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[Senate Hearing 113-152]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 113-152

 
                    REVERSING IRAN'S NUCLEAR PROGRAM

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 3, 2013

                               __________

       Printed for the use of the Committee on Foreign Relations

      Available via the World Wide Web: http://www.gpo.gov/fdsys/

                                 ______

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                COMMITTEE ON FOREIGN RELATIONS         

             ROBERT MENENDEZ, New Jersey, Chairman        
BARBARA BOXER, California            BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
JEANNE SHAHEEN, New Hampshire        MARCO RUBIO, Florida
CHRISTOPHER A. COONS, Delaware       RON JOHNSON, Wisconsin
RICHARD J. DURBIN, Illinois          JEFF FLAKE, Arizona
TOM UDALL, New Mexico                JOHN McCAIN, Arizona
CHRISTOPHER MURPHY, Connecticut      JOHN BARRASSO, Wyoming
TIM KAINE, Virginia                  RAND PAUL, Kentucky
EDWARD J. MARKEY, Massachusetts
               Daniel E. O'Brien, Staff Director        
        Lester E. Munson III, Republican Staff Director        

                              (ii)        

  
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                            C O N T E N T S

                              ----------                              
                                                                   Page

Albright, David, president, Institute for Science and 
  International Security, Washington, DC.........................    34
    Prepared statement...........................................    36
Corker, Hon. Bob, U.S. Senator from Tennessee, opening statement.     3
Jeffrey, Hon. James F., Philip Solondz distinguished visiting 
  fellow, the Washington Institute for New East Policy, 
  Washington, DC.................................................    43
    Prepared statement...........................................    45
Menendez, Hon. Robert, U.S. Senator from New Jersey, opening 
  statement......................................................     1
Sherman, Hon. Wendy, Under Secretary for Political Affairs, U.S. 
  Department of State, Washington, DC............................     4
    Prepared statement...........................................     6
Takeyh, Ray, senior fellow for Middle Eastern Studies, Council on 
  Foreign Relations, Washington, DC..............................    46
    Prepared statement...........................................    48

                                 (iii)

  

                    REVERSING IRAN'S NUCLEAR PROGRAM

                              ----------                              

                       THURSDAY, OCTOBER 3, 2013

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in room 
SD-419, Dirksen Senate Office Building, Hon. Robert Menendez 
(chairman of the committee) presiding.
    Present: Senators Menendez, Cardin, Shaheen, Coons, Kaine, 
Markey, Corker, Risch, Rubio, Johnson, and McCain.

          OPENING STATEMENT OF HON. ROBERT MENENDEZ, 
                  U.S. SENATOR FROM NEW JERSEY

    The Chairman. Good morning. This hearing of the Senate 
Foreign Relations Committee will come to order.
    We are here today under unusual circumstances, but 
nevertheless ready to fulfill our constitutional duty to 
oversee national security policy, foreign policy, international 
economic policy as it relates to safeguarding America's 
interests abroad. That is our fundamental duty.
    And we have convened today to ensure that the world 
understands that a shutdown of Government in the United States 
is not a shutdown of American interests and obligations abroad.
    Having said that, we are pleased to have with us a familiar 
face to the committee, Under Secretary of State for Political 
Affairs Wendy Sherman. She is here to help shed light on U.S. 
policy toward Iran, given the change in leadership and recent 
statements of President Rouhani, and to provide her perspective 
on behalf of the Department on the way ahead on the nuclear 
issue.
    On our second panel today, we have three distinguished 
experts from the private sector: Dr. David Albright, a 
physicist who is the founder and president of the Institute for 
Science and International Security and who has written 
extensively on secret nuclear weapons programs around the 
world; Ambassador Jim Jeffrey, a distinguished visiting fellow 
at the Washington Institute, where he is focused on Iran's 
efforts to expand its influence in the region; and Dr. Ray 
Takeyh, a senior fellow at the Council on Foreign Relations and 
a former senior adviser on Iran at the State Department. We 
look forward to all of your testimonies and thoughts on the 
status and the future of United States-Iran policy.
    Before we hear from our panelists, let me restate concerns 
that I have expressed publicly and will express again for the 
record. In my view, the sanctions have worked to bring us to 
this pivotal point, and the fundamental question is now whether 
the Iranians are ready to actually conclude an agreement with 
the international community; whether they are prepared to turn 
rhetoric into action.
    In the lead-up to last week's U.N. General Assembly 
meeting, I was cautiously hopeful about what we would hear. But 
in my personal view, the new face of Iran looked and sounded 
very much like the old face, with a softer tone and a smoother 
edge. Although Iran's messenger may have changed in the last 
election, the message seems to have remained the same.
    The questions are these: Should we be cautiously hopeful 
for a diplomatic solution, given the new leadership and 
rhetoric coming from Tehran? What are the administration's 
near-term diplomatic goals and objectives for the P5+1 
negotiations? How do we test Iranian intentions that they are 
negotiating in good faith? How do we get Iran to commit to 
transparency and to allow full verification that it has 
abandoned its pursuit of a nuclear weapons capability?
    Until we have the answers to these questions, it is my view 
that we must sustain the pressure on Iran and maintain the 
credible military threat that has brought Iran to the table.
    Now it is clear that while we are talking about Iran, its 
centrifuges are still spinning. In the last 2 years, it has 
installed thousands of additional centrifuges, and although it 
is not enriching in all of them, the vast majority are fully 
installed and under vacuum, meaning Iran could quickly double 
its enrichment capacity.
    The fact is these expanded capabilities are reducing the 
time Iran needs to quickly produce a sufficient amount of 
weapons-grade uranium. The fear is that Iran will achieve a 
breakout capability, defined as the technical capability to 
produce sufficient weapon-grade uranium for a nuclear device 
without being detected by the international community.
    According to the work of one of our panelists, David 
Albright of the Institute for Science and International 
Security, if Iran continues to expand its centrifuges at its 
current pace, it will be able to produce by mid-2014 enough 
material for one bomb within a period of several weeks. It is 
an open question as to whether the international community 
would be able to detect a breakout if it would occur this 
quickly.
    Iran is also nearing completion of a heavy water reactor in 
Iraq. If that reactor operates, Iran could create a plutonium 
pathway to nuclear weapons, enough plutonium each year for one 
or two nuclear weapons.
    From my perspective, as long as Iran is actively pursuing 
its nuclear program, we must actively work to increase the 
pressure. This is no less than what is required by multiple 
U.N. Security Council resolutions. And while we welcome Iran's 
diplomatic overtures, they cannot be used to buy time, avoid 
sanctions, and continue the march toward a nuclear weapons 
capability.
    I welcome President Rouhani's announcement at the U.N. 
General Assembly, and the Supreme Leader's fatwa that Iran 
seeks a peaceful resolution to international concerns about 
Iran's nuclear program and is committed to a peaceful nuclear 
program. But compliance with the U.N. Security Council 
resolutions, in my view, would be the ultimate test of Iran's 
intentions.
    Let me conclude by restating my belief that the sanctions 
regime in place thus far has been critical in compelling the 
Iranian Government back to the negotiating table. If the 
sanctions were not hurting, we would not have heard so much 
about them in President Rouhani's speech. What is important now 
is what Iran does, not what it says. We do not need more words. 
What we would like to see is its compliance with the four U.N. 
Security Council resolutions and the suspension of uranium 
enrichment.
    Some of us are moving forward with a new round of sanctions 
that will require further reduction in purchases of Iranian 
petroleum. But we are also serious about relief from sanctions 
if the Iranian Government meets its Security Council 
responsibilities.
    With that, let me turn to Senator Corker for his opening 
statement.

             OPENING STATEMENT OF HON. BOB CORKER, 
                  U.S. SENATOR FROM TENNESSEE

    Senator Corker. Well, thank you, Mr. Chairman.
    I know there was some discussion about whether having a 
hearing today or not having a hearing today in light of the 
circumstances was the right thing to do. But I do appreciate 
very much your focus on Iran and some of the threats that our 
Nation faces.
    And I want to say that we have had, since you have been 
chairman, a number of really important issues to deal with, and 
I know that this is going to be one of the most important that 
we deal with over the next several months. And I do appreciate 
the diligence that is being put forth. I also want to thank you 
for the efforts that you and Mark Kirk, together, have put 
forth relative to sanctions.
    And just as in the Syrian debate, you know, where we had 
people with differing viewpoints, all of which I thought were 
very respectful and thoughtful, I really was proud--regardless 
of where people came out, I was really proud of the way the 
committee handled itself with humility and soberness.
    And so, as we deal with this issue, I want to start by 
saying still the greatest threat to our Nation, the greatest 
threat still is ourselves. And it is our inability to deal with 
our fiscal matters in an appropriate way. And I think today's 
meeting in light of a Government shutdown still points to that.
    This, on the other hand, is a grave threat to world peace. 
And again, I thank you for the way that we are going about 
this, and I hope that what we will do together as a committee 
after testimony from these two panels--and I know some 
potential activities that will take place in the Banking 
Committee--is that we will be prudent about how we go forth 
with these.
    I do believe the sanctions that we have put in place have 
created this moment, and I do know that the administration, in 
fairness, opposed some of those sanctions. And we had to sort 
of push the administration to the table, and yet I will say the 
administration now is trying to take advantage of those.
    So I hope that together, through intelligent testimony and 
thoughtfulness, I hope we will move ahead in a fashion that 
shows a real strategy, that causes Congress to help push these 
negotiations along and push to ensure that what Iran does is 
real. It is not just talk.
    So I thank you very much for the sentiments. I thank you 
for your previous efforts. I look forward to the testimony 
today, and I look forward to this committee and the Banking 
Committee acting in unison in a way that produces a result 
here, which is what all of us want to see.
    So thank you very much.
    The Chairman. Thank you, Senator Corker, and we appreciate 
your work and your leadership as well with us.
    With that, we will recognize Secretary Sherman. Your full 
statement will be included in the record, without objection, 
and the floor is yours.

STATEMENT OF HON. WENDY SHERMAN, UNDER SECRETARY FOR POLITICAL 
       AFFAIRS, U.S. DEPARTMENT OF STATE, WASHINGTON, DC

    Ambassador Sherman. Thank you very much.
    Chairman Menendez, Ranking Member Corker, distinguished 
members of the committee, thank you for inviting me to be here 
today, even during these difficult times. It is always welcome 
to return to the Senate and speak with you about an issue we 
both agree--we all agree--is one of our country's primary 
foreign policy and national security challenges.
    Today, I plan to speak about recent talks with the Iranian 
Government at the U.N. General Assembly in New York of which I 
was a part, the status of our negotiations, our continued 
effort to put pressure on the Iranian Government, and a 
potential path forward for diplomacy, including the core 
actions needed to reach a verifiable agreement with Iran.
    Let me start with a very brief survey of our dual-track 
policy to show how we arrived at this point. As President Obama 
has said many times, the United States remains committed to 
preventing Iran from obtaining a nuclear weapon. The strategy 
we have pursued--and continue to pursue--to fulfill this 
commitment is the dual-track policy of engagement and pressure.
    While our preference has always been diplomatic engagement, 
we concluded that such engagement would not work absent 
meaningful pressure. In response, we and our allies, with the 
President's and your very crucial leadership, established one 
of the toughest sanctions regimes the world has ever seen. As a 
result, 23 economies have united in significantly reducing or 
eliminating purchases of Iranian crude oil.
    Over the past 24 months, Iran's rial has depreciated by 
approximately 60 percent, as Iran's access to the international 
financial sector has been largely severed. Indeed, in the runup 
to his election this June, President Rouhani made the case that 
the failure to pursue a serious agreement on the nuclear file 
and the international sanctions that resulted from that failure 
was devastating the Iranian economy.
    I would emphasize that it was the Iranian Government's 
choices that led to these devastating sanctions, and it will be 
the Iranian Government's actions in the months ahead that will 
be a key factor in determining whether we decide the sanctions 
should remain in place or whether we can begin to relieve some 
sanction pressure as Iran addresses our concern.
    President Rouhani says he has a mandate--both a popular 
mandate from the Iranian people and a mandate from Supreme 
Leader Khamenei--to pursue an agreement that satisfies the 
international community's concerns over Iran's nuclear program. 
As the President reaffirmed last week, we are prepared to test 
that proposition in a serious way. In doing so, we must remain 
mindful of the long history of Iranian deception regarding its 
nuclear program and insist that Iran's new tone be met as soon 
as possible by new and concrete and verifiable actions.
    We must also do our part to ensure the success of this 
effort and to avoid any measures that could prematurely inhibit 
our ability to secure a diplomatic solution. The process for 
testing Iran's intentions began last week in New York. There, 
on the margins of the U.N. General Assembly, Secretary Kerry 
and I met Foreign Minister Zarif and the Foreign Ministers of 
the P5+1.
    In that meeting, as in all of our exchanges with the 
Iranian Government, including the Secretary's bilateral with 
Foreign Minister Zarif, we made clear that we seek an agreement 
that respects the right of the Iranian people to access 
peaceful nuclear energy while ensuring to the world that Iran 
meets its responsibilities under the Nuclear Nonproliferation 
Treaty and U.N. Security Council resolutions.
    Foreign Minister Zarif gave a thoughtful presentation. He 
told us that Iran does not seek nuclear weapons and detailed 
the reasons why it did not make sense for Iran to possess 
nuclear weapons.
    We also made clear in return that his words alone, while 
welcome, are not enough. So in the coming weeks, we will look 
to the Iranian Government to translate its words into 
transparent, meaningful, and verifiable actions. We enter this 
period with our eyes wide open. As Secretary Kerry has said, no 
deal is better than a bad deal.
    Now it is time to see if negotiations can begin in earnest. 
Let me give you an idea of how we see this moving forward.
    Given the scope of Iran's nuclear program and its history 
of noncompliance with U.N. Security Council resolutions, as 
well as the deep mistrust between our two countries, any 
productive path forward must include confidence-building 
through meaningful, transparent, and verifiable steps. We will 
be looking for specific steps by Iran that address core issues 
including, but not limited to, the pace and scope of its 
enrichment program, the transparency of its overall nuclear 
program, and stockpiles of enriched uranium.
    The Iranians, in return, will doubtless be seeking some 
relief from the comprehensive international sanctions that are 
now in place. We have been clear that only concrete, viable 
steps, and verifiable steps can offer a path to sanctions 
relief. We look forward to hearing Foreign Minister Zarif's 
suggested plan, which he says he will bring to us when the P5+1 
meet next with the Iranian delegation in Geneva on October 15 
and 16.
    Let me assure you that we will continue to vigorously 
enforce the sanctions that are in place as we explore a 
negotiated resolution and will be especially focused on 
sanctions evasion and efforts by Iranians to relieve the 
pressure.
    I must note here, if I may, Mr. Chairman, to take an extra 
moment and note, however, our ability to do that--to enforce 
sanctions, to stop sanctions invaders--is being hampered 
significantly by the shutdown. I think many of you will have 
seen an article by Josh Rogan and Eli Lake today that 
``Government Shutdown Empties Offices Enforcing Sanctions on 
Iran.''
    OFAC, which is in the Treasury Department, which really 
oversees much of this, along with our own sanctions monitoring 
group, has been completely, virtually utterly depleted in this 
time. In addition, the intelligence community, which we rely on 
for intelligence information to go after sanctions evaders and 
sanctions people who are not paying attention to the sanctions, 
as the DNI said, General Clapper, the other day, has been 
devastated as well--more than 60 percent reduced during the 
shutdown.
    So we will do our best to enforce these sanctions, to stop 
sanctions invaders, but I sincerely hope that the shutdown ends 
soon so that we are truly able to do so in the runup and as 
these negotiations proceed.
    As we move forward, it will be critical that we continue to 
move together and take no steps that signal divisions to Iran 
that it could and likely would exploit. Further, as the effect 
of our sanctions on Iran depends in part on the actions of our 
partners, we must ensure that our sanctions do not place an 
undue burden on those countries. It is not in our interest to 
create fissures within the international coalition facing Iran, 
as the impact of our pressure comes from the steps these 
countries take.
    We will also continue to raise our other concerns, 
including Iran's sponsorship of terrorist organizations, human 
rights abuses, and destabilizing activities across the region. 
And we will remain absolutely dedicated to the return of U.S. 
citizen, Robert Levinson, and United States-Iranian dual 
nationals, Saeed Abedini and Amir Hekmati.
    Indeed, both the President and the Secretary of State 
raised these cases with the Iranians. Every day their families 
wait for them to come home.
    So, as we do, we will remain in close consultations with 
our allies and partners in the region, including Israel, whose 
security remains a paramount focus. We will also continue our 
close consultation with you and with other Members of the 
Congress, as we have in the past, so that any congressional 
action is aligned with our negotiating strategy as we move 
forward.
    Thank you again for this opportunity to discuss with this 
committee the important developments over the past week in New 
York. As always, I look forward to regular engagement with you 
in the weeks ahead and to your questions and comments today.
    Thank you.
    [The prepared statement of Ambassador Sherman follows:]

    Prepared Statement of Under Secretary of State Wendy R. Sherman

                              INTRODUCTION

    Chairman Menendez, Ranking Member Corker, distinguished members of 
the committee, thank you for inviting me to be here today. It is always 
a pleasure to return to the Senate and speak with you about an issue we 
both agree is one of our country's primary foreign policy challenges.
    This hearing comes at a pivotal time for U.S. policy toward Iran. 
As requested, I will speak about recent talks with the Iranian 
Government at the U.N. General Assembly in New York, the status of our 
negotiations, our continued effort to put pressure on the Iranian 
Government, and a potential path forward for diplomacy--including the 
core actions needed to reach a verifiable agreement with Iran.

                DUAL TRACK POLICY AND ROUHANI'S ELECTION

    Let me start with a brief survey of our dual track policy to show 
how we arrived at this point.
    As President Obama has stated many times, the United States remains 
committed to preventing Iran from obtaining a nuclear weapon.
    The strategy we have pursued--and continue to pursue--to fulfill 
this commitment and address the international community's concerns with 
Iran's nuclear program is the dual track policy of engagement and 
pressure. While our preference has always been diplomatic engagement, 
we concluded that such engagement would not work absent pressure.
    In response, we and our allies, with the President's and your 
leadership, have established a robust sanctions regime. I would 
emphasize that it was the Iranian Government's choices that led to 
these devastating sanctions, and it will be the Iranian Government's 
actions in the months ahead that will be a key factor in determining 
whether we decide the sanctions should remain in place or whether we 
can begin to relieve some sanctions pressure as Iran addresses our 
concerns.
    The pressure on Iran has been severe and may lay the groundwork for 
a diplomatic outcome that addresses our concerns. However, we remain 
clear-eyed about the challenges ahead and the importance of vigilance, 
while proceeding in good faith. Through our continued efforts and the 
work of the Congress--notably through the leadership of the chairman of 
this committee, with the support of the ranking member--we have 
leveraged our economic influence effectively to raise the financial 
stakes for the Iranian Government.
    In aggregate, we have led the international community in 
implementing an unprecedented sanctions regime that is having a real 
and tangible impact. Twenty-three economies have united in 
significantly reducing or eliminating purchases of Iranian crude oil. 
In 18 months, Iranian oil exports were cut by more than 1 million 
barrels per day. Iran's rial has depreciated by approximately 60 
percent over the past 24 months. GDP has contracted by over 5 percent 
in the same period. Iran's access to the international financial sector 
has been largely severed and its ability to engage in normal economic 
activity has been sharply curtailed.
    The Iranian Presidential election last June focused on the economy. 
Questions of how to engage with the international community on the 
nuclear file were front and center as President Rouhani, a former 
nuclear negotiator himself, ran against candidates that included then-
current negotiator Saeed Jalili. Rouhani made the case that the failure 
to pursue a serious agreement on Iran's nuclear program was devastating 
the Iranian economy--and he won the election.
    President Rouhani says he has a mandate--both a popular mandate 
from the Iranian people and a mandate from Supreme Leader Khamenei--to 
secure sanctions relief and improve Iran's economic situation, which 
can only be accomplished by pursuing an agreement that satisfies the 
international community's concerns over Iran's nuclear program.
    As the President reaffirmed last week, we are prepared to test that 
proposition in a serious way. But we must do our part to ensure the 
success of this effort and to avoid any measures that could prematurely 
inhibit our ability to secure a diplomatic solution. Here it will be 
important that we--the Executive and U.S. Congress--remain in close 
consultation with each other, and that we ensure we can continue to 
show the Iranian Government that the international community remains 
firmly united as we begin this process.

                   REVIEW OF LAST WEEK'S P5+1 MEETING

    Last week, Secretary Kerry and I met with Foreign Minister Zarif 
and the Foreign Ministers of the P5+1 countries in New York on the 
margins of the U.N. General Assembly. Although we have indicated we are 
open to bilateral dialogue with the Iranians, we have emphasized that a 
nuclear deal would be concluded and implemented by the P5+1.
    In our New York meeting, we made clear that we seek an agreement 
that respects the right of the Iranian people to access peaceful 
nuclear energy while ensuring to the world that Iran meets its 
responsibilities under the Nuclear Non-Proliferation Treaty and U.N. 
Security Council resolutions.
    Foreign Minister Zarif gave a thoughtful presentation and set forth 
some ideas on how to proceed. He told us that Iran does not seek 
nuclear weapons and detailed the reasons why it did not make sense for 
Iran to possess nuclear weapons. We also made clear in return that his 
words alone, while welcome, are not enough. The test will lie in Iran's 
actions, to include the development and implementation of specific 
confidence-building measures as well as actions that ultimately address 
all of our concerns.
    So in the coming weeks, we will be looking to the Iranian 
Government to translate its words into transparent, meaningful, and 
verifiable actions. We enter this period hopeful, but sober. As 
Secretary Kerry said, no deal is better than a bad deal. So now it is 
time to see if negotiations can begin in earnest and generate a 
positive result.

                            FUTURE PROSPECTS

    Let me give you an idea of how we see this process moving forward.
    Given the scope of Iran's nuclear program and its history of 
noncompliance with IAEA Board of Governors and U.N. Security Council 
resolutions, as well as the deep mistrust between our two countries, 
any productive path forward must start with mutual confidence building.
    Meaningful, transparent, and verifiable steps are necessary. We 
will be looking for specific steps by Iran that address core issues; 
including but not limited to the pace and scope of its enrichment 
program, the transparency of its overall nuclear program, and 
stockpiles of enriched uranium. The Iranians, in turn, will doubtless 
be seeking some relief from the comprehensive international sanctions 
that are now in place. We have been clear that only concrete verifiable 
steps can offer a path to sanctions relief. We look forward to hearing 
Foreign Minister Zarifs suggested plan when the P5+1 next meet with the 
Iranian delegation in Geneva on October 15 and 16.
    We need to ensure throughout that the international community 
remains united and does not permit sanctions to prematurely unravel. 
Let me assure you that we will also continue to vigorously enforce the 
sanctions that are in place as we explore a negotiated resolution, and 
will be especially focused on sanctions evasion and efforts by the 
Iranians to relieve the pressure.

                          CONCLUDING THOUGHTS

    We are mindful of the serious challenges ahead. But we are also 
prepared to move expeditiously in pursuit of a diplomatic resolution to 
this crisis. If there is indeed a diplomatic outcome available, then it 
is one we must test with good faith and due diligence.
    As the President said after his phone call with President Rouhani, 
``the very fact that this [phone call] was the first communication 
between an American and Iranian President since 1979 underscores the 
deep mistrust between our countries, but it also indicates the prospect 
of moving beyond that difficult history.''
    Any path to a meaningful agreement will be difficult. Both sides 
have significant concerns that will have to be overcome. Both sides 
will also have to demonstrate to one another's satisfaction that any 
understanding that is reached will be fully implemented. We are 
prepared to pursue this diplomatic track along with our P5+1 partners, 
and hope that Iran's actions soon live up to their words.
    As we move forward, it will be critical that we continue to move 
together and take no steps that signal divisions to Iran that it could 
and likely would exploit. Further, as the effect of our sanctions on 
Iran depends in part on the actions of our partners, we must ensure 
that our sanctions do not place an undue burden on those countries. It 
is not in our interest to create fissures within the international 
coalition facing Iran, as the impact of our pressure comes from the 
steps these countries take.
    We will continue to raise our other concerns, including Iran's 
sponsorship of terrorist organizations, human rights abuses, and 
destabilizing activities across the region. And we will remain 
dedicated to the return of U.S. citizen Robert Levinson and U.S.-
Iranian dual nationals Saeed Abedini and Amir Hekmati. Every day their 
families wait for them to come home.
    And as we do, we will remain in close consultations with our allies 
and partners in the region, including Israel, whose security remains a 
paramount focus. We also hope to continue our close consultation with 
the Congress, as we have in the past, so that any congressional action 
is aligned with our negotiating strategy as we move forward.
    Thank you again for this opportunity to discuss with this committee 
the important developments over the past week in New York. As always, I 
look forward to regular engagement with you in the weeks ahead and to 
your questions and comments today.

    The Chairman. Thank you, Madam Secretary.
    Let me start off, and there is so much here. But I heard a 
sentence in your statement, and I get a little concerned. And 
let me make it very clear from my perspective that when we 
start talking about relieving sanctions as the Iranians begin 
to alleviate our concerns, you know, I am not sure exactly what 
we mean by ``begin to alleviate our concerns.''
    You know, there is a real, legitimate concern here that the 
Iranians will do a certain amount that ultimately begins to 
create some sanction relief. But at the end of the day, that 
draws back the international community, that draws back the 
forces of keeping the pressure that has brought us to this 
moment. And then to gear that back up would be an incredibly 
difficult proposition.
    So I listen to the words, but Iran has repeatedly said that 
they reject the development and use of nuclear weapons. And 
that has been reiterated now. But how believable is that 
statement, given what we know about Iran's history that prior 
assessments that have been brought before this committee, both 
I think in public as well as in private, that Iran has 
previously, at the government's direction, sought a nuclear 
weapons program?
    So they still, as far as I know, have not admitted that 
they were pursuing a nuclear weapons program. They still say 
they reject that, unless that has happened at the P5+1 
negotiations and we have not heard about it. What are we 
talking about here in terms of relieving sanctions if they 
begin to alleviate our concerns? And how do we reconcile what 
the Iranians are saying now with what is a verified history of 
moving toward a nuclear weapons program?
    So I get concerned about that. And the final element of 
this, so that I can package it so you can give me a response, 
is President Rouhani has been very clear and proud of the fact, 
as is evidenced by his book, that last time he conducted 
negotiations over Iran's nuclear program, he was able to use 
those negotiations as a stalling tactic while his government 
advanced its nuclear program.
    I look at all of those realities, and I get concerned. I 
understand the need to test the diplomatic possibility. But by 
the same token, I get concerned when I hear about easing of 
sanctions to satisfy some of our concerns.
    Ambassador Sherman. Mr. Chairman, I think this is a very 
legitimate concern and one that we have thought through very 
carefully as we move ahead to these negotiations. We quite 
agree with you.
    The fundamental large sanctions that we have in place 
should not disappear any time soon unless all of our concerns 
are addressed by the Iranians. And with that, we agree with you 
because we do not want the sanctions regime to fall apart.
    At the same time, the reason we also focus on confidence-
building, some early test, whether that is some degradation of 
their current posture, some freeze, some pause--there are many 
ways to do this--is because every day their nuclear program 
goes forward. And to get to a comprehensive agreement will take 
some time because there are highly technical issues here that 
take some time to negotiate. It is not like you can do this 
over a 48-hour period. It will take more time than that to do 
so.
    So since we know they are continuing with their nuclear 
program and because of the history that you point out when 
Rouhani was the chief negotiator 2003 to 2005, we know that 
deception is part of the DNA. We want to make sure that we can 
put some time on the clock for those comprehensive 
negotiations.
    So what we are thinking through is what is it that would 
give us some confidence today, would put some time on the 
clock, stop their nuclear program from moving forward while we 
get to that comprehensive agreement that it would allow the 
full sanctions relief they are looking for? There may be some 
elements that we can do initially if they take verifiable, 
concrete action that will put time on the clock that are 
reversible or, in fact, do not go to any of the key sanctions 
that have brought them to the table. So this is the issue.
    The Chairman. Let us talk about the time on the clock.
    Ambassador Sherman. Sure.
    The Chairman. David Albright, who will follow you on the 
second panel, provides some very detailed information about the 
status of Iran's nuclear program that is very concerning, 
indicating that Iran will soon have the ability to break out in 
a time period as short as 2 weeks to several months. Is that an 
assessment you concur with?
    Ambassador Sherman. What I would say is I can give you in 
this setting, and we would be glad to have a classified 
briefing with our intelligence community and give you our 
detailed assessment. I am not going to do that here publicly 
because, quite frankly, I would not want Iran to know what our 
assessment is about how much time there is.
    The Chairman. So let us assume that Mr. Albright's 
assessment is right. I am not saying you will--for argument's 
sake, let us assume his assessment is right. If that assessment 
is right, then your timeframe for definitive action is 
relatively short.
    Ambassador Sherman. We believe that we have some time, but 
we do not have a lot of time. I would agree with that 
statement.
    I would also say that what we have said publicly is from 
the time that the Supreme Leader decides that he truly wants to 
go for a nuclear weapon--and we do not believe he has yet made 
that fundamental decision but wants to put the pieces in place 
that give him that option--it could take as much as a year 
before he got there. Now there are many factors here that 
change that clock, and I have tremendous regard for Dr. 
Albright, and so I would listen carefully to him for sure.
    But I think it would probably be best for us to have that 
classified briefing with the committee and tell you all of the 
elements that change that clock. Let me give you one example.
    Last year, the--not at this U.N. General Assembly, but a 
year ago--the Prime Minister of Israel put a very key element 
on the table, and that is how much quantity stockpile of 
enriched uranium Iran might have that they could then easily 
convert to 90 percent enriched uranium, which then would give 
them the material they needed for a nuclear weapon, if they had 
weaponization, if they had a delivery mechanism, all of which 
is in the future.
    What the Iranians did, however, is they started to convert 
their enriched uranium into oxide. And even though it can be 
changed back, that takes some time. So the Iranians very 
smartly changed the calculus of the clock by converting that 
enriched uranium to oxide.
    So calculating the time clock here is very complicated, 
which is why I would like to do it in a classified session. 
What I will say, though, is every single day, our intelligence 
community, at least when we have them full time, which we do 
not at the moment--but we are still focused on this, even with 
the staff we have--look at where the Iranians are on a variety 
of factors because all of those factors change the clock.
    The Chairman. And I will just move on by saying part of the 
equation here is our ability to detect a nuclear breakout by 
Iran, and that is not with scientific precision here. And so, 
that is part of our challenge as to how close to the line do 
you let them go?
    Senator Corker.
    Senator Corker. Thank you, Mr. Chairman.
    And Secretary, thank you for your testimony and your job on 
behalf of our country.
    I do not think there is any question but that the actions 
that this committee and others have taken, and Congress in 
general, toward Iran have helped put us in the place we are in. 
I know that the administration touted the fact that this 
committee passed an authorization for the use of military force 
as being one of those things that moved Syria into a place 
where they were willing to negotiate. And you know, we will see 
as history plays out whether that was, in fact, the case and 
what the outcome is going to be.
    Obviously, there are a lot of questions about what is 
happening on the negotiating front. I guess what I would ask 
you relative to us is, what is it you would like for us to do 
in the interim to support the outcome? I know there have been 
discussions about additional sanctions. There have been 
discussions about things even more draconian than that at a 
date in the future if nothing changes.
    What is it that you would like to see us do to support a 
successful conclusion here? Would you like for us to move ahead 
with additional sanctions?
    Ambassador Sherman. Thank you, Senator.
    First of all, I do want to thank this committee for the 
vote you took on Syria. I know it was very difficult, but I do 
believe it was helpful.
    I was with the Secretary in the negotiations with Lavrov in 
Geneva for the agreement and very much part of all of the 
discussions on the U.N. Security Council resolution and OPCW 
and looking ahead to the Geneva Conference on Syria. And the 
action by this committee to say that there was a credible 
threat of force in Syria was absolutely critical to our ability 
to move forward on CW.
    So I thank you, Mr. Chairman. I thank you, Ranking Member 
Mr. Corker, and all of the members of the committee, for the 
action that you took. I know it was quite difficult, but it 
was--I do want to tell you, having experienced it, it was quite 
meaningful.
    Secondly, in terms of Iran, I think that your holding this 
hearing today is important. I actually told the Iranians on the 
margins of the P5+1 meeting that I would testify, and they 
would hear from me that we were glad for what the President, 
President Rouhani had said, what Foreign Minister Zarif had 
said. But that words would not be enough. That they had to come 
to Geneva with actions, that Zarif had to present a plan.
    So I thank you for this opportunity because it is important 
for them to hear the messages you are delivering and the 
message I am delivering in public that Secretary Kerry said in 
Tokyo. Just today, you saw on the morning news where he said 
again a no deal is better than a bad deal, that we are doing 
this with our eyes open. So this public discussion is very 
important to the negotiation.
    Secondly, on your encouraging us to enforce the sanctions, 
to get all the assets in place to do so is equally critical, 
and the oversight you provide in that regard very helpful. In 
terms of legislation that is currently being discussed here on 
the Hill, we do believe it would be helpful for you all to at 
least allow this meeting to happen on the 15th and 16th of 
October before moving forward to consider those new sanctions.
    And the reason I say that is because I want to be able to 
say to Iran, this is your--and I am saying it here today 
because they will listen to all of this. This is your 
opportunity. Come on the 15th of October with concrete, 
substantive actions that you will take, commitments you will 
make in a verifiable way, monitoring and verification that you 
will sign up to, to create some faith that there is reality to 
this, and our Congress will listen.
    But I can assure you if you do not come on the 15th and 
16th with that substantive plan that is real and verifiable, 
our Congress will take action, and we will support them to do 
so. So I would hope that you will allow us the time to begin 
these negotiations and see if, in fact, there is anything real 
here. With my telling of the Iranians quite directly that if 
there is not, that everyone is ready to act.
    Senator Corker. Well, that is a pretty clear answer and one 
I did not really expect. We have been getting some mixed 
signals from others within the administration. So I think what 
you have just said is that if Iran does not come to the table 
in mid-October in the way that they should, that you would 
fully support this committee and the Banking Committee and the 
Congress in general adding additional tough sanctions on Iran?
    Ambassador Sherman. We would very much look forward to 
working with you on figuring out what those sanctions ought to 
be and how to proceed forward. So I cannot commit today for the 
administration that I agree with every line in legislation that 
is currently pending. But we will certainly want to go back to 
looking at what pressure needs to be added; yes.
    Senator Corker. And in interim, to alleviate any concerns 
that any of us might have, we pass laws here, and it is up to 
the executive branch to implement those. And I think what I am 
hearing you say is that throughout these negotiations, the 
administration is absolutely going to continue to put pressure 
on and continue to process and do all those things necessary to 
keep the existing sanctions working in a better way each day.
    Is that correct?
    Ambassador Sherman. That is correct, Senator. We will 
continue to enforce them with one caveat, that the shutdown 
does make it more difficult for us to do so because we do not 
have OFAC. We do not have our full intelligence committee. The 
State Department is putting restrictions on travel by State 
Department employees, and we use our sanctions team to travel 
the world, to go after sanctions evaders and folks who are not 
following through.
    So it will limit our ability to do that. So, quite frankly, 
where Iran is concerned, the sooner the shutdown is over, the 
better we will be able to do the job you are asking us to do 
and that we want to do.
    Senator Corker. So, Mr. Chairman, if I could just ask one 
more question? My time is up, and I appreciate very much your 
testimony today. I know that you do not want to talk about 
publicly where we think Iran's capabilities are. I think most 
of us have a pretty good idea based on the many classified 
meetings we have been involved in.
    But it has been my sense that the appropriate length of 
time to give Iran and the United States to come to a conclusion 
is 2 to 3 months. So let us move away from what their 
capabilities are, just to give us a sense as far as how we 
might be most productive here, would you agree that that is an 
appropriate timeframe for us to allow negotiations to come to a 
fruitful conclusion?
    Ambassador Sherman. Senator, to be perfectly frank about 
it, I think I will have a better answer to that question after 
the meeting in Geneva on the 15th and 16th. It really depends 
on how fast they are ready to go.
    Now you heard various things from the Iranians in New York. 
We heard them say that they could complete an agreement, a 
comprehensive agreement, and implement that agreement within a 
year. That is what Zarif said to us.
    I think they can get to agreement. When we said we wanted 
to go faster than that, he said we could get to an agreement 
faster than that, we could not implement it in that period of 
time. And it probably cannot be implemented in that period of 
time because--in 3 to 6 months because there are a lot of 
highly technical things that have to be put in place.
    But I do think you are correct to say that we will know in 
the next short period of time whether there is anything serious 
and real here or not.
    Senator Corker. Mr. Chairman, thank you.
    And Madam Secretary, thank you.
    The Chairman. Senator Cardin.
    Senator Cardin. Thank you, Mr. Chairman.
    And Secretary Sherman, thank you very much for your public 
service. Thank you for being here today and underscoring a 
point that this shutdown is really hurting this country in so 
many ways; so many ways.
    The success of dealing with Iran, and I understand your two 
tracks of pressure and diplomacy, very much depends upon our 
ability to carry out what we say we are going to do. And we 
have to be able to monitor that. We have to be able to get the 
intelligence on that. We have to be able to understand what is 
happening around the world.
    And any diminishment of that capacity could have a major 
impact here. So there is many reasons why we should resolve 
this issue today about the Government remaining open. Not 
tomorrow, today it should be done. And you are just giving us 
one additional reason, and I thank you for that.
    I want to go, underscore the point that the chairman made. 
It is not just what we do, as far as sanctions against Iran and 
keeping the pressure going, it is what the international 
community does. It is the enforcements. And it is what the 
United States position is with the international community.
    And I think we all agree that we would like to see 
diplomacy work. We would like to see Iran move in the right 
direction and be able to monitor and make sure it occurs. But 
when we use language such as we are prepared to look at the 
sanctions if Iran makes significant progress or does certain 
things, it seems to me the international community may 
interpret it differently than we do.
    Just the fact that we are meeting today has put additional 
pressures on international capitals to look at reducing some of 
its pressure on Iran. Many of our closest allies could do more 
in reducing their oil consumptions from Iran. They could do 
more.
    It seems to me that if we are to be successful in the 
pressure to get Iran to give you not just the offer we are 
looking for, but the actions that are needed, that we need to 
increase the pressure, not reduce the pressure on Iran at this 
point. And that, yes, it means what we do, but what we do in 
working with our coalition to say now is the time to reduce 
your oil purchases from Iran, not to increase it. And the world 
oil market right now is favorable for us to really reduce even 
more.
    So I guess my point to you is I would hope that our 
position is to strengthen the effect of the sanctions today so 
that we have the very best chance to make diplomacy work and 
that we have an understanding with the international community, 
our partners in this, that they will also move to strengthen 
the sanctions. And yes, we are prepared to give you additional 
tools here in Congress. We would like to do that with you.
    And I think Senator Corker's point about that is clear, 
Senator Menendez's point. I think you have the support of 
Congress. But I would hope that we could have a sense of 
urgency with our coalition partners on the sanctions to tighten 
the enforcements of these sanctions. How is our coalition 
responding to this? Are we making progress?
    Ambassador Sherman. Thank you very much, Senator.
    I do think we have made enormous progress. In every single 
meeting that we had at the U.N. General Assembly, and I think 
probably some of you saw the ``60 Minutes'' piece on Secretary 
Kerry. He had 59 bilateral meetings last week in the U.N. 
General Assembly, and I do not know how many I had on my own as 
well.
    So in every single one of them where there was a concern 
about whether it was financial sanctions or oil sanctions or 
evaders, Iran was a topic of conversation. In virtually every 
one where it was relevant to that particular country, whether 
that was China, whether that was Russia, whether that was 
Turkey, whether that was India, whether it was to Indonesia--
anybody that is part of that international coalition. Because 
you are quite right, what matters here is not----
    Senator Cardin. But China----
    Ambassador Sherman [continuing]. Is that international 
group.
    Senator Cardin. China is still buying a significant amount 
of oil from Iran. Some of our closest allies in Asia are buying 
oil from Iran. We have a ``Rebalance to Asia.'' It seems to me 
that we could be more effective in having greater help from 
those countries.
    Ambassador Sherman. I agree. Indeed, as you know, Secretary 
Kerry is on his way to APEC and the East Asia summit. He is in 
Tokyo today. Iran is a big topic of conversation in Japan.
    If the President is able to go to APEC and to the East Asia 
summit--he is not going to Malaysia and the Philippines--Iran 
will be a big topic of conversation as well. There are talking 
points that are part of any bilaterals held there to make sure 
we move forward.
    Senator Cardin. And those talking points are to strengthen 
the enforcements?
    Ambassador Sherman. It is to ensure the enforcement, to 
strengthen the enforcement, to watch what Iran does on the 15th 
and 16th. Many of these countries have a relationship with 
Iran. We do not. And so, one of our talking points is to say to 
them here is a message we want you to deliver to Iran.
    This is the opportunity on the 15th and the 16th to put in 
front of the international community--not just the United 
States--in front of the international community, specific, 
concrete, substantive, and verifiable steps that will address 
the concerns of the international community. Take this 
opportunity, or you will see that pressure continuing to 
increase.
    Senator Cardin. Thank you.
    The Chairman. Senator Risch.
    Senator Risch. Thank you, Mr. Chairman.
    First of all, Mr. Chairman, let me say that I am glad you 
included Pastor Saeed Abedini, who is one of my constituents 
who is held in Iran, and the other two individuals. And 
frankly, without those people being freed, there is no chance 
that Iran is going to convince me that they have any 
willingness to participate in the international community and 
do what is right here.
    Secondly, let me say that I associate myself with the 
remarks of the chairman and with Senator Cardin, and we have 
had some discussions here about the shutdown, and I think the 
world knows that we are having an intramural fight here over 
internal policy. But let there be no mistake. When it comes to 
these kinds of issues, we stand shoulder to shoulder on them, 
and we are not divided on these issues. We will move forward 
together on these issues as Americans and will join the 
country.
    Given that, let me say that I appreciate Senator Cardin's 
remarks, and again, I know this gets into the political weeds, 
and I cannot speak for all Republicans. But if a bill came to 
the floor in moments that relieved our intelligence services, 
the State Department enforcing these sanctions, and all the 
problems that you have described, I would vote for it in a 
heartbeat. And although I cannot speak for any other 
Republicans, I can tell you that I think it would probably, if 
we had a vote on it, pass the Senate unanimously.
    But we are not going to get a vote on it for political 
reasons, and it is unfortunate. But I want you to know that I 
am there, and I think most every Republican, if not all 
Republicans, would be there to back the expenditure of those 
funds because we all agree on that. And it is really 
unfortunate that those of us that have been elected to govern 
and want to govern cannot govern because we cannot get a vote 
on these things.
    So we are going to continue to work on it. We know what is 
right for the country, and this has got to get resolved.
    Let me move for a minute to the new President of Iran. 
Frankly, I have been really dismayed by the embracement of this 
charm offensive that he brought to the United States. When you 
look at this man's history, and indeed, when you look at his 
abilities, when we all know who is actually running that 
country, we ought to just flat ignore him. He has indicated 
that he has used this type of tactic in the past to achieve the 
policies and the goals that Iran wants to achieve in the 
nuclear field.
    And so, having said that, what can we expect of him now? 
What we can expect is the front that he is putting on, the 
facade that he is putting on, is to do exactly what he has been 
doing all along, including in formal meetings, that he 
bamboozled us. And he brags about bamboozling us.
    And look, we are smarter than this. We should understand 
that this guy, what he is saying now, you cannot put any weight 
on whatsoever when you look at what his history is. So I, for 
one, have been very disappointed at all of this.
    I think what we ought to do is take a step back and say, 
look, we do not want to hear this stuff. We do not want to see 
smiles. We do not even want handshakes. What we want to see is 
some action. And I look forward to October 15. I would like to 
say that I had cautious optimism. I have no optimism.
    I think what you are going to get is you are going to get 
another dog-and-pony show. I think you are going to get another 
shuffle, and I think it is going to be business as usual. And 
we have seen it day after day, month after month, year after 
year, while I have been here, and I think it is just going to 
go on until they can achieve what they want to achieve.
    So bless you for what you do. Keep it up. You have a very 
difficult task, and I think this committee and this Congress is 
willing to help and willing to put our foot down firmly to 
proceed with the road we have gone down to try to bring these 
people to where they need to be.
    Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    And thank you to Secretary Sherman. We very much appreciate 
your being here.
    You talked a few minutes ago and in your testimony about 
meaningful, transparent, and verifiable steps that would 
address core issues. I want to ask you, first, if there is 
agreement within the administration about what those concrete, 
verifiable steps would look like in order for negotiations to 
continue?
    And then, secondly, whether there is agreement with our 
international partners about what those steps should look like?
    Ambassador Sherman. Thank you very much, Senator.
    We have extensive discussions about various scenarios 
before we go to a negotiation, both internally and with our 
P5+1 partners, because it is being united that really makes any 
negotiation effective. And doing a negotiation with six 
partners is never an easy undertaking.
    And as Senator Cardin and others have pointed out, it is 
the international unity of sanctions and the international 
unity of negotiations that makes this effective. And if there 
are divisions, it makes it much harder. So, yes, we have gotten 
clear about where we want to head at the end of the day, what 
might be an early test of whether there is anything real here, 
and we, in fact, have many mechanisms in advance of the 
negotiation to make sure that we are completely united in our 
approach.
    And you know, we may disagree with some of our partners in 
the P5+1 on many things. Russia and China do not always agree 
with us. Some of my European partners sometimes want to go 
further than I want to go. But at the end of the day, we come 
to an agreement because we all understand how important it is 
to be united in going forward, and I appreciate, as Senator 
Risch says, the bipartisanship on this issue.
    I did, if I may, Senator, want to make one remark in 
response to Senator Risch, which goes to this as well. The 
shutdown and putting a piece of legislation on for the 
intelligence community 
or for OFAC at Treasury would, indeed, be helpful. But it would 

not be nearly enough. There are so many parts of this that are 
problematic.
    Even in the State Department, indeed, 2014 security 
assistance funding for Israel, for instance, will be delayed 
until there is a CR or full-year appropriation. Our ability to 
protect the Sinai is delayed with that force.
    So no one piece of legislation is going to solve what is a 
very complex international issue that we face, and we are 
beginning to see editorials, which we understand they are 
political. So we only take them so far.
    But in Sri Lanka, where we have been pressing them very 
hard on democracy, governance, and human rights, they wrote a 
very critical editorial today, you know, saying health care is 
a universal human right, and yet the United States cannot come 
to an agreement on it. So who are they to preach to us about 
accountability and governance?
    So this is very complicated for us, but I very much 
appreciate the bipartisan support on Iran and our efforts to 
move this forward.
    Thank you.
    Senator Shaheen. Thank you.
    I would just have one disagreement with you, and that is I 
think there is one piece of legislation that would deal with 
this. And all the Speaker has to do is to call it up, and that 
would get us a continuing resolution that would keep the 
Government open.
    But let me just go back to your statement because I 
understood you to say that there are ongoing negotiations. It 
was not clear to me whether you were saying that there is 
agreement now on how those negotiations might go forward and 
what people are looking for from those.
    Ambassador Sherman. We are finalizing what the negotiation 
frame will look like. What I will say is that the P5+1 has 
agreed that the proposal we put on the table in Almaty stays on 
the table, and we will not offer anything new in the first 
instance. The onus is on Iran to put their response on the 
table to us.
    So we are waiting to hear from Foreign Minister Zarif, who 
will head the delegation. We will not put new ideas on the 
table until we hear from Iran.
    Senator Shaheen. Thank you.
    I only have a few seconds left, but I was struck by the 
news accounts of Rouhani's return to Iran and that there were 
demonstrators there in opposition to him and to some of his 
statements. And I wonder if you could speak to the internal 
situation in Iran and to what extent he continues to have the 
support of the religious leaders in the country.
    Ambassador Sherman. Well, as many of your colleagues have 
pointed out, Rouhani is very much part of the religious cleric 
class in Iran. He has been a member of the Expediency 
Discernment Council. He has been on the Supreme National 
Security Council. So he is very close to the Supreme Leader.
    He is very tough. He is very conservative. But he does have 
politics, even in Iran. He won as a moderate--moderate in their 
system, not moderate in our system. But he won as a moderate in 
their system, saying that he would take a different approach to 
the West.
    But he does have to deal with people who are much more 
hard-line than he is. Hard-liner that he is, there are people 
who are more hard-line.
    I would suspect that those protesters were approved by the 
regime so that we would see that there was not just support for 
what Rouhani was doing, there were also some people who opposed 
what Rouhani was doing. And I think the Supreme Leader has 
given Rouhani and Zarif enough rope to get this over the line 
and perhaps even enough rope for other purposes if they are not 
successful.
    Senator Shaheen. Thank you very much.
    The Chairman. Senator Rubio.
    Senator Rubio. Thank you, Mr. Chairman.
    Thank you for being here today, Madam Secretary.
    This is not a new issue for our country. Back in the 1990s, 
I know you were involved with President Clinton in the North 
Korean experience. At the time, President Clinton was adamant 
that North Korea would not attain a nuclear capability, and of 
course, they did.
    And I raise that for the following question that I have, 
and let me preface it with this. There are five countries in 
the world that enrich uranium or reprocess plutonium, but they 
do not have a weapon. Those countries are Germany, Japan, 
Brazil, Argentina, and the Netherlands.
    Then there are two other countries that enrich or 
reprocess, but do have a weapon--North Korea and Pakistan.
    So my first question is which one of these two types of 
countries does Iran look like the most? Do they look more like 
North Korea and Pakistan, or do they look more like Germany and 
Japan and Brazil and Argentina? Who do they resemble the most?
    Ambassador Sherman. Senator, I would make a couple 
comments. One, they resemble themselves. They are a sui generis 
case, in many ways more dangerous than any country who has the 
ability to reprocess, enrich, or has nuclear weapons or seeks 
to get nuclear weapons.
    Senator Rubio. Okay, but----
    Ambassador Sherman [continuing]. So----
    Senator Rubio [continuing]. I understand they have a 
special case. They are only different in some ways than North 
Korea and Pakistan, but I think you would agree they do not 
look anything like Germany, Japan, Brazil, Argentina, or the 
Netherlands.
    Ambassador Sherman. Of course not.
    Senator Rubio. Okay. Here is why I am asking that. The 
President, at the U.N. General Assembly, he said that we 
respect the right of the Iranian people to ``access peaceful 
nuclear energy.'' And that sounds innocuous enough.
    Now the President of Iran has said publicly that Iran's 
right to enrichment is nonnegotiable. So here is my question, 
what is our position? What is our official position? Does Iran 
have a right to enrich plutonium--to enrich uranium or to 
reprocess plutonium?
    Ambassador Sherman. So the President's full comment on the 
quote that you gave is, ``I have made clear we respect the 
right of the Iranian people to access peaceful nuclear energy 
in the context of Iran meeting its obligations. So the test 
will be meaningful, transparent, and verifiable actions which 
can also bring relief from the comprehensive international 
sanctions that are currently in place.''
    So the President has circumscribed what he means by the 
Iranian people having access, and that word was, as National 
Security Adviser Rice said on Fareed Zakaria, very carefully 
chosen. Access, not right. But access to peaceful nuclear 
energy in the context of meeting its obligations.
    Senator Rubio. So, is it our position that Iran has the 
right to have access to uranium or plutonium for peaceful 
purposes, but they do not have a right to enrich it or 
reprocess it themselves? Is that our position?
    Ambassador Sherman. It has always been the United States 
position--and I have said to my Iranian interlocutors many 
times-- 
is that article 4 of the Nuclear Nonproliferation Treaty does 
not speak about the right of enrichment at all; does not speak 
to enrichment, period.
    It simply says that you have a right to research and 
development, and many countries, including countries like Japan 
and Germany, have taken that to be a right. But the United 
States does not take that position. We take the position that 
we look at each one of these.
    And more to the point, the U.N. Security Council resolution 
has suspended Iran's enrichment until they meet their 
international obligations. They did not say they have suspended 
their right to enrichment. They have suspended their 
enrichment.
    So we do not believe there is an inherent right by anyone 
to enrichment.
    Senator Rubio. Okay, so no one has an inherent right to 
enrichment, although you have outlined the case of these 
countries, which, by your own admission, they do not resemble 
Iran at all.
    So, as we enter negotiations with Iran, why is that not our 
starting point? Why do we not make that very clear? Because the 
President of Iran has made it very clear that in his opinion, 
enrichment is nonnegotiable. Why does not our President say, as 
he has said on other issues that we are facing now as a 
country, that he will not negotiate until a certain condition 
is met?
    He has laid down those markers on some domestic disputes 
that we are having now. So why doesn't he enter the negotiation 
with Iran by simply saying there is no negotiation until you 
give up your enrichment and your reprocessing capability 
because of the kind of country that you are, as you have 
described?
    Ambassador Sherman. It is very interesting, Senator. I 
think it was today or yesterday that President Rouhani actually 
qualified his own statement. He said we will not give up our 
capability to have enrichment, but we can discuss the details.
    So, you know, a negotiation begins with everybody having 
their maximalist position, and we have ours, too, which is they 
have to meet all of their obligations under the NPT and the 
U.N. Security Council resolutions. And they have their 
maximalist positions, and then you begin a negotiation.
    Senator Rubio. Here is my last question then, Will 
President Obama ever agree to ease sanctions in any negotiation 
that does not require Iran to abandon its enrichment and 
reprocessing capabilities?
    Ambassador Sherman. I am not going to negotiate in public, 
Senator, with all due respect. All I can do is repeat what the 
President of the United States has said, which is we respect 
the right of the Iranian people to access peaceful nuclear 
energy in the context of Iran meeting its obligations. The test 
will be meaningful, transparent, and verifiable actions.
    Senator Rubio. Okay. So my last question then is you are 
not able to say here today that there will never be an 
agreement to lower sanctions so long as Iran does not abandon 
its enrichment or its reprocessing capabilities?
    Ambassador Sherman. What I can say to you today is that 
Iran must meet the concerns of the international community, 
including the United States, and all of its obligations under 
the NPT and the U.N. Security Council resolutions, which have 
suspended its enrichment.
    The Chairman. Senator Coons.
    Senator Coons. Thank you, Chairman Menendez. Thank you for 
convening this critically important hearing and ensuring that 
this committee continues to fulfill its constitutional duty, 
even in the middle of a Government shutdown.
    And Madam Secretary, thank you and to all the witnesses who 
will appear today. And thank you for the very hard work that 
you and the Secretary have been doing to continue to strengthen 
and sustain the sanctions regime, which is critical to getting 
some chance of some progress in this.
    In engagement with Iran, we have to be clear-eyed and 
realistic about our goals. And at the end of the day, I think 
there is broad agreement here that we must not allow Iran to 
acquire nuclear weapons capability and that any negotiations 
must demand a verifiable end to their uranium enrichment 
program.
    I support the President's assertion that all options are on 
the table. I appreciate your opening comment about the actions 
of this committee and its role in progress with regards to 
Syria, and I strongly believe that the credible threat of 
military force has to be maintained in order that there be any 
progress around the negotiating table.
    I am encouraged, frankly, that the sanctions are having 
some real impact, both in terms of economic repercussions and, 
hopefully, forcing the regime in Iran to change its calculus 
with regards to their nuclear program. That has formed, I 
think, the basis for negotiations. But I also think it is 
unclear whether Hassan Rouhani is genuine in his stated 
intentions and is capable of making a deal.
    So I might also say at the outset I appreciate your 
continuing to press the cases of several Americans or Iranian 
Americans. In my case, I have been concerned about and engaged 
with the case of Mr. Hekmati. This charm offensive to me is so 
far not charming. The release of political dissidents and 
prisoners is a beginning and very, very modest step and could 
be advanced further by taking real steps to end the oppression 
within Iran and ongoing terrorist actions outside of Iran to 
kill or take hostage Iranian dissidents.
    So let us talk, if we could, first about whether or not 
Rouhani is capable of making a deal. Does he have the authority 
from the Supreme Leader? Khamenei in a speech in September 
talked about heroic flexibility. But I was pleased to hear you 
clear-eyed about the fact that deception, as I think you said, 
has long been part of the DNA of their negotiating strategy.
    Does Rouhani have the authority to make a real deal and see 
it through?
    Ambassador Sherman. I think we do not know, Senator, to be 
perfectly honest. He says he has a mandate from the Supreme 
Leader to--as does Foreign Minister Zarif, in a derivative 
fashion--to, in fact, come to an agreement with the 
international community. But as I have said, we are ready to 
test that, but we do not know, and he may not know.
    It may be that the Supreme Leader has said to President 
Rouhani and Foreign Minister Zarif, ``Go give it a try. See 
where you can go, see where you can get.'' And they may not 
even know what the limitations are of their ability to 
negotiate. But we have to test this, and we have to test it, as 
many of your colleagues have said, in a short enough period of 
time, in a way to ensure that their nuclear program cannot just 
go on and on and on and on and on to a point where we wake up 
one day and find out they have the capability we all do not 
want them to have.
    So we will test this. We will do it in a relatively short 
period of time. We will see if there is anything real here, and 
we will see whether President Rouhani, Foreign Minister Zarif 
can deliver on what they have said to us, which is they not 
only have a mandate from the Iranian people, but a mandate from 
the Supreme Leader. But we have to test it.
    Senator Coons. Well, we have short timelines, I think, both 
in terms of their steady progress, their steady advancement 
toward a nuclear capability and this shutdown.
    This maddening, I think unconstructive, destructive 
shutdown of the U.S. Federal Government, as you mentioned at 
the outset, is preventing both OFAC and the intelligence 
community from effectively enforcing sanctions.
    What is the plan forward for dealing with this shutdown, 
should it continue for another couple of weeks? And how do we 
make sure that the American people understand the very real 
risk this is creating for the United States and for our goals 
with regards to stopping Iran's work toward a nuclear weapons 
capability?
    Ambassador Sherman. Well, I certainly think, Senator, that 
this hearing today, the statements from the members, from the 
Senators, helps to convey that message. I think it is critical 
that we move forward in the bipartisan way that this committee 
has proceeded to deal with Iran, and to do so, we not only need 
all of the tools at our disposal to enforce the sanctions. But 
we need all of the tools at our disposal for national security 
and foreign policy, including the lectures that we give to 
countries all over the world about good governance.
    I have been in Washington for a very long time and once 
worked up here on Capitol Hill. I know that Members on both 
sides of the aisle can come to the right decision, and we are 
all hopeful--I speak as an American citizen now--that that 
happens very quickly.
    Senator Coons. Well, last, if I might, you know, Rouhani 
has made all these great promises, both at the United Nations, 
but also domestically. What, if any, evidence is there that the 
human rights situation within Iran has improved or that Iran 
has in any way backed off their campaign against Iranian 
dissidents outside of Iran?
    What more could we be doing to try and advance human 
rights, both within Iran or to thwart their efforts outside of 
Iran that have taken many lives and have continued to threaten 
stability regionally?
    Ambassador Sherman. Thank you, Senator.
    As you said, we welcomed the release of 16 prisoners of 
conscience, including human rights lawyer Nasrin Sotoudeh. But 
we hope that Iran will expeditiously free all of the 80 
political prisoners whose pardons it recently announced, many 
of whom we are still working to confirm as released.
    So, indeed, it would be very, very wise of Iran to speak to 
the international community by making affirmation of the 
release of all of those prisoners.
    In addition, as you pointed out, we have three Americans 
that we are all quite concerned about--Robert Levinson, Amir 
Hekmati, and Saeed Abedini. Both Mr. Hekmati and Mr. Abedini 
are in prison. It would be a grand humanitarian gesture, since 
they really did nothing wrong, for them to be released, and it 
would be very, very important if Robert Levinson, who has not 
been known to his family since March 2007, almost 7 years now--
almost 7 years--for Iran to cooperate, help us to find out 
where he is and get him released back to his family.
    Finally, we have sanctioned more than 30 Iranian 
individuals and organizations for their involvement or 
complicity in serious human rights abuses and censorship. We 
will continue to move in that regard on sanctions enforcement. 
We have continued to strongly support the mandate of the U.N. 
special rapporteur for human rights in Iran, and we also use 
our Virtual Embassy Tehran platform and its associated 
USAdarFarsi Facebook, YouTube, Twitter, and Google+ platforms 
to promote freedom of expression, respect for human rights, and 
free and fair and transparent electoral processes.
    It is very interesting that Alan Eyre, who is a fluent 
Farsi speaker and really the voice of our face to Iranians, an 
interview with him was put on the front page of an Iranian 
paper for the first time, including with a very nice picture of 
Alan. He is part of our delegation and our team for 
negotiations because he is a fluent Farsi speaker.
    He understands Iran quite well. It helps to understand 
sometimes what is going on in the room. So he is a great asset 
on all of these issues.
    The Chairman. Senator Johnson.
    Senator Coons. Thank you, Mr. Chairman.
    Senator Johnson. Thank you, Mr. Chairman. And I would like 
to thank the chairman for making the determination that this 
hearing was essential to our continuing the government here.
    I happen to think that national security is the top 
priority of government. I think it is actually an essential 
part of government, and so I would also like to thank Secretary 
Sherman for coming here today. I am thankful the State 
Department has certainly determined that you are essential as 
we are moving forward to making sure that we enforce the 
sanctions against Iran because that is essential to our 
national security.
    So let me start with that; that question. I appreciate the 
fact that in your testimony, you said that the shutdown is 
causing concern about our being able to enforce Iran sanctions. 
So does not the State Department, does not the Treasury 
Department have the ability, just like we have in Congress, of 
making a determination in terms of what is essential activity?
    Ambassador Sherman. Well, certainly. And the head of OFAC, 
I understand, I think is still at work, as well as with a 
couple of staff. But OFAC's responsibilities are enormous, and 
they have to determine, given what they have in front of them, 
who they can keep and who they cannot.
    Senator Johnson. But we are here today in this hearing 
because we believe the actions of Iran pose a serious national 
security threat to this Nation. So why would the State 
Department or the Treasury Department not deem the people in 
charge of enforcing the sanctions against Iran as an essential 
service of the Federal Government? Why would they not do that?
    Ambassador Sherman. Well, we only have limited budgets 
available to us. So I know that you would believe that there 
are many things that Treasury must do to make sure that U.S. 
currency, U.S. monetary and fiscal policy is protected. I mean, 
they have a whole variety of things that are essential to U.S. 
national security and foreign policy and economy----
    Senator Johnson. It is a matter of prioritizing spending.
    Ambassador Sherman. Well, it is not just a matter of 
prioritizing spending. There are bottom lines here, Senator, 
with all due respect. And I think the fundamental point here 
is, I truly believe every member of this committee wants us to 
keep Iran front and center, as we do.
    And I know that Secretary Lew, I know that DNI Clapper and 
Director Brennan all want to make sure that Iran is front and 
center. But there are realities to how much money we have 
available to us during the shutdown.
    Senator Johnson. Okay. Well----
    Ambassador Sherman. And it is limited.
    Senator Johnson. Well, Madam Secretary, as I said to you 
before the hearing, I really would like to think that we can 
have politics end at the water's edge. And I believe this 
committee really has shown that capability I think during a 
very thoughtful debate on the Syrian issue. So I believe that 
is true.
    But then you come before the committee here, and I think 
very appropriately, again, I appreciate the fact that you are 
pointing out to us that you are concerned about our ability to 
enforce the sanctions against Iran. So I guess the question I 
would have is, is it not also appropriate then for you to come 
before Congress, maybe before the House and say, listen, if you 
do not have the ability to deem those sanction enforcers as 
essential, if you need additional funding, to ask the House to 
pass a measure quickly, which I believe they would do probably 
today if you made the request.
    And then ask Senator Harry Reid to bring that up in front 
of the Senate. Probably on the basis of unanimous consent, I 
think we could get that funding to you in a matter of hours. I 
mean, would you be willing to work with Congress to do just 
that?
    Ambassador Sherman. As I said----
    Senator Johnson. Because it is essential.
    Ambassador Sherman. As I said, Senator, I believe that 
there are many essential pieces to what we do. Many.
    Senator Johnson. Have you made the point to the President 
how crucial it is to make sure that we maintain the sanctions 
and 
can enforce them against Iran? Have you made that point to the 
President?
    Ambassador Sherman. I think that everyone knows that it is 
essential that we enforce things with Iran. I also believe that 
it is essential that we make sure that Israel's peace and 
security is affirmed through our budget. I also believe that it 
is essential that we can, in fact, talk with countries around 
the world about good governance and have credibility when we do 
so because our own system is working.
    Senator Johnson. Okay.
    Ambassador Sherman. So this is very complicated, and I 
defer to the bipartisanship up here to ultimately solve the 
problem. You know how better to get that done than I do.
    Senator Johnson. Well, obviously, we are at an impasse 
right here, and discussions are not working very well. I 
certainly did not want to have a Government shutdown. But now 
we are having the House making the attempt to start passing 
over--let us call them--mini appropriation bills.
    The way the process ought to work, it should have happened 
months ago. But again, I am highly concerned about the national 
security of this Nation. I would hope the President is equally 
concerned.
    So that being the case, we are at this impasse. Why do we 
not at least allow the House to pass mini appropriation bills, 
mini continuing resolutions, so we can fund the essential parts 
of Government so that we are not concerned about the 
enforcement of the sanctions against Iran?
    Again, I would really encourage you through the 
administration, talking to the President, whoever you need to 
talk to, to make that request, allow that to come to a vote in 
the Senate and have President Obama sign those funding measures 
so that we can continue with the essential services of 
Government.
    Thank you.
    The Chairman. Senator Kaine.
    Senator Kaine. Mr. Chair, I was not going to do this, but I 
cannot resist. It is not the Department of State's fault, and 
it is not the administration's fault that Congress has not 
passed a budget.
    It is not the Department of State's fault, and it is not 
the administration's fault that the House and some in this body 
have repeatedly blocked even a budget conference from starting. 
Everyone around this table knows this, but just for folks who 
are here. The Senate had not passed a budget in 4 years, and we 
passed one on the 23rd of March, the same week that the House 
passed a budget.
    And we have been making an effort to go into a budget 
conference so that we can make these funding decisions since 
the 23rd of March and have been blocked in doing it 19 times. 
The attitude has been we will not have a budget conference 
because we are not interested in talking. We are not interested 
in listening. We are not interested in compromise.
    Only after pushing the Government to shutdown at midnight 
Monday did the House say, well, now let us have a conference. 
But not a conference about the budget. Let us have a conference 
about whether or not the Government of the United States should 
be open or closed.
    I mean, we should not be expecting the State Department to 
help bail Congress out of the dysfunction of not being willing 
to sit down and compromise. I mean, please, do all you can to 
stress the critical nature of your work, but we know that, and 
so does the President. This is up to Congress to solve, and it 
is only going to get solved if we sit down and have a 
conference about the budget, which we have been trying to do 
since March.
    Now my question, it is really an observation, and it is 
based upon some questions that I have heard Senator Risch ask 
before. Ambassador Sherman, in the sanctions regime against 
Iran, an area that I continue to be concerned about, is the 
waivers to 
nations that continue to purchase Iranian oil in a significant 
way. And Senator Risch and I were in a hearing recently with an 
Ambassador candidate to India, and we were talking about that 
or who is going to deal with India.
    And the nations and especially China, which purchases such 
a large amount, that continue to purchase Iranian oil, if we 
could get them to do more to scale back their energy purchases, 
I think it would take the sanctions regime, which are having an 
effect, and make them even more effective and, hopefully, help 
us.
    We had a meeting in early July, and I think Senator McCain 
was at this meeting. Senator Reid pulled it together. It was 
with the number-two leader of the Chinese Government, and I 
asked him this question. You have reduced your oil purchases 
from Iran for a variety of reasons, including to help the 
sanctions. Could you reduce them dramatically further and then 
say, but if you give up your nuclear program, we are going to 
buy a lot more from you?
    So have a stick, but then have a carrot. And could India do 
the same thing? Dramatically reduce oil purchases, but with a 
carrot down the road. Or Japan could do the same thing.
    And the response of the Chinese official was very adroit 
and very quick. He said we would be very willing to consider 
cutting our purchases from Iran even further if you would sell 
us liquid natural gas.
    Now that was the issue we were talking about with our 
Ambassador or representatives to India. And I would just kind 
of, from a political affairs standpoint, hope that the United 
States asset, this significant supply of natural gas, while the 
exportation of it has some other domestic economic issues we 
ought to balance, I think that is a real resource and asset 
that we could have that could even take the nations that we are 
currently exempting from the sanctions and could help them 
dramatically reduce their purchases in a short-term period as a 
way to enhance sanctions.
    And I just want to sort of encourage you to think about 
that asset in that way.
    Ambassador Sherman. Thank you very much, Senator.
    Indeed, our energy bureau, headed up by Ambassador Pascual, 
has looked very carefully at this and be glad to ask him to 
come up and brief the committee on what we are doing in this 
regard. LNG works in some countries as a substitute. In others, 
it does not.
    And as you point out, there are a lot of domestic as well 
as international issues involved in deciding whether we are 
going to export our gas and the tremendous asset we have now 
discovered that we have. But I do think it is something worth 
pursuing. We are pursuing it and would be glad to arrange a 
briefing for the committee on what works about this and what 
does not work about this and how we could move it forward and 
what are the considerations for it.
    We also agree that we need to keep pressing China. India, 
Turkey, South Korea, Japan, and their small amounts of oil that 
still go to Taiwan, that we need to keep pressing, and we are, 
all of them, for reductions. But all 23 importers of Iranian 
oil have either eliminated or significantly reduced purchases 
from Iran, and we are left with only 5 major customers of oil.
    So, with your help, thank you for the tremendous progress.
    Senator Kaine. And Mr. Chairman. Mr. Chairman, if I might 
just very quickly?
    But you continue to believe, though, that if those five 
major purchasers continued to scale back in significant ways, 
that could be a very strong additional leverage point to 
increase sanctions and help us with our diplomatic discussions 
surrounding the Iranian nuclear program?
    Ambassador Sherman. Without a doubt. Though I would note, 
particularly probably for China and India, it becomes more and 
more difficult to do because their demands are growing 
exponentially even as they are reducing. And I think I have 
used this statistic in front of the committee before.
    A given percentage reduction from China, who is currently 
the largest purchaser of oil from Iran, would be approximately 
equal to a volume reduction twice as large as the same 
percentage reduction from India, three times as large as the 
same percentage reduction from South Korea, and four times 
bigger than the same percentage reduction from Turkey.
    So even a 1-percent decline in Chinese purchases is double 
what anybody else's reduction is because their volumes are so 
great.
    The Chairman. Senator McCain.
    Senator McCain. Thank you, Mr. Chairman.
    Thank you, Secretary Sherman. Thank you for being here.
    I think there is a question in the minds of many of us 
about credibility. Mr. Rouhani is one of the most trusted 
figures of the Islamic regime's Supreme Leader. He has been the 
Deputy Speaker of Parliament, and as we know, he also served as 
a negotiator.
    And then, on an interview that he gave, which is out there 
on the Internet, ``The day that we invited the three European 
ministers, only 10 centrifuges were spinning at the Iranian 
nuclear facility.'' Rouhani boasted on the tape, ``We could not 
produce one gram of U4 or U6. We did not have the heavy water 
production. We could not produce yellow cake. Our total 
production of centrifuges inside the country was 150.''
    But then Rouhani admitted in the video the purpose of 
prolonging negotiations. ``We wanted to complete all of these. 
We 
needed time.'' He said three European ministers promised to 
block U.S. efforts to transfer the Iranian nuclear dossier to 
the United Nations using veto power as necessary.
    He called Iran's claim that it stopped its nuclear program 
in 2003 a statement for the uneducated and admitted that the 
program not only continued, but it was significantly expanded 
under his tenure. In the interview, Rouhani said that after he 
took over the country's nuclear project, the country's 150 grew 
to 1,700 by the time he left the project.
    Then Rouhani made his boldest statement. ``We did not stop. 
We completed the program.''
    Now we are supposed to trust this guy? What possible 
confidence do you have in this individual?
    Ambassador Sherman. Senator, I do not trust the people who 
sit across the table from me in these negotiations, and you are 
quite right that Rouhani was the chief negotiator from 2003, 
2005, and I am well familiar with that interview with his book. 
That as Secretary Kerry has said, we must test the proposition 
that has been put before us, but not forever and ever, for the 
reasons you point out.
    Senator McCain. How long should the test take, do you 
think?
    Ambassador Sherman. Well, I think we will know whether we 
are even at the beginning----
    Senator McCain. So we do not know how long the test will 
take?
    Ambassador Sherman. We will know----
    Senator McCain. Do you have a date?
    Ambassador Sherman. Can I finish my sentence?
    Senator McCain. Sure.
    Ambassador Sherman. Thank you, Senator.
    I think we will know when we meet on the 15th and 16th 
whether there is anything real here or not. I think we will 
know rather quickly whether we are beginning a serious 
negotiation or whether we are moving down one more road that 
leads nowhere.
    Senator McCain. Do we have evidence that the Iranian regime 
is training their regular forces in the use of chemical weapons 
in Syria?
    Ambassador Sherman. In this setting, what I can say to you, 
Senator, is that we are quite well aware that Iran is very 
heavily engaged in Syria, both with advisers, boots on the 
ground, the financing of Lebanese Hezbollah, providing all 
kinds of strategic advice in ways that are quite destructive 
and horrific.
    Senator McCain. So you cannot say in public hearing whether 
we know whether the Iranians are training Syrians in the use of 
chemical weapons or not?
    Ambassador Sherman. I will be glad to have our intelligence 
community come back to you on that.
    Senator McCain. I see. Is Qasem Soleimani playing a role in 
the Assad regime's decisionmaking, in your assessment? What 
influence does he have over the regime's command and control?
    Ambassador Sherman. What I can say, again, in this setting, 
and I think we probably should make sure we get a classified 
briefing for you on all of this, Qasem Soleimani is very 
critical to the IRGC Quds Force. He is engaged, we believe, in 
what is going on in Syria in ways that obviously we wish he was 
not.
    Senator McCain. And the situation, as a result, to the Camp 
Ashraf people. We know they were Iranian dissidents. At one 
point, they were designated as a terrorist organization. But 
the United States of America, is it true, gave them an 
assurance that if they moved, that they would be protected?
    We know the Iranian influence has dramatically increased in 
Iraq. In fact, we know now that al-Qaeda is alive and well and 
doing extremely well, moving back and forth across the two 
countries. Now, there was a murder of, I believe, 51 people who 
were members of this camp, and many of them had in their 
possession guarantees from the United States of America that 
they would not be harmed.
    First of all, are those facts true? And second of all, if 
true, what lesson does that send to people who we say will be 
under our protection?
    Ambassador Sherman. Senator, I share your deep concern 
about what happened at Camp Ashraf. This was a vicious attack 
on September 1, and many lives were lost. And the United States 
continues to press the Government of Iraq at every opportunity 
at the most senior levels to ensure the safety and security of 
residents at Camp Hurriya, where many of the MEK were moved for 
better safety.
    We strongly and swiftly condemned the attack. We, of 
course, extend our condolences to the victims' families, and we 
are working with the Government of Iraq and the United Nations 
Assistance Mission for Iraq, UNAMI, to peacefully and 
voluntarily transfer the surviving residents to safety at Camp 
Hurriya on September 12. And we are working for the protection 
of the people in Camp Hurriya because we do not want a repeat 
of this.
    So, to date, the Government of Iraq has moved in over 700 
large T-walls, over 500 bunkers, over 600 small T-walls, and 
nearly 50,000 sandbags. U.N. monitors visit the camp daily, in 
accordance with the MOU, to assess human rights and 
humanitarian conditions.
    But I must say, Senator, the real answer to this, to the 
safety and security of all of the people in the camps--who 
wants to live in a camp?--is resettlement to third countries to 
get out of Iraq and to get out of harm's way. And I would call 
on all of the people who are here today representing the rights 
and interests of the MEK and the leaders of the MEK in the 
camps and in Paris to allow this resettlement to go forward 
because until the resettlement happens, safety and security is 
going to be at risk.
    We will do everything in our power to keep people safe in 
these camps. But as you point out, the al-Qaeda threat is 
increasing in Iraq, and it is difficult.
    Senator McCain. Unfortunately, we did not keep our word, 
despite your good words, and I appreciate those good words. And 
I hope that--and I hope that this issue will be raised with the 
Iraqi Government, and we in Congress may have to look at the 
kind of aid and how we are extending that to Iraq if this kind 
of thing is going to be countenanced by the Iraqi Government.
    And I do not--I used up all my time. I thank you for your 
response.
    The Chairman. Before I turn to Senator Markey, let me echo 
what Senator McCain has said in this regard, and I have put out 
a statement in this regard. I have also talked to our 
department. You know, America went to the MEK, and we said 
disarm and we will protect you. And then we ultimately left, 
and that protection has not been there.
    You can put up I do not care how many tons of sandbags, but 
when elements of the Iranian--excuse me, of the Iraqi forces 
actually may very well be complicit in what took place, 
sandbags are not going to take care of the problem. And I agree 
with you that resettlement is a critical part. Maybe the United 
States could be part of leading the way in saying to a universe 
of these individuals that, in fact, you can be resettled to the 
United States, and that would get the rest of the world to 
offer further resettlement.
    But it is unacceptable to lose one more life when American 
commanders gave these individuals a written guarantee toward 
their safety, and it sends a message to others in the world 
that when we say that we are going to do that and we do not, 
that they should not trust us.
    And for one thing that this committee can do, since it has 
jurisdiction over all weapons sales, is that I doubt very much 
that we are going to see any approval of any weapons sales to 
Iraq until we get this situation in a place in which people's 
lives are saved.
    Senator Markey.
    Senator McCain. Could I say thank you, Mr. Chairman.
    Senator Markey. The sanctions have squeezed the regime of 
Iran, but we cannot let the Iranians wriggle out of the impacts 
of the sanctions through a mirage of cooperation. We should not 
relax the sanctions one inch while Iran's intentions are still 
unknown.
    And as you have noted, Madam Under Secretary, we are not in 
a trust, but verify situation with Iran here. We do not trust 
the Iranian regime, and we should not trust the Iranian regime. 
And that is where we are going to be, and I think we all agree 
on that.
    There has been a very high historical prevarication 
coefficient coming out of Iran on this program. And by the way, 
they are no different than the North Koreans. They are no 
different than the Iraqis. They are no different than the 
Syrians. They were all using what each of these countries says 
is an interest in wattage, electricity wattage, in order to get 
access to a civilian nuclear electricity program to compromise 
it in order to obtain the uranium and plutonium.
    They all lie. They all lie. It is all about the nuclear 
weapons. And each country does it, and we keep falling for it. 
Not ``we''--in general, the world keeps falling for it. We keep 
trusting them, you know, to not compromise it, and all you need 
is a slight change in the government, and all of a sudden, 
these materials are going into the hands of those that want a 
weapons program.
    And by the way, that is my concern about saying, well, we 
will consider giving a nuclear program to Saudi Arabia or, for 
that matter, to the United Arab Emirates. When the government 
changes, so can the program as they just boot out all those 
people who were inspecting the civilian program.
    It is just an ongoing storyline that never changes, and 
then we wind up getting deeper and deeper, which is why we have 
to be thankful for the Israelis in 1981 when they bombed the 
Osirak nuclear power plant in Iraq. It was not truly under 
full-scope safeguards. And when they bombed the Syrian nuclear 
plant, they did the world a favor because, again, this whole 
safeguards regime question is completely dependent upon how 
intrusive, how continuous the inspections regime is in 
guaranteeing that the program is not compromised.
    And I do not think it should take a long time to determine 
whether or not they are going to allow the inspectors in to go 
to those sites to begin the preliminary work. We all know that 
is what happened in Iraq. They let the inspectors in when they 
thought there was going to be a war, and we could not find the 
nuclear weapon program, okay?
    We should have never started the war because we could not 
find the program that was the ostensible justification to make 
sure the next attack did not come in the form of a mushroom 
cloud, and we could not find the program. But we had the 
inspectors in, and they were riding all over that country. That 
is what Iran has to accept.
    There has been a compromise to this program, okay, as other 
countries have compromised their nuclear programs. And that is 
why we have to be very careful in the Middle East as we talk 
about Saudi Arabia having a civilian nuclear program. There are 
300 days of sunshine in the Middle East. Whenever we are 
talking about selling nuclear power for electricity into 
countries that have oil and gas, okay, then we should just cast 
an arched eyebrow.
    It is very, very likely that 10 years from now, 20, 30, it 
will all turn on us again, and we will be talking about 
American young men and women being put at risk. So I guess my 
question just came in the form of that comment. I would like to 
move over, if I could, very briefly over to the cyber issue.
    We know that there are Iranian extremists that have been 
attacking sites in the United States, in Saudi Arabia, other 
places. What role is their capacity to launch cyber attacks on 
the West, on other countries in the Middle East, playing in 
these negotiations to make sure they know that we want that 
shut down as well, and we do not want them playing games in 
this ever-increasingly dangerous area of international 
conflict?
    Ambassador Sherman. Senator, thank you. Thank you for your 
comments, and you have long been a leader and a champion and a 
speaker about nuclear energy, nuclear power, nuclear weapons. 
You and I have had these conversations for many years.
    Where cyber is concerned, we are, of course, concerned 
about the capability of Iran. We are concerned about the 
capability of many countries in the world to use cyber.
    Where Iran is specifically concerned, I think that 
discussion would better take place in a classified setting, and 
I would be glad to arrange for that briefing to occur.
    Senator Markey. Well, again, I just want to say that that 
is a big part of this storyline.
    Ambassador Sherman. Absolutely.
    Senator Markey. Okay. And they use it, again, in a regional 
context that then drives these other countries toward their own 
sense that they have to increase their own protection. And so, 
I think it is absolutely critical that we play the lead role 
here.
    Stuxnet played a big role right now in buying us more time, 
but we know that a counterpart capacity also exists in Iran and 
other countries to attack us, to attack the West, to attack 
those regional neighbors. And so, I just want to highlight that 
issue, thank you for your work on it, and wish you good luck. I 
think we are at a critical point.
    And I would just say this in summation, Mr. Chairman. Back 
in the cold war, Brezhnev died, Chernenko died, Andropov died--
three leaders in 3 years--and Gorbachev took over April of 
1985. He said he wanted to end the nuclear arms race. He said 
he wanted to reduce nuclear arms. He said he wanted an 
agreement.
    We had to test it, but we had a moral responsibility to 
test it and to trust, but verify, as Ronald Reagan said. We 
have a lot of reason to put Iran in the same category that we 
put the former Soviet Union. But Rouhani shows up as a new era 
potentially, potentially. And I think it is exactly what you 
just said. We do not know how long his leash is that the 
Supreme Leader is giving him.
    But if it is one, then we can test it quickly because they 
can let those inspectors in, and we can get the preliminary 
guarantee that those sites are going to be made accessible to 
the world. And I think there will be a sigh of relief that will 
be breathed, as there was in the mid-1980s when Reagan was able 
to extract that same kind of inspection regimes.
    I thank you, Mr. Chairman.
    The Chairman. Thank you.
    Madam Secretary, before we let you go, I have two final 
questions. One is last week Pakistan's Prime Minister said he 
intended to move forward with a natural gas pipeline deal with 
Iran that was agreed to by the previous government with 
Pakistan. If that were to take place, it would be in clear 
violation of our Iran sanctions regime, not to mention that it 
would provide a critical revenue stream to Iran, and it would 
create challenges globally with our other partners in terms of 
saying we are following you on the sanctions, but you cannot 
allow somebody to get away with it, and then all of us be 
ultimately subject to the sanctions.
    Is the administration having discussions with Pakistan on 
this issue, and are we ready to proceed with sanctions if they 
continue on the deal?
    Ambassador Sherman. Thank you, Mr. Chairman.
    A couple of points, if I may? On Pakistan, we have those 
discussions and will continue with the Pakistani Government. My 
own assessment is it is not going anywhere anytime soon. But 
they certainly understand where we are and what our sanctions 
require, should it proceed.
    So we will keep vigilant about not only what Pakistan may 
do, but any country that is going to have to confront the 
sanctions that the United States and the international 
community has at its disposal.
    If I may, Senator, I would also like to take the 
opportunity to comment on what you said about Iraq. And we 
quite agree--and what Senator McCain said. We quite agree that 
we need to do everything we can to resettle the people, to get 
them out of the harm's way, to make good on the word we gave to 
the MEK.
    I know that there are strong feelings up here, and I 
understand why, about arms sales to Iraq. But I do want to put 
on the record that U.S. security assistance and foreign 
military sales in particular are tools that we use for building 
and shaping Iraq's defense capabilities and integrating Iraqi 
security forces with our security forces and regional partners.
    And I just want to caution that withholding security 
assistance may well serve to decrease our influence in Baghdad, 
cede relationships and leverage to strategic competitors who 
will fill the vacuum and could conceivably damage our long-term 
interests. So I just ask that we talk very carefully as we go 
forward.
    The Chairman. Well, let me caution you about the 
overflights that Iraq has permitted from Iran into Syria 
largely with impunity. And let me also caution that the seven 
hostages, which we believe the Iraqi Government knows where 
they are, should they die, it would be complicating matters for 
all of that.
    So I hope that we have both cautioned each other.
    Ambassador Sherman. Quite agree. Quite agree. I quite agree 
with you on both issues.
    The Chairman. Let me close by asking you one final 
question. What is it that we will accept less than what the 
world has said is necessary through the Security Council 
resolutions?
    Ambassador Sherman. I am sorry?
    The Chairman. What is it that we would accept in these 
negotiations with Iran less than what has been established 
under the Security Council resolutions?
    Ambassador Sherman. We have continued to say to Iran that 
we expect them to fulfill all of their obligations under the 
NPT and the Security Council resolutions.
    The Chairman. All right. Well, thank you for your 
testimony. I look forward to what the Department and the State 
Department is going to be able to do with Iran as you test 
their intentions. I intend to keep the Department's feet to the 
fire----
    Ambassador Sherman. Thank you.
    The Chairman [continuing]. On our issue of sanctions as we 
move forward. And Senator Corker.
    Senator Corker. Mr. Chairman, I will be very brief. I know 
we have another panel coming, but I would like to ask the 
Secretary. You know, we have talked a lot today about the 
nuclear issue and other important issues here today. But if we 
negotiate an end to their nuclear program or a significant 
rollback, we still have a country that is hostile.
    They are a state sponsor of terror. They have a terrible 
human rights record. So, you know, I know that you all are 
looking at trying to negotiate some relief, if you will, 
relative to the sanctions. But the fact is that the way the 
sanctions law reads, they have got to not only dismantle their 
nuclear program, but they also have to renounce terrorism.
    And I just wonder how are those negotiations going 
simultaneous to these others and what you are doing to ensure? 
Because, again, the way the law reads, these sanctions cannot 
be undone unless all of that occurs, and it seems to me we are 
only moving on one track, a very good one track. But I am just 
wondering how you might be addressing the other?
    Ambassador Sherman. We have been clear with the Iranians 
that we are talking here about their nuclear program and the 
sanctions that relate to their nuclear program and that the 
sanctions that exist regarding human rights actions, their 
terrorist actions are still on the table because of exactly 
what you say, which is that they need to make progress, 
considerable progress around human rights. They have to stop 
their sponsorship of terrorism.
    They have to stop regionally destabilizing that part of the 
world and many other parts of the world, quite frankly. So 
those are other discussions that we have with Iran, as is the 
subject of this today and as the subject of the 15th and 16th 
will be on their nuclear program.
    Senator Corker. Thank you.
    The Chairman. Thank you, Madam Secretary, for your 
testimony. We always appreciate your service.
    Ambassador Sherman. Thank you for the opportunity.
    The Chairman. Let me call up our next panel. I have 
introduced them already, but David Albright, founder and 
president of the Institute for Science and International 
Security; the Honorable James F. Jeffrey, distinguished 
visiting fellow of the Washington Institute for Near East 
Peace, and Ray Takeyh, senior fellow for Middle East studies on 
the Council on Foreign Relations.
    [Pause.]
    The Chairman. And let me apologize to Mr. Takeyh for my 
mispronunciation of his name.
    We welcome you. Your full testimony will be included in the 
record without objection. We ask you to summarize it in about 5 
minutes or so, and we will start with Mr. Albright.

 STATEMENT OF DAVID ALBRIGHT, PRESIDENT, INSTITUTE FOR SCIENCE 
           AND INTERNATIONAL SECURITY, WASHINGTON, DC

    Dr. Albright. Well, thank you very much, Mr. Chairman and 
Ranking Member Senator Corker and other members of the 
committee, for the opportunity to testify today.
    I think it has been made clear that there is certainly hope 
that an agreement with Iran can be achieved over its nuclear 
program, and I think I certainly share many of the views here 
that one should be skeptical and move very quickly to test 
whether the Iranians have really changed.
    And I think we also have to keep in mind that the goal is 
not necessarily specific limitations on their nuclear program, 
but it is to provide an agreement that ensures that they will 
not seek nuclear weapons. And I think that is a very difficult 
thing to do. And what I would like to do is talk through some 
of the issues on the nuclear program and then some of the 
implications of that kind of objective on what you would like 
to see in agreement.
    And I think it is clear to everybody, and some have made 
this point today, that Iran's nuclear program is large and 
growing. And it is also true that there has been no signs of 
the reduction in that program since President Rouhani took 
office. In fact, some of his comments in New York clearly 
implied that he envisions a growing nuclear program.
    And as you know, there are two main gas centrifuge sites in 
Natanz and Fordow. There is also growing suspicion that they 
may be building a new one, and President Rouhani has not 
provided answers to that question.
    Also Iran has produced very large stocks of enriched 
uranium, significant stock that is near 20 percent enriched and 
then a very large stock of 3.5 percent enriched uranium. And 
then, during the last 2 years, Iran has essentially doubled the 
number of its centrifuges at Natanz and Fordow, and it now has 
over 19,000 centrifuges installed at these facilities. And 
1,000 of them are these advanced centrifuges that we have 
worried about for years.
    And so, Iran is putting together a considerable nuclear 
weapons production capability, if it chose to go that route. 
And I think, as I mentioned, in developing a negotiating 
position, we have to look at how to constrain that program and 
provide the kind of assurance we need that it would not build 
nuclear weapons, and in that, we have to consider how long it 
would take Iran to make weapon-grade uranium for a nuclear 
weapon.
    And I think the chairman has mentioned some of the 
estimates, and we have done some looking at today and how much 
they could do. And essentially, if Iran made a decision today 
to produce weapon-grade uranium, which is, to us, the long pole 
in the tent of making a nuclear weapon, it could make enough 
weapon-grade uranium for a bomb in about 1 to 1.5 months.
    Now there are many things that can happen that would 
lengthen that time, but that, to us, is a credible minimal time 
for Iran to break out. Now I do not think Iran would do that 
now because it would be detected by the inspectors, and it 
would have to fear that it would be struck militarily. So I 
think what we would call the breakout estimates provide some 
assurance that there is still some time to solve this problem.
    But unfortunately, Iran continues to add centrifuges to its 
program, and we would hope that would stop. But if you look at 
the plan trends of its centrifuge program, we think that by 
mid-2014, Iran could have so many centrifuges installed and 
could also produce more 20 percent enriched uranium that it 
could break out before and break out and produce enough weapon-
grade uranium for a bomb before the international inspectors 
could detect that.
    Now that does not mean they would have a bomb at that time, 
and Ambassador Sherman talked about a U.S. estimate of about a 
year or up to a year. I mean, there is controversy on that. I 
think our estimate is to get an actual first nuclear explosive, 
it could take anywhere from 3 months to 12 months. We do not 
know their capabilities that well.
    But in terms of the long pole in the tent, it is the 
weapon-grade uranium. And once they have enough for a bomb or 
two, it is going to change things fundamentally, even if it is 
going to take them several more months to actually construct a 
nuclear explosive. Therefore, negotiations should clearly aim 
to limit Iran's ability to reach what we call a critical 
capability and what you have called a breakout capability and 
to increase the time it takes Iran to build nuclear weapons.
    Let me briefly talk about the plutonium side of this that I 
think Iran has caused more alarm by saying it is going to soon 
start the Iraq heavy water reactor, which, from a technical 
point of view, is pretty well designed to make weapon-grade 
plutonium and is not so well designed to make medical isotopes.
    And so, there is worry that this could open a second 
pathway to nuclear weapons for Iran, if they operate it. And 
so, I think it is very important in negotiations to get Iran to 
first simply say we are not going to start it until 2015 or 
later and then to seek the end of this construction project and 
just eliminate this as a possibility.
    Let me make one last point. For us, it is a very important 
one. We have worked on a lot of countries over time. We have 
seen countries get nuclear weapons. We have seen them give them 
up. One of the more troubling aspects of Iran's statements is 
its insistence that it had no nuclear weapons program in the 
past, it has none now, despite the overwhelming evidence that 
that is simply not true.
    Now I understand, and Senator Markey made the point, 
countries often lie about their nuclear weapons programs. I 
mean, that is nothing new, and sometimes people live with those 
lies. But in the case of Iran, if they do not start opening up 
and I would say answering the questions of the International 
Atomic Energy Agency on this issue, which has well-developed 
evidence and a whole set of questions and a negotiating path 
with Iran to settle this--and unless they settle this, it is 
going to be very hard to believe anything they do on this 
question.
    And I think if they are not willing to do this, then I am 
not sure they would pass the test that is needed to settle this 
issue.
    Let me end there, and I apologize for going over.
    [The prepared statement of Dr. Albright follows:]

                Prepared Statement of Dr. David Albright

    Iran has invested heavily in nuclear industries in the last 30 
years. However, its investments, often made in secret and dominated by 
black market purchases, have not been consistent with a strictly 
peaceful nuclear program.
    Despite many setbacks over the last three decades, Iran has found 
suppliers to provide the wherewithal to build many nuclear facilities. 
One of the most important suppliers was A.Q. Khan and his network of 
business associates in Europe, Asia, and Africa. They provided Iran in 
the 1980s and 1990s with many key requirements necessary to build and 
operate gas centrifuge plants. Without their assistance, Iran would 
have likely been unable to develop a successful gas centrifuge program. 
Since then, Iran has depended extensively on illicit foreign 
procurement of a wide range of nuclear-related dual-use goods to outfit 
many of its nuclear efforts. Those efforts continue today.
    Iran's current nuclear infrastructure is large. It has two gas 
centrifuge sites, the underground Natanz plants and the deeply buried 
Fordow enrichment plant. It has stated plans to build a total of 10 
enrichment plants and suspicions are growing that it is building 
another one in secret. It is operating a large power reactor at Bushehr 
and maintains relatively large uranium conversion and fuel fabrication 
facilities near Esfahan. It is nearing completion of a heavy water 
reactor at Arak that appears better suited to make plutonium for 
nuclear weapons than to produce medical isotopes for civilian use.
    If Iran decided to produce nuclear explosive materials today, it 
could use its gas centrifuge program to produce weapon-grade uranium 
(WGU). However, Iran's fear of military strikes likely deters it at 
this time from producing WGU or nuclear weapons. However, if its 
centrifuge plants expand as currently planned, by the middle of 2014 
these plants could have enough centrifuges to allow Iran to break out 
so quickly, namely rapidly produce WGU from its stocks of low enriched 
uranium, that the International Atomic Energy Agency (IAEA) would 
likely not detect this breakout until after Iran had produced enough 
WGU for one or two nuclear weapons. ISIS calls this a ``critical 
capability.''
    If the Arak reactor operates, Iran could also create a plutonium 
pathway to nuclear weapons. This reactor can produce enough plutonium 
each year for one or two nuclear weapons, heightening concerns that 
Iran aims to build nuclear weapons. Its operation would needlessly 
complicate negotiations and increase the risk of military strikes.
    current enrichment status and low enriched uranium (leu) stocks
    Iran began enriching uranium in its main enrichment facility, the 
Fuel Enrichment Plant (FEP), near Natanz in February 2007. Over the 
past 6 years, Tehran has increased the number of enriching centrifuges 
at Natanz to more than 9,000 
IR-1 centrifuges, added a set of tandem IR-1 centrifuge cascades in the 
Pilot Fuel Enrichment Plant (PFEP) at Natanz, and commenced enrichment 
at the fortified, underground Fordow Fuel Enrichment Plant (FFEP) in 
two sets of tandem IR-1 cascades. Additionally, Iran has worked to 
improve its cascade design and greatly increased its skill in operating 
centrifuge cascades. While the IR-1 is not an advanced centrifuge, and 
while its performance in Iran has been subpar, Iran's 
IR-1 cascades still could be employed effectively to make WGU.
    Iran has in the last 2 years installed many thousands of additional 
centrifuges at its facilities. Although it has not begun enriching in 
these machines, the vast majority are fully installed and under vacuum, 
meaning that Iran could quickly begin feeding natural uranium into 
these cascades and more than double its enrichment capacity.
    As of the August 2013 IAEA ``Safeguards Report on Iran,'' Iran had 
installed an additional 6,250 IR-1 centrifuges for a total of 15,416 
IR-1 centrifuges at the Natanz FEP. Iran has also begun installing its 
advanced centrifuge, the IR-2m, a centrifuge with a capacity three to 
five times greater than the IR-1 centrifuge, at the FEP. As of August, 
Iran had fully installed 1,008 IR-2m centrifuges there and was 
preparing to fully install over 3,000 of these machines at the FEP. 
Even if Iran installs no additional IR-2m centrifuges, these installed 
IR-2ms are equivalent to 3,000-5,000 IR-1 centrifuges.
    Iran has nearly fully outfitted the Fordow facility with IR-1 
centrifuges, although it continues to enrich in only 696 centrifuges. 
Another 2,014 IR-1 centrifuges are installed, for a total of 2,710 IR-1 
centrifuges. If all these centrifuges are devoted to making near 20 
percent LEU, Iran could nearly quadruple its output of this material to 
over 40 kilograms (kg) per month.
    In total, at the Natanz pilot plant, the Natanz FEP, and the Fordow 
site, Iran has installed 18,454 IR-1 centrifuges in production-scale 
cascade. To this must be added the 1,008 IR-2m centrifuges installed at 
the FEP. These results are summarized in Table 1.
    During this time, Iran has also enriched and stockpiled a 
significant amount of uranium. According to the August 2013 IAEA 
safeguards report, it has produced in total 9,704 kilograms of uranium 
hexafluoride enriched to 3.5 percent, some 2,877 kg of which has been 
further enriched at the Natanz pilot plant and the Fordow enrichment 
plant to produce 373 kg of near 20 percent LEU hexafluoride. As of 
August, Iran held a net 6,774 kg of 3.5 percent LEU hexafluoride and 
186 kg of near 20 percent LEU hexafluoride, having converted a portion 
of its near 20 percent fuel to uranium oxide suitable for fuel 
assemblies for the Tehran Research Reactor (TRR). These stockpiles are 
monitored by the IAEA, but if Iran chose to break out from its 
obligations under the Nuclear Nonproliferation Treaty (NPT), the stored 
LEU in both hexafluoride and oxide form would be available for the 
production of WGU. Table 2 summarizes these inventories.
    Based on the IAEA August 2013 safeguards report on Iran, Iran had 
converted no more than 30 kilograms of near 20 percent LEU, or 45 
kilograms of near 20 percent LEU hexafluoride, into fuel assemblies for 
the TRR. This represents approximately 12 percent of Iran's total stock 
of near 20 percent enriched uranium, or only about 25 percent of the 
amount of LEU Iran has sent to Esfahan for conversion.
    Unless the near 20 percent LEU oxide is converted to fuel 
assemblies and irradiated, it can relatively easily be reconverted to 
uranium hexafluoride suitable for further enrichment. Even if Iran 
began rapidly producing fuel assemblies for the TRR, due to the small 
size of the research reactor, Iran cannot realistically irradiate this 
fuel.
    As such, conversion into an oxide form cannot be seen as a 
significant confidence-building measure on its own. Even so, Iran 
should be commended for taking measures to convert its uranium to 
uranium oxide at the Esfahan facility. Although conversion of uranium 
hexafluoride into uranium oxide and fabrication into fuel elements does 
limit Iran's ability to quickly use this material in a breakout 
scenario, the only iron-clad way to prevent its further enrichment is 
for an outside country to hold this material in escrow prior to 
irradiation.
    Iran has been careful to convert sufficient near 20 percent LEU 
hexafluoride to keep its total stockpile of this material under the 
redline established by Israel of about 240-250 kilograms of near 20 
percent LEU hexafluoride. These values are a rough measure of the 
amount of this LEU needed for further enrichment to produce about 25 
kilograms of WGU, widely recognized as enough for a nuclear weapon.
    These data show that Iran has produced far more LEU than it needs, 
whether the LEU is near 20 percent enriched or 3.5 percent enriched. 
Thus, a halt to enrichment would still leave Iran with a sizeable stock 
of LEU that is far in excess of its current needs.

                    IRAN'S SHORTENING BREAKOUT TIMES

    A central consideration in assessing the threat of Iran building 
nuclear weapons is the timeline for Iran to acquire them following a 
decision to do so. The IAEA has concluded that Iran has the know-how to 
build a crude nuclear explosive device that it could detonate 
underground or deliver by aircraft or ship. It would take Iran longer 
to build a deliverable warhead for its Shahab 3 or Sajiil 2 ballistic 
missiles because Iran is believed to require more time to master the 
construction of a reliable, miniaturized warhead for these missiles.
    Overall, Iran would likely need anywhere from a few months to about 
a year to build a crude nuclear explosive device and longer to build a 
warhead for a ballistic missile. The ``long pole in the tent'' of such 
an effort is Iran's lack of sufficient WGU. It is assessed as not 
possessing WGU, and thus its priority would be the production of enough 
for a nuclear weapon, or more likely several nuclear weapons.
    In that light, Iran may seek to divert its existing stocks of LEU, 
enriching this material further up to weapon-grade as fast as it can. 
Iran's goal would be to accumulate enough weapon-grade uranium before 
it was detected and the United States and other nations responded, 
likely militarily destroying the facilities doing the enrichment.
    Over the last several years, ISIS in collaboration with U.S. 
centrifuge specialists at the University of Virginia have estimated 
Iranian breakout times under a variety of circumstances. These 
estimates seek to determine a minimum time for Iran to accumulate 
enough weapon-grade uranium for a nuclear weapon. In practice, breakout 
times may be even longer than predicted. For example, Iran may know in 
theory how to enrich to weapon-grade but in practice may encounter 
difficulties and unexpected inefficiencies. Iran has found enrichment 
very difficult and far more time consuming than expected. Nonetheless, 
one central trend in these calculations is that as Iran has further 
developed its gas centrifuge capabilities and increased its inventories 
of LEU, breakout times have shortened significantly.

How quickly could Iran break out today at the Natanz and Fordow 
        enrichment plants?
    The two main enrichment sites at Natanz and Fordow contain a total 
of 18,454 IR-1 centrifuges (see Table 1). In order to conduct a dash 
using safeguarded LEU at Natanz and Fordow, Iran would need to violate 
its commitments under the NPT, including diverting the LEU from IAEA 
safeguards. In that effort, however, Iran would need to make only minor 
modifications in the enrichment plants before starting to enrich to 
weapon-grade levels. We assess that these modifications today would 
take at least 2 weeks to accomplish.
    Recent estimates by the University of Virginia experts and ISIS 
incorporate the data from the August 2013 IAEA report on Iran. 
According to this estimate, if Iran used some of its existing stock of 
3.5 percent LEU, all of its near 20 percent LEU hexafluoride, and all 
of its installed IR-1 centrifuges, it could dash to produce one 
significant quantity (SQ) of WGU needed for a nuclear weapon, or 25 
kilograms of WGU, in 1.0-1.6 months. If it used in addition the 
installed IR-2m centrifuges at Natanz and Fordow, it could reduce this 
breakout time to 0.9-1.4 months.
    If Iran chose to dash at these plants to WGU without using its near 
20 percent LEU stockpile, it could produce 25 kg of WGU in 1.9-2.2 
months with its IR-1 centrifuges, or in somewhat less time if it also 
used its installed IR-2m centrifuges at the FEP. Iran currently has 
enough 3.5 percent inventory to produce approximately 100 kg of WGU, 
according to this estimate.
    These estimated breakout times today are sufficiently long enough 
to allow for detection by IAEA inspectors and a military response that 
could end further production. However, breakout times are growing 
dangerously short as Iran builds up its stock of near 20 percent LEU 
hexafluoride and installs more centrifuges.

                          CRITICAL CAPABILITY

    Although Iran is engaged in nuclear hedging, no evidence has 
emerged that the regime has decided to build nuclear weapons. Such a 
decision may be unlikely to occur until Iran is first able to augment 
its enrichment capability to a point where it would have the ability to 
make sufficient WGU quickly and secretly.
    ISIS measures Iran's progress through an indicator called critical 
capability, shorthand for an Iranian capability to produce one or two 
weapons' worth of WGU using a stock of sufficient near 20 percent LEU 
while avoiding detection by the IAEA and time for action to be taken to 
stop it. Iran would achieve this capability principally by implementing 
its existing, firm plans to install thousands more 
IR-1 centrifuges, and perhaps a few thousand IR-2m centrifuges, at its 
declared Natanz and Fordow centrifuge sites and to learn to start up 
WGU production faster than it is judged capable of doing today. ISIS 
currently assesses that Iran will reach critical capability in mid-2014 
if it continues on its current trajectory.
    Iran's critical capability date could be achieved a few months 
earlier. For example, it could happen earlier if Iran successfully 
deployed and operated several thousand IR-2m centrifuges while 
continuing to install and operate more IR-1 centrifuges.
    To delay this critical capability date, the most important 
condition that could be placed on Iran is achieving a halt to the 
installation of more centrifuges of any type. Any future nuclear 
agreement must include a limit on the number and type of centrifuges 
Iran can install. A numerical limit would need to be well below the 
number of centrifuges currently installed at Natanz and Fordow and 
below the number of centrifuges actually enriching in the summer of 
2013, when the level was around 9,000 IR-1 centrifuges. In determining 
this limit, each IR-2m should be treated as equivalent to 3-5 IR-1 
centrifuges. Once data are available on the ability of IR-2m cascades 
to enrich uranium, this equivalence can be better defined.

                        NUCLEAR WEAPONS PROGRAM

    During the last several weeks, Iranian officials, including 
President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif have 
emphasized that Iran has never pursued or sought a nuclear bomb. 
Unfortunately, the available evidence provides little reason to believe 
them. If Iran wants the world to believe it will not build nuclear 
weapons in the future, the Iranian Government should reconsider its 
blanket denials of ever seeking nuclear weapons in the past.
    The U.S. intelligence community in a ``2007 National Intelligence 
Estimate'' (NIE) stated: ``We assess with high confidence that until 
fall 2003, Iranian military entities were working under government 
direction to develop nuclear weapons.'' It added: ``We assess with 
moderate confidence Tehran had not restarted its nuclear weapons 
program as of mid-2007, but we do not know whether it currently intends 
to develop nuclear weapons.'' Our European allies, Britain, France, and 
Germany, agreed that Iran had a sizeable nuclear weapons program into 
2003. However, they differed with the NIE's post-2003 conclusion. They 
assessed that Iran's nuclear weaponization program continued after 
2003, albeit in a smaller and less structured manner.
    A March 31, 2012 New York Times story by James Risen reported that 
the 2010 National Intelligence Estimate assessed that ``while Iran had 
conducted some basic weapons-related research, it was not believed to 
have restarted the actual weapons program halted in 2003.'' In an 
earlier article on March 17, 2012, Risen wrote: ``Iran says its nuclear 
program is for peaceful civilian purposes, but American intelligence 
agencies and the International Atomic Energy Agency have picked up 
evidence in recent years that some Iranian research activities that may 
be weapons-related have continued since 2003, officials said. That 
information has not been significant enough for the spy agencies to 
alter their view that the weapons program has not been restarted.'' But 
Risen reporting shows that U.S. intelligence found evidence that 
research on nuclear weapons may have continued after 2003.
    These assessments are in line with the IAEA's findings. In its 
November 2011 safeguards report, the IAEA provided evidence of Iran's 
pre- and post-2003 nuclear weaponization efforts. The IAEA found, ``The 
information indicates that prior to the end of 2003 [the activities] 
took place under a structured programme. There are also indications 
that some activities relevant to the development of a nuclear explosive 
device continued after 2003, and that some may still be ongoing.'' 
Several years of efforts by the IAEA to resolve these concerns have 
proven fruitless. The IAEA is scheduled to meet Iran in late October to 
discuss these issues again, where Iran has indicated it wants to make 
substantive progress.
    Thus, these intelligence and IAEA assessments differ markedly with 
Iranian blanket denials about seeking nuclear weapons. Moreover, they 
share a view that Iran may have continued researching nuclear weapons 
in more recent times.
    These intelligence agencies also share an assessment that Iran has 
not made a decision to build nuclear weapons. So, President Rouhani's 
pledge that Iran will not build nuclear weapons can still be realistic. 
And his apparent willingness to seek meaningful negotiations offers the 
first hope in several years that an agreement solving this nuclear 
crisis is possible. However, if Iran is unwilling to detail its past 
efforts to build nuclear weapons, or at the very least acknowledge the 
existence of a program, it undermines the credibility of statements 
about its present-day nuclear intentions.
    If Iran truly does not intend to pursue nuclear weapons in the 
future, it should heed the experience of states that abandoned nuclear 
weapons. Brazil and South Africa described their past nuclear weapons 
efforts as part of their successful process to convince the 
international community that they had turned their back on nuclear 
weapons and would not seek them in the future. Brazil admitted its past 
nuclear weapons work at the start of its renunciations of all nuclear 
explosives. South Africa mistakenly chose the path of trying to deny 
that it ever had nuclear weapons as it limited its nuclear programs to 
civil activities and greatly increased transparency over its remaining 
nuclear programs. But South Africa's approach did not work; too many 
governments knew that it had had a nuclear weapons program and wondered 
if the deception meant that it was hiding ongoing nuclear weapons 
efforts. The IAEA, which was intensely investigating South Africa's 
nuclear activities, shared this skepticism. South Africa's deception 
poisoned the well.
    In March 1993, President F.W. de Klerk announced to the world that 
indeed South Africa did have nuclear weapons but had destroyed them 
several years earlier. He invited the IAEA to verify his statements. 
The IAEA did so in a half year because of South Africa's remarkable 
cooperation with the inspectors. South Africa's pledge that it would 
never seek nuclear weapons again suddenly became much more credible. 
These transparency measures quickly convinced the world of South 
Africa's sincerity.
    Iran may fear that it will be treated differently. The Iranian 
Government may reason that if it comes clean about its past activities, 
it will be punished by the international community. But other cases 
argue against such a response. The key is admitting these past 
activities should be part of a process of placing strategic limitations 
on its nuclear programs, instituting far greater transparency, and 
adhering to frankness about its past. The IAEA and governments can then 
develop confidence that Iran is not seeking nuclear weapons. But if 
Iran seeks to continue to hide its past military nuclear efforts, it 
may find that no amount of limitations and transparency on its current 
programs is enough to reassure the international community. Significant 
questions about its motives would likely remain, and thus it would be 
less likely to gain the major relief from sanctions it so desperately 
seeks.

Is Iran building a secret gas centrifuge plant?
    The question of whether Iran is building a third enrichment plant 
in secret has been an open one since then-Iranian nuclear chief, Ali 
Akbar Salehi, claimed on August 16, 2010, that ``studies for the 
location of 10 other uranium enrichment facilities'' had ended, and 
that ``the construction of one of these facilities will begin by the 
end of the (current Iranian) year (March 2011) or start of the next 
year.'' Succeeding nuclear head, Fereydoun Abbasi-Davani, said in mid-
2011 that construction on additional enrichment plants was delayed by 2 
years. Now, over 2 years later, is Iran building a new centrifuge plant 
in addition to the Natanz and Fordow centrifuge plants? Or is the plant 
deferred for another year? Iran in the past secretly constructed the 
Natanz centrifuge site, the Kalaye Electric centrifuge research and 
development plant, and the deeply buried Fordow centrifuge facility.
    Since March 2007, Iran has taken the position that it does not have 
to notify the IAEA if it begins construction of a nuclear facility, but 
the IAEA says that Iran has a legal obligation to do so under its 
current safeguards agreement. Iran's provision of information about the 
construction of any new enrichment sites is pertinent to instilling 
confidence about the peaceful nature of its nuclear activities and that 
it will not make weapon-grade uranium in secret.
    It remains for Iran to abide by the simple provision of its IAEA 
safeguards agreement, modified Code 3.1, to provide the IAEA with 
advance information about its construction of additional enrichment 
facilities and to explain any current construction of a third 
enrichment site. In avoiding its responsibility under its safeguards 
agreement, Iran risks that any site subsequently discovered being built 
in secret will be viewed as a threat, increasing the risks of military 
confrontation and undermining the credibility of President Rouhani and 
the regime.
    But an important question is how quickly could a secret site 
outfitted with  
IR-2m centrifuges produce WGU? Little is known about Iran's manufacture 
of these centrifuges or the total number manufactured to date or 
planned to be made in the next year. The IAEA is currently unable to 
monitor centrifuge manufacturing.
    To understand this case better, ISIS and its University of Virginia 
collaborators performed two estimates. Each assumes that the covert 
plant contains 3,000 IR-2m centrifuges, a size consistent with the 
Fordow plant, and the plant design has other similarities to that of 
the Fordow plant (in particular that the covert plant is not optimized 
for weapon-grade uranium production). The output of each centrifuge is 
considered slightly more than about 3-5 times that of the IR-1 
centrifuges.\1\
---------------------------------------------------------------------------
    \1\ Each IR-2m centrifuge is assumed to have an output of 3-5 
separative work units per year.
---------------------------------------------------------------------------
    The first case considers that Iran would divert safeguarded stocks 
of LEU to this plant. The IAEA would detect the diversion of the LEU 
within a few weeks; however, the centrifuge site would be unknown and 
immune from military strikes, complicating enormously any U.S. or 
international response. In this case, Iran would use both of its 3.5-
percent and near 20-percent LEU stocks, which are assumed to be at 
current levels. In this case, Iran could produce 25 kg of WGU in 1.3-
2.3 months before using up its current stock of near 20 percent LEU 
stockpile. Without using its 20-percent stockpile, and using only its 
3.5-percent LEU stock, Iran could produce 25 kg of WGU in 2.2-4.5 
months with enough 3.5 percent inventory for approximately 100 WGU. If 
Iran had sufficient near 20 percent LEU for one nuclear weapon, it 
could reduce breakout times to about 1 month.
    The second case is that Iran would not use its safeguarded LEU but 
a secret stock of natural uranium hexafluoride that it produced at a 
secret production plant. In this case, Iran would need 6.4 to 11 months 
to produce 25 kg of WGU.

IDENTIFYING AND ASSESSING NECESSARY CONCESSIONS BY IRAN IN NEGOTIATIONS

    As part of understanding the proposed negotiating process, it is 
useful to discuss the range of concessions that Iran could make in 
order to gain confidence that it is not seeking nuclear weapons. 
Incentives involving sanctions relief are equally important and are not 
considered here but an ISIS report prepared for the U.S. Institute of 
Peace includes this analysis. The following list includes a wide range 
of Iranian concessions. The final list would of course be decided in a 
negotiation and Iran may or may not agree to all of the following:
Resolving outstanding issues with the IAEA over the military dimension
   Address cooperatively the IAEA's concerns over its past and 
        possibly ongoing military nuclear activities. ``Coming clean,'' 
        or detailing past work on nuclear weapons, remains critical.
Limiting breakout times
   End production of any more near 20 percent LEU and commit 
        not to enrich uranium over 5 percent. Dismantle and 
        decommission the tandem cascades at the Fordow site and the 
        Natanz Pilot Fuel Enrichment plant.
   Send out under IAEA custody stocks of near 20 percent LEU in 
        excess of near-term needs of the Tehran Research Reactor.
   Decommission the Fordow enrichment site.
   Commit not to assemble a production line to reconvert 
        enriched U3O8 to UF6, whatever its 
        enrichment level.
   Freeze the number and type of Iran's installed centrifuges 
        to below an equivalent of 10,000 IR-1 centrifuges. Limit 
        enrichment to the Natanz site only.
   Send out under IAEA custody excess stocks of LEU enriched 
        below 5 percent. Stocks could be considered excess if over the 
        next several years, they are unlikely to be used to fuel a 
        nuclear reactor. The total stock should be less than the 
        equivalent of 1 tonne of LEU hexafluoride.
   Convert all LEU remaining in Iran first into an oxide form 
        and then into a solid fuel form.
   Halt production of LEU enriched less than 5 percent, unless 
        there is an economic need for domestically produced LEU fuel in 
        a reactor.
   Halt the construction of centrifuge components and the 
        assembly of centrifuges, except a limited number to replace 
        broken centrifuges at existing enrichment sites.
Increasing transparency
   Enhance IAEA monitoring, including:

        Implementing early notification of the construction of 
            nuclear plants (or more formally implement modified code 
            3.1. of the Subsidiary Arrangements to Iran's Comprehensive 
            Safeguards Agreement);
        Ratifying the Additional Protocol;
        Increasing the monitoring of centrifuge production and 
            assembly facilities; and
        Establishing remote monitoring at key nuclear sites.
Ending a plutonium pathway
   Halt the construction and operation of the Arak heavy water 
        reactor. Initiate studies to determine the feasibility and cost 
        of converting the reactor to a light water moderator and LEU 
        fuel.
   Commit not to conduct any plutonium separation or 
        reprocessing activities.
Halting illicit nuclear trade and proliferation to other countries
   Commit not to engage in nuclear smuggling to obtain any 
        goods for its nuclear or missile programs. Key nuclear- and 
        missile-related sanctions would become verification mechanisms 
        to ensure Iran's compliance with its agreements.
   Agree not to proliferate nuclear technologies to other 
        countries.

    Experts may differ over the relative importance of each concession, 
and negotiators may add or subtract concessions. However, most of these 
concessions would be expected to be needed in a final agreement that 
would establish confidence that Iran is not seeking nuclear weapons and 
that would provide confidence that an Iranian effort to do so would be 
detected in a timely manner, allowing adequate time for an 
international response to prevent Iran from successfully building 
nuclear weapons. As such, this list of concessions provides an 
indication of the difficult work needed to achieve an agreement that 
would lead to a significant reduction of sanctions.
    Some would argue that all of these concessions are not possible to 
achieve in an agreement with Iran. In that case, it is important to 
consider tradeoffs. Some can undoubtedly be weakened or avoided. 
Whether the agreement allows 5,000 or 10,000 IR-1 centrifuges may not 
matter that much if other conditions are in place. Likewise, the 
tonnage of 3.5 percent LEU in Iran is certainly adjustable. Perhaps no 
3.5 percent LEU needs to leave Iran. Some may also be startled by a 
condition to make the enrichment of LEU dependent on an economic 
evaluation of the need for reactor fuel, but such a condition is what 
drives most civilian nuclear programs. And if there is a settlement, 
Iran would be able to buy reactor fuel abroad at a lower cost than 
required to make the fuel itself. The imported fuel would be safer and 
more reliable, given that it would come from venders with decades of 
experience. Thus, an economic constraint on the enrichment of uranium 
is reasonable and would certainly make verification of any agreement 
easier.
    In some cases, dropping a concession could be highly problematic 
for the success of an agreement. For example, it is instructive to 
consider that Iran is now sticking by its story that it never had a 
nuclear weapons program and this would not satisfy the IAEA in its 
investigation about past and possibly ongoing nuclear weapons work. In 
this case, there would remain significant suspicions about whether Iran 
is maintaining a capability to build nuclear weapons. In response, an 
agreement would probably need to contain much more stringent 
limitations on Iran's enrichment capabilities and its centrifuge 
manufacturing facilities. Likely, many would demand that Iran agree to 
zero centrifuges or the dismantlement of its centrifuge program, a 
condition not included above, or a cap of far fewer centrifuges than 
the equivalent of 10,000 IR-1 centrifuges mentioned above. These 
concerns are driven by numerous verification uncertainties generated by 
an active, relatively large centrifuge program, and the IAEA currently 
having little hope of finding secret nuclear sites or verifying their 
absence. Iran's ratification of the Additional Protocol would help but 
even that may not be sufficient for the IAEA to determine with high 
enough confidence the absence of a secret centrifuge site to satisfy 
key IAEA member states, particularly when ambiguities arise, as is 
inevitable in such a complicated agreement. Moreover, under an 
Additional Protocol, or even the current Comprehensive Safeguards 
Agreement, the inspectors would be obligated to return over and over 
again to these alleged nuclear weapons issues as part of determining on 
an ongoing basis the correctness and completeness of Iran's nuclear 
declaration and developing confidence that no nuclear material has been 
diverted to a nuclear weapons program. The main difference would be 
that the Additional Protocol would grant the IAEA more tools to pursue 
their completeness investigations, generating more opportunities for 
conflict between Iran and the IAEA. Instructing the IAEA not to 
determine the completeness of Iran's declaration could damage the 
IAEA's credibility and greatly undermine confidence in ability to 
verify an agreement.
    Thus, some concessions may be obligatory if an agreement is to 
succeed. It is imperative to determine the critical concessions and the 
risks posed by omitting others as soon as possible.

   ADDITIONAL MEASURES TO LIMIT IRAN'S ABILITY TO EXPAND ITS NUCLEAR 
                                PROGRAMS

    The chairman has also asked for additional measures to pressure 
Iran and limit its ability to outfit its nuclear programs. ISIS just 
released a major report, the ``Future World of Illicit Nuclear Trade: 
Mitigating the Threat,'' written in part under a grant from the Project 
on Advanced Systems and Concepts for Countering Weapons of Mass 
Destruction (PASCC) at the Center on Contemporary Conflict, Naval 
Postgraduate School. This report is the result of a 2-year original 
research effort and contains a characterization of future threats over 
the next 5 to 10 years related to augmented nuclear trafficking 
worldwide and more than 100 recommendations aimed at preventing the 
emergence of these threats, including many related to better limiting 
Iran's nuclear progress.
    I would like to mention two key recommendations detailed in our 
report that would increase the effectiveness of sanctions against 
Iran's nuclear programs. They are:

   The U.S. Government would announce it will designate China 
        and Hong Kong, key persistent trans-shippers of U.S. goods to 
        Iran's nuclear program despite years of diplomatic overtures, 
        as destinations of diversion concern under the Comprehensive 
        Iran Sanctions, Accountability, and Divestment Act (CISADA) 
        unless they make concrete changes within a given grace period. 
        Just the threat of making this designation could inspire action 
        on the parts of China and Hong Kong, as it did with the United 
        Arab Emirates in 2007. If made official, such designations 
        could reduce the supply to Iran of proliferation-sensitive 
        goods, services, or technologies by: enhancing scrutiny by U.S. 
        Government licensing agencies of specific proliferation-
        sensitive exports from the United States to China and Hong 
        Kong; increasing pressure on the Chinese and Hong Kong 
        authorities to crack down on diversion through their 
        territories to Iranian end-users and Iranian intermediaries; 
        and helping secure support from other countries which likewise 
        face challenges in ensuring that sales to China and Hong Kong 
        do not end up in Iran, allowing it to expand its nuclear 
        programs.
   The U.S. Government should increase its use of sting 
        operations and investigations aimed at stopping Iran's illicit 
        nuclear procurement networks and launch a major effort to 
        encourage other governments to initiate their own sting 
        operations against trafficking in nuclear-related commodities. 
        Few governments conduct this type of sting operation, and U.S. 
        sting operations against Iranian smugglers have been 
        particularly effective. Implementing this recommendation would 
        help create an additional risk factor for Iran and those 
        helping Iran outfit its nuclear programs. The United States 
        should work with global partners to assist them and coordinate 
        with them on conducting their own or joint sting operations.

                       TABLE 1.--NUMBER OF CENTRIFUGES ENRICHING AND/OR INSTALLED IN IRAN
----------------------------------------------------------------------------------------------------------------
                                   IR-1 Centrifuges    IR-1 Centrifuges    IR-2m Centrifuges   IR-2m Centrifuges
            LOCATION                   enriching          installed *          enriching           installed
----------------------------------------------------------------------------------------------------------------
FEP.............................  9,166.............  15,416............  0.................  1,008
PFEP **.........................  328...............  328...............  0 **..............  N/A
FFEP............................  696...............  2,710.............  0.................  0
                                 -------------------------------------------------------------------------------
Total...........................  10,190............  18,454............  0.................  1,008
----------------------------------------------------------------------------------------------------------------
* Number of centrifuges installed includes enriching centrifuges.
** Iran has installed a number of different types of centrifuge in different cascade configurations at the PFEP.
  This table disregards centrifuges from which Iran recombines product and tails.

   TABLE 2.--CUMULATIVE TOTALS OF NATURAL AND ENRICHED URANIUM FEED AND 3.5 AND 19.75 PERCENT LEU HEXAFLUORIDE
                                                 PRODUCT IN IRAN
----------------------------------------------------------------------------------------------------------------
                                                        3.5 percent LEU     3.5 percent LEU    19.75 percent LEU
            LOCATION              0.711 percent feed        product              feed               product
----------------------------------------------------------------------------------------------------------------
FEP.............................  110,590 kg........  9,704 kg..........  N/A...............  N/A
PFEP............................  N/A...............  N/A...............  1,455 kg..........  178 kg
FFEP............................  N/A...............  N/A...............  1,422 kg..........  195 kg
                                 -------------------------------------------------------------------------------
Gross Total.....................  110,590 kg........  9,704 kg..........  2,877 kg..........  373 kg
================================================================================================================
Net Total.......................  110,590 kg........  6,774 kg *........  2,877 kg..........  186 kg **
----------------------------------------------------------------------------------------------------------------
* Number is less 3.5 percent enriched uranium hexafluoride used as feedstock at the PFEP and FFEP as well as 53
  kg 3.5 percent LEU hexafluoride converted to uranium oxide.
** Number is less 185 kg of 19.75 percent LEU hexafluoride fed into the process at the Esfahan conversion and
  fuel fabrication plants and 1.6 kg 19.75 percent LEU hexafluoride down blended.

    The Chairman. Ambassador Jeffrey.

      STATEMENT OF HON. JAMES F. JEFFREY, PHILIP SOLONDZ 
  DISTINGUISHED VISITING FELLOW, THE WASHINGTON INSTITUTE FOR 
                NEAR EAST POLICY, WASHINGTON, DC

    Ambassador Jeffrey. Thank you very much, Mr. Chairman, Mr. 
Ranking Member, for inviting me here today.
    First of all, I agree with what Dr. Albright has said, and 
that will shorten my comments considerably.
    We do have an opportunity through this latest set of 
actions associated with Mr. Rouhani to perhaps find a 
negotiated outcome. There is a possibility that we will avert 
either a military action and possibly war or, what would be 
even worse, a nuclear-armed, a nuclear-capable Iran.
    The devil is going to be in the details. There have been 
various attempts to achieve a breakthrough. At one point in 
2009, the Iranians accepted a very broad limitation on their 
enrichment, either moving out enriched uranium, or limiting 
what they would do, but then they reneged on it. Then, in 2010, 
under different circumstances, they accepted a somewhat 
different plan.
    So there is some room for maneuver in here, but the details 
are going to be very, very difficult, involving the sequencing 
of sanctions, which sanctions to withdraw. The question of 
enrichment, whether at all? If so, under what conditions? How 
much?
    You discussed this in very considerable detail with 
Secretary Sherman, and she was, as expected, very general on 
where the administration was on this because this is going to 
be basically much of the core of the negotiations. But what I 
would like to do is very quickly give a couple of more broad 
contextual aspects of this.
    First of all, the reason that we are so concerned about 
this nuclear weapon potential, compared to a nuclear-armed 
neighbor of Iran's--Pakistan, or even North Korea, and I think 
here that Secretary Sherman's comment that Iran is sui generis 
is correct--is because Iran is a different kind of animal. It 
has a regional claim to power that goes deep into the 
population, deep into its history. It presents the kind of 
problem we had with Milosevic a decade plus ago, the kind of 
problem we had with Saddam Hussein.
    The Iranians are going to be very unlikely to give up this 
regional quest for power, for hegemony, and the various tools, 
nuclear, terrorism, alliances with Syria, Hezbollah, and on and 
on. We can get them to push back on one or another thing when 
we put enough pressure on them, such as the nuclear issue. But 
this is a long-term conflict we are in with Iran. Even if we do 
get a breakthrough on the nuclear account, we are not going to 
resolve the conflict and we should bear that in mind.
    The second thing is what we have that has brought us to 
this point is very successful synergy between military threats, 
and the sanctions regime that Wendy Sherman went through the 
statistics on. They have been verified publicly. It is a very 
dramatic drop in oil, almost 60 percent of their exports have 
been cut.
    And thirdly, the cooperation of the international community 
because it is mainly the international community that has to 
carry out these sanctions at the price of being denied access 
to the U.S. banking system. So these three elements are very 
important to keep in balance.
    I am very concerned about the credibility of the U.S. 
military threat. The President took a step in the right 
direction the other day with Prime Minister Netanyahu, when he 
named specifically--among the ``all options are on the table, 
nothing is off''--he named specifically military force.
    That is important. We have to keep emphasizing that. 
Because what I am hearing in the region, I have been out there, 
is that people are doubting us. And it is very important that 
this military credibility remain intact.
    On the other hand, we have to be very watchful of our 
allies and our friends in the P5+1 and the people who are 
carrying out the sanctions because we need to have as much 
international cooperation as possible, both to get a deal, to 
continue to put pressure on Iranians, and, if necessary if we 
have to go to military action, to support us there.
    I will stop there.
    [The prepared statement of Ambassador Jeffrey follows:]

           Prepared Statement of Ambassador James F. Jeffrey

    Mr. Chairman, Mr. Ranking Member, Senators, thank you for the 
opportunity to appear before your committee on this critical matter.
    The rapid pace of events since IranianPpresident Hassan Rouhani 
took office this past summer has significantly increased the 
possibility of a successful negotiation on Iran's nuclear program, 
thereby forestalling either a military strike on Iran or the emergence 
of a nuclear-armed or nuclear-weapon-capable Iran. Either of these 
latter eventualities would unleash unknown but likely very serious 
consequences on an already stressed international situation. The United 
States thus should vigorously engage, with Iran and with our allies and 
partners, accepting risks when necessary, to achieve a diplomatic 
breakthrough that would meet President Obama's criteria of being 
meaningful, transparent, and verifiable.
    The technical outlines of any such agreement have been sketched out 
many times, by the P5+1 in its September 2009 offer to Iran and in 
studies and essays by many analysts, myself included. Iran will have to 
largely forgo use of its huge enrichment infrastructure, including 
closing the Fordow site, stop work on the Arak heavy water reactor, 
agree to much more intrusive IAEA inspections and implementation of a 
safeguards agreement, and come clean on its nuclear-related military 
research. Iran will insist on enrichment as a principle, but that would 
have to be limited in quantity and quality--that is, no more than 5 
percent, with all but immediately required enriched uranium stored 
``temporarily'' outside Iran and the whole process vigorously 
monitored. The P5+1 will have to lift or suspend nonmilitary sanctions, 
especially those targeting hydrocarbons trade and banking not tied to 
illicit nuclear materials trade, and de facto will have to countenance 
a minimal amount of Iranian enrichment.
    While the outline of such a ``big for big'' deal can be sketched 
out as above, two sets of detail-related issues will be-devil the 
negotiations. The first is operational: how to sequence tit-for-tat 
concessions and intermediary steps to move toward ``big for big'' in a 
low-trust environment. The second involves the two core concessions: 
enrichment and sanctions relief. The Iranians have repeatedly demanded 
formal international recognition of a ``right to enrichment.'' The P5+1 
should resist this demand. The right to enrichment is informally 
anchored in the Nuclear Nonproliferation Treaty, and has been 
explicitly annulled by legally binding U.N. Security Council 
resolutions. The most the P5+1 should do is void or, better, suspend 
the ban on enrichment as a ``quid'' for Iranian accommodation.
    The sanctions relief problem cuts two ways: first, difficulty 
reinstating international sanctions once lifted or canceled, given 
their economic disadvantages and possible noncooperation by Russia and 
China, thereby undercutting the ``stick'' component of any deal; and, 
second, likely reluctance by many in Congress to lift sanctions for any 
inevitably less-than-perfect agreement, thus undercutting the 
``carrot'' needed for any deal.
    A solution to the two-headed sanctions problem could focus on 
temporary ``test'' arrangements. U.N. and EU sanctions could be 
suspended for X period, following which they would automatically kick 
back in, absent new votes to extend or make permanent the sanctions 
relief, based on the degree of verified Iranian compliance. On the key 
U.S. sanctions--namely, the highly effective 2012 National Defense 
Authorization Act, which imposed bank penalties for funding Iranian oil 
purchases--the President in consultation with Congress could exercise 
the national security waiver in the act. To avoid a strong 
congressional reaction, any agree- 
ment would have to be at least minimally acceptable to Israel and a 
majority in Congress. Iran in turn would have to accept, at least 
initially, temporary, contingent sanctions relief in return for its 
concessions and actions (which themselves would be reversible).
    But even if these tough issues could be resolved, the opportunity 
to reach agreement remains only a possibility. To increase the chances 
of it becoming a reality, the following should be kept in mind in 
executing our diplomatic strategy.
    First, Iran's foreign policy reflects long-term regional ambitions 
amounting to de facto hegemony, broadly supported by the population. 
With or without an agreement, with or without more mutual trust with 
the outside world, these ambitions are unlikely to change, and they are 
inimical to the interests of the other states in the region, to the 
United States and its world role, and to an international community 
based on the U.N. charter. But we should neither demand that Iran give 
up these ambitions as the condition for any agreement, nor ``sell'' any 
agreement as a gateway to a friendlier Iran. Any agreement must rest on 
its own merits as a better alternative to military action or a nuclear 
Iran. Any acceptable agreement would perhaps improve understanding and 
trust between Iran and the outside world. While this would be a good 
thing for crisis management between hostile camps, it should not be an 
expectation from, or motivation for, doing a deal. Given this 
underlying reality, the United States should absolutely avoid 
concessions in return for ``enhanced trust'' or ``good chemistry.''
    Second, we are at this hopeful point only because of the threat of 
U.S. or Israeli military action, the impact of U.N., EU, and especially 
U.S. sanctions on the Iranian economy, population, and political 
system, and the willingness of the international community to accept 
these sanctions despite their costs. Thus, nothing done inside or 
outside the negotiations should weaken these three pillars and their 
necessary synergy.
    Third, it would be a mistake in any negotiation to hold 
international sanctions relief and other benefits hostage to a change 
in Iran's fundamental worldview and ambitions, or abandonment of its 
specific activities beyond the nuclear account, from internal 
oppression and support of terror to engagement in Syria. Iran's nuclear 
effort is a tactical sortie that in the face of sufficient pressure can 
be at least temporarily abandoned. Iran, however, is highly unlikely to 
yield to pressure on its fundamental interests, as it sees them. And 
any effort to compel it to do so will likely strengthen those who argue 
that a nuclear agreement is really a Trojan horse for regime change. 
Pushing such an agenda would not only scuttle negotiations but likely 
mobilize in opposition to the United States much of the international 
community needed for continued U.S. sanctions. As Congress considers 
new sanctions, it will be important to consider the timeline for their 
implementation.
    Finally, the credible threat of military force must overshadow any 
negotiating 
effort; not so obvious as to be provocative but present enough to be 
credible. Here, American will to act is as critical as American 
military capabilities. Frankly, the administration, beginning with its 
Afghanistan and Libya decisions and on to the President's May terrorism 
speech and punt to Congress on the Syria strike, has called our will 
into question. This can be reversed by our military readiness, more 
clarity on the administration's redline, a Presidential commitment to 
act on his own authority if the line is crossed, and expressions of 
congressional support for such action. However, the credibility of any 
threat of military force and other sticks is also enhanced if the 
United States puts a reasonable and comprehensive offer on the table. 
As seen in the runups to U.S. strikes in 1991, 2001, and 2003, the 
international community's vital support for military action is only 
attainable if the United States demonstrates it has taken every effort 
to offer a fair compromise.
    Pulling off a diplomatic coup of the present magnitude will require 
extraordinary effort, as the administration must deal simultaneously 
with the Iranians, our European allies, Russia and China, an Israel and 
Arab Gulf deeply skeptical of any compromise with Iran, an American 
public generally opposed to the use of force, and a Congress sharing 
seemingly the attitudes of both the American people and the regional 
skeptics. But the current standoff between Iran and the rest of the 
world is inherently unstable, and the alternatives apart from a 
negotiated settlement--a nuclear-armed or capable Iran, or a new war--
in the midst of a region already slipping out of control, are far 
worse.

    The Chairman. Thank you, Ambassador.
    Mr. Takeyh.

   STATEMENT OF RAY TAKEYH, SENIOR FELLOW FOR MIDDLE EASTERN 
     STUDIES, COUNCIL ON FOREIGN RELATIONS, WASHINGTON, DC

    Dr. Takeyh. Thank you very much, Mr. Chairman, Senator 
Corker, for inviting me, and it is a great pleasure again for 
me to be here with Ambassador Jeffrey and my old friend, David 
Albright.
    I think the Presidency of Hassan Rouhani has been greeted 
with assertions ranging from cautious optimism to euphoric 
anticipations of rapprochement. President Rouhani has been 
described in various ways as a reformer, a pragmatist, by his 
critics as a wolf in sheep's clothing.
    Although it is often suggested that President Rouhani is 
under significant domestic pressure at home, I think those 
claims are grossly exaggerated, if not overstated. The Islamic 
Republic has established a consensus on its core security 
issues, including the nuclear issue. That consensus may prove 
fragile and may be subject to internal censure. But the notion 
that he is under political pressure and, therefore, requires 
international assistance is, I think, overstated.
    Despite the softened rhetoric, we can count on the new 
Iranian regime to continue to assert as what it regards as its 
nuclear rights and press its advantages in a contested Middle 
East. The Islamic Republic will remain an important backer of 
the Assad dynasty, a benefactor of Hezbollah, a supporter of 
Palestinian rejectionist groups. It will persist its repressive 
tactics at home and deny fundamental human rights to its 
population. It is a government that will seek a negotiated 
settlement to the nuclear issue, but on terms that it will find 
advantageous.
    Hassan Rouhani's case is not without its contradictions. He 
insists that Iran can expand its nuclear program while 
reclaiming its commercial contracts, even though the program 
today stands in violation of security council resolution tone 
and style matter. But what should await President Rouhani is a 
hard tradeoff dispensing with critical aspects of the program 
in exchange for sanctions relief.
    It needs to be stressed that the United States is entering 
these negotiations with important advantages. Iran's economy is 
faltering. Its population is disaffected. It is distrusted by 
its neighbors. This is a time for Washington to negotiate a 
maximalist agreement and not settle for Iranian half measures 
and half steps.
    Although much of the attention recently, for obvious 
reasons, has been focused on the President Rouhani and his 
Foreign Minister, Javad Zarif, certainly an urbane and 
intelligent man, I want to draw attention on the Supreme 
National Security Council, which will actually make the 
fundamental nuclear decisions.
    The nuclear file has not been transferred to the foreign 
ministry. The negotiations and representation of the nuclear 
file has been transferred to the foreign ministry. The Supreme 
National Security Council has also had new staff members. Their 
names are not in the press, and they do not give interviews.
    It is headed today by Adm. Ali Shamkhani, a founding member 
of the Revolutionary Guards and an official long involved in 
Iran's nuclear program. He has recently appointed as his deputy 
a shadowy Revolutionary Guard figure, Ali Hosseini-Tash, who 
has been involved in the Iranian program from the very 
beginning.
    As Ambassador Jeffrey has suggested, their vision of Iran 
is one of a hegemonic Iran, a strong Iran, a preeminent, if not 
a pivotal power in the region. Their newly empowered leadership 
at the helm at the Supreme National Security Council also has 
been very much committed to their nuclear capability and has 
been involved in procurement efforts.
    Hosseini-Tash in one interview said, ``The nuclear program 
is an opportunity for us to make endeavors to acquire a 
strategic position and consolidate our national identity.''
    They believe in a measure of restraint. As Iran presses its 
nuclear strategy, they recognize the importance of offering 
some confidence-building measures to a skeptical international 
community. All this is not to suggest that Iran is inclined to 
suspend its program, relinquish its critical components. But as 
I mentioned, they may be open to dialogue.
    And they stress the Iranian reasonableness, the idea is 
that if Iran presents itself as a more reasonable actor, then 
its nuclear program can be sanctioned. Not sanctioned the way 
you are thinking of it--accepted, acknowledged.
    Hovering over all of this is Supreme Leader Ali Khamenei. 
His instincts are to call for defiance in pursuit of the bomb. 
In his role as guardian of the state, of course, he must 
consider their nuclear program in context of Iran's larger 
concerns.
    In recent months, he has opted for a strategy that takes 
into account his competing mandates. On the one hand, he 
presses for expansion of the nuclear program. On the other 
hand, he has accepted the need for negotiations and perhaps a 
measure of restraint.
    Khamenei hopes that his new President can somehow square 
the many circles that confront him and somehow make the Iranian 
program more acceptable to the international community. So as 
we go forward, we have to be cautious about some of the changes 
that are taking place.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Takeyh follows:]

                  Prepared Statement of Dr. Ray Takeyh

      the rouhani presidency: a kinder, gentler islamic republic?
    The Presidency of Hassan Rouhani has been greeted with assertions 
ranging from cautious optimism to euphoric anticipations of an 
unfolding rapprochement. President Rouhani has been at times described 
as a reformer, a pragmatist, and by his critics as a ``wolf in sheep's 
clothing.'' Although it is often suggested that President Rouhani is 
under significant pressure from hard-line elements at home, the Islamic 
Republic appears to have established a consensus on its core security 
concerns. That consensus may prove fragile, and subject to internal 
censure, but the notion that Rouhani is under political stress is 
overstated.
    Despite its soften rhetoric, we can count on the new Iranian regime 
to continue asserting its nuclear ``rights'' and press its advantages 
in a contested Middle East. The Islamic Republic will remain an 
important backer of the Assad dynasty, a benefactor of Hezbollah, and a 
supporter of Palestinian rejectionist groups. It will persist with its 
repressive tactics and deny its populace their fundamental human 
rights. It is also a government that will seek a negotiated settlement 
on the nuclear issue and will strive to test the limits of the great 
powers' prohibitions.
 Who is Hassan Rouhani?
    Hassan Rouhani is a long-time regime insider with a deep commitment 
to the Islamic Republic and its nuclear aspirations. Unlike many of the 
Iran's previous leaders, it is possible to develop an understanding of 
Rouhani's thinking through his own published books, most notably his 
account of his time as Iran's chief nuclear negotiator.
    Historians often suggest that Iran's clerical regime resurrected 
the Shah's atomic infrastructure after Iraq invaded the country in 
1980. In this telling, deterrence and self-reliance are at the core of 
Iranian nuclear calculus. But Rouhani says the revolutionaries' 
attraction to nuclear science actually began when they were still 
lingering in exile. In 1979, when Ayatollah Ruhollah Khomeini and his 
disciples appeared certain to assume power, an Iranian scientific 
delegation journeyed to Paris and implored the aging mullah to scrap 
the nuclear program, which was exorbitant and inefficient. The cagy 
Khomeini ignored such pleas. A year before Saddam Hussein's armies 
attacked Iran, Khomeini had decided to preserve his nuclear 
inheritance.
    During the initial decade of the Islamic Republic, the regime's 
preoccupation with consolidating power and prosecuting its war with 
Iraq eclipsed other priorities. Still, Rouhani describes a determined 
effort to secure nuclear technologies from abroad and complete the fuel 
cycle--an essential precursor to development of nuclear arms. Those 
efforts were redoubled during Ali Akbar Rafsanjani's Presidency in the 
early 1990s and were sustained by the reformist President Muhammad 
Khatami. Indeed, Rouhani is at pains to disentangle nuclear policy from 
Iran's contentious politics, insisting that all governments share 
credit for the program's progress.
    Rouhani spent much of his tenure negotiating with the European 
powers--Britain, France and Germany--over what kind of nuclear program 
Iran was allowed to have. The signature event of his time as a 
negotiator was his country's voluntary suspension of its program in 
2004. Those were heady days in the Middle East, with America's shock-
and-awe campaign in Iraq intimidating other recalcitrant regimes, such 
as Iran, into accommodation. ``No one thought that Saddam's regime 
would fall in 3 weeks,'' Rouhani recalls. ``The military leadership had 
anticipated that Saddam would not fall easily and that America would 
have to fight the Iraqi army for at least 6 months to a year before 
reaching Saddam's palace.'' Yet, the proximity of American guns 
behooved the theocracy to act with caution.
    Whatever political backing Rouhani has among Iran's reformers, he 
is not one 
of them; political freedom has rarely been a priority for him. During 
the late 
1990s, when Khatami and his allies were seeking to expand individual 
rights and strengthen Iran's anemic civil society, Rouhani was 
indifferent to their efforts. Still, unlike his militant predecessor, 
he belongs to the more tempered wing of the theocracy that sees the 
nuclear debate in a larger context of Iran's international relations. 
In the recent Presidential race, Rouhani stressed the importance of the 
economy--in particular Iran's declining standard of living.
    Rouhani's case is not without its contradictions. He insists that 
Iran can expand its nuclear program while reclaiming its commercial 
contracts, even though today Iran stands in violation of numerous U.N. 
Security Council resolutions and cannot reenter the global economy 
until it meets U.N. demands. Tone and style matter, but what awaits 
President Rouhani is the hard tradeoff of dispensing with critical 
aspects of the program in exchange for relief from sanctions. It needs 
to be stressed that the United States is entering these negotiations 
with important advantages. Iran's economy is railing and its population 
is disaffected. This is a time for Washington to negotiate a maximalist 
deal and not settled for Iranian half-measures and half-steps.
Who is in charge?
    Although much of the focus since the Iranian Presidential election 
has been 
on Rouhani and his thoughtful and urbane Foreign Minister Muhammad 
Javad 
Zarif, the critical decisions will be made in the Supreme National 
Security Council (SNSC). The composition of that body and its newly 
installed leadership tells us more about the direction that Iran is 
going to take then Rouhani and Zarif's speeches, press briefings, and 
tweets.
    The SNSC is increasingly being populated by a cohort of 
conservatives who spent much of their careers in the security services 
and the military. The head of the SNSC today is Ali Shamkhani, a 
founding member of the Revolutionary Guards and an official long 
involved in Iran's nuclear procurement efforts. Shamkhani has chosen as 
his deputy a shadowy Revolutionary Guard officer, Ali Husseini-Tash, 
who has long been involved in Iran's nuclear deliberations. The essence 
of these new leaders worldview is that since September 2001, Iran has a 
unique opportunity to emerge as the preeminent state of the region. 
However, over the past 8 years, Mahmoud Ahmadinejad's unwise 
provocations and his unnecessarily hostile rhetoric has paradoxically 
thwarted those ambitions. They argue that the only way for the Islamic 
Republic to reach its desired status is to present itself as a more 
reasonable actor while increasing its power. Such an Iran would have to 
impose some limits on the expressions of its influence, accede to 
certain global norms, and be prepared to negotiate mutually acceptable 
compacts with its adversaries.
    It is important to stress that despite their interest in diplomacy 
and embrace of a more tempered language, the new cast of characters in 
charge of the SNSC perceive that Iran must claim its hegemonic role. 
Given the displacement of Iran's historic enemies in Afghanistan and 
Iraq, they sense that it is a propitious time for the Islamic Republic 
to claim the mantle of regional leadership. Iran has finally been 
offered a rare historical opportunity to emerge as the predominant 
power of the Persian Gulf region and a pivotal state in the Middle 
East. Whether they are correct in their assessments of regional trends, 
the salient point is that such perceptions condition their approach to 
international politics.
    The newly empowered conservatives at the helm also believe that to 
enhance its influence Iran needs a nuclear capability. As the newly 
appointed deputy head of the SNSC, Husseini-Tash once noted, ``The 
nuclear program is an opportunity for us to make endeavors to acquire a 
strategic position and consolidate our national identity.'' But they 
also believe in a measure of restraint. As Iran plots its nuclear 
strategy, they recognize the importance of offering confidence-building 
measures to a skeptical international community. All this is not to 
suggest that Iran is inclined to suspend the program or relinquish its 
critical components, but they are more open to dialogue. Moreover, they 
stress that a reasonable Iran can assuage U.S. concerns about its 
nuclear development without having to abandon the program.
    At the core, all disarmament agreements call upon a state to forgo 
a certain degree of sovereignty in exchange for enhanced security. Once 
a state renounces its weapons of mass destruction program it can be 
assured of support from the international community should it be 
threatened by another state possessing such arms. This implied tradeoff 
has no value for Iran's rulers. The prolonged war with Iraq conditions 
their worldview and behavior. Iraq's use of chemical weapons against 
Iran has reinforced Iran's suspicions of the international community. 
For many of the Islamic Republic's leaders, the only way to safeguard 
Iran's interests is to develop an independent nuclear deterrent.
    Hovering over all this is Iran's Supreme Leader Ali Khamenei. The 
Supreme Leader's instincts would be to support the reactionary elements 
in their call for defiance and pursuit of the bomb. But in his role as 
the guardian of state, he must consider the nuclear program in the 
context of Iran's larger concerns. In the recent months, he has opted 
for an approach that takes into account his competing mandates. On the 
one hand, he has pressed for acceleration of Iran's program and 
construction of an advanced nuclear infrastructure. Yet, he has also 
conceded the need for negotiations and pressed the state toward a 
degree of restraint. Khamenei hopes that his new President can somehow 
square the many circles that confront him, and somehow make the Iranian 
nuclear program more acceptable to the international community. He will 
be cautiously assessing Rouhani's diplomacy, ready to impose the 
necessary restrains should the new team be prone to compromise Iran's 
core concerns.
    In assessing a state's nuclear path, it is important to note that 
its motivations cannot be exclusively examined within the context of 
its national interests and security considerations. Whatever strategic 
benefits such weapons offer a state, they are certainly a source of 
national prestige and parochial benefits to various bureaucracies and 
politicians. As such constituencies emerge, a state can cross the 
nuclear threshold even if the initial strategic factors that provoked 
the program are no longer salient. The emergence of bureaucracies can 
generate its own proliferation momentum, empowering those seeking a 
nuclear breakout. As time passes, the pragmatic voices calling for 
hedging are likely to be marginalized and lose their influence within 
the regime.

    The Chairman. Thank you all for your testimony.
    And Mr. Takeyh, I want to take off where you just finished. 
Is it that the Iranians have come to a conclusion domestically, 
maybe because of the sanctions, maybe because of other events, 
that they will have to, in essence, dramatically change their 
nuclear program? Or is it that they want to see if they can 
preserve the greatest amount of their nuclear program but 
relieve the sanctions?
    Dr. Takeyh. I think it is the latter. I think the intent is 
to preserve the program, at least what is there, the 
infrastructure that has already been created, the plutonium 
route, the two enrichment facilities, as well as the 
introduction of new generation of centrifuges which can operate 
with efficiency at high velocity.
    I think the intention is to preserve all that, but perhaps 
as an interim measure, negotiate over expansion of the program 
in exchange for sanctions relief. And they are not talking 
about waivers. They are talking about fundamental sanctions 
relief.
    The Chairman. And let me turn to you, Dr. Albright. What is 
the consequence of that? If we accept that, what is the 
consequence? What is the risk?
    I have the concern that we create sanctions relief for less 
than what the Security Council has established, which means the 
world, not just the United States. The world has established 
through four Security Council resolutions what it believes is 
the standard of what Iran needs to do. And if you accept less, 
do you run the risk that you are in a position in which Iran, 
if it changes the course of events after all of these 
agreements are had, a year or two from now, that we are largely 
back to where we are at?
    Dr. Albright. Certainly, excuse me, the risk is that they 
would continue developing this capability, and it would, in 
essence, reduce breakout times, perhaps give a greater 
capability to build covert centrifuge plants. And so, I think 
the Iranian goal is probably not much different than it was in 
2005 when the negotiations broke down is, they are willing to 
pause, but they are not willing to commit not to grow their 
centrifuge program.
    And that was an essential roadblock back then was it is not 
good enough that they for a couple years do not make it--do not 
install more centrifuges, a few transparency measures, and then 
after those few years, they will just grow again. And then 
maybe they will pause again. But it is still their proposals 
have tended to be that the program will grow, and they will not 
shrink it.
    And I think that this test is going to be very hard for 
Iran to meet. The way we have discussed today I think is a very 
hard issue for Iran. And then if you add in that there is 
mistrust that they have had a nuclear weapons development 
program in the past that the IAEA wants them to come clean on, 
then it may just be a bridge too far.
    The Chairman. What is their ability with the time that has 
passed in the IAEA, the International Atomic Energy 
Administration--that reviews countries throughout the world--
and their concerns or views that Iran was pursuing a nuclear 
weapons program. What is the ability of Iran to now undermine 
the facts as to what they had been doing as----
    Dr. Albright. Well, the IAEA has had, I do not know what it 
is, 10 meetings with Iran on this issue in the last several--2, 
3 years--and their argument is pretty clear. The documentation 
is fabricated. People are lying. You know, there is no evidence 
that is worth talking about. If something is substantially 
proven, they will say it is nothing to do with nuclear weapons.
    They tell the IAEA you cannot talk to the people you want 
to talk to. The IAEA has asked to go to several sites, not just 
the Parchin site. They are not allowed to go to those sites. 
And recently, in the last year or so, the IAEA was told you 
cannot ask about procurement information anymore, and yet that 
is a large part of the evidence on some aspects of the military 
dimension.
    So, and in a meeting that just happened last week, I think 
the IAEA tried to say it was constructive, but they also issued 
a statement saying there was no progress. But we hope there 
will be progress in the next meeting, which is in late October.
    The Chairman. Finally, what I call breakout capacity, you 
have a somewhat different definition of it, but it is the same. 
We are talking about the same thing. Just give the committee a 
sense of how you come to the calculus in which you have come 
to, the timeframe that you developed.
    Dr. Albright. Yes, the calculation is based on a set of 
work that we do with centrifuge specialists at University of 
Virginia, one of whom used to head what is called the physics 
program or the U.S. centrifuge program in the United States. It 
was the theoretical program for centrifuges.
    And we look at the calculations. We then look at how many 
centrifuges Iran is installing and what rate that is projected 
over the next year or so. We then assumed that the time we are 
worried about is when they would have enough 20 percent 
enriched uranium that would allow for the fastest breakout, and 
then we assume that they could make the switchover from low-
enriched uranium production to weapon-grade uranium production 
faster than they can today.
    And then we came up with this estimate of mid-2014. And I 
must say the criticism we are hearing is that it is sooner, 
particularly if they can deploy large numbers of these advanced 
centrifuges. We still think it is mid-2014 is a solid date. I 
would be very interested to knowing how the administration 
thinks about this and its calculations.
    Our specialists at UVA came out of the enrichment program 
of the United States and is aware of how the U.S. Government 
does its calculations, and we do not see major differences. One 
difference that I will point out is we look at minimum times. 
And we have heard this in previous hearings.
    We look at minimum times. The U.S. Government tends to look 
at more likely times. And so, I know we can--because from a 
policy point of view or the implications of our work, we think 
the minimum time is the one to know, where the likely time, 
which certainly would be longer, has less policy relevance but 
still is an important number.
    The Chairman. So mid-2014 is 8 months from now--8 or 9 
months from now. And you say to the extent that there is 
criticism of your institute's work is that it might be on the 
shorter time, not the----
    Dr. Albright. Yes, that is right.
    The Chairman. Senator Corker.
    Senator Corker. Thank you, Mr. Chairman.
    And thank each of you for being here. It is obviously a 
great privilege for us to have three very knowledgeable folks 
in this area to help us as we think through this. So thank you 
for making yourselves available and being here today.
    And I would ask Mr. Albright and Jeffrey, Mr. Takeyh sort 
of gave an internal assessment of sort of the politics inside 
Iran and where the files exist and all of those kind of things, 
and I would just like to ask first, do you all generally agree 
with his assessment of the internal situation in Iran itself?
    Dr. Albright. Yes, I cannot speak--I depend on Ray for 
these kinds of things. So I do not have independent judgment on 
the internal politics in Iran.
    Senator Corker. Yes?
    Ambassador Jeffrey. Yes, and I think most experts also 
would agree with him.
    Senator Corker. And just I know, Mr. Albright, you talked a 
little bit about the things that we know. I guess, based on 
especially some of the things Mr. Takeyh said, and our general 
sense of the way Iran as a country is, I guess you would assume 
there are also a lot of activities that are occurring that we 
do not know about. Is that correct?
    Dr. Albright. I think that is well known. I mean, you can 
just look at what the inspectors can do. They cannot look at 
where centrifuges are made. They do not have any idea how many 
have been made.
    They do not get a good picture of the research and 
development of advanced centrifuges. So there is many things 
that are not known. We do not know if they are building a third 
centrifuge plant, and that assessment is based on them saying 
they would and that the last public statement was we will start 
building one summer of 2013. And that statement has not been 
corrected or changed by the Iranians.
    So there is a lot of things we do not know. Where there is 
hope with Iran is that they will be more transparent. I mean, 
in these discussions, Iranians have said they are willing to be 
more transparent and perhaps answer these kind of questions. 
Where there is problems is when they say that is pretty much 
all they are going to do in terms of really limiting and 
avoiding real limits on their nuclear program.
    Senator Corker. So we have, you know, really bright and 
knowledgeable people like you come in to share with us the way 
things are. And then, at the end of the day, I guess our role 
is to take some kind of action. I mean, that is what we do 
here. Should we do something in addition to what has occurred?
    And sometimes I think, you know, we have to be the bad cop 
to push along the good cop, if you will, the people who are 
actually involved in the negotiations. And then, on the other 
hand, sometimes we can do things unbeknownst--not necessarily 
in this area, I think we have been very productive--but we can 
do things that actually hamper.
    And so, I would ask you this, all three of you, based on 
the way you see things evolving, what is it that the United 
States Congress should do relative to what is happening right 
now to support, to enhance, or not do to try to get to the end 
that we all believe has a very small chance of being 
successful? But what would you advise us to be involved in 
right now, all three of you?
    Dr. Albright. Yes, I think, let me first, on the hamper, I 
think I would agree with Ambassador Sherman that it is better 
to delay passage of new sanctions laws until Iran is tested. I 
mean, she gave the date of October 15. So it is actually not 
much of a wait, although I would expect the meeting in mid-
October could be complicated, and the message that testing may 
not be clear.
    So I think there may be a need to hold off a little longer. 
Where I think the Congress is very helpful is that you do these 
sanctions laws. I think they have been critically important in 
creating the pressure on Iran and that if Iran continues to 
increase its nuclear program, which will be clear in November 
in the next IAEA report whether that is true or not, then I 
think increased nuclear work should be met with increased 
sanctions.
    And the other thing is that the U.S. Government is clearly 
not trying to reveal its negotiating position, and I think that 
is good. But I think that it is important that there be 
mechanisms set up, and Congress, I think, can play an important 
role of what is a good negotiating position and what is not. 
And it can be done on a technical level, where it does not have 
to become that politicized of what are the steps that are 
needed in order to reach the point where the United States 
would have assurance that Iran is not going to build nuclear 
weapons?
    And anyone can come up with 20 conditions, but how do you 
then take the subset of that and, in a sense, how do you 
optimize it and decide that it is enough? And I think there 
needs to be quite a bit of discussion about that involving, I 
would hope, the U.S. Government. But I think Ambassador Sherman 
made it pretty clear that they are not going to participate on 
an unclassified level, but I think the American public needs to 
know.
    There is a lot of confusion about what is necessary to 
accomplish. And particularly if you add in war weariness, there 
may be a lot of pressure to accept a deal that is really not 
going to solve this problem.
    Senator Corker. Thank you.
    Mr. Jeffrey.
    Ambassador Jeffrey. I thought that the position that 
Secretary Sherman laid out is reasonable from the standpoint of 
someone who has been in the administration, this one and ones 
in the past. You always want the maximum flexibility.
    On the other hand, you cannot let that dangle out forever. 
As we have heard, you have a mid-2014 time period. Other 
experts I know--Olli Heinonen, formerly of the IAEA, and others 
at the Washington Institute--would agree with these kind of 
timelines. So we do not have a lot of time.
    It is very important that Iran understand that the charm 
offensive means nothing. What is important is what it does. If 
it does not take action, there will be more sanctions.
    Now I cannot talk to exactly what the sanctions would be. 
That is something that you folks are working on up here and 
will be back and forth in the administration, as Wendy Sherman 
said, because there are some that are more effective than 
others. What we do know is the sanctions that you folks have 
put in place are extremely effective, both in harming the 
Iranian economy and in bringing the Iranians to at least 
consider some kind of deal.
    In order to avoid sanctions which were put in place by the 
United Nations in 2010, they accepted a somewhat flawed deal 
from the Turks and the Brazilians just before. So they do 
respond to pressure. That is a good thing.
    So my recommendation would be give the administration the 
flexibility to see where Iran is going. We will know pretty 
soon the basic outlines. It may take more time, just like the 
agreement between Secretary Kerry and Lavrov over a month ago 
on the Syrian chemical situation was in place, and then it took 
a good number of weeks before the final resolution could be 
hammered out. But it was going in the right direction.
    If this goes in the right direction, you can hold off. If 
it is going in the wrong direction, you need to consider what 
further action would be appropriate.
    Senator Corker. Mr. Takeyh.
    Dr. Takeyh. So thank you.
    I think, looking at the Islamic Republic for quite a long 
time as I have, unfortunately, I would say that Islamic 
Republic responds to pressure, and that has been sort of 
validated by their response to the sanctions measures that have 
been enacted.
    So I guess the argument for pause in terms of passing of 
the legislation that is in front of you do not make all that 
much sense to me because I actually think that its expeditious 
passage could help the administration in their negotiations. 
While I am not quite sure if the pause, October 14 or whatever 
it is, past that date.
    I certainly anticipate that given that how heightened 
expectations are, the parties are going to emerge from the mid-
October meetings suggesting they had frank, good discussions, 
and they will proceed along those lines. I do not think, given 
how high the expectations have been, unfortunately, inflated, 
they can say otherwise.
    The second thing that I would suggest is along the lines of 
a rather poignant series of questions that Senator Rubio asked. 
We kind of understand the parameters of a deal that the 
international community is seeking to negotiate with Iran. We 
understand the Iranian position that they require an indigenous 
enrichment capability, even though they do not have natural 
uranium depositories.
    So they want domestic enrichment. The Russians, the 
Chinese, and the Europeans have largely conceded that. The 
position of the executive branch, as Senator Rubio 
demonstrated, was evolving.
    The United States Congress, Senate or the House, should 
actually have their own say, as a collective body, not as 
individual Senators, about whether they think a final status 
agreement would entail domestic enrichment on Iranian soil and, 
if so, under which modalities and so on.
    Everybody has expressed their point of view about this 
issue as a collective body except the United States legislative 
branch. Individual Senators have a position. At times, those 
positions are congregated in a letter and so on, but maybe you 
want to consider some sort of a resolution to that effect.
    And if the position--if the United States Congress wants to 
join the prevailing consensus that the Islamic Republic should 
have enrichment rights, then that is fine. But you should 
express a collective position.
    Senator Corker. Thank you all very much. Thank you.
    The Chairman. Thank you.
    Senator Rubio.
    Senator Rubio. I will just take it from there and tell you 
why I feel so strongly about that. I think in any negotiation 
the first thing we have to understand is who are you dealing 
with? Because that tells you a lot about the parameters of a 
negotiation and where it can head.
    So here is who I think we are dealing with. First, I think 
we are dealing with a country run by a bunch of liars because 
this is a country that has gone around saying--that their 
program is peaceful and that they will never develop nuclear 
weapons. And yet there are reams of open source reporting about 
the fact that at multiple times in the past, they have had an 
aggressive nuclear program. And I do not think anyone in the 
world now looks at what they are doing and concludes that they 
are not trying to build the capacity for weaponized nuclear 
capability.
    Here is another piece of evidence as to the belief that 
they are liars. They say that they do not have any intent to 
develop nuclear weapons, but they are investing a lot of time 
and energy on long-range missiles. Now what do you put on a 
long-range missile? You put a weapon. You put a nuclear weapon. 
It is the only reason to have one.
    So they are developing all of these ICBMs for one of two 
reasons. They are either planning one heck of a fireworks show, 
or they intend to put a nuclear warhead on a rocket and to be 
able to threaten the world with it.
    And the third reason why they are liars is because they 
admit to it. This is interesting. This is from Prime Minister 
Netanyahu's speech at the United Nations, and I am going to 
quote from it.
    He talks about a 2011 book where Rouhani basically writes, 
and he quotes, ``While we were talking to the Europeans in 
Tehran, we were installing equipment in Isfahan.'' Now for 
those who do not know, the Isfahan facility is an indispensable 
part of Iran's nuclear weapons program. That is where uranium 
ore, called yellow cake, is converted into an enrichable form.
    Rouhani boasted, and he quotes, ``By creating a calm 
environment, we were able to complete the work in Isfahan.'' 
Basically, he fooled the world once and now thinks he can fool 
it again.
    So, number one, we are dealing with a bunch of liars. The 
second thing we are dealing with is a bunch of really evil 
people. I know that is a term that gets thrown around loosely, 
but here is the evidence.
    They actively participate in the slaughter of innocent 
people in Syria and in other parts of the world. They actively 
destabilize their neighbors in Bahrain, in Lebanon, now in 
Iraq, and in other places. They provide support to Hezbollah so 
they can fire rockets into civilian areas of Israel.
    Two years ago, they tried to assassinate the Ambassador of 
Saudi Arabia in this very city, okay? This is who we are 
negotiating with. We are not negotiating with Belgium. We are 
not negotiating with Luxembourg. We are negotiating with a 
government, a country run by evil liars.
    And when you negotiate with evil liars, everything that 
you--all of your lines have to be clearly marked out, and the 
verifications have to be stronger. I mean, we are dealing with 
some very dangerous people here. And so, that is why I feel so 
passionately about being very clear about what our position is.
    And I believe that our--and you can--I am open to the 
comments of the folks who are here today because certainly you 
spend a lot of time on this. But I, for the life of me, do not 
understand why the official policy of the United States is not 
as follows.
    Number one, you stop enrichment of uranium. Number two, you 
allow the existing stockpiles to be transferred and removed 
from your country. Number three, take down all of those 
facilities you have that only serve the purpose of enriching to 
weapons grade, places like the underground secret facilities 
that they have in Qom or the centrifuges in Natanz. And number 
four, stop working on these heavy water reactors that are going 
to be used to produce plutonium.
    This should be our offer. Our offer should be you do these 
four things, and then maybe the sanctions start to get 
lessened. But this notion that somewhere in between that there 
is the capability of leaving in place the infrastructure and 
the enrichment capabilities so that 5 years from now, 8 years 
from now, when they have now fully developed their ICBMs. They 
have now fully developed the ability to turn that into a 
warhead, 5 or 6 years from now they can decide, you know what, 
we are going to get a weapon because fill in the blank. They 
can make up any excuse they want.
    This is who we are dealing with here, and there is 
precedent for this. This is what North Korea did. This is what 
Pakistan did, and this is what they are going to do. These guys 
are going to get a weapon because they view it as security for 
the regime. They view it as a way to become the dominant power 
in the region.
    And by the way, we should be scared of it not just because 
of Iran. A nuclear Iran means we will see a nuclear Saudi 
Arabia. We will see potentially a nuclear Turkey, and even 
potentially one day, a nuclear Egypt.
    And so, I just do not understand all the silliness about we 
are dealing with these guys. We are going to sit down. We are 
going to--they are buying for time. That is all they are doing. 
They are trying to--this is the bottom-line mandate that they 
have.
    What can we do to lessen these sanctions in the short term 
while continuing the slow, steady progression? Maybe we will 
slow down the progression, but they will get there nonetheless.
    Because ultimately if they reach a point where they can 
break out, they do not have to break out. Just the ability to 
break out gives them a tremendous amount of leverage on the 
world while they continue to develop their ICBMs for this 
fireworks show that they are apparently planning or for the 
ability to threaten the east coast of the United States.
    So I just hope that as policymakers, we start to take 
this--well, I know that the committee does--take this very 
seriously for what it is. Stop playing games. This is a very 
serious issue, and we are dealing with very dangerous people 
who while they say all these nice things out there, their 
actions are clear.
    They are assassinating, destabilizing, you know, all the 
things that they are doing. These are evil liars that we are 
dealing with.
    The Chairman. All right. I think you should be more 
passionate about how you feel on this issue. [Laughter.]
    But it is a very serious issue, and I appreciate your 
statements.
    Let me just do one final thing because my colleague Senator 
Corker, in his very thoughtful way as always, has asked what 
should the Congress do or not do? And several of you responded 
that the Congress should not necessarily proceed with any 
additional sanctions at this time until we see what happens on 
the 15th and 16th.
    And let me ask you this question. So the 15th and 16th 
comes. We have what will diplomatically be referred to as we 
have some substantive discussions. We believe that it is worthy 
of continuing forward, and these negotiations never turn into a 
few days after that. They turn into weeks after that, if not 
months.
    And so, the time clicks by. In the interim, nothing stops 
in the process itself as it exists today. And so, what is so 
wrong, when Dr. Albright says that mid-2014--so giving the 
whole month of October, November, December, and then through 
June, that is 9 months. And to the extent that he says the 
institute has received criticism is that it may be shorter, not 
longer.
    So 9 months, what is wrong with the Congress of the United 
States pursuing a perfecting sanctions regime that would seek 
greater reductions in petroleum that would look at some 
critical issues that the Iranians are still using even with the 
regimes that exist now, such as the use of steel in their 
automotive sector and shipping sector and what not.
    And which never get enforced until way beyond those 9 
months but gives the administration, as they are sitting there, 
the reality to look what is coming around the corner from the 
Congress if we cannot have now some real significant movement 
by Iran.
    None of the sanctions--and I have been the author of all of 
them, along with Senator Kirk and others--none of the sanctions 
have ever gone into effect immediately. They have a timeframe 
for implementation. They give an opportunity for countries to 
join us in the effort and to prepare, for example, in the 
reductions of petroleum.
    So it seems to me that--and some of us are contemplating in 
this new round of sanctions for the first time saying, but if 
the Iranians meet the responsibilities that have been laid out 
by the Security Council, then these new round of sanctions can 
cease, which gives a message to them that they are concerned. I 
often hear they are concerned that even if they struck an 
agreement that they ultimately are not sure that the Congress 
would remove the sanctions that exist.
    So if we created both a carrot and a stick whose 
implementation would not take place beyond the timeframe of the 
breakout period if nothing goes unabated, how is that not a 
positive for the administration versus it being a negative?
    Dr. Takeyh. I think the argument for pause makes sense if 
there is corresponding pause. Namely, if the Iranians also 
pause their activities. They are required by six U.N. Security 
Council resolutions, perhaps seven, to suspend their nuclear 
activities. They have not done so. They continue--if they pause 
spending $500 million a month in Syria to prop up the Assad 
dynasty.
    But there is no corresponding pause on their side. Their 
activities continue to go on on the nuclear front, on the 
proliferation front, on the terrorism front, and so on. So the 
argument of pause does not make much sense to me.
    I would make pitch for one additional idea that you may 
want to consider, which I have done so elsewhere. Namely, 
establishing an Iran human rights commission similar to the 
Helsinki Commission that was established or the China 
Commission, which essentially focuses on Iran's human rights 
abuses and can prescribe measures to deal with that.
    It is a conversation that can bring Democrats and 
Republicans together, and then also the executive branch would 
have observation status in that. And that would essentially 
focus the issue.
    Iran today is not just a proliferator, is not just a 
sponsor of terrorism. It leads the globe in execution of 
minors. It is second in executions per capita to China. There 
is grotesque and important human rights abuses that I think 
requires greater degree of accentuation and perhaps some 
similar legislative remedy as well.
    The Chairman. Ambassador Jeffrey.
    Ambassador Jeffrey. It is hard ever to argue against more 
sanctions on a perpetual aggressor and war criminal state like 
Iran. As I said earlier, this is a long-term conflict. But 
rather than say yes or no to even general sanctions, I would 
just give you one perspective.
    To my left, I have a guy who knows Iran far better than I. 
To my right, I have someone who knows the nuclear account far 
better than I. So what can I contribute to this thing?
    What I would suggest is, first, I know a little bit about 
dealing with foreign governments because I have spent about 40 
years doing it, and last, I know a lot about wars and military 
engagements because I have been involved in a lot of them. So 
what I would say is in figuring out your position, remember 
that there are many other actors besides the United States and 
Iran in this thing.
    We rely on other countries to accommodate us by carrying 
out these sanctions. They are the ones who cut imports of oil, 
not we. We put penalties on them if they do, but they have to 
decide that going along with us and avoiding the penalties is 
more important than bringing in the oil and such.
    And under certain circumstances, depending on what the 
sanctions are, they may or may not at some point go along with 
us. So that is the devil in the details. We do need this 
international coalition not only for the sanctions, but also--
and it is not at the back, but at the front of my mind with 
everything we do with Iran on this issue--if we have to go to 
military force.
    Because I think that is an extremely important threat, and 
I think it is our last possibility. And I have spent 4 years in 
Iraq and Vietnam. I know what it is like sending our troops 
into combat when they do not have the support of the 
international community, and it is very important that whatever 
the administration does and whatever the Congress does, we 
ensure that we are not so out of synch with the rest of the 
international community that we are isolated because that is 
going to be a bad place to be if this gets really serious.
    The Chairman. I appreciate that, and the fact is, is that 
in our--sometimes in the sanction regime effort, you have to 
lead and you get others to follow or to join. I should not say 
``follow,'' but to join. And that has actually been our 
experience here.
    And then at some points, others led, and we followed. The 
European Union was on its way to a total oil embargo before we 
moved in a certain direction--or asked for further reduction. 
So there has been to some degree in this respect a concert of 
efforts.
    And I agree with you we need to maintain that, but it just 
seems to me that the simple threat of a new round without that 
taking its bite well within a certain period of time beyond the 
breakout period is--I do not understand what the cause for 
alarm is.
    Dr. Albright, we will give you the final word.
    Dr. Albright. Yes, I do not think it is cause for alarm, 
but I think they have to be justified carefully. Because it is 
going to be asking allies to do things and even adversaries, if 
I can characterize China that way. So I think it has to be 
demonstrated that they are needed and justified.
    The Chairman. Well, I agree with that, and we can 
definitely do that because we can show where Iran, even under 
the present sanctions regimes, has efforts to circumvent.
    But I would simply say the world watches the slaughter in 
Syria and did not seem to want to act. And so, if we want to 
avoid the use of military force, which I believe needs to be a 
credible threat on the table as part of the equation, our best 
way to achieve that with the international community is to have 
Iran feel the domestic internal pressure that has, as you 
suggested, Mr. Takeyh, the Ayatollah and his dual portfolio 
come to a decision that the one not only has to be abated but 
maybe given up.
    Dr. Albright. Yes, I would add, though, that it should be 
motivated by what happens in October. I mean, and if they 
increase their program.
    The Chairman. And if October comes and we hear that we have 
had some positive, substantive negotiations, but nothing has 
ceased. Let us say if October came and they said we are going 
to stop right now all enrichment. So let us stop another round 
of new sanctions.
    I do not know. Maybe that might be something.
    Dr. Albright. Yes.
    The Chairman. And then work from there. But if October 
comes and all we hear, which is what every P5+1 process has 
largely led to, is that we have had discussions and, you know, 
there has been some good environment, but nothing substantive 
has come. How many times of the October 15s do we have?
    Dr. Albright. I would argue--I guess I would take 
Ambassador Sherman at her word. I mean, this is the test, and 
if they do not pass it in October, then more action would 
occur, particularly in Congress.
    The Chairman. Senator Corker.
    Senator Corker. Thank you.
    I like that line of questioning very much, and I want to 
follow on to that. And again, thank you as witnesses for being 
here.
    Mr. Takeyh, speaking of October, and we will know soon, 
obviously, but what is it that you think Iran's Foreign 
Minister is going to say to Secretary Kerry and Secretary 
Sherman?
    Dr. Takeyh. Well, my guess is they are going to try to 
suggest a greater degree of cooperation with the IAEA, which 
follows up on the promise of transparency. I think they have 
been for a long time interested in selling 20 percent 
enrichment, and to some extent, Prime Minister Netanyahu was 
remiss in emphasizing 20 percent when the problem has always 
been enrichment at 3.5 percent, and that is taking place at 
industrial scale in their towns.
    The Iranians have been trying to sell the 20 percent for a 
long time. So I suspect they might table something about 20 
percent in exchange for sanctions relief such as that may not 
directly involve the United States Congress, such as SWIFT 
accounts and so on and so forth. There are some aspects of the 
European commerce.
    And I think so you kind of come out of that meeting by 
suggesting some agreements have been made that deal at least 
with the outer parameters of the nuclear issue. That would be, 
my guess would be on the upscale of what they could offer.
    Senator Corker. So back to what Senator Menendez was asking 
a minute ago or talking about the coalition. I guess one of the 
important elements, and I know that you all are, two of you are 
taking a slightly more cautious approach to sanctions. Takeyh 
may be a little bit more aggressive.
    But an important part of what we are doing is keeping our 
coalition together. In other words, without the international 
coalition we have, the sanctions that we put in place generally 
do not have the impact that they otherwise would have. And I 
would just ask each of you to, from your perspective, tell us 
where you think that coalition is today relative to what is 
going on.
    And just add to that, in the event, for instance, these 
talks are not successful, and I think most people here are 
pretty skeptical about where this is going to go. Let us say 
there isn't something that comes out tangibly very soon. How is 
the coalition hanging together well, and can it go on for a 
long period of time as it is today?
    Dr. Albright. Yes, I would say my experience would be that 
it is under stress. I mean, Europeans are being asked to do 
more and more, and there is some pushback now that was not 
there a year ago. So I think it is under stress, and that is 
why I think any new congressional sanctions should be motivated 
by what Iran does or does not do.
    And I do share your concerns about mid-October because I 
just thought of this. In listening carefully to Ambassador 
Sherman, it appears that what could happen is Iran is being 
asked to respond to the Almaty proposal that was made, not to 
come up with a comprehensive framework agreement.
    And so, you could end up in a situation where Iran responds 
to that proposal, which is very limited, and the proposal is 
public now. So we all know what is in it, and even if Iran said 
yes to that, it does not get anywhere near what is necessary.
    So I think the administration needs to be pushed much more 
firmly about, is Iran going to provide in a sense a bottom line 
in October? And again, this would have to be nonpublic 
discussions, obviously, but I think we do need to know what 
exactly is going to happen in October, and is it the test that 
we think it will be?
    And I think the world is going to be watching very 
carefully, and I think what happened in Syria is something to 
pay attention to, that military strikes are not that easy to 
get support for right now. And I think the sanctions could be 
the most important pressure that is brought to bear to get Iran 
to take the steps necessary to solve this.
    And so, I would argue that after October that it really may 
be necessary to apply those sanctions or pass those sanctions 
in order to then get a deal.
    Senator Corker. Mr. Jeffrey.
    Ambassador Jeffrey. First of all, David is right about the 
Almaty deal and the going-in position. I think there may be 
some hope for offline, direct United States-Iranian talks, 
which the door does seem to be open to. And the President also 
in his statement the other day did refer to the sort of 
sanctions relief that the Iranians, I think, want. They would 
have to do very significant, verifiable, transparent, and 
meaning steps.
    So I think that he, at least, is thinking about going 
beyond the Almaty proposals and try to find out what their 
bottom line is. They, of course, will also want to know what 
the international community's bottom line is in terms of 
sanctions. So that will be the play.
    But in terms of your question specifically of the 
coalition, I am a little bit worried because I think the 
coalition, more than the United States, is being wooed a bit by 
Rouhani's performance at the United Nations, his various 
writings, and the rest of this stuff, and they are hoping that 
this era of good feelings will move forward. So we have to 
really educate them a bit that it is actions and not words, and 
the President has done a good job in this, and the more support 
he can get from Congress, the better on that.
    In terms of China and purchasing oil, that is something 
that I think you have to look at the intelligence on, on what 
their options are and where they are. In terms of Russia, they 
have been very unhelpful on the Syrian thing in some respects, 
and I think they will exact a high price for further 
cooperation with us.
    So there is some maneuvering back and forth. But I think 
that we are at a point where within the next few weeks, we can 
see whether the signs are going in that direction. Then the 
administration will have to convince allies, have to convince 
you, have to convince the American public, that it is worth 
either pursuing a negotiated track or return to the sanctions 
with the military option if the Iranians start crossing our 
redlines.
    Dr. Takeyh. I think on the strength of the coalition, the 
coalition has to be viewed as a large collection of countries 
with varying degrees of compliance records. The Russians and 
the Chinese have always been skeptical of sanctions, and they 
have tried to use their participation in these international 
meetings to negotiate their commerce and protect their 
commerce, particularly in terms of the Chinese and purchasing 
of Iranian oil.
    I do not see a clamor in Europe for sanctions relief. I 
think the European Union has, in some ways, moved even beyond 
and ahead of the United States on these issues. So I do not see 
this notion of the European Union seeking to resume its 
relations, commercial relations with Iran. Even in absence of 
the sanctions, I think that would be difficult, given the high 
risk of Iranian commerce.
    There are some Asian countries that continue to purchase 
Iranian oil, and here I think the Japanese or South Koreans 
have proven the most wobbly members of the sanctions committee, 
particularly in terms of the Japanese, which have even 
established their own insurance mechanism for transportation of 
the Iranian oil.
    So the Asian trade I think continues, but I think the 
European trade at this point has been severed, and I am not 
quite sure if the Europeans are clamoring to come into it. And 
the categories of concerns that Europeans have tend to increase 
beyond those of the United States. They are much more focused 
on human rights issues, for instance, as more so than we have 
been. We have more of a proliferation-centric policy.
    So I am not quite sure if the last couple of weeks in New 
York have changed the fundamentals of the coalition. Those who 
were weak continue to be weak. Those who were wobbly continue 
to be wobbly. And those who are resolute continue to be 
resolute.
    Senator Corker. Mr. Chairman, if I could, one last 
question? And you know, the chairman and I talked a great deal 
during the Syrian issue, you know, how we responded to that was 
very much going to impact the negotiations that we are talking 
about right now and Iran's response to us. And without giving 
any editorial comments, just wondering if you could share with 
us sort of the environment that we are in as far as the 
neighborhood as they watched the United States response in 
total.
    There were a lot of episodes, and you know, how the 
neighborhood has responded to our response to Syria, but 
especially Iran. If you could just share with me what kind of 
environment it has created within those countries?
    Ambassador Jeffrey. I would separate out the two. I think 
that the United States has a pretty convincing record of taking 
a tough position on Iran. I think that people generally believe 
that we are very serious about it. There are the sanctions that 
you have worked so hard on, and there are a lot of tough 
statements, most recently from the President a couple of days 
ago. But I think that people also look at what we have been 
doing.
    The withdrawal from Iraq, which I was involved in; the 
impending withdrawal of all or most of our forces from 
Afghanistan; the talk of a pivot to Asia, even though I suspect 
90 percent of the work of the foreign policy community still is 
in the Middle East; the way we not only led from behind on 
Libya--that may have been a pretty good idea--but the way we 
talked about and sort of praised ourselves for leading from 
behind; and most recently, the Syrian example has made, have 
all made our friends in the region question whether we are 
willing to use military force if things come to that.
    And that is a very dangerous situation. That is how we got 
into the Korean war. We had not put South Korea inside our 
defense perimeter. We explicitly excluded it by Dean Acheson. 
The North Koreans invaded, with Russian encouragement, and we 
then engaged.
    We do not want to stumble into a wall like that. We have to 
be very, very clear that we will use military force. Under the 
circumstances post Syria, this requires Presidential 
commitments and Presidential action and supporting action from 
the Congress to restore the belief, that is fundamental to 
everything that I have experienced in the last 40 years all 
around the world, that the United States and its friends and 
allies, as part of an international coalition, will act to 
preserve threats to the international order.
    That is being questioned now, sir.
    Dr. Albright. One thing I would like to add to that is--
well, two things. One is certainly the Gulf States are very 
concerned-- 
I mean, they have made that pretty apparent--in what the United 
States is going to do.
    Now question I would have is, is based on if we think about 
deterring Iran from breaking out. I mean, even now we think 
they could do it relatively quickly. I mean, a month, month and 
a half. I mean, the inspection can detect that and give timely 
warning that it is taking place. But that does not leave a lot 
of time for a military response.
    As breakout times shrink, it is pretty clear that the 
military--whichever one is going to do it, whether it is Israel 
or the United States--is going to have to be striking within a 
few days. And has the Syrian situation confused whether the 
President has the authority to do that.
    And again, this is not a case where there is clear evidence 
of someone violating a major international agreement, namely 
the Nonproliferation Treaty. So it is not a preemptive strike. 
It is an action has been taken that is judged as trying to 
build nuclear weapons. Can the United States--does the Obama 
administration feel it has the authority to act within a few 
days with a military response?
    The Chairman. Mr. Takeyh, you are going to have the last 
word of this hearing.
    Dr. Takeyh. Sure, in terms of regional situation, the 
Middle East is a region that continuously divides against 
itself, and it has divided against itself today. There is an 
interregional cold war on the one hand led by Saudi Arabia, on 
the other hand by Iran. And this is a cold war that is playing 
itself out in the gulf, in Bahrain, even though I think the 
Saudis' claims are overstated. It is playing itself out in 
Iraq, playing itself out in Lebanon, and certainly playing 
itself out in Syria.
    So that is the sort of a division we see in the region. It 
is a cold war that is likely to be more protracted because it 
is predicated on sectarian identities, Shia versus Sunnis and 
that sort of a thing. So the Middle East is in a particularly 
unstable and dangerous period.
    The United States, obviously, has a role in terms of 
reassuring its allies and deterring its adversaries. It is a 
role that it chooses to play however maladroitly or 
successfully it may want to.
    The Chairman. Well, thank you all. It has been a very 
interesting and helpful panel. I appreciate it.
    With the thanks of the committee, the hearing's record will 
remain open until the close of business tomorrow for members' 
questions.
    And with that, this hearing is adjourned.
    [Whereupon, at 12:47 p.m., the hearing was adjourned.]
                              ----------                              

              Additional Material Submitted for the Record

        Responses of Under Secretary Wendy Sherman to Questions 
                   Submitted by Senator Robert Corker

    Question. Is the administration considering including Iran in 
upcoming negotiations to achieve a political settlement to the conflict 
in Syria? If so, why? What constructive role do you feel Iran can play 
in those negotiations? How will their participation affect the Syrian 
opposition?

    Answer. We believe that whoever attends the Geneva Conference on 
Syria must accept and publicly support the Geneva Communique, including 
the key point of establishing by mutual consent a new transition 
governing body with full executive authorities. We have been clear that 
Iran has played a destructive role in this crisis by sending Quds 
Forces into Syria, by helping Hezbollah fight in Syria, and by 
organizing the dispatch of Iraqi Shia militiamen to fight in Syria, all 
directly contributing to the Assad regime's brutality against the 
Syrian people. If Iran were to endorse and embrace full implementation 
of the Geneva Communique publicly, we would view the possibility of 
their participation more openly. So far it has not done so.

    Question. We have established that Iran is already dangerously 
close to achieving critical breakout capability. If we give you 3 
months to test diplomacy they will be closer. What is our strategy to 
move Iran back from breakout in the event diplomacy fails?

    Answer. We believe there is a window for diplomacy, but time is not 
unlimited, and the President has consistently said that all options are 
on the table. We are confident that the international community would 
have sufficient time to respond to any Iranian breakout effort. We 
continue to closely monitor Iran's nuclear program for any signs that 
the regime has made an explicit decision to develop a nuclear weapon or 
is operating secret facilities for covert production of enriched 
uranium.

    Question. President Obama has repeatedly emphasized the fact, both 
at the United Nations and in his statement after the phone call with 
Rouhani, that Ayatollah Khamenei has issued a fatwa against nuclear 
weapons. Are you using the fatwa as a serious factor in assessing 
Iranian intentions?

    Answer. On September 26 in New York, at a speech at the Council on 
Foreign Relations, President Rouhani paraphrased Ayatollah Khamenei and 
stated, ``The development, production, stockpiling and use of nuclear 
weapons are contrary to the Islamic norms.'' As President Obama has 
stated many times, we remain committed to ensuring Iran does not obtain 
a nuclear weapon--and as a result, we were heartened to learn about the 
fatwa against nuclear weapons.
    But the fatwa itself is not the basis for assessing Iranian 
intentions. Iran must match its rhetoric with meaningful, transparent, 
and verifiable actions. This has always been our stance.

    Question. What is your current assessment of the amount Iran has in 
its foreign exchange reserves? Under current conditions, when will Iran 
run out of money?

    Answer. Independent experts estimate that Iran's foreign currency 
reserves were valued around 70-80 billion USD in 2012. In theory, if 
Iran used only its foreign currency reserves instead of earnings 
derived from trade surpluses with other countries, the Iranian 
Government would have about 8 months before running out of money to pay 
for imports. However, because most of Iran's foreign reserves are 
extremely difficult to access, the period is less than 3 months under 
this scenario.
    Most of Iran's reserves are partially or completely inaccessible 
largely due to the administration implementing key provisions of the 
Iran Threat Reduction and Syria Human Rights Act of 2012 (TRA) on 
February 6, 2013. In addition to putting restrictions on Iran's foreign 
currency reserve holdings, provisions in the TRA restrict Iran's 
ability to use oil revenue held in foreign financial institutions. Due 
to the success of the TRA, the Iranian Government can only use the vast 
majority of its overseas holdings to facilitate bilateral trade with 
countries that import Iranian oil, or to facilitate humanitarian trade.

                                  
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