it is and it is certainly because the way the administration handled the negotiations with the peace treaty, dragged into the last minute, push them to make concessions and drop them and decide to withdraw from the deal. and also push back from europe
and has worked. look at the russian sanctions. look at the question of tariffs on steel and on aluminum. there are ways if there is political will in europe, i spent at least two months of the past will attend your. i couldn't since until two weeks ago but now it is up there. there is momentum and the mighty ways they can do it. our organization published a report on may 2 with a set of ideas, because i agree with axle that there is no silver bullet solution to shield european companies or interested in doing business with iran. maybe multi national but the medium and smaller european entities, but if the europeans offer a package of incentives to iran, then maybe the total sum of the political and economic weight of that package would be more than the sum of its individual elements. maybe that would be enough for
iranians to survive in the next two months to two years. also, and a further some iranian officials as well, talk 13 years to negotiate this deal. if we're talking about another two years, and in case the trump administration either changes its mind or its history, then it's worth saving this deal for the next two years. >> that's been my argument to the rain is to hold on. >> can i respond to that? >> did you want to add something? >> we might want to talk about the transatlantic partnership aspect of this later on but to pick up on what was said, there's really a growing pressure in europe now from the society, from media on policymakers to take firm action. i think that might actually change the way that european
policymakers approach this. to give an example, i read into major german newspapers this morning the transatlantic partnership is dead. >> "der spiegel" had an interesting cover. >> resistant, which was -- that's the first thing. pressure is building up. there's a lot of frustration in europe over u.s. policy. the other thing i would add, will talk about potential measures to encourage this activity and iran, beyond the big move such as going to the devotee l, even working with credit lines, i know that the eas is looking into new creative ways of what they can do -- >> eas? >> eas. >> european action service. >> they are look at what they could do to encourage perhaps mainly small companies to do business in iran. is there anything european
policymakers can do with due diligence? a lot of european companies that do due diligence cost in terms of manpower and just fees are discouraging. they are looking at ways of working with the private sector. i know they keep the dialogue open and i been in several meetings with european companies recently where we have these discussions like is anything the eu could do to work with due diligence? can we make some sort of white list of people who can't do business with? we have good tracking record. it's too early to tell whether that would be enough, but to pick up on your point, all these measures combine might be able to send a message to the private sector and to iran that -- >> it's worth to hang on. >> very quickly. >> i just want to -- not
disagree with you at all but what we end up if you are right, that there is a chance that europe encourages someone to stay in can we see the same from china. and six months from now, 90 days, 180 edition of the sanctions come back into effect and, in fact, european, asian countries do not reduce their purchases of oil by november. right? that's enough to keep iran in the deal. what does it mean for your sanctions? it means the united states is faced with the prospect of do we start sanctioning the companies our closest allies, or do we do nothing? make exceptions and exemptions, and under either scenario, you end up with bad. either you end up with the ugly choice that the training face in
the '90s but i think even more extreme what if we do nothing, our sanctions become feckless and the next time we try to affect be the whether it's on rush or north korea or has been whatever the next crisis is, the rest of the world goes, you know, we know they are not serious. we know that threat isn't real, and yes, we may end up with iran still in the deal but for the united states and sanctions as a tool is very damaging. >> i wrote something about that myself just the other day. >> great time with north korea. >> great timing, absolutely. i really do want to -- >> just from, if i look at this from his point of view and i remember this when i was working in d.c. that an emerging concern among u.s. policymakers was that, look, , if the united stas is seen as overly using their
financial leverage on international scale to push your political agenda, what can the long-term implications of that be? in potential looking at of the financial, but it was a concern that was sort to take form here. i think this is really adding to that concern. >> this is a this is a test ind. you been very patient. say your name. [inaudible] >> is it on? i don't hear it. [inaudible] >> all another mic? thank you.
>> dick morningstar from the atlantic council get one thing haven't talked about is the cow irretrievably out of the barn? is there still room for negotiation between the united states and europe over the next six months? is it too late? no matter what, even if the sanctions are not to be feckless or even if there is an agreement with europe at this point, will there still be an indefinite chilling effect at least a a mr investment in iran because of uncertainty as to what may happen? the of the question is there a way do you think for the eu to look at this issue beyond iran? and to put it also in terms of the economic and trade negotiations that are taking place or hopefully will be taking place with europe? and to basically go beyond blocking legislation if it becomes necessary but also raise
the stakes with respect to tariffs on things that may be very important to u.s. industry? >> excellent. >> on the first question, was, i used to think there would be groups of some kind of negotiation between europe and the united states and it would be room for diplomacy. not as much anymore. for those of you who watched trump's statements and he was really quite clear. we might think whatever all this strategy, it is not a detailed one but it seemed to me there is some kind of strategy. i think president trump believes that lively imposing all sanctions on iran and putting for the economic pressure on iran that he can semaphores the back to the negotiating table and make a better deal. if that's his strategy, giving
any kind of exemption for the europeans to continue even minor investments or business activity with iran would run completely counter to that approach. i have become more pessimistic that there would be any willingness on map of the united states to do that. before the actual announcement i thought that given there is a great deal of concern, particularly in congress, for european concerns for the transatlantic lanes that there would be open to some kind of negotiation. >> the europeans are not willing to come back i think after the experience -- >> and i think they are mindful that iran is very likely to give in to these new demands. i get a prospect for the new better deal as, you know, not going to happen.
>> i am inclined to agree. for the europeans are saying the transatlantic relationship is dead, you know, however, and so i've been feeling quite pessimistic about this for a while. with the set of trump's tweets about china and cte, i am now thinking actually the kind of deal of a fashion that may be in the offing is between president trump or the united states and china. it's not a jcpoa kind of deal. the deal of another sort entirely but it has to do with the way in which sanctions will be imposed and tolerated and may be an exchange of measures around the u.s.-china broader trade issues, and how much pain shall be imposed pursuant to a set of sanctions the measures, concerns about terrorist. that is not a nuclear arms control deal. it is not a deal among security
partners. that's an economic speed is are you saying china would trade away some of its commerce with iran in order to get of the benefits from the united states? >> perhaps, in the trade realm. of. i think that's what china, has proven to associate action strategies with the united states when it comes to economic trade and ip and critical industries and insinuating itself quite well in the united states and has enormous amount of leverage, now has this massive letter to paul with attorney on how much it will comply with iran sanction if it may get some of the concessions from the united states on trade and tariff terms. the only deal i see happening has to do with economic relationships between the united states and china. >> interesting. aldie, iran has that it's not coming back to negotiate negotr seeing what happened to the jcpoa, but are there any circumstances under which iran would return to some kind of negotiating?
at least conversation with europeans if not the united states have any of these issues? >> with the trump administration it's very difficult to imagine because, first of all, iran first said it will trigger this process in the deal in order to get the rest of the p5+1 to officially condemned the u.s. as a violator of the deal. the u.s. was violating the deal before but now it's include noncompliance with the agreement. that's a a huge political victy for iran. people underestimate this. for four decades use put iran on the international stage as, condemned it as violating international norms. for iran to be able to get the other five powers involved in this to condemn officially come to save u.s. is in noncompliance is a huge political victory. they will not let that go. so once that happens i think again the objective is to see if they can get an arrangement
between the people of iran. i think the president himself, president trump, has indicated he is interested in a better deal. i'm not sure if that's the perspective the people around him who mostly i think are seeking regime change. so even as you want to negotiate with the president, you have to go through his people who want either a clash with iran or military or regime change. it's very hard to imagine the personal channel directly to the president, i don't see where that's pretty between the supreme leader of the president? >> and because the president is going to understand iran's legitimate security concern and is willing to put more incidents on the table, then made one can imagine. i tried to explain iran to weston officials, our site is not a bizarre mentality.
it is a bizarre mentality it always depends on what you give them in return. and i think actually a deal with president trump is harder to get but it's likely to be easier to maintain pick a deal with president obama was easier to get but harder to maintain. i don't close the door on it entirely. i also don't see much interest from china to get into a deal because if you think strategically, this is the only place in middle east, bill clinton will that is going to oil in the next 100 years. iran is only country in that part of the world in which the u.s. does not have a foothold. so if china helps the u.s. to achieve its objectives, that is bound to be lost. >> belt road initiative. china is gone on iran for a lot more than just oil.
right there. wait for the mic, say your name. >> i'm a fellow at harvard university and a studying this topic for the last four years and trying to explain to european policymakers that the companies are not regulated in brussels but in washington. they fear they know kind of our learning the hard way. what i'm kind of the fearing for the foreseeable future, not so much like they are coming to this realization with respect to iran what you think is a lost cause because there are no real instruments available to implement this political bill to keep up the deal. i'm kind of bored with respect to russia if you compare russia to iran. iran is not really that much important economically for the european union. russia is very much important for the european union. if you look at the recent sanctions, they are already these sanctions and you could
have exactly the scenario which plays out right now with respect to russia, which is way more important to the european union. if you have european companies regulated in washington, withdrawing from the russian markets, this would be way worse i think that the fallout we are witnessing right now and i'm not seeing, given the escalation of european union in the past but supporting the extensive kind of interpretation of u.s. jurisdiction how this might like be solved in a kind of constructive manner? i just want to find out like the spillover effect with respect to russia. >> if anyone has any comments on that. >> true. i think that people who are involved in the russian market are learning a lesson that
people, so europeans involved in the russian market or learning a lesson that europeans involved in the ring and markets learned a while ago, which is that risk is very big and very scary, and it could be very costly. it may cause you to wind down certain relationships. the u.s. sanctions policymakers are proving themselves more and more creative in how they make it at you. i think european banks have long known their regulators are in washington and southern district of new york. but european companies are learning this lesson and i think people thought that it would be contained to north korea and iran and, in fact, actually the net is widening quite a lot. >> just to add, keep in mind there's secondary sanction is still fairly noble.
i think when we were incumbent and supporting these nation together and building the regime on iran, it wasn't done this way. it was done over several years. it was done with broad consensus on the problem we're trying to address, and it was done with thousands and thousands of hours of outreach and explanation and guidance to form partners and foreign companies. you know, so far very little of that exists with respect to the sanctions that have come back into play in six months. i think we saw similar problems. >> this is the russia sanction. >> if you look at the legislation that was signed into law in august it was pretty broad and assemblies quite
clumsy. it was refined significantly i guidance from ofac and the state department to make it what secondary sanction is this idea which is the specific behavior. i completely agree that there will be a very different story that it was between 2010-2014. >> you say the secondary secondr sanctions are meant to deter. have companies been prosecuted for violating secondary sanctions? >> great question. this gets to the heart of the sanctions theory. there's lot of what is prohibited. what is prohibited, and that could extend to foreign banking if the use in u.s. correspondent account. if you're a foreign partner of use company you could be prohibited from doing business in iran or cuba. companies tend to be very careful about that because their penalties and criminal penalties
attached to the second or sanctions is different. the goal is to come how do we stop a french company doing business an event with no connection to the united states? it's by threatening that french company with blocking them from the united states and that's a lot of what is going back with iran. of course, the ability, look, we used to get a lot of criticism from congress of not sanction enough banks. the the argument we get making was by the time you sanctions then you've lost because are doing business and iran that you don't want them to do. really though secondary sanctions are focused on deterrence and effectiveness of that deterrence is premised on the credibility of the u.s. threat. >> yes, rachel. wait for the mic. >> thanks for a great panel. rachel with "congressional quarterly." my question is what is the role
of congress in all of this? specifically, if it looks like it could be some potential deal with china that would alleviate some of the secondary sanctions harm and the having machine ist going to collapse because of the reposition at sanctions, what does this mean for europe? are they the losers and all of this because they're not big enough to get a special carveout from china? if that's the case should congress contemplate any kind of legislative action over trump's had? >> does anybody want that one? >> that was a rich set of questions. let me just praise the question because it is appropriate for us to be thinking about all the doubt of the story which has a broad array of political and economic sanctions which people are only starting to grasp.
so with respect to the role of congress and some of these various senators that could play out, congress has increasingly over the last 20 years taken a bigger and bigger role in the creation of new sanctions authorities and in the oversight of their implementation and enforcement with respect to iran. it took a big step in the 2015 and in our legislation and a shifted into and a tiger last summer with legislation signed in august in both of those there was a policy principle of high the administration hands if you will or force them into a specific direction and the conduct of foreign policy. what's challenging about that is the product of a particular political moment, and the political moment changes, which
is why, it is the known to anticipate and no ways -- congressman, i can't see why they wouldn't have the own say about the iran sanctions, and it could be a kind of course correction, if you will, from what the administration does. it could be a double down which would have the effect of being politically neutral for the because they're not take any political stance different from the president. that may be a safe place for many republicans in this congress. or they could decide to try and force the president hands in a particular direction, like if he decides that chinese financial institution for all company that is doing business with iran may continue to do so independent of the rest of the administrative, maybe congress want something to say about that.
i can't see how they would sit on their hands when they have not done so for the last so many years, particularly the last five to eight. the same outside interest groups that supplied much of intellectual capital for the various sanctions bills through 2012 in particular, and have supplied much of the same intellectual capital to the current administration. they are not going to rest on their laurels. the same motivation is to play. of course they are giving their thoughts and ideas to the hill, and hoping they will run with them. >> harlan. the mic. >> i would like to expand the boundaries of this discussion because it's not just iran and the jcpoa but with two other fairly significant events taking place. talks in korea on june 12 about denuclearization.
they have an interesting trajectory. if they could succeed god knows what that means, north korea will not denuclearized with a good feel. either way you will have profound implications. we have a tariff tiff with the eu and china that is not yet really worked its way through. i'd like you all despite tonight, on one hand you could come up with their grand strategy that some of trump is typed all these things together. i think that would make a better work of fiction or a program on hbo. but more importantly, you have these other events of what could happen in korea, which is unpredictable, of what could happen with the terrorists. could you just explore the various options you may consider to see a that could we expect the jcpoa? >> if i may. i've already said we would be so lucky to get a a jcpoa like a group for north korea. it would be fantastic. i don't think we'll get that far. that's just my view. anybody else?
iran and north korea are such different countries. kim jong-un can make a decision come he can make it stick. iran is and what like that. that's why took 13 years to get the jcpoa. but any thoughts all of you have on whether this show of strength by president trump exactly could help them with kim jong-un be irrelevant? what you think? >> the president believes that. but as you said, barbara the iranian case and the drink is a quite different and there are a few differences. obviously the most important one is we are had a deal with iran. once the deal has collapsed, i think with it is trust in the with the united states. the iranians have a long memory. i feel 2018 diplomacy with the u.s. would be a similar
precedent the 1953 with u.s. involvement in iranian politics. that's one major difference. second as barbara said, iran is not a hermit kingdom. it has politics. it's very risky for any of the iranian politician or administration to engage in direct negotiation with use anymore. for sure president rouhani would not be able to do. we are talking post-2012 21. the door is closed on that one. at the end of the day north korea has the ultimate deterrent in its hands. iran doesn't iran give what most of its leverage. if there if you are going to be negotiations i think the iranians will have to reconstitute the leverage that the loss. that's what we're likely to get into another cycle of isolation is is to completely collapses. at the end of the day north korea has a security guarantor. iran doesn't.
that's with is another rift, which i think if the europeans manage to keep the deal alive with china and russia, and those who were seeking to kill the deal, and do not succeed, their plan b might be to raise tensions in the region so that there is more friction between iran and the u.s., in yemen and syria, iran, u.s. and its allies by the way, not just the u.s. in this way we move for some kind of confrontation that within make assisting the deal between the europeans and iranians an impossibility. the last point i make is the lessons, people most talked about the lessons the north koreans would learn from this experience with the iran deal. i'm more worried about the lessons that iranians learned from what the north koreans have an able to achieve can which is the only way you can get a deal
with the u.s. and force the u.s. into negotiating table is to develop nuclear weapons, otherwise you either end up like iran. you give away everything and the goalposts will move, or that you end up like libya. like moammar gadhafi. i'm more worried about that because i've also started to hear from iran, people were very serious like national security adviser in iran, talking about exiting if the deal collapses. this was an impossible thing to to hear six months ago for a country that always used to say strategically, religiously, we don't want nuclear weapons. now they're talking about maybe that's the way to go. >> axel, , did you want to add something? >> the other part of your question touched on the eu. the other question which i didn't really respond to. we constantly hear this term being thrown around, this is doing damage to transatlantic relations, undermining the
transatlantic partnership. while we rarely specify what that would look like in practice. that's important to look at. to me that answer comes in two different port. on the one hand, neither side wants this disagreement to affect other areas of the relationship. in the united states, particularly with the u.s. congress, there is a great deal of concern for the transatlantic partnership and recognition of how mutually beneficial that is. meanwhile, on the european side, my sense on the meetings i've had is that they will try to compartmentalize this, meaning they will try to keep this agreement to the nuclear deal rather than letting it spill over into other areas of cooperation. which i think that we have seen sort of, we haven't seen any fireworks from the main european
leaders yet. having said that though, this is serious and we are seeing a growing sense of frustration within europe over unilateral u.s. policies. just to understand this, one of the most disheartening things i've heard in my conversation with european diplomats with one senior official telling me look, what's the point? at what point can what's the point of policy coordination with the united states? so in some ways i think we might see foreign ministers in europe start to question the very foundation of the relationship with washington. security has always been a cornerstone of the relationship, and from a security point of view, this is kicking the eu in the teeth. yes, long-term i think we could see long-term consequences. the last point i would like to make is we see a lot of references been made to iraq. >> 2003, absolutely.
>> unappointed go into whether this is iraq again. one important thing i would want to make is that 15 jersey go in iraq we saw the deficient point out in europe. the key question for european leaders became a you or do not align with u.s. policy? we are not seen those dynamics today. this time this splits right of the atlantic were we have the united states on one side and the european leaders are all saying that we remain committed to the jcpoa and full of limitation. i think that's the last point i would want to make. >> we are unfortunate that time, but that's a perfect segue. tomorrow afternoon we have two members of parliament from europe. one from france and one from germany, who will be coming and we will talk about the whole question of transatlantic relations and what this dispute is doing in terms of popular sentiment towards the united states. i encourage those of you to come back, come back for that one. thank you very, very much for
coming. obviously we will have to do a lot of follow-up on this in the days and weeks ahead. thank you to my speakers, all very great. thank you. [applause] [inaudible conversations] [inaudible conversations] .. >> we're live now on rayburn hill as the reform committee get ready to look at a progress report on the 2020 census. the acting assistant attorney general is expected to testify. this is live coverage here on c-span2. it should start in just a moment.