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tv   Atlantic Council Discussion on Sanctions  CSPAN  March 19, 2019 1:52pm-3:56pm EDT

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said it was co-equal but had no stronger power to interpret the constitution than the president or congress. today we're seeing all three branches insisting on their coequal powers. that's something the framers hoped for. >> so much more to learn about the constitution at the national constitution center, we always appreciate your time, jeffrey rosen. thank you very much. >> thank you. pleasure as always. the u.s. special representative for venezuela is meeting this week with his russian counterpart in rome to discuss issues in venezuela. the u.s. backs the venezuelan opposition leader and is considering sanctions, russia supports the venezuelan president, nick hololas maduro. jack lew spoke at the atlantic council in washington, d.c. first we hear a panel discussion with sanctions experts. this is about two hours.
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>> good morning everybody. welcome to the morning devoted to sanctions. it's a great turnout for a tuesday morning and it seems that as long as the atlantic council does the sanctions program, none of us doing it will ever be lonely. sanctions are a used and some say misused tool. sanctions are discussed usually in connection with a particular policy so it's russia sanctions, iran sanctions, venezuela sanctions. today, we're discussing a lot of this but also the use and potential abuse of the sanctions tool. the panel is going to be moderated by my former colleague from the government, now colleague at the atlantic samantha sultoon. she was one of the designers of the sanctions policy, she was
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ofac policy for a number of years, and now she's over here at the atlantic council. her last work was done with brian o'toole, also atlantic council colleague. everything you need to know about the new russia sanctions bill, 2.0, which was introduced last week, that's available here in hard copy as is brian's piece with david mortlock, one of our panelists on a larger look about sanctions, sort of a strategic look very much on point to our topic today, that's also available in hard copy. i commend them and i will continue to shamelessly flog atlantic council products. we try to give the best analysis available that people don't pay $20,000 a pop for and it's actually better than what
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people are paying $20,000 a pop for any way. we pride ourselves on that. the atlantic council sanctions team is populated mostly by actual practitioners of sanctions policy. people who have had to work with it and it is run on a daily basis. so that is enough from me. you will hear from me for good or ill later, and now it's my pleasure to turn things over to samantha sultoon. >> thank you, ambassador fried. as we are midway through the trump administration there is a
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great deal to take stock of. we will however limit our discussion today to the sanctions issues alone. sanctions have become the special of the day that has never changed. they play essential roles in u.s. government policies on russia, iran, venezuela, north korea among many others. to assess these in the trump administration more broadly we have a very knowledgeable skilled panel that i would like to introduce now. first we have to my left, ms. helen baker. ms. baker is deputy chief of missions at the embassy of the kingdom of the netherlands in dc, a career diplomat having served in nairobi, sarajevo in a mission to the united nations in new york among others. for the minister of foreign affairs. next we have david mortlock, nonresident senior fellow with the atlantic council's global
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energy center and a partner at the law firm of wilke, farr and gallagher. he previously served in various positions at the state department and was the director for international economic affairs at the national security council. next to david we have kerri-ann bent. she serves at barclays bank where she focuses on sanctions and money laundering, anti-bribery. kerri is also a member of barclays legal pro bono team and the barclays women's initiative, an organization that recruits and provides mentors for women. i like to open our panel by looking at where sanctions have been effective and positive lessons learned from those experiences. there are a few key lessons that our team at the atlantic council economic sanctions initiative assesses to be main priorities. first, that multilateral sanctions are more
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fefktive theffective than unilateral sanctions. that sanctions are only as effective as the policy is practical and thoughtful. that we need to be patient and strategic when implementing sanctions as they rarely prompt an immediate result. and that sanctions are most effective when making the recalibrated reflects shifting crop priorities and changing facts on the ground. in considering these two key takeaways on sanctions, let's first look at how these examples or success stories. while the trump administration has been comfortably ahead of allies in imposing sanctions on the maduro regime, this appears to have been done in coordination with allies. the eu and canada have also imposed targeted sanctions, and t groups have called on the venezuelan military to recognize one gauido as interim president.
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with that context in mind, what's your perspective on the tru trump administration's ability to canpitalize on these positive sanctions lessons learned and in regards to both a coordinated venezuela policy but also more broadly in the use. would you want to start? >> sure. i think venezuela has been in terms of coordination, it is the smart ring on venezuela. the impact is that is what we saw in the markets whether that was the us attempting to have it felt by us investors. you're definitely seeing where previously they had smart sanctions in the context of russia and we saw that they even enhanced the better growth to generally be more specific and they provide more guidance. they definitely see the coordination not just with multinational governments but also the coordination between ofac and also industry groups that are reaching out and providing feedback in terms of the sanctions.
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>> i would like to echo that point and also the introduction you made emphasizing if you can do it in a multilateral fashion, we feel the effectiveness of sanctions is more likely. of course, first and foremost it's very important that there is unity of purpose when you decide on sanction regimes and the more unity of purpose you can guarantee in the u.n. or on top of that by imposing additional sanction regimes, for example, in terms of the u.what u.s. has done and with russia and venezuela, but also there is that university of purpose, that is something that is really important for us. we think the transatlantic corporation has unity of purpose and also when it comes to the congress sanctions you would
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like to implement and other key sector for effectiveness is the implementation of the regime from paper and that's just not good enough, and for the netherlands, it's very important that once the sanctions regime is agreed, it's also implemented. we tried to reach out to other countries. >> we did that for example when we are on the u.n. security council last year, and also helping them in addressing obstacles they face in implementation, for example when it comes to defense building and to that effect we also contributed to various projects that the state department is implementing and to that effect. it's important to have that unity of purpose, to have the transatlantic cooperation, but also it means that there is clarity in text and legislation that is introduced on top of multilateral efforts. we sometimes struggle a little bit with that on the european sides, we struggle with that a little bit because you have to admit that in certain cases there is a certain degree or a certain amount of ambiguity built into
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text, which is understandable also, because it gives the administration a certain room to maneuver and that can be very understandable and needed. but it does cause an impact on companies. very often, even the feeling that the sanctions are up in the air already has a chilling effect on companies and transactions or operations that they are planning. so you see for us, this is an issue that we are often confronted with that we tried to also reach out to the u.s. administration to seek certain guidance. we'll leave that maybe for later in the discussion and i must say when it comes to venezuela in regard that as a good corporation. same goes for the drpk, for that matter. and most experiences with the sanctions committee and the un security council and also feel that that has been quite an
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effective sanction. >> my view on venezuela is that it is actually a great example of learning a lot of the lessons that i think the administration in many ways, it has fell down on over the last two years. obviously we didn't know what the end game is or how this will play out, but i think there are at least two factors that are strength here and not present in other regimes. the first is a coherent foreign policy goal. what is the outcome that the administration seeks? right? economic pain is only an immediate goal of sanctions. that's only the tool. it's not the goal of the sanctions regime. right? harming the iranian economy is not the foreign policy goal ultimately of the united states. it is behavior change of the
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regime. and i think with venezuela the difference has been the administration has articulated what the actual outcome we seek is. and then worked backwards on how we deploy tools to achieve it. the other big difference we see with venezuela regime is sanctions as only part of an entire coherent foreign policy strategy. right? we have seen situations like with iran where the sanctions are unilateral sanctions that appear to be the primary tool of the foreign policy to seek broad behavior change. we've seen russia where a strong sanctions policy and strategy seems to be a stand-alone tool in messaging that is diluted by the president's own statements. but with venezuela we've seen a
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multilateral approach. we seen a not only a multilateral sanctions approach but a multilateral diplomatic approach. we've seen the use of pools like recognizing the guaido government. we have seen sanctions be the tool to kind of follow and chase these broader statements of policy that we seek to recognize another government, that we seek to ensure that they have the resources available to them to assume governance of the country when that time comes. then how do we use sanctions to actually push that policy more broadly. like i said, on venezuela, there's a long way to go before we see how this plays out. but i think what we are seeing in real time is a much more savvy deployment of sanctions as part of that broader strategy. >> thank you. actually i would like to pick on a point that kerri and david
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raised, which std cis the conce smarter, more sophisticated sanctions in the use of licenses and waivers and regulations to both calibrate sanctions programs in a more targeted fashion like we saw more historically under the obama administration with cuba, but eventually with the iran waivers and some other russian sanctions. it would be helpful to hear your contacts and your assessments on whether these are creating more smarter fefktive effective sanctions, and what that does on the implementation side. >> is definitely more challenging to implement when you have general licenses that talk about activity being permissible and not a blanket restriction so that makes you, forces you how to look at each activity. you have to look at markets, see whether it falls in line and that is a very careful analysis that certain areas of, say, a
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financial institution or certain industry groups have not been familiar with. they haven't been familiar with sanctions from a market or securities or bond perspective. so when you're having to stifle these industries, that certainly is a little bit more challenging than having blanket restrictions. i think i understand the administration's objectives, but i think implementing on the ground is definitely a little bit more comfortable cumbersome with this market situation. >> i think it's better to have more targeted sanctions, and with waivers it makes a more targeted approach. however, it still in my earlier remark about clarity that is needed also goes to this waiver system. it has to be very clear to companies what transactions would be allowed, which wouldn't be allowed, what the process would be to obtain such a waiver
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if they approach treasury of ofac. it's not always clear what criteria their requests will meet. are companies willing to go that route? what how long will the process take but there's already an impact felt on companies decision-making or even in the psychological sense of the word. so, yes, in principle, these waiver systems can make a positive contribution to a more effective sanctions regime but then yes, it's still hard to elaborate on the nuts and bolts. >> i agree with those comments. i think i'll just add that i think the development of sanctions over the last decade, certainly the last few years has gotten more nuanced, more scalpel like, especially with the birth of the secondary
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sanctions around 2009/2010 to the use of sectoral sanctions in 2014, which have really come to fruition in venezuela. we saw unprecedented level of general licensing two weeks guy with the pedevesa. they are getting more savvy. a whole government approach dealing with international affairs at treasury, understanding what the economic consequences would be. i think the risks are -- i don't think they're there yet, but the risks are sort of moving in a way that is too quickly. this is good job security for lawyers and compliance teams.
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if ofac becomes too nuanced too quickly, it may overtake companies ability to comply. we're seeing some of this in over-derisking. we were guilty of this in the last administration of developing sanctions. the assumption that companies would go right up to the line and not go over it. what was legal, they would do, what was illegal, they would not do. so let's make our economic impact assessment based on what we'll make illegal. the reality is that's not where most companies draw the line. what resources look like, risk profile looks like. you draw the line in different places. that is from the compliance side of ofac, that's what ofac recommends. the reality is that some companies are taking a much more conservative approach, pulling back further than those people
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sitting in the room designing sanctions actually intend. so i would sort of suggest two things that could improve the situation here. i think first is investing in ofac's implementation resources. right? ofac is under great demand. again, this is something we were guilty of in the last administration. we need designation packages over here. we need a new executive order over here. we need a new sanctions regime here. that puts a strain on ofac and on the rest of the government to be developing those packages to -- there were many sleepless nights with the designations team to develop those packages. in the meantime, companies need guidance, they need specific
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guidance on specific fact-based situations. ensuring that ofac has the resources, the personnel, the time, the money to focus on implementation. it's just important to put those sanctions programs in place to begin with. the other thing i would recommend, from an outsider's perspective, is consistency. what we have seen between sanctions programs is somewhat of a lack of consistency. right? if you talk to a foreign company, foreign lawyers, they will say, well, with iran, it's prohibited to export oil from iran. right? well, no, it's not prohibtd itp it's prohibited to do it with the involvement of a u.s. person, perhaps secondary sanctions. but what is clear is the messaging from the
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administration is if it's subject to secondary sanctions, don't do it. compared to what we have seen from the implementation of the russian sanctions, we have not seen any significant implementation of the provision. we've seen very inconsistent messaging on does that mean foreign companies should be avoiding sdns entirely. we know there's a risk of secondary sanctions. certainly it's not perceived by foreign companies as the same level of risk as dealing in iranian crude exports, for example. so i think that lack of consistency means that the next sanctions regime, it will come out and companies will say how do we treat this one? is it a russia-like program, an
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iran-like program, and companies will look more to the president's press conferences then they will to the actual law. i think that really dilutes the impact of the law and the power of the law that when these sanctions get put out, companies turn to them and say i understand i can do this, i cannot do this. i understand i will face the threat of sanctions if i do this. i will likely be okay if i don't. for those sanctions to be effective, i think companies need to understand exactly what the risks are in a consistent way. >> do you agree that companies in general tend to over comply or do they de-risk -- >> yes sh, abt shg, absolutely. we have seen some of this de-risking.
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you -- we have seen it in the caribbean, we've seen it with somalia. we've seen banks simply say it is not worth the cost of compliance. if i have to call my -- if i have to have a massive compliance team to review every transaction or if i have to call my outside counsel every time there's a transaction involving a bank, is it worth my time? it's a business calculation. if you're spending more money on compliance than you are making of that business, why do it? even if u.s. policy perspective, it is really important to have remittances go to somalia. it's important to have commercial banking available in the caribbean. it's important that for the implementation of u.s. policy that someone is processing payments for food and medicine being sent to iran.
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so if you don't have banks, you don't have other companies doing those things, then u.s. policy is not properly being implemented. >> i think one point there, i do think there is an economic factor that's tied to it. i do agree that a consistent message could be helpful. i wonder if it's backwards, if it's whether the economic impact is what is driving the inconsistency in the message. where you see iran may not be as involved in the global economy, there's a stronger position that's taken against iran, not wanting to go to that line of secondary sanctions, but russia does have a global impacted on the economy, we're more hesitant to say there would be more secondary sanctions in that scenario. i do agree, it creates challenges in terms of driving your policy and understanding what your risk tolerance will be. if anyone was reading the tea leaves following the last administration and the next, you probably wouldn't have had a
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policy going right up to the line with iran. because you knew likely that that would be a snapback that occurred. if you are a company that went full-scale into iran and the now you have to unwind agreements that your client or you may have entered into, that is going to be a burden that you may have been able to avoid. i think there is a couple of competing -- in addition to having some consistency in terms of guidance given, there's also that economic factor and what sanctions regimes have a global impact on the economy. >> if i can respond to that. those are great points. i would say it is absolutely right that the economic interests are going to drive the implementation. with iran, it's very difficult. the impact of iran to the global economy or russia.
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if it is very difficult for a company to design a compliance program around talking points, it's much easier for them to design a sanctions program around the law. so i think the administration, ofac and this goes for all administrations, they need to ensure they are -- whatever they want the outcome to be, they are designing law around that. not just have tacking points. they can't finesse the law with talking points. i think you brought up snapback, that the great example where we have done well. there was a very clear statement this is the law now. if we end up in this scenario where iran is not in compliance, we trigger snapback, this is the law afterwards. there was a very clear statement of what that would be, and what
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waivers would be withdrawn. it was very complicated but it was man naageable for people wh dove in and understood what provisions would come back into effect. so i think that is a great example of where it was done well. it was explicit what the law is now and what the law would be in the event of snapback. then companies can make that risk assessment and said, knowing what the situation could be in the future, is it worth the riggisk of going full bore. >> if you say that snapback was done well from a u.s. perspective that is -- >> well, the legal structure and design of snapback was done well. the policy we can get into. >> after the munich security conference, there's not much more to be added to that. but we would disagree on that, yeah. >> i was not suggesting the
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policy decision to trigger snapback was a good one. just that when it was designed back in 2014 it was done with great clarity. >> if i could jump in quickly and shift gears slightly. looking more on the impact of maybe the overuse of sanctions. given the prolific use in the last few years, what is the assessment looking forward as to how sanctions are affecting the use of the u.s. dollar and what role the u.s. financial system is likely to have going forward given things like the development of the spv and where the spv currently stands in terms of processing the types of policy concerns that the u.s. wants to see addressed, humanitarian issues, medicine, food, that's something u.s. policy can get behind. the broader decision for the trump administration to
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unilaterally withdraw is prompted this discussion in the first place and the desire for some european countries to continued doing business in euros. if we're going to continue to see sanctions being used, do you think this is likely to drive a rise in the use of other currencies, cryptocurrencies? >> i think the dollar is still -- cash is king. you're seeing the dollar as the world reserve currency. at the moment, i don't see that changing. but if you are looking ahead in 20 years or so, the development of crypto, the interest of several countries to move away from the dollar, those forces coming together you can certainly see where there may be certain reliances that are not placed on the u.s. dollar anymore, and where it would be beneficial for other countries to be able to use other forms of currency
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whether it's another currency denomination or cryptocurrency to enable them to process transactions and to do business. you have seen definitely developments in the cryptocurrency world, i don't know if it will necessarily go to that, but you can see where the dollar will be chipped away. i think the spv does that. there will be comfort with u.s. government might not be as concerned about that. but what if you started processing all transactions in another currency. you can see were certain industries, if they adopt that approach there may be some impact to the u.s. economy. that could be something that will be concerning. i think right now cash is probably still the preferred world currency. but you do see companies that are moving away from it just because of the problems with sanctions. >> if i could add to that, jpcoa and spv aside, in general it
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should concern us if transactions would start circumventing u.s. dollar international financial system. if that starts happening, we also start losing track of the transactions and we might not have a good oversight of what's going on outside of our purview. at the time it was also an important argument for the european union, when swift was under december cushion. we wanted to keep swift outside of the rein of sanctions. because if these financial transactions were finding alternative routes, we would be at a loss. >> in terms of spv, which i find fascinating. we have to begin by being honest about what spv is about. it'scircumvention of the
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u.s. dollar. it's not even circumvention of sanctions. what it appears to be is simply moving financial transactions and i ron from one european financial transaction to another european financial institution spv. it is not -- we are not seen a situation where countries or companies are moving away from the dollar, it was generally prohibited to do business with iran in dollars. it is currently generally prohibited to do business with iran in dollars. none of that has changed because of the jcpoa.
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what we are seeing with the spv is that is intended to facilitate mediterranean through medicine. and we have seen a vehicle to avoid the risking. if the european banks don't want to process the transactions with iran, the spv will. frankly from what we were discussing earlier, that is good for the u.s. policy because it is to allow humanitarian trade with iran. i think that we have to be realistic. i don't think it's a sign of the weakness of the dollar and the dominant global exchange currency. there are certain structural broader things involved that really do not endanger the dollar based on current use of sanctions until we do something truly extreme. but i will refer to jack lew on that. he has the broad perspective. i'm interested to hear his thoughts. there are -- aside from that, i think realistically there are two risks of the spv. the first is the broader policy issue of the spv. the spv itself, not a
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particularly effective way to avoid u.s. sanctions. the u.s. can wasanction the spv and those using it. it is a bold political statement to have the european foreign minister stand next to zarif at the u.n. general assembly and say we are going to launch this project because we disagree with u.s. policy. and i think that is what is astonishing about the spv, the political statement about the schism between u.s. and european policy. i think the other issue with the spv is long-term. the spv is not effective at avoiding sanctions. but -- this goes back to a point we made in the piece, that the real -- in the near-term, the risk of misuse or overuse of sanctions is not a threat to the
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dominance of the dollar. it's a threat to the effectiveness of sanctions. the tool itself continuing to be impactf impactful. if you can find ways around it, is not going to diminish the value of the dollar. you can't do business with iran in dollars any wway, but what i will do is make it harder for the united states to have the leverage to use sanctions as an effective tool. the spv is not going to work in that respect. at least in a way it is currently design. but if you have countries and companies continually prodding because u.s. policy is so contrary to their own government, their own views, the sfv may not work today but you continue to prod, you will find something that works at some point. i think that goes back to the point that the best way forward is multilateral, to guard against. not just multilateral, but global credibility of u.s. sanctions, to ensure that we
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don't have people so hard trying to find ways around them. >> picking up on your point about schisms -- one other major schism this that we have seen is a view of the congress versus the president in terms of the relationship with russia. and this had led congress to incressingly assert itself in sanctions, both in the russia con sex and more broadly. one of the most recent examples is section 216 which demands congress has an opportunity to review any decision by the congress to delist sacnctions. this came to a head very recently in december with the decision by the ministration to the list and aluminum giant and its holding company. considering this increasing role of congress and sanctions, and their decision to increasingly insert themselves in the implementation process is beyond
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looking at the policy side alone, what is your assessment in terms of the impact with sanctions, both with the ability to make those decisions more multilateral, but also does this represent an overreach of congress' role or is this a balance? looking at you, david. >> it is really fascinating. on russia, it's been really fascinating, but it's not new. we had a strong congressional interest in iran during the obama administration. congress inserting its repeatedly through legislation, including legislation that the administration outright opposed. but nonetheless, once that legislation was in place, the administration implemented it in good faith. so russia and the russian legislation, congress' involvement is not new, but it
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is true that the type of involvement is new. the delistings is new. something that the administration was against that sort of ability of congress to really slow sanctions changes down, to review them. and i think there is some real danger here in that the administration, ofac, needs to move nimbly and needs to be able to move based on substance, not politics. and we saw the intersection of politics and substance. i think what we saw was on the substance was a success for sanctions in a good blueprint for saying to be able to get out
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from under sanctions, you really must diminish your ties with sanction individuals, with russian oligarchs, and it sent a strong message to other russian oligarchs, if you get close to putin, you could end up like deripaska, and end up negotiating away your control of your empire. however, we are dealing with a situation where the message from the president is completely inconsistent with that. so it is not surprising that the congress would have concerns over what the administration might be with respect to russia. and to want to act as a check on that. and what we saw with the rusal delisting was a failure of the administration to put those two issues together and realize there would be real scrutiny and real interest from congress and what administration was doing in removing russian companies from the sdn list. i think there may have been an
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assumption it's was low key to issue that notice to congress on december 19th, right before the holidays, before the swearing in of a new congress, let's get this done quickly and quietly. but it had completely the opposite effect. it created great skepticism from the hill regarding whether this was substantively good and justified and a strong step on sanctions rather than allowing a russian oligarch to skate away relatively unscathed. on substance again, i don't think that was the case, but that was not well explained, either to the hill or in public. so, you know, i think frankly as a result of that, obviously we saw deska being introduced, a
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really good explanation of the bill and what's changed put out yesterday. but no doubt we are going to see continued involvement especially -- this is true for future administrations as well -- especially where there's disagreement between the administration and congress on policy. can go well in a situation like here with desca, or whether it's time to consider visions and consider to be effective, and receive input from the administration, outsiders, or you end up in a situation like cata, where you have two presidents and two weeks later you have a piece of legislation that may not have been the most well thought through piece of information with sanctions. that is really a danger i think. >> from a european perspective, we have long considered the
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russian sanctions as a very strong example of transatlantic unity, and in 2014 when the c crimea sanctions were put in place, and there's a mechanism where they have to be extended every six months. with a clear purpose of russia stick to the minsk agreement. but we have always been working very closely in very much appreciated that corporation. of late we also find there's been more challenging to -- certainly this has resulted in intensified conversations, not just with the administration but also with congress. congress is, like you said, an important machine or motor of sanctions legislation. sometimes in the conversations from a european perspective we
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also meet some misconceptions as if europe was too weak on russia. it's good on this occasion to repeat that actually the eu has imposed economic and diplomatic sanctions as well as restricted asset freezes after the illegal annexation of crimea, and the impact of those sanctions is felt in the eu. the eu carried a much heavier economic burden than the u.s. for sanctions against russia. our imports from russia are almost half, and they declined from the same period last year by 25%. exports, similar trend, between 2013 and 2017, eu exports to russia declined by almost 40%, while u.s. exports to russia declined by 26%. there is that economic impact. which makes sense because of geographical distance and more intense trade and investment
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relations. just to emphasize that we have felt the impact of those sanctions. the eu has also since worked with the u.s. related to chemical weapons attacks, salisbury, the eu has moved to instate cybersanctions and is working on human rights regime. so there is no naivety about the russians from our side. we do feel that this is sometimes not understood well in our conversation, or we feel a need to re-emphasize these facts. that is a course when it comes to secondary sanctions and collateral damage that that can bring to european companies. in the case of rusal, we've seen that quite clearly. in that particular case there was a lot of outreach between eu and european member states to congress and the administration trying to make those same
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points. and i think in the future we'll continue to do that. because eventually it is more effective if we can work together and have that translaptd transatlantic unity we have had. >> just to add one other point to that, i think while this may not be with sanctions, i think it's here because of the administration. what you have seen is ofac being transparent about what it takes to get you off the list and what it takes to be delisted. i don't think that we have that level of transparency before. and whether it sets a dprentspr or not, having that information out there, and congress with a close vote almost agreeing to the delisting, that creates
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uncertainty. i think that creates -- if you were delisted before, you are delisted and you are no longer subject to sanctions. and that was your message. here when you have another party weighing in and not necessarily being completely on board, then it creates a little bit of uncertainty for companies that want to do business with those individuals. they have to take a risk-based approach because it is not necessarily clear and convincing that this person or entity should be completely devout of sanctions. i think that is what we are seeing and what's happened as a result of the check and the balance in congress against the administration. >> thank you. i'll refrain from commenting further on congress's ro role a look to the audience for some q & a. introduce yourself and your affiliation. i occupied a little bit more time than originally planned, so we'll try to limit it to one question per person if possible.
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>> i'm barbara slavin, i direct the future of iran initiative at the council. and i wanted to as the panel, particularly the european representative to try to get into the head of mike pence and mike pompeo when they invade against the spv. i think the europeans have made it very clear that initially this is going to be just for authorized transactions, humanitarian transactions with iran that don't violate the sanctions. i was really surprised by that, and also by the demands that europeans leave the iran nuclear deal. why do you think that was the case and how will you respond to that? thanks. >> i think angela merkel gave the best response to that in munich over the weekend. it's clear that we don't see eye to eye on the jcpoa and the yune
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l unilateral withdrawal of the u.s. from that agreement. for the european union, this is a security concern. it's a national security concern that is at stake, we always regarded it not as a perfect solution, but at least an agreement that we were on board and i think it's been clear in our response that we maintain to the jcpoa. it's also clear with the u.s. policy in terms of the overall policy of ironically the sanctions back on the table and forcing iran back to the negotiation table. it is also not that the european union is blind to the other things that iran is doing in the region. when it comes to human rights abuses, the ballistic missile aspect of it all. but those are outside of the
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scope of the jcpoa, and the european point of view is that we will stick to the jcpoa, and we value that agreement that was made and, you know, came about together with the u.s. with the previous trammed administration. to get into the head -- i don't think we'll go there. i think it is clear that we don't see eye to eye when it comes to that. it is also the government of the european country to decide on their policy. >> i defer to helee n on the european approach. but obviously, there is a total stalemate on views and that is not going to change anytime soon. i think what we saw in munich
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was the sort of cementing of positions. europeans are going to go forward with jcpoa, we're going to reimpose sanctions. and that has -- that is sort of in a way the silver lining, glass half full of that is that has sort of settled into a bit of an equilibrium. there will be these dust-ups, threats to sanctions against european companies doing business in iran, but iran is still in the deal. at the end of the day, that's a positive thing that iran is in compliance with the jcpoa. as you said, there are a lot of other things we need to address with iran that are pretty horrific, but them not developing a nuclear weapon, that has got to be good news. >> if you could introduce yourself and your affiliation, we would appreciate it. >> good morning. paula stern, long-time member of
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the atlantic council. would you talk about the intersection of our sanctions vis-a-vis iran, vis-a-vis russia, vis-a-vis even venezuela, with regard to the u.s./european alliance? in other words, does the preoccupation right now with the jcpoa and the activities regarding the sanctions, take away from the attention that the u.s. in that you have had on the russian sanctions with regard as you said in your words to the illegal annexation of crimea. what is that doing in terms of u.s. sanctions policy? is it lessening tension?
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is it diverting us? is it pulling apart the alliance when you're focusing on this new set of policies that were articulated by the trump administration, vis-a-vis iran? >> do you want to start on the alliance? >> yeah. i mean, clearly sanctions regimes are an important tool for foreign policy, both for the u.s. and for the european union. there are many lines of communication between the european union and the u.s. administration on sanctions as a foreign policy tool, on sanction regimes. i don't think that necessarily the fact that we don't see eye to eye on one particular aspect leads to a diversion of attention among other aspects.
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that conversation is still happening and we'll continue to engage in thatconstructively, as we think the u.s. administration is. i'm not too pessimistic in that regard. these days people talk about pulling apart the transatlantic relationship. yeah. let's not go there. we are not at that place and we should make absolutely certain that we don't get to that place. so keep up the good work. >> and i think you mentioned also earlier on that there are places where we have strong coordination bilaterally. >> if you look at the working level, there's a close working level between brussels, the state department, treasury,
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ofac, on guidances, on various pieces of legislation that are floating. so that is absolutely a conversation that is happening. >> we'll take one more question, please. >> it's been five years since the illegal annexation of crimea, you mentioned the difficulties of enforcement and implementation of russia-related sanctions because it's such a large economy. what do you think is the shape of crimea-related sanctions? do you see the threats of more ininvestigati invasion or avoidance of these sanctions? >> kerri do you want to speak on the potential avoidance? >> i think the crimea sanctions will remain. i think the administration will need to craft some clear objections in what their gone
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y ongoing intention will be with regard to russia. the crimea ones will remain. whether we will see circumvention of that program, i can't predict what will happen, but that was one clear objective that had global support. that was supported across the eu, also the u.s. i think the crimea program is one we have a commonalty on. however, as the u.s. develops different interests and targets towards russia, that may be where we see a die verbvergence the global community with regards to russia. >> i will add my agreement, the one area of russia sanctions with being the strongest level of implementation and coordination with europe is on
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rye mia crimea and russian's interference in the ukraine. obviously now we have seen u.s. sanctions on cyber interference, on russia's involvement syria, and there is a whole host of issues that the sanctions are now responding to. my recommendation would be twotold. one is more realistic than the other, but it is a clear distinction from the administration about -- and congress as well about what sanctions are directed at what. if russia -- if we intend sanctions to have an impact on russia's behavior and putin's decisionmaking, which i think i've given my arguments on why i believe that has been the case in the past, then we need to be very clear about what we are laying down sanctions for. we know that executive order for 2014, the crimea embargo, obviously that has to do crimea,
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and if putin implemented minsk tomorrow, presumably an awful lot of sanctions would be lifted, the directives, the crimea embargo i think would stay in place, both from europe and the united states, if russia continued to occupy crimea. i think that should be the case with all the different lines of sanctions. they should be very clearly tied to policy goals and russian behavior. and of course this may be a sad note to leave on, but the other problem is the president's own words. and, you know, those sanctions a are -- the sanctions are -- the impact on putin's behaviors, the impacted of the sanctions are essentially nullified when the
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pit stands up a president of the united states stands up and dismisses russia's actions. sanctions cannot compensate for such a strong message from the u.s. leader. so those would be the two >> i think we're actually, given those uplifting and less than uplifting remarks, going to have to leave it there as we have had a very thorough warm-up. if you could please join me in thanking carrie, david and hyan for their thoughts. if everyone could stay in their seats. we will do all the shuffling up here. hopef hopefully, you can say comfortable for a minute or two. thank you.
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>> the most depressing thing i read this morning was jack lu's cv. because it makes me feel like such a retched underachiever, not to say a loser. i started -- i worked first with jack lu when he was deputy
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secretary of state on the first obama term. and then he went on to be director of omb, white house chief of staff, treasury secretary and helped save the global economy from meltdown. you know, what have we done? but the reason he is an apt person to speak today so sanctions is because of his speech in march 2016, a kind of v valedictorian speech. i would be proud to say i was c co-author of it, but i had nothing to do with the preparation. but that was a thoughtful, strategic look at the sanctions
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tool. at a time when the obama administration had used it far than it expected to coming into office and during the bush to obama transition. the panel was discussing some of the risks of sanctions in some detail. and it's useful two years into the trump administration to have this larger discussion. so it is a pleasure to welcome to the stage colleague and boss, secretary jack lu. so, i was looking at your article. i re-read it, your 2016.
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and then i read -- then i read an article you wrote with richard nephew, my former colleague from the state department at columbia. in 2016, you said, there are risks. the risks of overuse. you laid out some of them. and lessons of sanctions. but in the article written last year, you said, washington is using its economic power in aggressive and unproductive ways, undermining its global position. so basically, no 2016 you said, hey there are dangers. in 2018 you said, we're there. we're in it. how bad, how reversible, what do we do? there are other things i want to raise. i thought i would start out with sort of the big thing, because you wrote it.
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>> well, thank you, dan, for the very generous introduction. i have to say, when a group of us without a lot of foggy bottom experience arrived in january 2009, there was a group of career diplomats of which dan was one who gave a crash course to a bunch of very eager students for which all of us have been very grateful ever since. let me go back to the reason why i gave the talk at carnegie at the end of the obama administration. we had a lot of experience with sanctions. probably more than any of us had expected. and i think not to overstate it, we had developed a quite sophisticated approach to sanctions, to take what had historically been a much blunter tool and to make it a tool that we could use and control the spillover and unintended consequences so that you could use it in cases where you might
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hold back if you didn't have that ability to be more finely honed. i gave the talk because we learned a lot of lessons the hard way. it seemed like the right thing to do to lay out what i hoped was a thoughtful way both what we learned and concerns we had in terms of how those tools would be used going forward. one of the things i made clear in that talk -- i hope i made clear in the article that richard and i -- we teach together at columbia. happy to write it together in foreign affairs. it's important the united states maintain its ability to have sanctions as an effective tool and that it reserve the ability and the right to use that tool unilaterally when it's appropriate. why do i say that? i say that because i can't count
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the number of times i was in a room where if we didn't have sanctions as a meaningful way to respond, the conversation almost immediately would have gone down a path towards do you or do you not use force. the number of circumstances where you need to express your national interest and your view but where force is not the right next step, it's important to have sanctions as an effective tool. what i warned in the carnegie talk was that sanctions are most effective when there's broad buy-in around the world amongst our allies. they're only really effective to compel policies to change, for another sovereign to change its policy, if there's meaningful and lasting relief from the sanctions, because if you are going to be damned if you do and damned if you don't, the country made its judgment as to what it believes in its national
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interest. if the ability to get sanctions relief is something that can't be relied on, then sanctions are not an effective way to lever a negotiation. ultimately, it's a negotiation to change government policies that are offensive in another country that are the real purpose of sanctions. the experience we had in the obama administration was in the case of the iran sanctions, we learned through a series of incrementally ratcheted up sanctions that you could keep a community together if you listen to what the concerns of your allies and even some not so allies were when you needed them to be part of the united front. did china and india reduce their oil imports as much as other countries? no. but they reduced them
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significantly. the combined affect of all the countries of the world working with us was to bring iran to the negotiating table. i don't know that would you have g gotten that result if you had done a unilaterally set of sanctions, even the secondary sanctions that cut off dealings with u.s. financial institutions. ultimately, it was that global pressure. relatively little cheating that made it effective. in the last two years, to carry forward on iran, the story couldn't be more different today than it was two years ago. just this past weekend, i know you were in munich, dan. you saw it play out on the world stage. we don't have the support of our closest allies or really any of our allies on the reinstatement of sanctions on iran.
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what you are seeing in response to that is a process to look for ways around u.s. sanctions with more creativity and more energy than we have seen before. you ask about what the timing of the impact is. i'm not going to sit here and say i think that we're at the moment where a special purpose vehicle will create the ability to circumvent the united states and, therefore, relieve the pressure on iran today. what i worry about and what richard and i speculated about in the foreign affairs article is that the plumbing is being built and tested to work around the united states, that over time as those tools are perfected, if the united states stays on a path where it's seen as going it alone and doing what it says it wants to do, even
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without the buy-in of other nations, that there will increasingly be alternatives that will chip away at the centrality of the united states. i kind of liken it to a long-term process. almost like geological time. you know, if you think about the post world war ii order as being something that has got very special power in terms of the u.s. place in the world, none of us knows if we did everything right. that goes on for 50 years or 100 years. let's say it's 50 years. if the policies of the united states have the effect of shortening that by a decade or two decades, that is very meaningful in terms of the u.s.' role in the world and the kind of arc of history. i think the way the u.s. is approaching the use of its unilaterally authorities now is
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causing that process to hasten. i hope that before the changes become so real that they are irreversible, there's a change in how we do our business. but, you know, i don't know what the time period is, whether it's two years, four years, six years. there's some period of time that the world will wait before it says, well, we're going to start to develop these things in the most aggressive way. and i think what you are seeing and what you saw play out in munich was a warning shot. >> well, it's certainly true that at munich when vice-president pence called for the europeans to withdraw from the jcpoa it fell flat and you could put it more strongly than that. let me cite a possible counter example which came up in the panel discussion this morning, and that's venezuela sanctions.
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where the united states has acted at least in the same direction, although ahead of the european union, and with the support of the oas. now the trump administration does not, in fact, pride itself on its devotion to multilateralism or its solidarity with the european union. and yet, it has acted on behalf of if not the same policy, a consistent policy of transatlantic policy and with the oas and the sanctions in venezuela which are tough have not generated any outcry. is this a one off, or could we look at this as an example of trump administration doing it right, in which case -- i'm trying to construct this -- i don't know that it's right. but at least to tease out the issue. is the challenge that you have -- which you have discussed
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a function of a policy disagreement over iran that we're extrapolating from, or is it broader? because if a f it's the foit's it's -- >> i think it is broader. if you look, for example at the tariffs that are being now -- they're now in place and being contemplated, together with the withdrawal from the jcpoa, the withdrawal from paris, the series of actions that have been taken, there's a pattern there. venezuela is the exception. i actually think venezuela is much more akin to the way that the iran sanctions were put in place than the way the withdrawal from jcpoa was managed. it's a different process. it reflects a respect for the
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need for multilateral buy-in. it reflects the u.s. working as part of and as a leader of a global movement much a. and i think that is a place of great strength. it also shows the power of sanctions, even in a case where if you had asked me how integrally connected are the u.s. and venezuelan economies, i would have said we're not very interconnected. we barely had any relation with them with the exception that citgo is there. the money that's paid for oil to be purchased is hard currency. a lot of the other payment is forgiveness of debt and other things that are not hard currency. even though we have a relative to our relationships with other countries small contact with venezuela, there's enormous power in the u.s. economic relationship. to my mind, venezuela represents
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more the way things ought to be done than other thing weerz talking about. i'm not sure i can come up with another example. in the last couple years though another example. in the last couple years though. i'm not sure i can come up with another example. in the last couple years though. >> dprk sanctions. the last six months or so of the obama administration when i was in the sanctions job, we were starting to turn towards something which the trump administration implemented as maximum pressure. although, this will probably irritate people on both sides, a lot of the specific sanctions that the trump administration put in place and executed skillfully were ideas that -- >> we cued up. >> right. more continuity. everybody is supposed to deny it. but there it is. this is a case of the trump
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administration again acting according to a clear policy, which had general -- in fact, almost universal buy-in in terms of its objectives. working with our allies and putting pressure on china to do more. it was reasonably successful. then there's a question of singapore and the statement. >> i will acknowledge your point that dprk is a mixed -- it's a mixed case. it's important to remember that we went to the security council in december of 2016. i actually chaired a security council meeting. the only time a finance minister chaired a security council meeting to ratchet up sanctions
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because the nuclear program was accelerating, the missile program was accelerating. candidly, it had gained speed faster than had been expected. if i was going to look back knowing what we knew in the last quarter of 2016, if we had known it a year before, you would have seen more action in the obama administration, which is why all those actions were cued up. i also agree with you that the tougher stance on china had an affect of bringing china more forward than it probably would have otherwise been. at the same time, i think the extreme rhetoric that was used to frame the issue combined with the grandiose of a dictator in
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north korea sends a jarring message about what the real consistency of the united states is. i think the imposition of tariffs on china in a way that has been quite aggressive -- i had many, many encounters where i complained about many of the policy issues that the current administration is challenging china on. but i don't think that going to a trade war is the way to resolve those differences. you ask about the interaction of china's pressure on the dprk and the u.s. engaging in a trade war, i don't know if that's been totally thought through. i don't know that -- i do know that the principle economic pressure point on north korea is china. balancing how you engage china to maintain china's cooperation is something that requires
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diplomacy, not just rhetoric and not just unilateral actions like the imposition of tariffs. i think it's an unfinished story. obviously, there's another round of meetings coming up, both on trade and on dprk. i hope that there's a resolution in the dprk that is stable. i have to say, i'm not optimistic it will meet the standard we set for the jcpoa. this administration has defined the jcpoa as being the worst deal ever. i think the odds of north korea actually putting its nuclear program completely on hold is a long shot. i hope it happens. believe me, the world would be a safer place if it happens. i worry about the impact on our alliances in asia if there are
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material reductions in our ability to offer security assurances to japan and the republic of korea. so i think the end of the dprk engagement is far from known. but i will concede your point that it was a case of continuing to work in an area where there was broad international c consensus. it was possible to bring more pressure to bear. whether that will have the effect of reversing north korea's policy remains to be seen. >> to generalize, i think what i hear you saying is the use of the sanctions tool in north korea -- against north korea was done with relative skill but within a policy context which was internally inconsistent.
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>> right. unilateralism and sanctions is connected to unilateralism in other areas. this is a point we tried to make in the foreign affairs article, that you have to look at them kind of together. because the role of the united states in the world doesn't get separated out into the united states as the author of sanctions, the united states as a trading partner, the united states as the leader of democracy. it's kind of the whole package. the sanctions tool in north korea, you know, if anything i have been circumspect and said, if we had known in 2015 what we knew in 2016, we probably would have been even quicker to use more pressure. putting it into the context of the other things going on, in
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2015 we were still keeping china in the fold to keep the pressure on iran to get an iran deal. we were keeping pressure on china to stay engaged on paris to try and deal with climate change. in diplomacy and international economic policy, you are always making tradeoffs about where you put the maximum pressure when the intelligence suggested you had more time on dprk, it didn't become unimportant. it just didn't become the dominant concern. as you know, by the last quarter of 2016, that was shifting. it was shifting because our -- the clarity of the picture was changing. i do think that in imposing more sanctions on the dprk in 2017, it did put pressure on the
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regime. i'm not sure how to separate that from the other elements. >> right. here is -- there's one sanctions regime that the trump administration has put into affect which is counterintuitive. it's global magnitsky. a tool that was debated. it was congressionally driven, debated during the obama administration. the trump administration exbr e embraces it. the trump administration and human rights policy are not things i think of linked together. there it is. the trump administration has used it to go after some pretty awful characters. including some people we were looking at hard in the obama administration. bad actors in africa. with blood on their hands. not good people.
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how do you -- what do you make of both the irony of the trump administration embracing a human rights sanctions tool and what do you think of their -- of its implementation so far? all sanctions tools can be used badly or misused. >> i have to confess, dan, in my private life i haven't followed all of the instances in which the global mag has been used. i do think that it is important for sanctions to be a tool that is available when there are appropriate times to protest human rights violations. what i don't know is how effective they are, whether it's people who come to the united
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states who do business with the united states or how symbolic they are. unfortunately, with many instances of using sanctions, when there are human rights violations, it ends up being more an expression of policy view than something that can effectively change behavior. i just don't -- i haven't studied the series of actions. i found when we debated human rights grounds for sanctions, i always asked, is this going to be something that is going to change behavior or is it going to be something that puts kind of a stake in the ground of what we think is right and wrong? i was always careful about using sanctions for symbolic purposes. they're so important when you can have real affect, that i was worried over time it would dilute the power of sanctions if
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they were used kind of too widely. that's not commenting on any of the specifics, because i just haven't studied them. >> fair enough. in government, we spent a lot of time on the russia sanctions program. >> we sure did. >> tried to balance the imperative of responsing effectiafe aggressively to russia aggression without blowing back and damaging us and our allies. we have seen the trump administratiod try to find that balance under circumstances where the president's own policy is far from clear.
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the administration's policy is therefore inconsistent. two questions. do you think we got it right in retrospect? should we have been tougher? did we handle it about right? more importantly, where should we go now? because i'm thinking about russian behavior. if i were still in government trying to design sanctions for russia, one of the problems i would have is trying to separate the different strands of russian bad behavior that we're trying to respond to. russia aggression against ukraine, killing people in the uk using nerve gas, interfering in our elections. those are all separate activities. >> many streams. >> right. what advice would you give? >> i think you have go back -- have go back to when russia's violation of ukraine's
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sovereignty became the reason for our sanctions program. we obviously had a strong view that protecting sovereignty in europe was a very significant u.s. national interest. our allies agreed with that. they faced a difficulty from the great resection. they were worried about taking steps that were going to cause a recession in europe. we weren't so anxious to cause a recession in europe either. we had just come out of one. the only thing that might have tipped the u.s., would have been a recession in europe. it was a moment in time when being thoughtful about how to put pressure on russia was at a premium. as a practical matter, i don't believe a sanctions regime could
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have been effective without european buy-in. we didn't have enough contact with russia to do it unilaterally and to create the amount of pressure that would potentially change russia's behavior. i actually think it was quite an accomplishment that we had a series of increasingly tough sanctions as russia's movement into ukraine advanced, as their refusal to withdraw became clear. it started with designating a bank that was the favorite bank of putin's cronies. it moved on to the areas of global finance and trade where russia most needed access to international financial markets and energy technology.
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i think it's an important element of sanctions policy to show a willingness and ability to keep ratcheting up the pressure, because what you are trying to do is get a government to change its policy without having the spillover affects be worse than you can bear. was it successful? this was all before the election interference. it's important not to mingle them. i think that arguably they were successful in the sense -- it's hard to separate it from the impact of declining global energy prices, which had a crushing blow on russia's economy at the same time. the minsk accords may or may not have happened without the sanctions. there still may be some possibility at some point of a geopolitical resolution.
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it certainly stopped the advance and the continued ratcheting up of the violation. was it a complete success? no. you compare iran coming to table and agreeing to put its nuclear program on ice, that's an easier place to say sanctions did what sanctions were supposed to do. i think it would be easy to dismiss the russia sanctions as ineffective because the whole world didn't change, because the change did reach a stable -- a level -- it didn't worsen. in some ways it got better. i think this administration's engagement with russia is very hard to separate the broader issues regarding russia from the sanctions issues. they meet in so many points in terms of questions that are
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being asked and answers that are still not easy to have confidence about. i think it was notable that congress passed a law taking away presidential discretion in terms of how to implement and withdraw from russia sanctions because there was a distrust of the administration and its willingness, ability to do so in an appropriate way. i'm historically a big advocate of discretion. putting the tools in place, taking them out, it's very difficult. you have to defend things with a lot of criticism. if you believe that putting sanctions in place only makes sense if when there's resolution you remove them, you want to give a president the ability to turn it on and off based on the evolving negotiation and resolution.
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when congress doesn't trust a president, it takes away authority. i think we saw some of that in the russia sanctions. in terms of the -- this gets a little beyond russia. but it's related. the perception that sanctions are being implemented in a quasi judicial manner, i thought it was a matter of strength to the united states that when ofac brought an action, it was rock solid. you could take it to court and you could defend it. there was not a sense that there were political decisions being made on whether or not an action violated a sanctions law. i think when you mix up sanctions efforts and policy or political decisions, it tends to undermine the efficacy of the sanctions themselves.
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if i get what i want, a sanction can be dialed down. that's not a good use of the sanctions tool. even if the trade objective is a worthy one. i agree with that. as someone who never worked in treasury ever, i have to say that my ability to count on ofac to not have to worry that they would get it wrong, to trust their analysis was an asset i cannot speak too highly of. to be able to actually count on the implementers to get it right every time, just as you sglaid. >> i have no reason to believe they are operating differently
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now than they were then. it doesn't have the top cover of the most senior officials buying into that approach. >> from what i have seen, their professionalism remains completely intact. and their skill remains intact. they are overworked. >> that was always the case. >> the american taxpayer gets a very good deal. it is worth investing in. i say this -- i never worked there. but i also think you have made a point that i want to underscore. sanctions work if they are embedded in a strategy which makes sense and is consistently followed. my own answer to the question, have the ukraine related sanctions worked, well, if you are putin, why do a deal based on minsk which forces him out
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and restores it to ukraine when he thinks he may get it all by out waiting us. >> that's not because sanctions were in effect. >> exactly. >> that's because he is making a geopolitical calculation that he has more leverage now on a policy basis. >> exactly. the sanctions are weakened if they are embedded in a policy which is inconsistently followed. if you are putin and you listen to the administration and it's inconsistent with the president, the head of the administration, what does that do to the power of the message which sanctions are backing up? that's my words. that has -- that's been of concern to me. now we have an audience of experts, people that have studied sanctions for a long
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time. i wanted to open it up to questions. then please identify yourself. >> barbara slaven. i direct the iran initiative here at the atlantic counsel. pleasure to see you. given the u.s. has withdraw from the jcpoa and violated the understanding that was reached, what in your mind will it take to bring iran back into new negotiations? will we have to put more on the table? why should they have any faith that the u.s. -- the next u.s. administration would uphold an agreement when this previous -- the current one didn't. >> i think it's interesting that at least to date, i have seen nothing in any public reports to suggest that iran has actually reversed its side of the jcpoa. i see no evidence of a reinstitution of the nuclear
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program. one has to wonder whether that is because there's some hope that with the rest of the countries that were party to the j k jcpoa sticking with it that there might be a return to it at some point on the part of the united states. i think i would be more comfortable thinking that iran's nuclear program wasn't coming back because we were continuing to do the monitoring and we were continuing to have the ability to know and n rein real time wh going on. all the benefits we got from the jcpoa. but i do tli ithink it's intere that for all of the tension in munich over jcpoa, there does seem to be some at least hope that there might be some rethinking going forward. look, i have never said that
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jcpoa reflected a clean bill of health for iran. iran does a lot of very bad things. and we never withdrew the sanctions that were in place for terrorism. we never withdrew the terrorisms in place for regional destabilizati destabilization. we said, when you clean up the rest of your problems, maybe you will have a right to expect to be at that level. we never said that the jcpoa was a clean bill of health. we were determined to live by the letter of the law on jcpoa and make sure that iran got the benefit of that bargain because if not, how do you get sanctions to work to get a government to change its policy? this was a very important set of concessions. on the other hand, it was never
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the case that we thought that eliminated all the other concerns. look, i don't know what it takes to get iran back to the table on these other issues i. certa iss. i don't think the higher level of tension makes it more likely that's going to happen. i'm not saying we were on the doorstep of iran cleaning up its other problems. but i would say it's probably farther away, not closer, today. >> undersecretary. >> thanks, dan, and thanks to you both. for an excellent presentation. >> identify yourself. >> i'm sorry. eric hershorn. i worked with both of you in the obama administration and proud to have done it. i think, jack, you are maybe
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under dea underselling the success of the russia sanctions. dan, you are a student of russia and eastern europe. whether you would comment on the idea that putin hasn't gone anywhere else significant. syria, he had been missing around to start with. he stayed out of the baltics. he hasn't been fomenting much visible trouble there either. >> i think it's a fair point. i think the reality is that there was a price to be paid when you crossed the line. he took note of that. i was trying to address the kind of confines of the ukraine issue. frankly, to be -- i'm very proud of the quality of the sanctions that we put in place. they put maximum pressure on russia with minimal harm to our allies. that was not an easy thing to do. we had to figure out the wiring
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of the global financial system in ways that we never had to before. in order to achieve that outcome. what i can do -- i can't say it cleaned up ukraine. that would be an overstatement. if you compare it to iran, it's -- iran is an easier case to say cause and affect, sanctions, negotiation. i do think that there were lasting benefits to the sanctions program. i agree with dan that if there had been clarity of u.s. position, might have even been more so. the fact that there's so much of a change in u.s. posture towards russia and different positions depending on who in the u.s. government you seek guidance from, that is -- that's terrain that creates opportunities for bad actors. i'm not sure that -- i will
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leave it at that. >> yes, ma'am. paula stern. thank you very much. i'm asking this question going back into history, as you can so well. with regard to congressional assertiveness vis-a-vis, economic sanctions. we are talking today about ofac for the most part and some other aspects. but we didn't talk about the export controls, the commerce department -- >> i implicitly was referring to that. >> they are very hard working as well. so we have a whole menu of ways in which we can use u.s.
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economic sanctions. we meaning the u.s., administration and the congress. having written a book on how congressional assertiveness brought about the jackson-vanick amendme amendment. i'm wondering if you think we can imagine an effective congressional assertiveness in the near future, visrvis-a-vivi shaping of economic sanctions, given the differences of views that are being articulated about the president trump's positions on russia or on iran or on other countries that have been targeted by the u.s. >> i think if you look back over where congressional asserti
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assertiveness and sanctions has been most effective, the two examples you come to are jackson-vanick and south africa sanctions to end apartheid. both were very targeted. both were aimed at a very specific purpose and had, i think a great deal of affect. i don't know how congress does that on a broad basis. you get to what the inherent difference between legislative policy and executive branch that has implementation authority. one of the things i said at c carneg carnegie, in order for sanctions to really work, there has to be a deep, deep capability to enforce the sanctions. that's not shg yomething you ca as a matter of legislative. there are things more akin to
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the justice department than congress. if one were to rely on congress to design sanctions on a micro basis. it's hard to see how that would end up in the long-run being as effective as being well-designed executive authorities. the flip side of that is, if executives are not trusted with the authority, congress tends to pull back. i think we're now at a place in russia you have seen that a little bit. do i don't flow what the fknow wha will bring. the point i was making just because you make the good point, it's not all ofac and treasury. the linkage of finding on zte
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that was based on violation of clear rules to an outcome in a trade negotiation confused the issue. it confused the issue in a way -- prosecutorial discretion exists in law, it exists in sanctions. you can choose not to impose a sanction. if you choose to impose the sanction and then you withdraw it because of a benefit you get there some other area, that you will -- it weakens the efficacy of the sanctions tool. >> you mentioned about the standards for jcpoa. what should the u.s. consider easing sanctions for korea.
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south korean government contends south and north korea are in a special relationship and should be given special consideration. the moon government wants to move ahead with the tourist amount. should the u.s. government give sanctions exemptions to projects? >> i think iran and the dprk are in different places on their nuclear program. you could say the country was the target of the sanctions wouldn't have and wouldn't be able to have nuclear weapons. that may be too late in north korea if they already have nuclear weapons. will they go back and remove the capacity that they have? i think the u.s. should try to
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get as close to that as humanly possible and should want the kind of assurances that existed in jcpoa that you would see all of the things that go into building a nuclear weapon and sanctions would spring back into place if there was a violation. on the nuclear side, it was as close to rock solid as an agreement can be. i think the fact that the administration has been so dismissive of jcpoa -- the burden will be on them to explain why any agreement that leaves north korea with nuclear weapons is an acceptable outcome. if the price of that agreement is to withdraw u.s. security guarantees from historic close allies, that is something that ought to raise some serious concerns.
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i think they're very different situations. it's hard to imagine an outcome in the case of north korea that leaves me as confident as i was about the iran agreement that five and ten and 15 years later you would be able to say that iran didn't have nuclear weapons. if i was going to set that bar, i might be setting it in an impossible place. to me, that suggests the criticism of jcpoa was unfounded. the expectation for north korea is too low. it was a very early embrace of a very bad leader. so far, he's gotten the benefit of the engagement. he has gotten recognition that no other american president was willing to give. he is being treated as if he has
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entered the world of nations as an equal. so far, he hasn't changed any of his bad behavior. iran didn't get any of that. so i think there's a double standard on this. i hope it's successful. believe me. the world would be a better place in north korea did not have nuclear weapons. i think the question of deference to the republic of korea, obviously, we took steps to close okthat when the nuclea program was wrapping up. i think it's very important to be careful about releaieving th pressure on north korea until there are results that will lead to a better outcome than we have got right now. so far, i don't see that.
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>> we have time for two quick or one longer question and answer. >> thank you, secretary. you mention ed about the huawei. what do you think are the scenarios regarding huawei, given the context of current negotiations? >> i'm not familiar enough with where the legal proceedings on huawei stand, where they came from. i must say, it seep seemed o ee there was an action that led to the extradition request whether it did. i think there are serious
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questions about the behavior. there are serious questions about what the right legal outcome is. what i think is odd is the suggestion that if trade talks go okay, maybe it's not the extradition thing -- it can be worked out. they ought to be separate. there ought to be a legal proceeding that stands on its own and there ought to be trade negotiations that stand on their own. the two ought not to be confused. >> one comment about the jcpoa. in my experience, given my cold war experience, the jcpoa was like arms control with the soviet union. it did not and was not intended to make the soviet union a nice place. it was intended to shift the
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competition away from the area most dangerous to the united states through the outbreak of general nuclear war to areas of less danger to us but greater advantage as it turns out. arms control was regarded by the hard right at sophomoric. it would put us to sleep in the face of the danger. arounds control wo arms control worked to our advantage. the whole structure of the jcpoa -- i wasn't doing iran policy. so i'm not defending my own. i wasn't directly involved. the whole logic of it was to move -- was not to make iran nice but to get rid of or at least manage a terrible problem and deal with iran's other problems, which is not a hard problem to figure out. you said as much.
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the comparison with the cold war, which as i recall ended rather well, and ended after reagan discovered the use of arms control combined with an overall soviet strategy, which made sense. that's just a digressidigressio >> it doesn't get better if iran were to have a nuclear weapon. it only gets worse. >> right. >> which is really another way of restating what you said about the cold war. >> exactly. okay. yes, sir. >> first of all, we are grateful to our western partners, including the u.s. and eu for strong sanction policy against russia in response of aggression against ukraine. at the same time, right now,
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five years after the first sanctions against russia for this aggression, unfortunately, it's obvious that in terms of purpose to change behavior of russia, it's not fully effective. russia is still occupying crimea. russian forces are still there. maybe it's time to make sanctions more painful for kremlin, for putin. it's obvious it could be done. right now, they are creating a new tool to undermine ukraine, to undermine europe. maybe it's time to think about more painful sanctions against russian energy export pipelines. thank you.
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>> i obviously took a measured approach in terms of describing the sanctions. ru i don't disagree. if we were going to declare the sanctions had worked, you would say they changed their policy and withdrew. but they didn't keep moving forward. as eric said, they didn't move into other countries. it kind of froze things with minsk in the background to hopefully work it through. i think the idea of keeping pressure on russia is something that i'm sympathetic to. i think it makes sense to keep pressure. i'm not doing this day to day. the challenge of keeping unity in europe hasn't gone away. that i think would be something that was essential, the supply
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of natural gas in europe from russia is a weakness that we could export more lng possibly that reliance. i think we are doing more of that now. but it's not -- it's something i off the top of my head can't tell you whether that would be the tool that would be the appropriate one. i don't disagree with the basic that the united states should be keeping pressure on russia. >> as a footnote to that, actually, the menu of escalatory options towards the end of the obama administration is still available. and some of those elements are included in the most recent
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legislation. and you can all read about it. we have it out there. shameless plug. but what's interesting is that those options still exist. i would rather not have it in legislation. i'm an executive branch person. and i think there are all kinds of down sides of having sanctions legislation, especially detailed sanctions legislation. but to avoid that, the administration has to have credibility. and we did. the sanctions -- the russia sanctions legislation during the obama administration was not -- was not all that strong. because they had -- congress had more faith in the executive than it does now. and with that -- but fair question. all right. i'm told we are running actually over. i suspect we could have gone on. and it would have been my pleasure to do so. but i just want to thank you, mr. secretary, for your time
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both here and especially your service, what you achieved. and that perspective now is of critical importance, i think, you know, even as you say in your private life. i want to give you no rest. but thank you very much. thank you all for coming. [ applause ] ♪ coming up here on c-span3, governors discuss the implications of federal policy in their states. what works and what doesn't. that's followed by white house science and technology director,
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calvin droguemeyer on trump administration science goals. and council of economic chair, kevin hassett and his predictions on u.s. economic growth. >> it's been 40 years since the creation of c-spanful. and i just want to take a couple of seconds here to thank a lot of people for how we got here 40 years later. start with the viewers who grabbed on to this concept from the very beginning and popularized it over the last 40 years by spending time watching their government make laws, discuss issues and, frankly, give us an opportunity to find out how interested americans are in civic affairs. secondly, need to thank the congress. because 40 years ago, the congress opened up the house of
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representatives to televisions for the first time in history. and because of that, we were able to put together over the years an evolving concept called c-span. third and probably most important, because we wouldn't be here without private industry in the name of the cable television business. and executives who are creating cable television systems back in the years when we started for saying, it's time to do something other than movies and sports. and that's how c-span was created. there's no federal money in this network or these networks that we have. there never will be. the idea is that private industry was creating a public affairs network for the people that are subscribers to their systems. and those individuals stop long enough in their busy schedules to say, let's try something unique and different and something that doesn't make money for us, but just provides a service to our viewers, and
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people around the world now that want to see how the american government operates. so thanks to our viewers, to the united states congress, and to our cable television industry executives who made this one of the more unique places in television after 40 years of service. and now a view of national issues from the state perspective. politico talked to several governors who are in washington, d. d.c., for the annual national governors winter meeting. we'll hear from governors of arkansas, oregon, new hampshire, connecticut and puerto rico about the opioid epidemic, infrastructure, border security and other policy issues. >> thank you. good to be with


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