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94–013 PDF 2016

S. HRG. 114–7

PERSPECTIVES ON THE STRATEGIC NECESSITY

OF IRAN SANCTIONS

HEARING

BEFORE THE

COMMITTEE ON 

BANKING, HOUSING, AND URBAN AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED FOURTEENTH CONGRESS

FIRST SESSION

ON

EXAMINING THE ROLE AND IMPACT THAT ECONOMIC SANCTIONS 

HAVE HAD ON IRAN’S ILLEGAL NUCLEAR PROGRAM

JANUARY 27, 2015

Printed for the use of the Committee on Banking, Housing, and Urban Affairs

(

Available at: http://www.fdsys.gov/


BANKI-41578DSA with DISTILLER
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS 

RICHARD C. SHELBY, Alabama, Chairman

MICHAEL CRAPO, Idaho 

BOB CORKER, Tennessee 

DAVID VITTER, Louisiana 

PATRICK J. TOOMEY, Pennsylvania 

MARK KIRK, Illinois 

DEAN HELLER, Nevada 

TIM SCOTT, South Carolina 

BEN SASSE, Nebraska 

TOM COTTON, Arkansas 

MIKE ROUNDS, South Dakota 

JERRY MORAN, Kansas 

SHERROD BROWN, Ohio 

JACK REED, Rhode Island 

CHARLES E. SCHUMER, New York 

ROBERT MENENDEZ, New Jersey 

JON TESTER, Montana 

MARK R. WARNER, Virginia 

JEFF MERKLEY, Oregon 

ELIZABETH WARREN, Massachusetts 

HEIDI HEITKAMP, North Dakota 

JOE DONNELLY, Indiana

WILLIAM D. DUHNKE III, Staff Director and Counsel 

MARK POWDEN, Democratic Staff Director

DANA WADE, Deputy Staff Director 

JELENA MCWILLIAMS, Chief Counsel 

BETH ZORC, Senior Counsel 

JOHN O’HARA, Senior Counsel, International/Terrorist Finance 

CHRISTOPHER FORD, Senior Counsel, National Security Policy

LAURA SWANSON, Democratic Deputy Staff Director 

GRAHAM STEELE, Democratic Chief Counsel 

COLIN MCGINNIS, Democratic Policy Director

DAWN RATLIFF, Chief Clerk 

TROY CORNELL, Hearing Clerk 

SHELVIN SIMMONS, IT Director 

JIM CROWELL, Editor

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BANKI-41578DSA with DISTILLER
CONTENTS

TUESDAY, JANUARY 27, 2015

Page

Opening statement of Chairman Shelby ................................................................ 1

Opening statements, comments, or prepared statements of: 

Senator Brown .................................................................................................. 3

Senator Menendez ............................................................................................ 5

Senator Corker .................................................................................................. 6

Senator Tester .................................................................................................. 8

Senator Toomey ................................................................................................ 8

Senator Merkley ............................................................................................... 10

Senator Heller ................................................................................................... 10

Senator Warren ................................................................................................ 11

Senator Sasse .................................................................................................... 11

Prepared statement ................................................................................... 64

Senator Heitkamp ............................................................................................ 12

Senator Cotton .................................................................................................. 12

Senator Donnelly .............................................................................................. 12

Senator Rounds ................................................................................................. 14

Prepared statement ................................................................................... 65

Senator Reed ..................................................................................................... 14

Senator Scott ..................................................................................................... 15

Senator Crapo ................................................................................................... 15

Senator Schumer .............................................................................................. 16

Senator Kirk .....................................................................................................

Prepared statement ................................................................................... 64

WITNESSES 

Antony Blinken, Deputy Secretary of State, Department of State ...................... 18

Prepared statement .......................................................................................... 66

Responses to written questions of: 

Senator Shelby ........................................................................................... 110

Senator Brown ........................................................................................... 112

Senator Kirk .............................................................................................. 114

Senator Tester ........................................................................................... 116

David S. Cohen, Under Secretary for Terrorism and Financial Intelligence, 

Department of the Treasury ................................................................................ 21

Prepared statement .......................................................................................... 69

Patrick Clawson, Ph.D., Director of Research, Washington Institute for Near 

East Studies .......................................................................................................... 51

Prepared statement .......................................................................................... 74

Mark Dubowitz, Executive Director, Foundation for Defense of Democracies ... 52

Prepared statement .......................................................................................... 79

ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD

Remarks by President Obama and Prime Minister Cameron in Joint Press 

Conference on January 16, 2015 ......................................................................... 118

Washington Post article, ‘‘Give diplomacy with Iran a chance,’’ by Laurent 

Fabius, Philip Hammond, Frank-Walter Steinmeier, and Federica 

Mogherini .............................................................................................................. 130

(III)


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(1)

PERSPECTIVES ON THE STRATEGIC 

NECESSITY OF IRAN SANCTIONS 

TUESDAY, JANUARY 27, 2015

U.S. SENATE, 

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS, 

Washington, DC. 

The Committee met at 10:01 a.m., in room SD–538, Dirksen Senate Office Building, Hon. Richard Shelby, Chairman of the Committee, presiding. 

OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY 

Chairman SHELBY. The Committee will come to order. We will 

not have demonstrations in the Committee. We would have to clear 

the room if there are demonstrations in the Committee. 

First this morning, I would like to welcome the new Members to 

the Senate Banking Committee: Senator Tim Scott, Senator Ben 

Sasse, Senator Tom Cotton, Senator Mike Rounds, and Senator Joe 

Donnelly. I look forward to working with them and also my distinguished colleague, the Ranking Member, Senator Brown from Ohio. 

I hope that this is the first of many meetings of the Banking 

Committee. If history is any guide, it will be. While we may express differences in opinion from time to time, I expect that we can 

reach common ground on several issues this Congress. 

We will begin today’s hearing with an opening statement by me 

and the Ranking Member. I will then turn to our Members for any 

brief remarks that they may have before we hear from our witnesses. 

Members will be recognized by the Chair in order of seniority for 

those present at the gavel and in order of arrival thereafter. Each 

Member will be allotted 5 minutes for as many rounds as time permits. 

As soon as a quorum is present—and we are getting close to it—

I will pause briefly to approve—we hope to approve the Committee’s budget, the Committee’s rules, jurisdiction, and Subcommittee 

membership. But today we will hear from our witnesses on the role 

that economic sanctions have had on Iran’s illegal nuclear program. 

Iran has long been a serious threat to U.S. national security interests. It is the world’s foremost sponsor of terrorism; it supports 

radical regimes; it destabilizes its neighbors; and it continues to 

pose a threat to our ally, Israel. 

Further evidence of Iran as a destabilizing force in the region is 

the recent ousting of the Government of Yemen. Many reports credit Iran as a major backer of the rebels in that uprising. 


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Since the mid-1980s, Iran has been pursuing capabilities that 

would enable it to build nuclear weapons. As as a result, the 

United States has led efforts to impose strong and progressively 

more stringent sanctions against Iran under both Democrat and 

Republican administrations. 

Over the past few decades, a bipartisan consensus has emerged 

that tough sanctions are essential in order to persuade Iran to 

moderate its reckless behavior. Consequently, sanctions have succeeded where diplomatic efforts have repeatedly failed to bring Iran 

to the negotiating table. 

After many rounds of talks, it is not at all clear that the existing 

sanctions regime will produce a viable nuclear deal that will protect U.S. national security interests. I think it is worth repeating 

that, without the pressure of tough sanctions, Iran would not have 

been engaged in any talks in the first place. 

Our common goal now, I believe, is to ensure that these talks 

produce an acceptable outcome and that Iran’s leaders understand 

that such an outcome is in their best interest as well. So far, it is 

not clear to me that they believe this. One indication is that the 

Iranian regime continues to insist on a deal that would keep its nuclear capability largely intact. Such a result would be dangerous 

because it would allow Iran to remain within reach of producing 

nuclear weapons. 

I am also concerned that the weakening of sanctions or even the 

perception of this may be insufficient to keep Iran at the table. The 

Administration has argued that Iran, a country with a history of 

defiance and deception, will negotiate a mutually acceptable agreement without the certainty that harsh sanctions will take effect if 

it does not. I respectfully disagree with the Administration on this. 

I believe that the repercussions of Iran’s failure to reach an 

agreement by midyear should be clearly defined by statute. The 

President and other officials have said that Congress should not 

interfere, that a deal is close, that the situation is delicate, and 

that an attempt to legislate any additional sanctions may give Iran 

an excuse to walk away from the negotiating table. 

It has been my experience that if a party is negotiating in good 

faith and with the intent to reach an agreement, they will seek 

common ground, but not an excuse to walk away. If Iran is looking 

for a way out, I believe that they never intended to ever reach an 

agreement in the first place. The fact that the current negotiation 

has already been extended twice is further evidence of their recalcitrance. 

There is now a growing bipartisan consensus that not only does 

Congress have a role to play in ensuring that Iran does not back 

away, but it also has a responsibility in this regard. It is clear that 

sanctions brought Iran to the negotiating table, and the threat of 

future sanctions represents Iran’s only incentive to successfully 

conclude an agreement. I look forward to hearing the perspectives 

of our witnesses today on this critical issue. 

And now I turn to the Ranking Member of the Committee, Senator Brown. 

Senator BROWN. Mr. Chairman, could I ask if we are going to do 

the Committee business now? Should we do that now? 

Chairman SHELBY. Do you want to go ahead and do it? 


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Senator BROWN. Sure. 

Chairman SHELBY. We have a quorum? 

Senator BROWN. We have a quorum. 

Chairman SHELBY. We will do it. It is a good idea. Thank you. 

Senator BROWN. OK. Thank you. 

[Whereupon, at 10:07 a.m., the Committee proceeded to other 

business and reconvened at 10:09 a.m.] 

Chairman SHELBY. Senator Brown. 

STATEMENT OF SENATOR SHERROD BROWN 

Senator BROWN. Thank you, Mr. Chairman. I appreciate your 

willingness to delay this hearing from last week and the markup 

also by a week from the original notice dates. Historically, even in 

a Senate where bipartisanship might be lacking, this Committee 

has operated with bipartisan comity, particularly on the issue of 

sanctions. We have proceeded with regular order, carefully assessed policy options in the past, and usually taken months to craft 

tough, targeted sanctions, focusing their effect on Iran’s leaders 

while minimizing harm and unintended consequences for our Nation and for our allies. 

But in a departure from past practice, this hearing originally was 

not noticed in a timely way under the rules of the Senate. I appreciate the willingness of Deputy Secretary Blinken and Treasury 

Under Secretary Cohen to testify today. They were originally given 

too little notice, and I hope we can avoid that in the future. 

Notwithstanding the Senate rules that guarantee witnesses chosen by the minority as a matter of right, our initial request to seat 

Administration witnesses was refused. In fact, the Administration 

is generally not considered to be minority witnesses. They should 

not be. All of us should want to hear from those at the center of 

these negotiations regardless of who sits in the Oval Office. 

Since we have a number of new Members, it is important to note 

that this Committee has not heard directly from the Administration on Iran since December 2013. Former Chairman Johnson withheld action on further negotiations while nuclear negotiations were 

ongoing—for further legislation while nuclear negotiations were ongoing and arranged periodic classified briefings for all of us instead. 

People have different views on these issues. The process should 

involve not just an oversight hearing like today’s, but also a set of 

hearings on the legislation that we will mark up as well. 

If this Committee is serious about oversight and serious about 

policymaking, we should delay a markup until we get a full sense 

of the likely consequences of this very important action. We should 

consider the implications of other legislative proposals which may 

come before other relevant committees, like those being developed 

by Senator Feinstein, by, jointly, Senators Paul and Boxer; by our 

distinguished colleague on this Committee, Senator Corker; and 

their relationship to new sanctions legislation. Some might be helpful, some might not be helpful. Instead, it looks like this sanctions 

bill will be hustled through this Committee with no actual legislative hearings, even though Members likely have questions about its 

provisions and, frankly, are uncertain about what congressional action might mean for the negotiations. 


BANKI-41578DSA with DISTILLER
4

The President said new sanctions legislation would dramatically 

undermine the negotiations and our relations with negotiating 

partners and erode international support for multilateral sanctions. 

He said he will veto the bill. Our negotiating partners have expressed strong opposition. 

Mr. Chairman, I ask consent that statements by the President 

Obama and Prime Minister Cameron and the recent Washington 

Post op-ed from the EU foreign ministers and the EU high representatives, I ask unanimous consent that those be placed in the 

record, Mr. Chairman. 

Chairman SHELBY. Without objection. 

Senator BROWN. Thank you, Mr. Chairman. 

The Committee should hear all arguments on all sides. They 

should probe them. We should test them against our own knowledge and experience on these issues. If Congress acts to force the 

President’s hand in the next few months by overriding his veto, 

and if doing so contributes to the collapse of negotiations and our 

heading down the path toward a military confrontation, Congress, 

beginning with each one of us, will be held responsible. 

This Committee bears an unusually grave and historic responsibility to assess the full consequences of acting now. We should be 

especially careful to ensure a thorough process. We have the time 

to do so since no new sanctions would be applied for 6 months. In 

the meantime, existing sanctions will continue to bite, and to bite 

hard. 

I have supported the search for a diplomatic solution. Some predicted that JPOA would unravel the sanctions regime. It has not. 

Others worried Iran would not comply or would benefit unduly 

from sanctions relief or from new trade deals. None of that, as our 

two Administration witnesses will affirm today, none of that has 

proven true. 

There have been situations where we and Iran disagreed about 

whether certain things were allowed under the JPOA. They were 

litigated and they were resolved by Iran ceasing that activity. 

I am not naive about the likelihood of a deal with Iran. I know 

that the President has set those odds roughly at 50–50. But I think 

we must allow the President to test these proposals. 

I urge the Chairman to step back and adopt the process usually 

used in this Committee under Chairmen of both parties, undertake 

additional hearings, delay a markup and further action to see if a 

nuclear deal can, in fact, be reached by the deadline. Ultimately, 

while some of us might differ on tactic, it is clear we share the 

same goal: to ensure that Iran does not achieve a nuclear weapon, 

to do that diplomatically, if possible, while recognizing that other 

alternatives remain on the table. 

A longer, more orderly process will ensure that we are fully informed of the potential consequences of our actions so that no one 

looks back with regret that we rushed another critical national security decision through Congress without fully understanding its 

implications. Mr. Chairman, history is an unkind judge of policymakers who make that mistake. 

Thank you. 

Chairman SHELBY. Senator Menendez. 


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STATEMENT OF SENATOR ROBERT MENENDEZ 

Senator MENENDEZ. Well, thank you, Mr. Chairman. For years, 

Congress has played a significant role in authorizing nuclear sanctions on Iran, and I am proud to have taken the lead role in what 

has been a bipartisan effort to pass a series of sanctions that more 

than anything else has been responsible for Iran’s decision to enter 

negotiations on its nuclear program. 

Now, the legislation that Senator Kirk and I have drafted would 

signal to the Iranian regime that there will be more consequences 

if they choose not to reach a final deal. This morning, however, 

many of my Democratic colleagues and I have sent a letter to the 

President telling him that we will not support passage of the KirkMenendez on the Senate floor until after March 24th and only if 

there is no political framework agreement because, as the letter 

states, we remain hopeful that diplomacy will succeed in reversing 

Iran’s ability to develop a nuclear weapon capability in accordance 

with the timeline that the P5+1 and Iran negotiating teams have 

set for themselves, which is March 24, 2015, for a political framework agreement. 

But we also say in this letter that we remain deeply skeptical 

that Iran is committed to making the concessions required to demonstrate to the world that its nuclear program is exclusively peaceful by March 24th. 

The fact is that negotiators are now in their 18th month of talking, and senior Administration officials continue to forecast the 

chance of reaching an agreement at less than 50–50. In the interim, Iran has breached the Joint Plan of Action at least once and 

made a mockery of it a second time by trying to illicitly procure 

parts for the Arak reactor in violation of U.N. Security Council resolutions. Iran is procrastinating because the longer the negotiations 

last, the further the P5+1 moves in their direction. 

We have slowly shifted positions during the last 18 months after 

dismantling Iran’s nuclear infrastructure—the Arak reactor, the 

Fordow enrichment facility, Iran’s 19,000 centrifuges—to allow 

Iran to keep all those elements in some form while we settle for 

alarm bells that will tell us only when it is too late, when Iran has 

breached. And without prospective sanctions that are ready to be 

implemented, our only option may very well be what some of my 

friends are worried about: either a military one or accepting Iran 

as a nuclear weapons state. Neither are desirable. 

At the same time, Iran has stonewalled the IAEA’s access to key 

sites where weaponization activities took place. They are looking 

for and seem likely to get an agreement that kicks this most serious issue down the road, to be addressed at a later date, after a 

deal is signed. 

I cannot begin to understand how we would build an inspection 

and verification regime or how long the agreement must last until 

we know how far they have come toward building a nuclear weapon. 

Finally, I want to make a few points clear about the substance 

of the Kirk-Menendez bill. As drafted, it would not violate the Joint 

Plan of Action. The Joint Plan of Action limits the imposition of 

new sanctions during the talks, and our bill would not impose sancVerDate 0ct 09 2002 16:32 Jan 21, 2016 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 S:\DOCS\94013.TXT SHERYL

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tions until 1 month after the final deadline runs out at the end of 

June. 

We also provide the President with additional flexibility through 

monthly waivers if he believes that they may be on the verge of a 

deal and it is in the national security interest to do so. Only after 

2 years of failed negotiations would the legislation trigger additional sanctions. In my view, we need Iran to understand that 

there are consequences if they fail to reach a comprehensive agreement, and the consequences are closing loopholes in existing sanctions and expanding sectoral sanctions. 

At the end of the day, Iran must make up its mind about what 

is more important: its nuclear weapons program or the welfare of 

its people. Until now, Iran has not been motivated to make such 

a decision. In my view, a strong, bipartisan bill that outlines the 

consequences of failure could be the motivator that Iranian leaders 

need to make the hard decisions. 

And, Mr. Chairman, I would just say, as someone who voted 

against the war in Iraq when many of my colleagues who now seem 

to be doves voted for it—which was a monumental mistake, in my 

view—and as someone who has worked hard to create the opportunity so that we do not have the only option of being a military 

attack or accepting a nuclear-armed Iran, what I do not want to 

see and what I will not submit to is having the aspirations that we 

had in North Korea, which ended up not turning into the aspirations we desired, but turning into North Korea being a nuclear 

weapons state, for which we are paying enormously today. And 

that is a test of history and judgment that those who supported 

that at that time I think will come to regret as well, should come 

to regret as well. And that is why I for one do not want to see it 

happen a second time. 

Chairman SHELBY. Senator Corker. 

STATEMENT OF SENATOR BOB CORKER 

Senator CORKER. Thank you, Mr. Chairman, and I look forward 

to your leadership and Senator Brown’s, and I am one Senator who 

would say that I am perfectly happy with the two of you only giving opening comments. And while I love listening to my colleagues, 

I like listening to witnesses more. 

I will say that, on the other hand, I appreciate what Senator 

Menendez has just said, and I want to thank him and Senator Kirk 

for their outstanding leadership on sanctions. There is no question 

that our Nation and the P5 together would not be where we are 

today had the two of you not led in putting in place a sanctions 

regime that most of us here have been involved in. I want to thank 

you for that. And so there is no question to me that we would not 

be at the table today had that not occurred. 

I, too, want to welcome the new Members. I have found this to 

be one of the most outstanding committees in the U.S. Senate, and 

I want to welcome everyone here. 

I will say to Mr. Donnelly, when I first got here, I, too, sat in 

the cameraman’s lap. 

[Laughter.] 


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Senator CORKER. And I will say that I think my service during 

that time was better than it is today. So he is a nice guy, and I 

know you will get to know him well. 

[Laughter.] 

Senator CORKER. So thank you. 

I think that some of the things that Senator Menendez has laid 

out really do bear tremendous scrutiny, and I know we are going 

to have some classified briefings to get into more depth. I know 

that David Cohen has done a very good job in putting in place the 

regime we have. But the fact, if you just looked at the practical 

needs for a country like Iran, with one nuclear reactor—and this 

is where we began. What are the practical needs of a country like 

this? Most scientists would say maximum 500 centrifuges. Maximum. 

So here we are, we are negotiating at a point we all know that 

is way beyond that. What is the purpose of a country like Iran having more than 500 centrifuges? Why would they be putting their 

citizens through the havoc that they are putting them through at 

this point? 

We are not focused heavily enough, in my opinion, on the research and development. We keep talking about Arrow 1’s and 

Arrow 2’s, and people make fun of the little bomb, if you will, that 

Bibi Netanyahu showed at the United Nations, talking about the 

20 percent, because we are shipping much or reducing it to nonusable materials. But the fact is they have Arrow 6’s and above 

that can go from 0 to 90 percent passing the 20 percent market like 

that. And yet we are not focused on that in the appropriate way. 

Again, I would just associate myself with the comments of Senator Menendez. The previous military dimensions of what Iran has 

done is incredibly important for us to know prior to any agreement 

being reached. We need to know what their scientists were able to 

develop prior to 2003. 

Now, Mr. Chairman, I will say this: We have done best when we 

were united. This is an issue that I know the Chairman has to feel 

this way. I will wait until Schumer finishes his phone call. 

This issue is an issue that we need to address in a bipartisan 

way. The last thing we need to do is pass a bill out of the U.S. Senate that is not veto-proof. So I want to say to my colleagues on both 

sides of the aisle, I think we are all searching for the right way 

for the Senate and for Congress to weigh in. And, again, I appreciate the efforts of my colleagues. 

The President just left India. One of my first votes here was on 

the 123 Agreement with India that was done under President 

Bush. We have voted as a Congress on twenty-seven 123 Agreements, which is a civil agreement with another country relative to 

nuclear weapons or civil nuclear activity. And yet the Administration is telling us today that they do not want us to weigh in on this 

agreement. 

So, Mr. Chairman, in closing, I hope that we will find a bipartisan way for this Congress to responsibly weigh in in a manner 

that assures that if there is a deal with Iran, it is a deal that will 

stand the test of time; that it is a deal that will ensure that not 

in the near future will they achieve nuclear capabilities. 

Thank you for the time. 


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Chairman SHELBY. Thank you. 

Senator Tester. 

STATEMENT OF SENATOR JON TESTER 

Senator TESTER. Thank you, Mr. Chairman, and I look forward 

to your leadership as well as Ranking Member Brown’s leadership 

on this Committee. And I want to welcome the new Members, also. 

This is a very, very good Committee. 

I think we are in an interesting situation with the Chair and 

Vice Chair not only this Committee but of Foreign Affairs on this 

Committee. I think it allows us to glean some information that may 

be very, very handy while we talk about how we are going to deal 

with Iran into the future. 

I would just say this: You know, Iran has been a bad actor. That 

is not breaking news. We all know that. But the bottom line for me 

is that if we have an opportunity to make them more predictable 

in the Middle East without nuclear weapons, I think that is a risk 

that we need to take. Knowing full well that they have not acted 

appropriately in the past, I think we ought to give them the opportunity to act appropriately. In the meantime, verify, verify, verify. 

And I think that is critically important as we move forward in 

these negotiations. 

I also want to thank Senator Menendez for his leadership. I want 

to thank him for his statement today. I think that what I heard 

you say is let the negotiation process work through the 24th of 

March and then come back and get the Administration in here and 

either say enough is enough or, if successes are happening, move 

forward. 

So I would just say that I want to thank the Chairman, Ranking 

Member Brown. It is a little new regime now that I have not been 

accustomed to, nor anybody else that was elected since 2006. But 

by the same token, I think there is an opportunity here to work 

in a bipartisan way to move things forward in a way that works 

for this country and for the world. 

And so, with that, thank you, Mr. Chairman. 

Chairman SHELBY. Senator Toomey. 

STATEMENT OF SENATOR PATRICK J. TOOMEY 

Senator TOOMEY. Thank you, Mr. Chairman. I appreciate your 

having this hearing today. I think it is extremely important. I appreciate the Administration witnesses. 

We all do agree, as Senator Tester mentioned, that Iran is certainly among, if not the most dangerous regime in the world. The 

question is: What should we do about it? 

I am going to suggest three things that I want to hear more 

about and three things that I recommend, Mr. Chairman. 

First, I think we do need to pass a sanction bill that should be 

at least as strong as the Nuclear Weapon Free Iran Act of 2014, 

the Kirk-Menendez bill. 

I also think we should make it clear to the President that he 

should seek to preclude any uranium enrichment capability by Iran 

in a final agreement that is reached. 


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And I think that any such agreement negotiated between the Administration and the Iranians should be put to Congress for a vote 

before it becomes operational, and let me touch briefly on why. 

First of all, I think additional sanctions are necessary. The whole 

purpose of sanctions is to raise the cost of acquiring nuclear weapons to an unacceptably high level for the Iranian regime. The 

whole point is to make the cost exceed the perceived benefit. It 

seems to me that sanctions were making some progress in that direction. They certainly were having a huge adverse impact on the 

Iranian economy. Arguably, the sanctions brought Iran to the negotiating table, but then we recently eased those sanctions, in my 

view, without commensurate concessions from the Iranians. And 

now Iran has allowed the second deadline to pass without an 

agreement. Their nuclear program continues. Their economy has 

begun to recover. So, in my view, prospective, tough, conditional 

sanctions should be implemented if Iran for the third time chooses 

to obfuscate and delay rather than to reach an agreement, and Iran 

should know now that that is what is coming. 

Second, the American people will not be saved from a nuclear 

Iran if Iran retains the capacity to continue to enrich uranium. If 

all Iran wanted was the ability to generate electricity, they do not 

need any enrichment capability for that. The fact is you can buy 

enriched uranium. The Iranians have a contract with Russia to do 

exactly that. There are 18 countries around the world that have 

peaceful nuclear energy programs without any active enrichment 

capability. They purchase their uranium. 

Frankly, the only reason I can think of that Iran would insist on 

retaining enrichment capability in an agreement is if it wants to 

retain the ability to eventually produce weapons-grade uranium. 

And let us remember, any meaningful enrichment capability can 

quickly be adapted to a weapons-grade capability. So I think American security depends significantly on ending uranium enrichment 

capability. 

Finally, Mr. Chairman, congressional approval of any agreement 

is going to make the agreement more durable. The Obama administration—if an agreement is reached, it is going to happen with only 

18 months left in this Administration. Our national security interest in preventing Iran from having nuclear weapons will extend far 

beyond the remainder of this Administration’s term. So Congress 

should vote on the agreement, just as the Senate would ratify any 

important treaty, and the Iranian people need to know that they 

are negotiating with the American people and have the broad support of Congress rather than just the President. 

So I think Congress should act now; pass a strong sanctions bill 

that would go into effect prospectively and conditionally; make it 

clear to the President that he should seek to completely eliminate 

Iran’s enrichment capability; and require that any agreement negotiated come before Congress. 

And let me just close with this, Mr. Chairman. I understand the 

Obama administration has threatened to veto any bill that would 

do what I have just described, even calling for prospective and conditional tightening of sanctions. The President argued in the State 

of the Union that new sanctions passed by this Congress at this 

moment in time will all but guarantee that diplomacy fails. 


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Well, there is a problem with this analysis, in my view, and that 

is, if the Iranians are serious about a deal, they would not walk 

away from the negotiations over conditional, prospective sanctions 

that they have the power to avoid and that do not violate the 

JPOA. In fact, they would be motivated, not deterred, by conditional sanctions. 

And I think we have to ask ourselves, if they are serious about 

reaching an agreement, why aren’t they a little bit concerned about 

driving us away from the negotiating table? But rather than showing good faith and any kind of restraint, instead Iran has violated 

the Joint Plan of Action, and they are now rampaging through the 

Middle East; continuing their indirect control of Lebanon; propping 

up Assad while he massacres several hundred thousand of his own 

people; exerting ever more power in Syria and Iraq; and last week, 

through proxies, overthrowing a government that was supportive 

and cooperative with the United States in Yemen. 

So, Mr. Chairman, I think this is overdue. I am very grateful 

that you are having this hearing. I look forward to the testimony 

of both panels, and I think Congress needs to act. 

Chairman SHELBY. Senator Merkley. 

STATEMENT OF SENATOR JEFF MERKLEY 

Senator MERKLEY. Thank you very much, Mr. Chairman, and I 

think everyone here on this panel has the goal of preventing Iran 

from having a nuclear weapon. Not only does it represent a direct 

threat, but it represents what could be the start of a nuclear arms 

race. We see so much in many international conflicts in the Middle 

East, the Shiite and the Sunni history and mistrust and enmity 

that drives so much of the conflict, and certainly a Shiite bomb 

might well drive a Sunni bomb, et cetera. The last thing we want 

is for Iran to have a nuclear weapon. 

That is why we are here, to listen to your testimony and to gain 

insight. I certainly want to understand better how the actions by 

the Congress may strengthen the negotiating hand of the United 

States or damage it, certainly both directly and in terms of the 

strength of the collective alliance necessary to make a sanctions regime effective. Diplomacy is certainly an art. Those of you who 

have been deeply engaged certainly have insights to share with us, 

and I look forward to hearing them. 

Chairman SHELBY. Senator Heller. 

STATEMENT OF SENATOR DEAN HELLER 

Senator HELLER. Mr. Chairman, thank you, and to the Ranking 

Member, for holding this hearing today. If I may add to what Senator Corker said to my friend across, Mr. Donnelly, as the latest 

Member on this Committee to have sat in your seat, get to know 

the cameraman well. There will be times he will feel like your only 

friend. 

Senator DONNELLY. We are already going to a ball game. 

[Laughter.] 

Senator HELLER. Mr. Chairman, in assessing the nuclear agreement with Iran, my assessment is this: I cannot imagine a higher 

risk versus reward scenario than this agreement. Crippling sanctions brought Iran to the negotiating table in the first place, and 


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by suspending these sanctions, I am very concerned that the 

United States has deteriorated the leverage that congressional action has provided this Administration. 

That is why today is so important. We need to understand what 

impact these sanctions are having on Iran and whether it is bringing them closer to producing a nuclear weapon. Furthermore, it has 

always been the policy of the United States through resolution 

after resolution, passed with unanimous, nearly unanimous support by Congress, that Iran should not have the ability to enrich 

uranium, even for peaceful purposes. Yet the interim agreement 

has effectively codified Iran’s right to enrich uranium, all in the 

hopes that Iran will keep its promises to allow international inspections and cease enrichment activities. 

A nuclear Iran is not in the best interest of the Middle East or 

Israel, and I am concerned that this deal has created security risks 

and uncertainty, not only for the United States but also for our regional allies. 

I am glad this Committee is holding this hearing. I hope it will 

move forward with legislation that will hold Iran accountable as 

the negotiations continue and allow for proper congressional oversight. 

And with that, Mr. Chairman, I thank you and look forward to 

hearing from our witnesses. 

Chairman SHELBY. Thank you. 

Senator Warren. 

STATEMENT OF SENATOR ELIZABETH WARREN 

Senator WARREN. Thank you, Mr. Chairman, and I am looking 

forward to working with you and with my good friend, the Ranking 

Member, Senator Brown. 

You know, we all share a common goal, and that is to prevent 

Iran from developing nuclear weapons. At this moment, I believe 

our ongoing negotiations with Iran are our best hope for achieving 

that goal and should be our first priority, since undermining those 

negotiations risks escalation and risks the possibility of war. 

I am looking forward to hearing from our witnesses today about 

whether the proposed new sanctions legislation will be helpful or 

harmful to that goal. And with that, I yield the rest of my time. 

Chairman SHELBY. Senator Sasse. 

STATEMENT OF SENATOR BEN SASSE 

Senator SASSE. Thank you, Mr. Chairman. Thank you for the 

welcome. And, Ranking Member Brown, I look forward to working 

with and learning from you and all of my new colleagues. Mr. 

Chairman, thank you for your leadership in beginning with this 

important strategic issue, and in the interest of getting to our distinguished witnesses, I ask that my prepared remarks be made a 

part of the record. 

Chairman SHELBY. Without objection, it is so ordered. 

Senator SASSE. Thank you. 

Chairman SHELBY. Senator Heitkamp. 


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STATEMENT OF SENATOR HEIDI HEITKAMP 

Senator HEITKAMP. Thank you, Mr. Chairman, and I can assure 

Senator Corker and Senator Donnelly, the worst seat in the house 

is where now my friend Jerry Moran sits. Enjoy the backs of the 

heads of the witnesses and not being able to read their placards, 

because focusing is always a good thing over there. 

But I only want to add one thought, and I think Senator Corker 

is really the only person who has talked about this. A divided Congress is not in the best interest of our national interest, especially 

when we are talking about something that is the most significant 

challenge that we have to our national security and the security of 

the world today. And so it is critically important that we listen. It 

is critically important that we pay attention to a path forward that 

can truly unite this country in a very critical common cause. 

And so I look forward to the witnesses. I look forward to another 

2 years of serving on this Committee. I will assure you, as someone 

who was new last year, this truly is one of the best Committees in 

the entire U.S. Senate, and I welcome all the new Members. 

Chairman SHELBY. Thank you. 

Senator Cotton? 

STATEMENT OF SENATOR TOM COTTON 

Senator COTTON. Well, I did not have a statement prepared, but 

since you called on me, I will thank you, Mr. Chairman, and the 

Ranking Member. I am looking forward to serving on the Committee. 

I know that several Members—the Obama administration has 

expressed concern that any prospective, conditional sanctions could 

cause Iran to walk away from the table, could minimize the cooperation we have received. Iran, however, is responsible for killing 

and maiming hundreds if not thousands of our troops in Iraq and 

Afghanistan. As those who served there know, they remain the 

number one sponsor of state terrorism. According to the State Department, they continue to prop up the Assad regime. They control 

the Iraqi Shiite militias. And just in the last couple weeks, an Iranian-aligned Shiite militant group has taken over the capital of 

Yemen. An Iranian general has been discovered working with 

Hezbollah on the outskirts of the Golan Heights to strike Israel. 

Fortunately, he was discovered by an Israeli missile. 

Iran has reached a defense pact with Russia, and Alberto 

Nisman, the prosecutor who is investigating the 1994 bombing of 

the Jewish community center in Buenos Aires, largely attributed to 

Iran and Hezbollah, has mysteriously turned up dead. 

So I have to ask: Is this the cooperation that our forbearance has 

achieved us? Can America afford any more cooperation from Iran? 

I yield back. 

Chairman SHELBY. Thank you. 

Senator Donnelly, you are not last today. 

STATEMENT OF SENATOR JOE DONNELLY 

Senator DONNELLY. Thank you, Mr. Chairman. It is an honor to 

be on this Committee. I appreciate your hard work and Ranking 

Member Brown’s, and I want to thank Senator Corker and Senator 

Menendez for your leadership on this issue as well. 


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I am new to this Committee, but from my seat on the Armed 

Services Committee, I believe the prospect of a nuclear-armed Iran 

is one of the most serious threats to our national security interests. 

I am looking forward to working with my Republican colleague, 

Senator Sessions, to address this threat and other proliferation 

concerns as we lead the Strategic Forces Subcommittee this year. 

And I appreciate the seriousness with which we shall debate this 

issue in this Committee. 

While there are honest differences in how to achieve our goals, 

I think it is important to recognize that there is a strong consensus 

about the importance of nuclear nonproliferation. The necessity of 

ending Iran’s nuclear weapons program is at the top of that list. 

The unanimity of support on this issue has fostered a strong, 

united effort bringing together not only our European partners but 

also Russia and China. We share a belief that not only is the threat 

of a nuclear-armed Iran too great to tolerate, but that Iran’s nuclear program could set off an arms race in the Middle East. 

Senator Corker and I heard that just last week when we were 

traveling over there. And that would deliver a severe blow to global 

nonproliferation efforts and making the world a more dangerous 

place. 

There is also a strong consensus we should make every effort to 

decisively end Iran’s nuclear weapons program through diplomatic 

means. While we often tout the strength of our military as the 

greatest fighting force the world has ever known, we were also the 

global leader in driving diplomatic solutions. Like many of my colleagues here today, I have spoken with leaders across the world 

and heard them say that they need our support, often saying if the 

United States does not lead the way, no one will. 

As with our military, we have many tools in our diplomatic toolbox, from international aid to bilateral and multilateral agreements 

to sanctions. We are here today to examine those tools and we can 

best use them to solve one of the single greatest threats to U.S. 

and global security. 

Through my years in Congress, I have long supported sanctions 

on Iran, and the benefit of hindsight has only reaffirmed my commitment to these sanctions. There is no question the strong international sanctions regime, built through legislation passed by Congress, brought Iran to the negotiating table. I pray these talks succeed. 

It is for that reason that I support legislation to strengthen sanctions should the Iranians fail to reach an agreement by the deadline the White House has set. The legislation this Committee will 

mark up on Thursday supports that aim. It would impose new 

sanctions only if these talks fail. 

By introducing this legislation now, we are sending a clear message that the time has come for Iran to stop playing games. However, while I strongly support this legislation, I also firmly believe 

we must give the P5+1 talks a chance to succeed. This effort is far 

too serious to become a political football and the consequences are 

far too great. 

Some have expressed serious concerns about passing this legislation prior to the March 24th deadline in the talks. Our first panel 

today will undoubtedly reiterate the Administration’s warnings on 


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what could happen if we act prematurely, and I take those concerns seriously. I cannot support any action that would needlessly 

undermine the chances for success in this endeavor. 

As such, while I intend to cosponsor the legislation, I believe the 

Senate should wait until after the March 24th deadline in the talks 

to consider this bill on the floor. If after that deadline passes Iran 

fails to reach an agreement on a political framework that addresses 

the parameters of a comprehensive nuclear agreement, we should 

move this forward decisively. This deadline is a critical test of 

Iran’s intentions. And while I am realistic about Tehran’s willingness to play fair, I will give them until March 24th to prove themselves to us and to the world. 

Thank you, Mr. Chairman. 

Chairman SHELBY. Senator Rounds. 

STATEMENT OF SENATOR MIKE ROUNDS 

Senator ROUNDS. Thank you, Mr. Chairman and Ranking Member Brown. I look forward to participating in these hearings. I also 

look forward to hearing the testimony from our witnesses today. 

Therefore, I have an opening statement that I would like, with 

your permission, to have submitted for the record, and I will yield 

the rest of my time back. 

Chairman SHELBY. Thank you. Without objection. 

Chairman SHELBY. Senator Reed. 

STATEMENT OF SENATOR JACK REED 

Senator REED. Thank you very much, Mr. Chairman, and I am 

at this point convinced that it is not the right time to pursue new 

sanctions legislation, and doing so could diminish our security, not 

enhance our security. 

In the past, Congress has led the charge for more aggressive and 

expansive sanctions, indeed in front of many Administrations. And 

the Obama administration’s aggressive implementation of the sanctions regime, together with the international coalition, the P5+1, 

have brought Iran to the negotiating table and led to the Joint 

Plan of Action. While it is not a long-term solution, we have seen 

tangible effects that the Joint Plan is having some effect. 

Since its implementation in January 2014, the Iranians have 

taken steps to halt, and in some cases roll back, aspects of their 

nuclear program, particularly on three possible paths to a bomb: 

enough 20 percent enriched uranium for one bomb, the installation 

of next-generation centrifuges, combined with the growing stockpile 

of 3.5 percent enriched uranium, and fudging and advancing the 

plutonium track at the Arak reactor. 

Moving forward with new, unilateral U.S. sanctions at this time 

risks undermining the negotiations and could jeopardize chances to 

secure additional gains through a comprehensive agreement. If negotiations are taken off the table, then the course of action before 

us will be even more challenging, of higher risk, and potentially 

without our international partners. 

Moving forward with sanctions gives one of the most onerous and 

brutal regimes in the world the ability to walk away and attempt 

to avoid blame. Doing so could also drive a wedge between the 


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United States and our international allies, and this international 

coalition is as important as unilateral American sanctions. 

Earlier this month, British Prime Minister David Cameron stated that further sanctions, in his words, ‘‘could fracture the international unity that there has been which has been so valuable in 

preventing a united front to Iran.’’ This view has been echoed by 

top-level P5+1 officials, calling on Congress to give negotiations a 

chance and hold off on sanctions. 

It makes little sense to decide now what we will do if negotiations are not successful. We should give these negotiations a 

chance and wait to see if a comprehensive agreement can be 

reached. With an agreement, Congress can make a thoughtful determination on the merits and act quickly and decisively to respond 

with a much higher probability of international support. Without 

an agreement, Congress must and will act. It is at that point, not 

now, that we should move decisively. 

To be clear, given the nature of the Government of Iran, any 

agreement reached between the P5+1 and Iran must meet rigorous 

standards. But such a peaceful resolution to Iran’s nuclear program 

will not be possible if we do not allow the negotiations to proceed 

to conclusion, and pursuing additional sanction legislation now 

would harm our best chance to achieve our objective of preventing 

a nuclear-armed Iran. 

Thank you very much, Mr. Chairman. 

Chairman SHELBY. Senator Scott. 

STATEMENT OF SENATOR TIM SCOTT 

Senator SCOTT. Thank you, Mr. Chairman, and I look forward to 

working with you and other Committee Members on this Committee. I think that we have heard so many opening comments 

today that I am going to submit mine for the record. I look forward 

to hearing the testimony from our witnesses. 

Chairman SHELBY. Thank you. 

Senator Crapo. 

STATEMENT OF SENATOR MIKE CRAPO 

Senator CRAPO. Thank you, Mr. Chairman. I, too, look forward 

to working with you and Ranking Member Brown on the Committee. As a number of Members have said, this is one of the most 

critical Committees in the Congress, and as you can see from the 

significance of today’s issue, this Committee handles issues that 

are critical to our Nation, not only with regard to our national security but with regard to our economic strength, our growth of our 

economy, and protection of and development of jobs in this country. 

So I welcome our new Members as well. This is an exciting Committee with a multitude of critical issues that we will need to work 

forward on. And I want to follow up on comments that Senator 

Corker and some of the others have made about the importance 

that we develop consensus in this Committee to move forward. This 

Committee has a record and a history of moving forward on the 

kinds of incredibly important issues that we deal with on a consensus basis, and it is my hope that we will be able to continue to 

develop that path forward. It is what will help us to bring solutions 

to this country. 


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I do also have a lot of the same concerns that have been expressed by others here that I will not reiterate at this point. There 

are a number of questions I have in addition to the issue of whether we should pursue sanctions legislation right now, and I am one 

who believes we should move forward decisively on new sanctions 

legislation now. But I also want to hear from the Administration 

about what the negotiations are yielding. I realize that not a lot 

can be discussed in a nonclassified environment with regard to 

that, but the fact is that the substance of the agreement that we 

are negotiating is as critical as the question of timing on new sanctions legislation. And because of that, I also want to raise the importance of the fact that whatever the new agreement is that is 

reached, if one is reached, it should be submitted to Congress for 

a vote and an approval in Congress. And I am very concerned 

about the fact that there is some indication that there will not be 

an opportunity for Congress to weigh in on this agreement once it 

is reached, if we are able to get to a point where an agreement is 

achieved. 

So, Mr. Chairman, again, I will withhold any further comments 

until we get to another situation in which we have the ability to 

question and even in a confidential meeting ask stronger and different questions. But I thank you for having this hearing and look 

forward to the future hearings and actions we will take on this 

issue. 

Chairman SHELBY. Senator Schumer. 

STATEMENT OF SENATOR CHARLES E. SCHUMER 

Senator SCHUMER. Thank you, Mr. Chairman. And first I want 

to congratulate you on Chairman and Senator Brown on Ranking 

Member. I look forward to working with you, Mr. Chairman, and 

certainly look forward to working with Sherrod under your leadership. I would just have the record show that Shelby, Brown, and 

Schumer are often in the gym at 7:30 a.m., and who knows what 

can happen when we are on those bikes huffing and puffing away. 

As many know, I have been a long supporter of strong sanctions 

to prevent Iran from achieving their desired goal of obtaining nuclear weapons. The leaders of Iran would have continued expanding their nuclear weapon capability, but sanctions made them 

think twice about it. The bottom line is very simple. It is sanctions, 

tough sanctions, not the goodness of the hearts of the Iranian leaders, that brought Iran to the negotiating table. 

We in Congress passed important legislation that put strong 

pressure on Iran. Senator Menendez and Senator Kirk deserve tremendous recognition for leading the charge, as they are doing now. 

Sanctions work best when they are multilateral, and getting the 

P5+1 and other countries like India and South Korea to be part of 

the sanctions regime helped make the sanctions all the more effective. And in this regard, I want to give a shout-out to President 

Obama and his Administration and the gentlemen at this table. All 

of you deserve tremendous recognition. 

I have to say that critics of the President do not give him enough 

credit that he deserves for effectively lining up the nations behind 

the sanctions regime which brought them to the table in the first 

place. 


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Having said that, I believe the only way Iran will voluntarily 

stop their march to nuclear weapons is if they know tougher and 

tougher sanctions will be enacted if they fail to come to a strong 

agreement that prohibits them from obtaining nuclear weapons. 

That is why I support the Kirk-Menendez legislation, a bill that 

would increase sanctions on Iran if they are unwilling to come to 

a deal by the Administration’s extension deadline of June 30th. It 

is almost irrefutable logic that if sanctions brought Iran to the 

table, additional and tougher sanctions are more likely to cause the 

Iranians to give in, and give in more quickly, to reach a final deal 

that will prevent Iran from becoming a nuclear threshold state. 

There are a hierarchy of outcomes here. The worst possible outcome the world, the United States, and Israel face is a nuclear 

Iran. That would be devastating. Make no mistake about it. A nuclear Iran will lead to a nuclear arms race in the Middle East, the 

most volatile region in the world. The chance of an actual nuclear 

war occurring—and that would poison the whole globe, even if it 

occurred in one portion of the globe—is much greater, unfortunately, if Iran has a nuclear weapon. 

But once we all agree that a nuclear Iran is unacceptable, I think 

everyone agrees it would be better to come to that result with a 

strong negotiated agreement rather than by America or Israel, or 

both, having to take military action. So if you had to rank the hierarchies of solutions in order of desirability, the worst, a nuclear 

Iran; next, having to use the military option; the best, a negotiated 

agreement that is strong and tough enough and prevents Iran from 

being a nuclear threshold state. 

The President has said that he needs a little more time to come 

to this conclusion. Mr. Blinken in his testimony states the Administration’s goal is to conclude the major elements of a deal by March. 

Since a strong, negotiated agreement is the best solution, a solution that I hope we can come to, I, along with a group of my colleagues, many of whom are sponsors of the original Menendez-Kirk 

legislation, are releasing a letter that states we will not vote for the 

bill on the floor of the Senate until then. If by March 24th the Iranians have not come to an agreement, the letter states we will vote 

for the bill on the floor of the Senate at that time. 

Barring significant changes to the bill, I intend to vote for KirkMenendez in the Committee on Thursday so that a bill can be 

ready to go if the Iranians are incapable of demonstrating their 

real seriousness by March 24th. 

And let me just say one word about a proposed settlement, which 

I know Senator Corker—even though I was on the phone, I still 

heard what you had to say. 

[Laughter.] 

Senator CORKER. I enjoyed listening to your conversation while 

I was——

Senator SCHUMER. About a proposed settlement. There are numerous vital elements of a successful negotiated agreement, but 

one of the most important, the agreement must contain stronger 

language that allows inspections anywhere, anytime, unannounced. 

This is the only way to ensure that Iran complies with the agreement since I and most of us have little faith in the Iranian leadership. 


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Thank you, Mr. Chairman. 

Chairman SHELBY. Thank you. 

Senator Moran? 

Senator MORAN. Mr. Chairman, thank you very much. I will 

forgo an opening statement and yield back my time. 

Chairman SHELBY. Thank you. 

On our first panel today, the witnesses are the Honorable Antony 

Blinken, Deputy Secretary of State, United States Department of 

State; and the Honorable David Cohen, Under Secretary for Terrorism and Financial Intelligence, United States Department of the 

Treasury. 

Gentlemen, we welcome you both. Mr. Blinken, both your written 

and oral testimony will be made part of the record. You may proceed as you wish, Mr. Secretary. 

STATEMENT OF ANTONY BLINKEN, DEPUTY SECRETARY OF 

STATE, DEPARTMENT OF STATE 

Mr. BLINKEN. Thank you very much, Mr. Chairman. 

Chairman Shelby, Ranking Member Brown, and Members of the 

Committee, it is very good to be with you today to discuss where 

we are with our negotiations with Iran to verifiably ensure that its 

nuclear program will be for exclusively peaceful purposes going forward. 

Our core goals for these negotiations are clear and they are consistent: Any agreement must effectively cutoff the four pathways 

Iran could take to obtain enough fissile material for a nuclear 

weapon—two uranium pathways through its activities at Natanz 

and Fordow; a plutonium pathway, through the Arak heavy water 

reactor; and a potential covert pathway. Any agreement must require stringent access, monitoring, and transparency measures to 

maximize the international community’s ability to detect quickly 

any attempt by Iran to break out overtly or covertly from an agreement. Any agreement must give us confidence that, should Iran 

choose to break its commitments, it would take at least 1 year for 

it to produce enough fissile material to make a bomb. And any 

agreement must deal with the PMD issue, missiles capable of mating a nuclear weapon to a missile, and R&D. 

In exchange, the international community would provide Iran 

with phased sanctions relief tied to verifiable actions on its part. 

Such relief would be structured so that sanctions could be quickly 

reimposed if Iran were to violate its commitments. 

As we speak, negotiations continue among the P5+1 and Iran. 

They have been substantive; they have been serious. We have 

made progress on some of the key issues that separate us, but real 

gaps remain. 

Overall, however, we assess that we still have a credible chance 

of reaching a deal that is in the best interest of the United States 

as well as that of our allies and partners around the world. Our 

goal is to conclude the major elements of the deal by the end of 

March and then to complete the technical details by June. 

We believe we are negotiating from a position of strength. In the 

past, Iran could use the cover of talks to buy time and advance its 

programs. Thanks to the interim agreement we reached, the socalled Joint Plan of Action, or JPOA, Iran’s program was frozen in 


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many respects, rolled back in some, and international inspectors 

were given unique access to learn more about the program during 

the pendency of the interim agreement. Before the JPOA, Iran had 

about 200 kilograms of 20 percent enriched uranium in a form that 

could be quickly enriched to weapons-grade levels. It produced 

much of that material at the Fordow facility, buried deep underground. Today Iran has no 20 percent enriched uranium. Zero. 

None. It has diluted or converted every ounce, suspended all uranium enrichment above 5 percent, and removed the connections at 

Fordow that allowed them to produce 20 percent enriched uranium 

in the first place. 

Before the JPOA, Iran was making progress on the Arak reactor, 

which, if it had become operational, and together with a reprocessing facility, would have provided Iran with a plutonium path to a 

nuclear weapon. Once fueled, the Arak facility would be challenging to deal with militarily. Today Arak is frozen in place. No 

new components, no testing, no fuel. 

Before the JPOA, Iran had installed roughly 19,000 centrifuges, 

the vast bulk at the Natanz facility. Today 9,000 of those centrifuges are not operational. Iran has installed no new centrifuges, 

including next-generation models, and Iran’s stockpile of 4 percent 

low-enriched uranium is capped at pre-JPOA levels. 

And before the JPOA, inspectors had limited access to Iran’s nuclear facilities. Today the JPOA has enabled inspectors’ daily access to its enrichment facilities and a far deeper understanding of 

its program—its centrifuge production, its mines, its mills, and 

other facilities important to the program. And the IAEA has repeatedly reported that Iran has lived up to its commitments under 

the interim agreement. 

Just as we asked Iran to uphold its commitments under the interim agreement, we have lived up to our commitments to provide 

it with limited relief. But as my colleague will make clear, that relief is dwarfed by the vast amounts denied to Iran under the existing sanctions regime, which remains in force. Indeed, under JPOA 

and throughout its existence, sanctions pressure on Iran has increased, not decreased. 

This Committee is now considering legislation to impose additional sanctions on Iran should negotiations fail. And I know, the 

Administration knows that the intent of this legislation is to further increase pressure on Iran and, in so doing, to strengthen the 

hand of our negotiators to reach a comprehensive resolution. So 

while we appreciate the intent of this effort, it is our considered 

judgment and strongly held view that new sanctions at this time 

are unnecessary and, far from enhancing the prospects for negotiations, risk fatally undermining our diplomacy, making a deal less 

likely, and unraveling the sanctions regime so many in this body 

have worked so hard to establish. 

The new sanctions are unnecessary because, as I noted a moment 

ago and Under Secretary Cohen will elaborate on, Iran already is 

under acute pressure from the application of the existing sanctions 

regime. In recent months, that pressure has only grown stronger 

with the dramatic drop in oil prices. Should Iran refuse a reasonable agreement or cheat on its current commitments under the interim agreement, the Senate could impose additional sanctions in 


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a matter of hours, matching or going beyond what the House has 

already passed. The Administration would strongly support such 

action. Iran is well aware that an even sharper Sword of Damocles 

hangs over its head. It needs no further motivation. 

So new sanctions are not necessary, in our judgment, but they 

pose a real risk. They pose a risk, as we have talked about before, 

that Iran could use them as an excuse to walk away, citing a violation of the interim agreement. Even if the sanctions and trigger 

legislation are not a technical violation, they could be perceived as 

such and used by Iran as an excuse both to walk away or indeed 

to divide our partners from us. 

The trigger legislation is what is on the table right now before 

us. I appreciate very much the comments that Senator Menendez 

made a short while ago about a letter that he sent the Administration, which I have not had a chance to read. I heard Senator Schumer describe it as well. But we appreciate the recognition that our 

negotiators could use some additional time and space to pursue the 

diplomatic option in the absence of this legislation being passed. 

Let me just very quickly cite the concerns that we have even 

with trigger legislation, were it to be passed during these negotiations. 

First, as I noted, this could give Iran an excuse to walk away 

from the negotiating table, violate the interim agreement, and pursue its nuclear program full tilt. Instead of keeping its uranium enrichment under 5 percent, as it has since the JPOA was signed, it 

could start enriching again at 20 percent or even higher. It could 

rebuild its stockpile of low-enriched uranium, going beyond preJPOA levels. It could stop the suspension of the work on the Arak 

reactor. And it could eliminate the access that inspectors have. 

Second, even if it doesn’t walk away or even if it promptly returns to the table, the process could, in fact, empower hardliners 

to press the negotiators to adopt much more stringent positions at 

the negotiations and make a conclusion of the negotiations much 

more difficult, if not impossible, using terms that we could not accept. We sometimes have a tendency to see Iran as a monolith, a 

country devoid of politics. In fact, the politics are intense. There 

are different camps, and in the event there was a dispute over 

whether new sanctions had been imposed by the United States, the 

hardliners could user that to press the negotiators to take positions 

that would make an agreement very, very difficult, if not impossible to reach. 

Finally, as has been noted—and this is most important, because 

ultimately what Iran thinks is much less important than what our 

international partners think. Our international partners believe 

that the United States, if it is perceived as acting prematurely 

through additional nuclear-related sanctions legislation in the absence of a provocation or a violation by Iran, their willingness to 

enforce the existing sanctions regime, much less add additional 

sanctions in the event of the failure of the negotiations, that is likely to be diluted. Their support, as has been noted, is critical. Without it, the sanctions regime would dramatically atrophy. 

Up until now, we have kept many of these countries on board, 

including countries for whom sanctions are clearly against their 

self-interest, their economic interest. We have kept them on board 


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because they believe we are serious about trying to conclude a diplomatic resolution of Iran’s nuclear program. If they lose that conviction, the United States, not Iran, risks being isolated, the sanctions regime would collapse, and Iran could turn everything it 

turned off under the JPOA with no consequence. In other words, 

we would lose everything we have achieved over the last decade in 

turning the tables on Iran, isolating Iran not the United States. 

We can debate whether any or all of these things would happen, 

but it is the judgment of those I believe are best placed to know—

the diplomatic professionals and other negotiators who have been 

at the table with the Iranians, with our partners for months and 

indeed for years, that is their conclusion. They believe the risks are 

real, serious, and as I said at the outset, unnecessary. That is their 

best judgment. So why run these risks and jeopardize the prospects 

for a deal that will either come together or not in the next couple 

of months. Why not be patient, especially with the program frozen 

under the interim agreement? There is nothing to be gained and, 

in our judgment, lots to be lost by acting precipitously. 

And, finally, as I noted, this is not just our view. This is the view 

of our closest partners. You heard Prime Minister Cameron a week 

ago. Some of you may have read the piece written by the foreign 

ministers of the United Kingdom, France, and Germany, and let 

me conclude with that. They wrote: ‘‘Introducing new hurdles at 

this critical stage of the negotiations, including through additional 

nuclear-related sanctions legislation on Iran, would jeopardize our 

efforts at a critical juncture. While many Iranians know how much 

they stand to gain by overcoming isolation and engaging with the 

world, there are also those in Tehran who oppose any nuclear deal. 

We should not give them new arguments. New sanctions at this 

moment might also fracture the international coalition that has 

made sanctions so effective so far. Rather than strengthening our 

negotiating position, new sanctions legislation at this point would 

set us back.’’

Thank you, Mr. Chairman. 

Chairman SHELBY. Secretary Cohen. 

STATEMENT OF DAVID S. COHEN, UNDER SECRETARY FOR 

TERRORISM AND FINANCIAL INTELLIGENCE, DEPARTMENT 

OF THE TREASURY 

Mr. COHEN. Good morning, Chairman Shelby, Ranking Member 

Brown, and distinguished Members of the Committee. Thank you 

for the invitation to appear before you today. 

As this may be my last opportunity to appear before this Committee before I take on other duties, I want to begin by expressing 

my appreciation to you, Chairman Shelby, Ranking Member 

Brown, and to all Members of this Committee for the courtesy that 

you have shown me over the last several years. 

There is no higher national security priority than ensuring Iran 

does not acquire a nuclear weapon, and President Obama has made 

clear that we will do everything in our power to prevent that from 

happening. 

For us at Treasury, that has meant working within the Administration, with Congress, and with international partners to impose 

the most powerful sanctions in history. And in many respects, the 


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sanctions have worked exactly as designed. They have driven Iran 

to the negotiating table because Iran’s leaders know that relief 

from sanctions can come only in exchange for taking steps that will 

guarantee that Iran cannot produce a nuclear weapon. 

As we sit here today, no one knows whether the negotiations ultimately will yield a comprehensive deal. But we, like you, are dedicated to testing fully the diplomatic path. As we do so, Iran’s economy remains subject to intense pressure from sanctions. 

Under the Joint Plan of Action, which has been in effect for a little over a year now, Iran halted progress on its nuclear program, 

rolled it back in key respects, and allowed unprecedented inspections of its enrichment facilities. In exchange, Iran received limited 

and reversible relief from some nuclear-related sanctions. 

Importantly, the JPOA left in place the full architecture of our 

financial, banking, oil, and trade sanctions, our terrorism and 

human rights sanctions, and our domestic embargo. This means 

that Iran is still cutoff from the international financial system. It 

is unable to export even half the oil it was exporting in 2012, and 

it is barred by sanctions from freely accessing most of its oil revenues and foreign reserves. 

These sanctions are not just words on the books. We vigorously 

enforce them. Since the signing of the JPOA, we have designated 

nearly 100 Iran-related targets and imposed over $350 million in 

penalties for sanctions evasion. Put simply, Iran still is not open 

for business, and its economy remains in a deep hole. Let me cite 

just a few metrics. 

In 2014 alone, our sanctions deprived Iran of over $40 billion in 

oil revenues. That is well over twice the total estimated value to 

Iran of the JPOA sanctions relief. Altogether, since 2012, our oil 

sanctions have cost Iran more than $200 billion in lost exports and 

oil proceeds it cannot access. 

Iran’s currency, the rial, has depreciated by 16 percent just since 

the signing of the JPOA and 56 percent since January 2012. And 

Iran’s economy today is 15 to 20 percent smaller than it would 

have been had it remained on its pre-2012 growth trajectory. 

Because of the scope and intensity of the sanctions Iran currently 

is subject to, and because of the economic pressure those sanctions 

continue to apply, Iran is negotiating with its back against the 

wall. Accordingly, we see no compelling reason to impose new sanctions now even on a delayed trigger. Indeed, we think new sanctions legislation is more likely to be counterproductive than helpful 

in the negotiations. 

Today Iran’s nuclear program is frozen in its economy, and thus, 

its negotiating team remain under enormous pressure because we 

have been able to hold together the international sanctions coalition. Enacting new sanctions now threatens to unravel this. 

If Congress enacts new sanctions now and the negotiations ultimately prove unsuccessful, our international partners may blame 

us, not Iran, for the breakdown in the talks. If that happens, overall support for the sanctions regime would then decline, making it 

more difficult to maintain and more difficult to intensify sanctions 

pressure. And if a breakdown in talks led to the demise of the 

JPOA, we would lose the additional insight into Iran’s nuclear proVerDate 0ct 09 2002 16:32 Jan 21, 2016 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 S:\DOCS\94013.TXT SHERYL

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gram and the restrictions on development that the JPOA has given 

us. 

Make no mistake: This Administration understands and embraces the power of sanctions. Sanctions are a key component of 

many of our most important national security initiatives. We are 

not sanctions doubters. But neither do we believe that layering on 

additional sanctions is always the right move. Sanctions are one 

tool in our toolkit, alongside diplomacy, military action, and the 

myriad other ways that we project power. 

If diplomacy does not succeed, the President said that he ‘‘will be 

the first one to come to Congress and say we need to tighten the 

screws.’’ But in our view, now is the time to give diplomacy every 

chance to succeed, not to create a new sanctions tool. 

Thank you, and I look forward to addressing your questions. 

Chairman SHELBY. Thank you. 

Secretary Blinken, many observers have questioned Iran’s willingness to negotiate in good faith. Even President Obama assesses 

the chances of a final nuclear deal at about 50 percent. Do you 

foresee today any circumstances under which the Administration 

would once again extend the negotiations? 

Mr. BLINKEN. Thank you, Mr. Chairman. As I noted, our goal 

and intent is to try and include the outlines of an agreement, the 

key elements, by the end of March and then to take the time to 

June, if we get there, to fill in the technical details. That is what 

we are focused on. That is what we are driving toward. 

As I sit here today, I cannot absolutely rule out that we would 

look for additional time. For example, if we get to June and we 

have the core elements of a deal in place and we are working on 

the technical details and it turns out that we need a little bit more 

time to dot all the I’s and cross all the T’s, we may come and seek 

it. 

Similarly, even in March, were we to get to a point where virtually all the elements of a deal had been worked out but we were 

short on one chapter, we might want a little bit more time in that 

initial period to do that. And I should remind you as well that the 

way this is structured, the actual deadline is June. We set ourselves the obligation of trying to reach the elements, the broad elements of a deal, by March. 

So a long way of saying our focus and intent is getting the elements of a deal done by March and everything concluded by June, 

but I do not want to arbitrarily say today that we could not under 

any circumstances come back and seek a little bit more time. It 

really depends on exactly where we would be. 

Chairman SHELBY. Would you concede that protracted negotiations are in Iran’s favor, that is, if their goal, as we believe, is to 

obtain nuclear weapons? 

Mr. BLINKEN. Actually, Mr. Chairman, I think what has happened over the life of the interim agreement is that this has 

worked very much in our favor. Again, in the past, we have had 

talks with Iran where it has been able to advance its program 

while it was talking. In this case, we have frozen the program in 

critical respects, we have rolled it back in some, and we have gotten more inspections access than we have ever had, and with very 


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limited relief, and as my colleague just laid out, that relief has 

been dwarfed by the sanctions pressure that remains on Iran. 

So actually throughout this period, I think this has benefited us, 

not them. 

Chairman SHELBY. But you just brought it up, and you said that 

you have effectively frozen the program. Nonetheless, Iran continues to produce low-enriched uranium and reportedly to work on 

more advanced centrifuges. We have seen this before. As President 

Rouhani has admitted, during the last so-called suspension of 

Iran’s program, some 10 years ago, Iran established a technological 

foundation for rapid subsequent progress. What evidence do you 

have today that Iran is not once again using the cover of international negotiations—that is, protracted negotiations—to advance 

its nuclear program? Because we hear the opposite. 

Mr. BLINKEN. Mr. Chairman, on the question of the stockpile, 

under the interim agreement its low-enriched uranium stockpile is 

capped at the level it reached before the agreement went into effect. So that stockpile has not grown, and indeed, the under 2 percent that it had, which it had a fairly vast quantity of, that also 

has been significantly diluted. 

In terms of the research and development and advanced centrifuges, you are absolutely right that no doubt Iran is seeking in 

various ways to continue to perfect other centrifuges. But under 

the agreement, it cannot do the critical kind of testing that is necessary for it to actually make advances. It cannot run gas through 

new centrifuges. The R&D is capped at where it was before the 

agreement went into effect. 

So are they tinkering with centrifuges and trying to build them 

someplace? Almost certainly. Are they able to do the kind of testing, running gas through them, that would materially advance 

them? Are they able to connect them together in a way that would 

demonstrate that they work? No. 

Chairman SHELBY. But that is a little more than tinkering, what 

they are doing, I believe. According to the International Atomic Energy Agency, Iran produced more than 500 additional kilograms of 

low-enriched uranium—that is a 7-percent increase in its holdings—between September and November of this past year alone. 

That is a 7-percent increase in only 3 months. 

Assuming that Iran continues its uranium production at this 

same pace and we reach no nuclear agreement, how much stronger 

will Iran’s nuclear capabilities be at the end of the Obama administration, say 2 years hence, compared to when the President assumed office? 

Mr. BLINKEN. Mr. Chairman, under the agreement, again, the 

low-enriched uranium stockpile is capped at a level at the end of 

the agreement that it was at before the agreement. Whether there 

are variations during the——

Chairman SHELBY. It might be capped. I am going to use that 

word pretty liberally there, that term. But they continue to pursue 

their goal, do they not, the best they can, anyway they can? 

Mr. BLINKEN. As long as it is consistent with the agreement. If 

it is inconsistent with the agreement and indeed the IAEA continues to report on a regular basis that it has lived up to its obligations under the agreement, it has not done that. 


BANKI-41578DSA with DISTILLER
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Chairman SHELBY. OK. Secretary Cohen, I will get to you because time is limited here. Last August, your office at Treasury 

and the State Department designated additional Iranian Government entities, and I will quote, ‘‘for activities that have materially 

contributed to or posed a risk of materially contributing to weapons 

of mass destruction and for efforts to support the development of 

nuclear weapons.’’ Doesn’t that mean that the Iranian Government 

is still trying to develop nuclear weapons even as we speak? 

Mr. COHEN. Well, Mr. Chairman, we did apply sanctions last August——

Chairman SHELBY. I know. 

Mr. COHEN.——as we have applied sanctions throughout the 

course of this Joint Plan of Action period, and obviously before as 

well. We do so against those entities that we see are violating our 

sanctions or seeking to violate our sanctions. 

There is no question that, as Deputy Secretary Blinken said, the 

Iranians remain interested in their nuclear program. These negotiations are designed to ensure going forward that Iran cannot 

produce a nuclear weapon. And in the meantime, we maintain our 

sanctions for the specific purpose of ensuring that we can disrupt 

every effort the Iranians may make to advance their program in 

the meantime. 

Chairman SHELBY. Secretary Cohen, why should we, and you—

of course, you are a big part of the Government—have any confidence in a negotiating partner such as Iran that continues to 

cheat, not just in terms of evading sanctions but by what a lot of 

us believe or have reason to know they continue to work on developing nuclear weapons? 

Mr. COHEN. Well, Mr. Chairman, I think the short answer is 

none of us should have confidence that Iran is going to live up to 

its current obligations or its future obligations. That is why the emphasis that many Senators have made here on verification is something that we are also very interested in. Deputy Secretary Blinken 

can speak to this at greater length, but I think we understand that, 

today and going forward, verification is critical. 

Chairman SHELBY. Secretary Blinken, this last here from me, I 

am concerned that Iran, which is designated by the State Department as the world’s leading sponsor of terrorism for so many years, 

continues to derail negotiations based on its so-called right to develop nuclear technology. I can hope that the U.S. negotiators are 

resisting Iranian efforts to claim this ‘‘inalienable right’’ because it 

was gravely undermine the proliferation regime, which we fought 

so hard to maintain. 

Mr. BLINKEN. We agree with you, Mr. Chairman. 

Chairman SHELBY. Can you confirm that it is the United States’ 

position, the State Department’s position here, that Iran enjoys no 

such right under either Article 4 of the Nuclear Nonproliferation 

Treaty or under any other provision or principle of law? 

Mr. BLINKEN. Yes, Mr. Chairman. We agree with you. It does not 

have a right to enrich. 

Chairman SHELBY. OK. Senator Brown. 

Senator BROWN. Thank you, Mr. Chairman. 

Mr. Cohen, you spoke of the difficulty of holding together our coalition. Mr. Blinken, you mentioned the potential of fracturing 


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international unity and the challenge of keeping the other five nations on board. 

Secretary Blinken, as you know, Prime Minister Cameron at the 

White House urged Congress not to move forward on new sanctions, including trigger sanctions taking effect later, now arguing 

it would undermine the P5+1 process. Talk through, if you would, 

especially as you emphasized, the sacrifice economically—I think 

something important to understand—that our five partners in this 

have sacrificed economically by being part of this coalition. Talk 

through what their views of this are, give examples how you think 

our allies might react in light of those comments. 

Mr. BLINKEN. Thank you, Senator. I think we have heard them 

address this very clearly. You alluded to Prime Minister Cameron. 

I quoted from an op-ed piece that the foreign ministers of France, 

the United Kingdom, and Germany wrote together, making clear 

their concerns about additional sanctions at this time during the 

midst of these negotiations that are reaching a critical juncture. 

The concern is that any such legislation, even trigger legislation, 

could be used and perceived as a violation, even if technically it is 

not, of the interim agreement and the obligation we undertook not 

to impose new sanctions while we were negotiating. That starts to 

sow doubt and confusion. It may send a message that we are not 

serious about reaching an agreement, and it is that seriousness 

that has helped hold this coalition together. 

The reason so many countries have been with us, in no small 

measure thanks to the painstaking diplomacy that we have done 

to hold them with us, is because they believe we are serious about 

trying to reach a diplomatic resolution of this problem. 

The moment they doubt that and lose faith in that, then the economic incentives many of them have not to abide by the sanctions 

regime may start to gain greater force, and they will say, ‘‘This is 

not going anywhere. We may as well start to cut deals. This is 

going to fall apart.’’

Now, maybe our core allies do not do that, although even some 

of our core allies I think would be very tempted. But keep in mind, 

one of the most important aspects of this—and Under Secretary 

Cohen can address this—are the oil sanctions and the fact that we 

have capped, and indeed reduced, the purchases of oil made by critical countries that are not part of the P5+1. They would like to buy 

more oil. Depending on where prices go, that can also be a big influence. They, too, will start to feel the pressure not to abide by the 

commitments they made and the pressure on Iran will be released. 

The other aspect is this: You know, the idea that we under those 

conditions would be able to impose additional sanctions on Iran I 

think would be incredibly difficult. I am even more worried—and 

Under Secretary Cohen may want to address this—about our ability to sustain the existing regime if we wind up in a situation 

where there is a dispute among us about whether we violated our 

commitments or not under the agreement. 

But the bottom line is this: If we thought it was necessary or indeed helpful to have it, to have these additional sanctions during 

the pendency of the negotiations, we would be the first to welcome 

it. But in our judgment, it does not give us anything that we do 

not already have. And so why run the risk, even if we cannot prove 


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this is what would happen, even if it is not 100 percent, there is 

a real risk, and the people who are closest to it believe that the 

risk is serious. Why do it when we do not need it? 

Senator BROWN. So your concern, Secretary, is if we were to do 

sanctions now with a trigger, our allies, part evidenced by the oped by the three countries and the EU Commissioner, EU Minister, 

would—that we would have more difficulty holding them and I assume China and Russia together to keep the sanctions as effective 

as they have been in making progress during the JPOA? 

Mr. BLINKEN. That is correct. I think the great strength of our 

position is the unity we have, that we forged with our partners in 

the P5 and indeed with other countries that are applying the sanctions regime. The strength of these sanctions goes in the first instance to what has been passed by Congress. That has been vitally 

important. But it is magnified exponentially by the fact that we 

have countries around the world who are implementing them. 

When that goes away, a lot of what we have achieved, a lot of what 

you have achieved in this room and in this body, will be diluted. 

Senator BROWN. Mr. Cohen, the President expressed concern last 

week that if Congress acts, in his words, prematurely on sanctions, 

it would potentially hand Iran a PR victory. It could lead other 

countries now cooperating with us, along the lines of Mr. Blinken’s 

comments, to reduce their commitment to international sanctions. 

Based on your experience building these sanctions painstakingly 

over the years, how difficult would it be to maintain them under 

these circumstances with our allies, what we do and what they do? 

Mr. COHEN. Senator, I think it would be difficult. I think there 

is a risk, as Secretary Blinken said, that we would lose some of the 

voluntary cooperation, and I would just cite one example here. 

In 2011, the U.N. Security Council passed a resolution, 1929, 

that called on member states to exercise vigilance over Iran’s banking activities, and there are several paragraphs in that resolution 

that did not demand anything from member states, but called on 

them to exercise vigilance. 

We have used that language, and we have used the very real 

sense that we are serious about a diplomatic resolution to get countries around the world, not just within the P5+1 but others—in 

Asia, India, Turkey, others—to apply really serious vigilance regarding Iran’s banking activities. That has had an enormous impact. 

If these countries begin to think that we are not serious about 

a diplomatic resolution, they can, consistent with their obligations 

under the United Nations Security Council resolution, be less vigilant, less active in how they look at Iran banking activity. That will 

have an impact on the sanctions regime. That will have an impact 

on economic activity in Iran, and it will all be to our detriment. 

Senator BROWN. And does that have a broader effect on our diplomatic efforts in the region and our standing in the world? 

Mr. COHEN. I would think so. I think it would—and, again, Deputy Secretary Blinken can speak to this, but I think if our partners 

and others around the world begin to doubt that we are serious 

about a diplomatic resolution here, I think it redounds to our detriment in many respects. 


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Senator BROWN. Let me ask one more question. Thank you for 

your forbearance. 

We have all talked about the role of Congress—certainly Senator 

Corker has sort of led the charge on that, and Senator Menendez 

has—on what we do with sanctions and what we do at the conclusion of the agreement, if there is an agreement that is acceptable. 

Talk to us about constructive things Congress can do in anticipation of an agreement to make sure that inspectors’ verification, bolstering sanctions, investigations, all of those kinds of things where 

we play a role in enforcing, making sure this agreement is enforceable, that the inspections are what they need to be, as both Senator 

Schumer and Senator Menendez said. Either of you. 

Mr. BLINKEN. Senator, first I would say that Congress has played 

a critical and indeed lead role getting us to where we are. It plays 

a critical and lead role now with the knowledge that Iran has that 

Congress can act with further sanctions if Iran walks away or reneges on its agreement. And, critically, Congress has to play a central role, if we get to an agreement, to make sure that Iran lives 

up to its commitments, because what we are thinking about doing 

should we reach an agreement is not to end sanctions immediately 

but to suspend them, and then test the proposition, test whether 

Iran meets a series of steps that it will have to agree to in the final 

agreement, and only at that point, over some significant period of 

time, would sanctions actually be lifted, which Congress would 

have to do since Congress imposed them. That is the most critical 

role, and I think it is really the enforcement regime that would be 

built into any final agreement with a snap-back provision so that 

suspended sanctions could be reimplemented very quickly should 

Iran renege on its commitments. 

Now, as to other elements going forward, one of the things that 

we have been doing and we will continue to do is to be in very close 

contact with you in a classified setting about where we are on the 

details of these negotiations. But it is very difficult to isolate one 

particular element and say this is what we have to have on X, Y, 

or Z, because all of these pieces have to fit together. And so I think 

being able to describe the totality of where we are in a closed setting I think will help you see where we are trying to get to. 

Senator BROWN. In closing, Mr. Chairman, so the Administration 

is committing to us that there will be a significant, important role 

of Congress throughout this process even if we—if we have an 

agreement as significant and important as you hope we get to. 

Mr. BLINKEN. That is correct. 

Senator BROWN. OK. 

Chairman SHELBY. Senator Corker. 

Senator CORKER. Well, I look forward to finding out more about 

that role during this questioning and answering. 

One of the reasons I like coming to hearings like this is to read 

the tea leaves and see where people are, and it is evident with our 

strongest Democratic leader on sanctions saying that he is not willing to vote on his bill until after March 24th, that if we want to 

speak with one voice and show strength to Iran, it is likely that 

we are not going to vote on the Senate floor on sanctions until after 

March 24th. 


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Mr. Blinken, I would just ask you, do you have a problem with 

that? 

Senator BLINKEN. Senator, I think that what I heard Senator 

Menendez say and then Senator Schumer say—not having seen the 

letter, I would not want to comment on it in detail, but on the basis 

of what I heard, I think it recognizes that our negotiators could use 

the time and space effectively, not having legislation pass before 

the end of March. I think the commitment to do that is something 

that we would see very favorably and would answer a big part of 

the problem that we had with the idea of the legislation, even trigger legislation, being passed now before the end of March. 

Senator CORKER. And I think that, you know, you know we have 

concerns about the limited access that we have to what Iran is 

doing. The JPOA allowed them to continue research and development. We know that they, during these negotiations, pumped UF6 

gas into an IR5 centrifuge. We know that. We caught them doing 

that. 

I have heard our negotiators tell us that Zarif could pass a lie 

detector test—Zarif, their negotiator, could pass a lie detector test, 

that they were never involved in any previous military dimensions 

because of the way Iran works, things are separated. So that somehow gives our negotiators confidence, and what it does for us is 

give us great concerns. 

Dr. Clawson’s testimony is going to state in just a minute that 

they have already passed a budget with lower petroleum prices, 

and they are willing to live with that. So I know that we have inflicted some pain, but the fact is they are willing to live with that 

pain because this program is so important to them. 

So we have concerns. As a matter of fact, as Joe Donnelly mentioned, we were in the Middle East last week, and the concerns are 

that Iran is here and the United States and its friends have been 

here, and during the negotiations most of the movement has been 

in the direction of Iran, and that is what everyone is concerned 

about. 

Your boss, Secretary Kerry, has been before us and told us that 

this has to pass muster with Congress, a final deal. Sanctions is 

about pushing toward a deal, but we would like for it to pass muster. You just said in testimony here with Senator Brown just a 

minute ago that it should pass muster. And the way we pass muster around here is we vote. We do not sit around and shoot the 

breeze at lunch. We vote. 

So what I have been pushing for—and I think numbers of people 

have alluded to it—and others have been pushing for is that if 

there is a final deal, we vote. Do you support that notion? 

Mr. BLINKEN. Senator, as I mentioned earlier, we believe Congress will have to vote at the end of any deal to eliminate the sanctions that would be part of any——

Senator CORKER. OK. Let me—since we have had this round before in Foreign Relations, I am going to say to the other Members 

what they wish to do is suspend, suspend for a long time, like probably beyond the time the President is here. What that means is the 

whole regime falls apart. If you suspend for that long, it is over. 

What we would like to do is vote. As Senator Kaine mentioned 

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ing of negotiations—of sanctions, and since we know Iran is perfectly happy with the suspension because they know the whole regime will fall apart once you suspend it, would it not be better if 

we just voted on the front end so that we could say yes or no on 

the front end? I do not know why you would object to that if, in 

fact, we have to vote a year and a half from now, 2 years from now, 

anyway? 

Mr. BLINKEN. Senator, I think there are a few issues at play. 

One is an issue, as we discussed last week in the Foreign Relations 

Committee, of the classic executive-legislative prerogatives. So any 

executive branch, Republican, Democrat, whoever is running it, 

will want to hold on to the prerogative of being able to negotiate 

nonlegally binding accords such as this one, as many Administrations have, and not have it voted up or down by Congress. That is 

one issue which we would have to address. 

But substantively, to your point, because I think it is critical, you 

know, if Congress had been asked to vote on the interim agreement 

within a month or so of its conclusion, I suspect that many Members who today agree that that agreement has produced real results and has advanced our security might in the first instance, because of the criticism the agreement received, have voted it down, 

and then we would be in a materially worse off place. 

So we think that, first, being able to test any agreement that we 

reach to make sure that Iran is meeting its commitments and 

doing so over an extended period of time before eliminating the 

final leverage, the critical leverage that comes with actually terminating sanctions, we think that would be a critical component built 

into the agreement. But I think Under Secretary Cohen can address the question that you raise, because it is an important question, about would the regime under suspension in effect fall apart. 

Mr. COHEN. I think it is instructive to look at what happened to 

the sanctions regime during the Joint Plan of Action, where we 

suspended some sanctions and continued to enforce the sanctions 

that remained in place. That is essentially the same model that is 

being conceived if there were to be a comprehensive agreement 

here. 

The sanctions did not fall apart. It did not deteriorate, the architecture did not collapse. And I think there are important reasons 

for that, most of which I would rather go into in closed session. 

Senator CORKER. Let us do that because I am out of time. 

Mr. COHEN. OK. But I think the critical point is with suspension 

of sanctions, with future termination, for all the reasons that Secretary Blinken said, it is important for the negotiations and for the 

deal. I think it is also important that this Committee not think 

that upon suspension the entire sanctions architecture collapses. 

That has not been our experience, and I think we have reason to 

believe that that will not happen. 

Senator CORKER. I would just respectfully say in closing that if 

it is perceived by the world that we have reached a deal that this 

Administration and the P5+1 have agreed is satisfactory, you will 

not hold, the sanctions regime will not hold. It will be a totally different dynamic where all of a sudden Iran is no longer a rogue 

state but they have now reached a final agreement with the P5+1. 


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So I would respectfully say that we do need to vote on any final 

deal. We vote on civil deals. And I would say actually since it appears we may be voting on sanctions immediately after March 

24th, maybe that is a place holder for Congress to even weigh in 

on whether they think, if a deal is reached, it is satisfactory or not. 

But I appreciate your testimony. 

Chairman SHELBY. Senator Menendez. 

Senator MENENDEZ. Well, thank you, Mr. Chairman. 

Look, for 20 years, when I was in the House of Representatives, 

I had been working on the issue of Iran when people were not paying attention. And no one wants the President to succeed more on 

achieving an agreement than I do. However, it is not just any 

agreement. It has to be an agreement that significantly moves Iran 

in a different direction. 

Now, Secretary Blinken, for the purposes of our colleagues here 

who do not sit on the Senate Foreign Relations Committee, last 

week under testimony you said, in response to my questions, that, 

look, this is no longer about dismantling Iran’s nuclear infrastructure; this is about getting at best, or maybe better, a 1-year alarm 

bell. Is that a fair statement? 

Mr. BLINKEN. Yes, Senator. The critical test is whether we reach 

an agreement that makes sure that it would take them at least 1 

year to produce enough fissile material for one nuclear weapon. 

Senator MENENDEZ. So we get an alarm bell, but we do not dismantle Iran’s illicit nuclear infrastructure. And I say ‘‘illicit’’ not 

just by U.S. standards but by international standards of Security 

Council resolutions. 

So let me just say, you spent a lot of time on perceptions, and 

last week I made a statement that I think was not taken in full 

context. The context is the more that I hear these arguments, the 

more concerned I am that we feed into the narrative there that 

Iran is the victim when Iran has original sin here by having an illicit nuclear program. 

But let me talk to you about perceptions. You talked about—you 

spent all of your testimony talking about Iran’s perceptions. Well, 

let me tell you what some of us perceive here in the United States 

of America. 

Number one is you see that the Iranians have a way to cheat and 

technically they are not in the Joint Plan of Action. So they cheated, and we, the United States, complained to the U.N. Security 

Council about violations of Iran trying to buy technology—for 

what? For the Arak nuclear reactor. 

They cheated when they fueled one of their centrifuges. They 

cheated when you, Mr. Cohen, last week in testimony said that, 

among the 100 times that you have sanctioned different entities, 

some of those times Iran was complicit with those who you sanctioned. So they are cheating in the midst of our negotiations. 

Now, in addition to that—we talk about the Congress forbearing—well, right now in Tehran there is legislation pending to 

deploy centrifuges that can enrich uranium more efficiently than 

ever to increase the production of a form of nuclear fuel that is just 

shy—just shy—of bomb-grade material. 

The Ayatollah has been talking about a resistance economy, and 

last week, the person whom we have got a lot of faith in, the IraVerDate 0ct 09 2002 16:32 Jan 21, 2016 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 S:\DOCS\94013.TXT SHERYL

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nian Foreign Minister, Zarif, said at the World Economic Forum 

that the global drop in the price of oil makes Iran less likely to 

agree to concessions on their nuclear program. Less likely to agree 

to concessions. 

So I do not know about you, but all of that put together, and so 

much more, says to me my perception here in the United States of 

America is that your aspirations, which I share, but I have mine 

dosed in a lot of reality because I do not want another North 

Korea. 

Now, what you are really telling us, when I hear your worries 

about what the Iranian perception is that, in fact, they are unlikely 

to make a deal, because if I, the Ayatollah, who is going to make 

this ultimate decision, think that a deal is good for me and my regime to stay in place, I am going to make it regardless of what the 

noise or the action is over here, especially action that would not 

take place until after June when you are supposed to have a deal 

fully consummated. Now, that is not going to stop me from making 

a deal that I otherwise want to make. It is just counterintuitive. 

So, look, I think you need to be looking at what Iran is doing 

right now, and I will just close by saying, you know, Iran can 

cheat, but we do not worry about that in the context of, you know, 

unsettling the Joint Plan of Action because technically it is not 

within it. But it is great if you can cheat outside of the Joint Plan 

of Action and get away with it. I am sure if we heard from the 

Saudis, the Emiratis, the Israelis, and others that they would have 

a different view than the Ambassadors that you have mentioned. 

I know that we have heard many times before the Senate Foreign 

Relations Committee when I was a member and when I chaired it, 

and even most recently, that, in fact, the world will come to an end, 

do not have sanctions, you are just going to split our coalition, you 

are going to drive the Iranians. And now the Administration heralds it as the singular reason why, in fact, the Iranians are finally 

coming to a negotiation. 

And just about every sanction that we have passed legislatively 

has needed 6 months to ultimately be invoked, and, of course, more 

time to feel a consequence. There have been one or two that were 

done more quickly, but overwhelmingly, they needed 6 months. So 

the time to implement any sanctions, assuming a deal does not 

work, is going to take a lead time of 6 months. Well, testimony before the Senate Foreign Relations Committee indicates that the 

Iranian ability to pass the nuclear threshold is well below the 6 

months, so those sanctions are inconsequential. And that is why 

some of us feel that the prospective nature of something that would 

not affect a deal that the Ayatollah wants to make is a guarantee 

that if they do not make it, we do not have the only option being, 

my God, they are going to cross the threshold. We either have to 

have a military strike or accept a nuclear-armed Iran. And that is 

not a choice that we want to have. 

Thank you. 

Senator CORKER. [Presiding.] Senator Vitter. 

Mr. BLINKEN. Could I just briefly address the Senator’s comments? 

Senator CORKER. Sure. 

Mr. BLINKEN. Very quickly, because I think——


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Senator MENENDEZ. Mr. Chairman, if he does, I want to be able 

to respond. 

Mr. BLINKEN. I will be very brief, because I think you raise some 

important points, Senator. 

First, in terms of what we are concerned about, we are most concerned about what our partners think, not what Iran thinks. That 

is what we are most focused on in terms of the possibility of additional legislation now. 

In terms of what Iran thinks, though, here is what our assessment is. I mentioned earlier that we sometimes have a tendency, 

all of us, to look at Iran as if it is some kind of monolith devoid 

of politics, when, in fact, the politics are incredibly intense. There 

are different groups. There are different camps. There are lots of 

people who do not want an agreement under any terms. And there 

are some people who would like to try to get an agreement not because they like us, not because they want to be nice to the United 

States, but because they think it is in their self-interest. They 

think that everything that we have achieved in putting this enormous pressure on them is something that they need to move beyond if the country is going to progress. They are more pragmatic, 

even if they are not nice guys. 

In thinking about how some of these things play in Iran, the reason we think about that at all is because we want to make sure 

that those who are in favor of trying pragmatically to reach an 

agreement that meets our needs and interests, that they are reinforced, and that those who are against an agreement under any circumstances are not reinforced. That is why this question also matters in terms of Iran, not because we care in a sense about what 

they think, but because we see how this evolves. We do not want 

the hands of the hard hardliners to be reinforced in this process, 

making a deal less likely. 

In terms of cheating, you are absolutely right that, first of all, 

there have been instances where we believe they were violating the 

interim agreement. We took it to the mechanism that was put in 

place to litigate these things, and when that happened, Iran 

stopped what it was doing. For example, on the IR5s, there was a 

difference of opinion. We carried the day. 

You are exactly right that outside of the interim agreement they 

are doing things in terms of procurement that we obviously oppose, 

which is exactly why during the agreement we have sanctioned 

more than 40 persons and entities who are trying to procure for the 

Iranian program. So we have been very vigilant about that. 

Thank you. 

Chairman SHELBY. [Presiding.] Senator Vitter? 

Senator VITTER. Thank you, Mr. Chairman. 

Mr. Secretary, Secretary Blinken, the State Department still considers Iran the world’s leading state sponsor of terrorism, correct? 

Mr. BLINKEN. If not the leading, certainly one of the leading. 

Senator VITTER. I think it is the leading, according to the State 

Department. That has not changed throughout this process, has it? 

Mr. BLINKEN. Right, correct. 

Senator VITTER. You would not expect it to change even if there 

were positive results of this negotiation from your point of view, 

would you? 


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Mr. BLINKEN. I think that is unlikely. 

Senator VITTER. Let me go back to one of Senator Menendez’s 

main points. Right now the goal of the Administration in this negotiation has essentially been dumbed down to a year warning flag, 

not dismantling the capability, not taking that away, but a year 

warning flag. Is that fair to say? 

Mr. BLINKEN. I would dispute the characterization of being 

‘‘dumbed down.’’ We have been——

Senator VITTER. At the start of this process, that was not the 

goal, was it? 

Mr. BLINKEN. The goal was to do two things. The goal was to 

make sure that the pathways that Iran has to a bomb—a plutonium path, a uranium path, and a covert path—were effectively 

cutoff. And to do that—and we have been at this for quite a 

while—we determined that making sure under any agreement that 

it would take them at least 1 year to produce enough fissile material for one bomb would answer that need. And it is worth pointing 

out two things. 

One, I think most experts believe that the idea that any country 

thinking about doing so would actually break out for one bomb’s 

worth of material is pretty unlikely. They would tend to want to 

accumulate four or five bombs’ worth. We have been very conservative about that, and that is very important. 

Second, as you know, the fissile material is not the only piece of 

this. Actually having a weapon, weaponization, is critical, and then 

having the means to deliver it. The reason the fissile material piece 

is what we have been focused on is it is the most visible thing. It 

is the thing that we can see, that we can verify, and that is the 

best way to give us the assurance we need that Iran would not 

pose a threat with a nuclear program. 

Senator VITTER. Mr. Secretary, in fact, at the very beginning of 

this process and this concept of negotiation, did the Administration 

talk about dismantling the capability, not having a year warning 

flag? In fact—take the words ‘‘dumbed down’’ out of it. In fact, has 

not that even aspirational goal moved enormously? 

Mr. BLINKEN. Senator, we can discuss in a different setting some 

of the details of where we are. I think what is critical is all of these 

pieces have to fit together, and you cannot judge one of these elements in isolation. So, for example, at different stages of negotiations, we may have been looking to do one thing in a particular 

area. That may change as we do something else in another area. 

Let me give you a concrete example just to be illustrative without 

getting into any detail. 

The question of the number of centrifuges that Iran might retain 

in an agreement is an important one because it goes to its ability 

to produce enough fissile material for a bomb in a certain period 

of time. But it is not the only element. The type of centrifuge, the 

configuration of the centrifuges, the stockpile—all of those things 

together——

Senator VITTER. I understand what——

Mr. BLINKEN. So that is why you have to—I think you have 

to——

Senator VITTER. My time is being eaten up, so let me expand and 

move on. Who on our side in terms of the U.S. Government is going 


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to make the judgment and the calculation about whether we have 

a year warning flag? 

Mr. BLINKEN. We have extraordinary expertise in this Government—scientists, engineers who work for the intelligence community, who work for the Energy Department, who work for the State 

Department——

Senator VITTER. And I will be the first to acknowledge that extraordinary expertise, but let me just ask you: Has that type of extraordinary expertise, including in the intelligence community, ever 

been wrong about these sorts of timetables before? 

Mr. BLINKEN. I imagine that there have been——

Senator VITTER. Well, you do not have to imagine. There is a historical record. Have they been wrong about these types of timetables before? 

Mr. BLINKEN. I would say that one of the things that we have 

done with the time that we have had during these negotiations is 

to bear—at least in my judgment and my experience; I cannot 

speak to others’ experience—in my experience, to bear down in an 

extraordinary way on the science and the technologies. But it is not 

just us. Our partners are critical parts of this, their scientists, their 

experts, not just the P5+1. We have an active, vigorous exchange 

with Israel, for example, their scientists, their intelligence community, all of us together. 

Senator VITTER. Let me just give you my conclusion, which is 

that all of these folks are very smart and very capable, and yet 

given the technical issues involved and given the lack of information involved, it is not like we have full access to everything we 

want. Our intelligence community and others have been wildly 

wrong before in similar judgments. So I think that is the historical 

record. I just want to point that out. 

A final question. There are recently foreign press reports about 

Iran’s continuing effort to buy S–300 missiles from Russia, which 

are air defense missiles, and how that is—after it was essentially 

dead and in the deep freeze because of the sanctions regime, that 

effort is now fully underway again. 

Where do you think that is? And is it not moving forward to 

some extent because Russia and others see this sanctions regime 

going away? 

Mr. BLINKEN. Senator, this is something that we are extraordinarily vigilant about. We have seen over the past couple of years 

various reports of different kinds of deals, including the one you 

cited, including oil deals involving Russia. I think if anything is 

motivating Russia right now to be looking at some of these 

things—and I should say we have—to our knowledge, this has not 

gone forward, has not been finalized, is not happening as we speak. 

I think what is motivating them, if anything, is the difference that 

they have with us over Ukraine and the extraordinary pressure 

that we have imposed on them over their actions in Ukraine. I 

think they are looking for other places to do business and other 

places to show that they are unhappy with us. But we have not 

seen this before. I don’t know. Under Secretary Cohen may have 

more on that. 

Senator VITTER. Thank you. Thank you, Mr. Chairman. 

Chairman SHELBY. Senator Merkley. 


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Senator MERKLEY. Thank you, Mr. Chair. 

Deputy Secretary Blinken, at what point do the extensions become counterproductive in that they essentially undermine any 

compulsion for the Iranian negotiators to reach an agreement? 

Mr. BLINKEN. I would say that, to date at least, precisely because 

we were able with the interim agreement to freeze the program in 

key respects, to roll it back in some others, and to get these enhanced inspections and access, that it has manifestly been a good 

thing for our security and the security of our partners going forward. And in exchange, as you heard earlier, the limited amount 

of relief that they have secured has been dwarfed by the remaining—almost the totality of the sanctions regime. 

So I think further extensions, were there to be any—and, again, 

that is not at all our focus, our intent. We are trying to drive this 

to a final agreement on the key elements by the end of March and 

then work on the technical details between the end of March and 

June. That is what we are focused on. I think it would—answering 

your question would depend entirely, or mostly at least, on the 

terms of any such extensions. If it got to the point where Iran was 

getting more and more in terms of relief under any kind of extension, I think you would have to answer the—you know, that question might be answered differently. 

So it really depends on the details, but our focus now is not extending anything. It is trying to bring this to a conclusion and 

making a determination, if we are not able to do that, that this 

process will have to come to an end because Iran is not serious 

about reaching an agreement. 

The $64,000 question is whether Iran can say yes to an agreement that protects our security interests and those of our partners. 

That is the answer we are still looking for. 

Senator MERKLEY. Can you picture a scenario a few months from 

now in which the United States concludes that it has not made 

progress, it is not going to make progress, that it essentially ends 

the negotiations, and holds the coalition together? 

Mr. BLINKEN. Yes, I can, and I think if during these negotiations 

it is demonstrated not just to us but to our partners who are negotiating and then our partners beyond the negotiations that Iran is 

simply unwilling or unable to make an agreement, then under 

those circumstances I believe that we will be in a position not only 

to sustain the existing sanctions regime, but to impose additional 

sanctions, including the sanctions being contemplated in Congress. 

But that is why it is so critical that we retain the high ground, that 

we do not create any excuses for the Iranians to divide and conquer, as they have done in the past, that we remain united as a 

group, as a coalition, that Iran remains the country isolated by the 

international community over its nuclear program, and that the 

United States does not get into a dispute with its partners over 

whether we have somehow violated our own commitments in terms 

of imposing new sanctions. 

Senator MERKLEY. You noted that there are many different elements inside Iran, and one of those is the IRGC, and I believe that 

at least a portion of the IRGC has benefited by controlling smuggling during the sanctions regime. What degree does that situation 


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create a force within Iran that is influential in trying to block any 

deal from ever being completed? 

Mr. COHEN. Senator, you are exactly right. I think the IRGC has 

tried to take advantage of the existing sanctions and their control 

over important aspects of the Iranian economy to benefit themselves. Frankly, that is one of the reasons why it would be beneficial to reach a comprehensive agreement with Iran, because it 

would ultimately impair the IRGC’s stranglehold on certain aspects 

of the economy. 

In terms of whether they are a blocking mechanism within Iran 

on reaching a deal, I would echo what Secretary Blinken said, 

which is there are politics in Iran, and I think our sense is the 

IRGC tends to be on the side of those who are less inclined toward 

a nuclear deal. But I think it is a complex question, and I think 

the last thing we want to do is to give fuel to the IRGC and their 

allies within Iran to undermine the prospects of reaching an ultimate arrangement here. 

Senator MERKLEY. Thank you very much. 

Chairman SHELBY. Senator Toomey. 

Senator TOOMEY. Thank you, Mr. Chairman. 

Secretary Blinken, I think you have already addressed this somewhat, but I want to be very clear. So, objectively speaking, would 

the prospective, contingent, trigger-based sanctions of the type of 

the Kirk-Menendez legislation, would passage of that and the 

President signing it into law, would that be a violation of the 

JPOA? 

Mr. BLINKEN. I think we would have to look very carefully at exactly how the final product was written and passed. So, for example, if a final product actually imposed additional sanctions, but 

then they were, in effect, suspended and then applied, that would 

be——

Senator TOOMEY. OK. I do not want to get too deep into 

hypotheticals that nobody has considered, right? I mean, what we 

are talking about is sanctions that would go into effect if and only 

if the Iranians choose to ensure there is no deal at that point in 

time. My understanding is that would not be a violation of the 

JPOA. 

Mr. BLINKEN. Again, I do think it depends on exactly how it is 

written if you are talking about a technical—but, again, it is not 

the question—the question really goes to how would this be perceived, how would it be seen, would it cause divisions among us 

and our partners? 

Senator TOOMEY. Let me address this, because this goes to the 

point that Senator Menendez was making, and I share his concerns 

very much, and maybe I can put it in a different way. 

So if the United States were to take this measure, which objectively is not a violation of the JPOA, and the Iranians decide nevertheless they are going to walk away from the table, that would 

strongly suggest to some of us that they do not want an agreement 

and they are looking for an excuse. 

And so one of the things that concerns me is what I perceive to 

be an apparent asymmetry in motivation here. We are supposed to 

avoid even offending Iranian sensibilities with legislation that is 

not even a violation of our agreement. Meanwhile, they blatantly 


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violate the agreement, and they continue their rampaged through 

the Middle East. They continue to support Hezbollah, prop up 

Assad, expand their footprint in Syria and Iraq, last weekend 

knock over a friendly government in Yemen, and we are not supposed to draw any inferences from their behavior, their willingness 

to defend us? 

So my concern is when you look at their behavior, you look at 

this apparent asymmetry and motivation, and then you look at the 

fact that we have moved the goalpost toward them—you know, we 

started off talking about eliminating enrichment capability. Now 

we are talking about just enough so that there is a 1-year heads 

up. It makes some of us worry about what kind of deal we are 

going to end up with. And I think that is a big part of the concern. 

Mr. BLINKEN. Senator, I think you are exactly right that there 

are some in Iran who do not want an agreement, and the last thing 

that we want to do in the course of these negotiations is to 

strengthen their hand and weaken the hand of those who are looking to get an agreement, again, not because they like us or want 

to be nice to us, but because they have determined it is in Iran’s 

self-interest. 

And so in the event there was a dispute over whether new sanctions had been imposed or not or we had violated our obligations 

under the interim agreement, those in Iran who do not want an 

agreement would say, ‘‘See, we told you. You cannot trust the 

United States. Walk away.’’ Or, ‘‘See, we told you. You have to 

drive for harder terms at the table, terms that’’——

Senator TOOMEY. I get all that, but——

Mr. BLINKEN. That is the danger. 

Senator TOOMEY. Like any society, there are complexities, and 

there are competing interests, and there are differences of opinions. 

But in this one, unusually, the final power is concentrated in one 

individual who really at the end of the day probably gets to make 

this call. 

Let me ask you another question if I could. I think if I remember 

correctly, you stated that it is your view and it is the view of the 

State Department that Iran has no right to enrich uranium. Isn’t 

it also true that they have no need? Isn’t it also true that if all they 

want is peaceful ability to generate electricity, they can purchase 

all the uranium that they need for that purpose? 

Mr. BLINKEN. Yes. We have said to them repeatedly almost exactly that, which is, if you want to have a civil program, you can 

certainly purchase that on the market. 

Senator TOOMEY. Right. 

Mr. BLINKEN. You are right about that. Here is what they say—

and I am not saying that they are right or that we have—just so 

you know what they claim. And, by the way, it is also highly suspicious that a country that is so bountiful in oil resources would 

want this type of nuclear program. 

Senator TOOMEY. Absolutely. 

Mr. BLINKEN. That certainly feeds our deep suspicion and lack 

of confidence. So I think you are right about that. 

Here is what they say: They claim that they do want to have a 

civil nuclear energy program so that they can devote oil to exVerDate 0ct 09 2002 16:32 Jan 21, 2016 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 S:\DOCS\94013.TXT SHERYL

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ports—that is one argument that they make—and remain energy 

self-sufficient. 

They also claim that they are preparing for post-carbon days. 

And, finally, in terms of getting it from other countries, they 

claim that in the past, when they have done such arrangements, 

the commitments that other countries have made were not kept. 

Those are the kinds of arguments we hear. But it is precisely because we are highly suspicious of their motivations, it is precisely 

because we know they had a program to weaponize at least until 

2003, which we believe now ended then, it is precisely because of 

all of that that any agreement we reach has to give us the confident we need to make sure that, as a practical matter, it will be 

useful for peaceful purposes. 

Senator TOOMEY. My time has run out, so I will stop. But it is 

precisely for those reasons that I think that it is vitally important 

that they not have the ability to enrich, the last point being that, 

as I know you are very well aware, the capability of enrichment, 

even at relatively low levels, is a short step from the capability to 

enrich to a weapons-grade level. And that is what I am concerned 

about. 

Thank you, Mr. Chairman. 

Chairman SHELBY. Senator Warren. 

Senator WARREN. Thank you, Mr. Chairman. 

As I mentioned earlier, we are all committed to a common goal: 

prevent Iran from developing a nuclear weapon. Right now, I believe our ongoing negotiations with Iran are the best hope for 

achieving that goal, and they should be our first priority, since undermining those negotiations risks escalation and risks the possibility of war. 

Now, Congress would gladly give our negotiators more leverage 

in these talks, but the President has repeatedly stated that if Iran 

violates the interim deal or if the talks fall apart, he will immediately call for new sanctions. And we know that would be ready 

to add more immediately. 

So, Deputy Secretary Blinken, I just want to be clear on this 

point. If Congress passes another sanctions bill now during ongoing 

negotiations, will that give our negotiators any new leverage? 

Mr. BLINKEN. In our judgment, no. 

Senator WARREN. Thank you. I agree, and I just do not see the 

upside to passing a bill now. So let us talk about the downside. 

Deputy Secretary, let us be clear on this one. Would passing a 

sanctions bill now strengthen or weaken hardliners inside the Iranian Government who are hoping to blow up the negotiations? 

Mr. BLINKEN. We would be concerned that the passage of new 

sanctions now would reinforce the hand of hardliners and weaken 

the hand of more pragmatic elements who are trying to get to an 

agreement. 

Senator WARREN. Thank you. 

We also need to consider the impact of a sanctions bill on our 

international partners, as you have mentioned earlier. Two experts 

and former Treasury officials wrote in the New York Times that it 

was the cooperation of our partners all around the world ‘‘rather 

than the severity of American sanctions alone that delivered results’’ in the negotiations with Iran. 


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But just recently, the foreign ministers of France, Britain, Germany, and the European Union all wrote that the new American 

sanctions ‘‘might also fracture the international coalition that has 

made sanctions so effective so far.’’

So, Under Secretary, if Congress passed new sanctions legislation 

now, how would that affect the willingness of our international 

partners to hang together to enforce the current sanctions? 

Mr. COHEN. Well, I think that what the foreign ministers said in 

that piece is a real concern, that their willingness to hang with us, 

to voluntarily work with us to impose sanctions, could be compromised. And it is a risk that is not worth taking since it does not 

provide us additional leverage at the negotiating table. 

Senator WARREN. All right. And, last, if diplomacy fails, we will 

have to move to other options, because all of us agree that an Iran 

nuclear weapon is unacceptable. So let us talk about what happens 

if the negotiations fail. 

If the United States had passed new sanctions legislation before 

that happened, would it be easier or harder for us to maintain an 

international coalition to work together to keep Iran from getting 

a nuclear weapon? 

Mr. BLINKEN. In our judgment, it could well be harder. It would 

certainly run the risk of muddying the waters and creating confusion among the coalition, and, in effect, we would end up arguing 

amongst ourselves instead of keeping the focus on Iran. 

Senator WARREN. All right. So thank you. 

We have every reason to be skeptical about the Iranian Government, and I think that has been made clear today. But our number 

one goal is to prevent a nuclear-armed Iran. If new legislation gives 

us no extra leverage and it increases the risk that the negotiations 

will blow up and it makes it harder for us to hold together an 

international coalition to keep Iran from getting a nuclear weapon, 

then I just cannot support it. 

Thank you, Mr. Chairman. 

Chairman SHELBY. Thank you. 

Senator Cotton—Senator Sasse. I am sorry. 

Senator SASSE. Tom is taller, but he is also younger. 

Chairman SHELBY. But you were first. 

Senator SASSE. Thank you, Mr. Chairman. 

Secretary Blinken, could you help us understand the evolution of 

the Administration’s position on sanctions going back to 2011, 

please? 

Mr. BLINKEN. Actually, I am happy to do that. I think Under 

Secretary Cohen could do that as well. If it is all right, maybe I 

will let him address that. 

Senator SASSE. Sure. 

Mr. COHEN. This Administration has been strongly supportive of 

sanctions going back to 2011 and, frankly, back to the beginning 

of this Administration. We have worked closely with Congress 

throughout. We have worked on our own to intensify the sanctions. 

I think it is actually important to set the record straight on this. 

If you look at the legislation that has been enacted over this Administration, beginning with CISADA in 2011—this was the legislation that said to banks around the world you can do business 

with the United States or you can do business with Iran, but you 


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cannot do both. That was legislation that the Administration 

worked very closely with Congress in devising and enacting. 

The oil provisions that required those who were purchasing oil 

from Iran to reduce significantly the amount of oil that they were 

purchasing or face being cutoff from the United States’ financial 

system, again, we worked closely—after an initial version of that 

provision was adopted, we worked very closely with Members of 

this Committee and with leadership to include provisions in that 

legislation that would enhance our ability to hold together the 

international coalition. 

And then, finally, I think what has been one of the most powerful sanctions that Congress legislated, which was the sanction that 

required when a country buys oil from Iran, that it goes into restricted accounts and can only be used for bilateral trade and that 

money cannot be moved around the world, that was a provision 

that this Administration came up with and provided to Congress 

to enact. 

So we have been foursquare behind intensifying sanctions legislatively. We have adopted more than a dozen executive orders. We 

have imposed sanctions on dozens and dozens and dozens of individuals and entities who have been involved in sanctions violation. 

So the evolution of our sanctions pressure has been to intensify, intensify, intensify, to drive Iran to the negotiating table. That 

worked. It got them there because it had the effect on their economy. 

What we are seeing now is that just because some is good does 

not mean that more is better. We got them to the negotiating table. 

They are there. They are negotiating in a substantive way. The 

idea right now is to see if we can close this deal and not to try and 

think we can force them to cry ‘‘Uncle’’ through additional sanctions. 

Senator SASSE. But isn’t it also the case, as Senator Menendez 

mentioned, there have been multiple times when the Administration has made an argument much akin to what we are hearing 

from you today. Subsequently, when the sky did not fall because 

of certain sanctions that the Administration did not request, you 

have later agreed that they were useful in driving the Iranians to 

the negotiating table. 

Mr. COHEN. And I think what is critical to bear in mind is that 

what we have done is we have worked with Congress in these sanctions to ensure that as the sanctions are enacted and as they are 

applied, we do it in a way to hold together the international coalition. There is a risk that I think is one that this Congress has been 

attentive to, needs to be attentive to, that we fracture the international coalition. It is not worth it to pass a piece of legislation 

that on its face looks like it will intensify sanctions if, in fact, it 

fractures the coalition. And so we have worked very closely with 

Congress in devising the sanctions and then in implementing the 

sanctions to hold together the coalition. 

Senator SASSE. And I have appreciated both of your testimony 

today about the reality of internal politics in Iran and the way that 

pragmatists may suffer in the face of these sanctions. I think you 

have made an argument there, but in the interest of time, I will 

not pursue the question I would like to ask about why our allies 


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would not also be able to see that conditional, prospective sanctions 

are being used apparently as an excuse rather than as a reality. 

But just to pivot in my last minute, could you explain to the 

American people how—in your testimony, Secretary Blinken, at the 

beginning, you said that you want to see the Iranians limited to exclusively peaceful purposes. How do you reconcile that with the exchange you had with Senator Toomey? 

Mr. BLINKEN. Thank you, Senator. This gets down to a fundamental question, which is, does any program that Iran has at the 

end of this—at the end of any agreement, does it allow it as a practical matter to break out to get enough material for a nuclear 

weapon or to try and develop it covertly? And what we are working 

to do in this Administration is to cutoff every single one of those 

pathways as a practical matter. 

In absolute terms, if they are enriching, does that mean that 

they could not enrich enough to get a weapon? Well, they could 

start to do that. But provided you have the access and the monitoring and the transparency to see it and then provided you have 

the time to do something about it, either impose additional sanctions to stop them or, if necessary, take military action, then as a 

practical matter their program will have to be for peaceful purposes, because if they try to do otherwise, they will be stopped. 

That is the test. So any agreement has to pass exactly that test. 

Senator SASSE. It just does not seem to be the same as a dismantling goal, which is where we began. 

Mr. BLINKEN. Yes, so, you know, we talk about enrichment and 

why do they need to enrich, why should we allow them. There is 

no right to enrich. We have been very clear about that. But as a 

practical matter, should they be left with any enrichment? And the 

problem is this: They have mastered the fuel cycle, whether we like 

it or not. We cannot bomb that away. We cannot sanction that 

away. We cannot argue that away. They have that knowledge. 

The real question is not whether they have any enrichment capacity. The real question is whether it is so limited, so constrained, 

so confined, so transparent, that as a practical matter they cannot 

develop enough fissile material for a bomb without us having the 

time to see it and to do something about it. That is the practical 

test. 

Now, in an ideal world, would we want them to have zero enrichment? Sure. Is that something they will ever agree to? I think the 

answer is probably not. And, second, our partners are unlikely to 

stick around in terms of implementing the sanctions regime if that 

has to be the bottom-line test. 

So we are focused on what is achievable in a way that materially 

answers our security concerns and those of our partners. That is 

what we are focused on. 

Senator SASSE. Thanks for the time. 

Chairman SHELBY. Thank you, Senator Sasse. 

Senator Heitkamp? 

Senator HEITKAMP. Thank you, Mr. Chairman. 

I have kind of three areas, and I do not want to be too argumentative, so I just want maybe a yes and no in following up on Senator Corker’s discussion with you. Just taking yourself out of this 

for just a moment and just looking at process, tell me what kind 


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of agreement you think is stronger and maybe more permanent, an 

agreement that is agreed to by the President of the United States 

with a divided Congress, or an agreement that has been approved 

by the President of the United States with the majority of Congress 

approving that agreement. 

Mr. BLINKEN. The latter. 

Senator HEITKAMP. Correct. You have spent a lot of time talking 

about the fragility or the internal politics of Iran, and I think I 

could make a pretty good argument that that tells me that the current sanctions need to be increased, because if you do not have a 

coalition around—if it is so fragile that simply a discussion or sanctions as Senator Menendez outlined, which would not take effect 

for a longer period of time, could, in fact, blow up the deal, then 

perhaps there is not enough political will within Iran to actually 

do a deal and a sustainable deal. And, so, my question is, as you 

are talking about this, what is the Iranian process for approval of 

an agreement? 

Mr. BLINKEN. It is not entirely clear whether, for example, their 

Majlis, their parliament, whether it would, and in what fashion or 

at what point it might have a say. But, here is the bottom line, and 

this was alluded to earlier, I think, by Senator Toomey. The Supreme Leader remains the first among equals. At the end of the 

day, he is the critical person in terms of blessing or rejecting a 

deal. But, he is not alone and he is susceptible to different groups 

that are pressuring him in different ways, some folks who do not 

want an agreement under any circumstances, others who believe it 

is necessary in order to help get Iran out from under the burden 

of sanctions and to help the country progress. 

There is a huge fight going on in Iran over exactly that. We see 

it every single day. Foreign Minister Zarif was called before their 

parliament because he took a walk with Secretary Kerry. So, there 

are folks who are trying desperately to make sure nothing happens, 

so——

Senator HEITKAMP. But to get back——

Mr. BLINKEN.——the point being that the process——

Senator HEITKAMP. I get what you are saying, Deputy Secretary, 

but would that not argue that this is extraordinarily difficult negotiations, because negotiations when people can exploit divisions on 

either side——

Mr. BLINKEN. Absolutely. 

Senator HEITKAMP.——make it extraordinarily difficult——

Mr. BLINKEN. Absolutely. 

Senator HEITKAMP.——and there has not been—you could argue 

there has not been enough economic pressure for the Ayatollah or 

for Iran writ large, not just the government and the government 

you are negotiating with, to basically make a firm commitment to 

resolving this issue in this process. And, I will just leave it up——

Mr. BLINKEN. I would say that they actually made a commitment—I am sorry, Senator—they have made an agreement under 

the interim agreement to take certain——

Senator HEITKAMP. Who made an agreement? 

Mr. BLINKEN. The government of Iran. 

Senator HEITKAMP. Yes. 


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Mr. BLINKEN. And, they made an agreement and they have kept 

to it. Now, on the—they have tried outside of the agreement, as 

has been alluded to, every single day to do all sorts of things to 

advance their program. We remain very vigilant. But, in terms of 

the agreement that they reached and they were able to reach as 

a government, the IEA has concluded on a regular basis that they 

have made good on those commitments. 

So, while we come into this with tremendous skepticism and certainly no faith in their good faith, the test is whether the agreement is tight enough, strong enough, transparent enough that if 

they try to get around it in some fashion, we will know it, we will 

see it, we will do something about it, and their knowledge of that 

will hold them to the agreement. 

Senator HEITKAMP. But, logically, the problem that at least I am 

having here is that it seems like we are talking about two different 

arguments. One is they are committed to this process, ready to go, 

and we could not possibly do anything here because it would upset 

that commitment. So, how strong is the commitment when we are 

looking at pretty modest, in my opinion, as we look forward, modest increases in sanctions? 

And, so, I want to get with, with Secretary Cohen, I want to get 

to another point, which is the oil sanctions. Can you just tell me—

and correct me if I am wrong—the oil sanctions are based on per 

barrel amounts and not dollar amounts, or is it the other way 

around? 

Mr. COHEN. It is per barrel amounts, yes. 

Senator HEITKAMP. It is per barrel amounts? 

Mr. COHEN. Well——

Senator HEITKAMP. Be careful. 

Mr. COHEN.——what we have—what the sanctions require is 

that importers significantly reduce the amount of oil they are importing from Iran. It is volume, not dollars. 

Senator HEITKAMP. OK. That is an important point, because if it 

were dollars, obviously, in a low dollar environment, Iran would 

not only be happy to have a dollar commitment, because they could 

move into markets that they had not had already, or low dollar 

value of oil. 

Can you explain to me your judgment on what low oil prices have 

done to the oil sanctions, and I will leave it at that because I am 

out of time. 

Mr. COHEN. The drop in the price of oil, the 50 percent drop in 

about the last 6 months, has had a significant impact on Iran’s 

budget process. They have—the way they budget is based on how 

much oil they are selling and what they think the value of that oil 

is. It is immediately brought into, by a formula into their budgeting 

process. They have been forced over the last several months to 

shrink their budget, restrict their spending, increase taxes, not allocate funds to their, essentially, their rainy day fund, because the 

drop in oil price has reduced the amount that they are able to have 

in their budget. 

So, it has, in effect, imposed another sanction on the Iranians. We calculate it to be worth about $11 billion in lost revenue to Iran 

during the course of this 7-month period of the extension, from 

June—from November to June. 


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Senator HEITKAMP. Thank you, Mr. Chairman. 

Chairman SHELBY. Senator Cotton. 

Senator COTTON. Mr. Blinken, 15 months ago, Secretary Kerry 

said that we could reach a deal with Iran in 3 to 6 months. What 

has happened? 

Mr. BLINKEN. I think, Senator, what has happened is that we 

have had, as you know, these very intense negotiations, multiple 

rounds of negotiations. In the course of those negotiations—this is 

incredibly, as you know, incredibly complex, and what has happened in the course of those negotiations is that on a number of 

issues, Iran has actually moved and gotten closer to where they 

need to be in order for us to make an agreement. In other areas, 

we have not seen sufficient movement. Our judgment has been that 

this has progressed enough, that they have demonstrated enough 

seriousness of purpose to warrant continuing it. Meanwhile——

Senator COTTON. All right. So, what was——

Mr. BLINKEN.——the program was frozen. 

Senator COTTON. Secretary Kerry obviously miscalculated when 

he said 15 months ago that we could reach a deal in 3 to 6 months. 

What was the main miscalculation? 

Mr. BLINKEN. I do not think, Senator, there was a miscalculation. I think what we built in, as you know, to the interim agreement was the possibility of extending it, and the extension would 

be based on a determination that we made that we had made 

enough progress, we could see the possibility of getting to ‘‘yes,’’ but 

we simply needed more time to do that and to test the proposition. 

That is exactly where we are now. 

Senator COTTON. Do you expect that you will reach an agreement 

by March 24? 

Mr. BLINKEN. I think the President said it was—how did he put 

it—less than 50–50. 

Senator COTTON. If you do not reach an agreement by March 24, 

will you walk away from the negotiations? 

Mr. BLINKEN. I think it depends entirely on exactly the details 

of where we are. So, as I said earlier, for example, if we conclude 

by March 24, the end of March, that we have not reached an agreement on the basic elements of a deal and that Iran is simply incapable or unwilling to get there, then, yes, I think we will have 

to conclude that this process needs to come to an end. If, on the 

other hand, we see that we have agreement on virtually all the elements but not every single one, then we may take some more time. 

And, indeed, remember, we have until June under the extension to 

see if we can get to yes. So, I think it really depends on the details. 

Senator COTTON. I mean, what possible action or lack of action 

by Iran could at this point cause the U.S. Government to walk 

away from these negotiations? 

Mr. BLINKEN. I think two things, Senator. First, if there were 

gross violations of the interim agreement, that would be a serious 

cause. 

Second, if we come to the conclusion, based on these intensive 

ongoing negotiations—literally, as we sit here, they are ongoing—

that they are simply not going to get to yes, that they cannot do 

it or they will not do it, that would cause us to say this process 

has come——


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Senator COTTON. Was Iran’s announcement that it is proceeding 

with two nuclear reactors a violation of the JPOA? 

Mr. BLINKEN. No. These are—as you know, it has a light-water 

reactor at Bushehr. It is allowed to have light-water reactors, 

which are proliferation resistant. There is no violation under the 

interim agreement or under the U.N. Security Council resolution 

for doing that. 

Senator COTTON. I mean, would you consider that a provocative, 

unhelpful act in the middle of sensitive negotiations? 

Mr. BLINKEN. Oh, sure. I think these kinds of announcements, 

absolutely, are trying to——

Senator COTTON. Would you consider the proceedings against 

Jason Rezaian, the Washington Post reporter being held, an ongoing—or, during the middle of these ongoing negotiations, a provocative act? 

Mr. BLINKEN. Absolutely. Senator, the Americans who are detained illegally, erroneously, wrongly by Iran need to be released 

irrespective of these negotiations——

Senator COTTON. Would you——

Mr. BLINKEN.——whether they succeed or fail, including Jason 

Rezaian. 

Senator COTTON.——consider the presence of a senior IRGC general with Hezbollah in Quneitra Province on the edge of the Golan 

Heights a provocative act? 

Mr. BLINKEN. Oh, absolutely. I mean, as you know and as others 

have said, Iran does things every single day in many parts of the 

region, and indeed beyond, that are highly objectionable to us and 

to most of our partners and that go to our security, which is exactly 

why, even as we have been working on this deal, we have been extraordinarily vigilant in cracking down on their efforts to procure 

for their weapons of mass destruction program, cracking down on 

their support for terrorism, building up the capacity of our allies 

and partners in the region to defend themselves against Iranian 

aggression. Absolutely. 

Senator COTTON. So, why is it that Iran can initially undertake 

needlessly provocative acts toward the United States and our partners, yet we are supposed to just simply look the other way while 

this Congress, considering legislation that clearly would not violate 

the JPOA, is supposed to consider the delicate sensibilities of socalled moderates in Tehran? 

Mr. BLINKEN. What we try to do, Senator, is, in effect, wall off 

the nuclear negotiations and try and see if we can reach an agreement, because if we do—if we do, and again, as you said earlier——

Senator COTTON. Well, I just——

Mr. BLINKEN. No, let me just emphasize this point, if I could. If 

we do, and if we, as a practical matter, eliminate their ability to 

develop a nuclear weapon, that is actually, over time, going to 

make it a little bit less likely that the kinds of provocative actions 

that you rightly cite, they continue to take, because they will not 

have the cover of that program to do it. So, we believe that even 

in these other areas, there is a chance that an agreement makes 

us better off than we are today——

Senator COTTON. Right——

Mr. BLINKEN.——but the point——


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Senator COTTON. I know that we have tried to wall off the nuclear negotiations. Iran has not. Ayatollah Khamenei has not. 

Kasseem Zamani [phonetic] has not. 

Mr. BLINKEN. We have not been sitting idly by. We continue to 

enforce vigorously the sanctions in all of these different areas, including the ones that are not part of the interim agreement. We 

continue to reinforce——

Senator COTTON. But, in the meantime, Iran now controls or has 

dominant influence in five capitals in the Middle East. 

Mr. BLINKEN. So, I think, you know, I would be happy to have 

this discussion about where Iran is or where it is not, but here is 

the thing. The people who are engaged in trying to negotiate this 

agreement, who, again, are not friendly to us, it is not that they 

like us, it is just that they are more pragmatic about where Iran 

needs to go if it is going to have a successful future——

Senator COTTON. But why would they stop——

Mr. BLINKEN. Our goal is to——

Senator COTTON.——if they are getting everything in slow motion that they would like in an end deal anyway? 

Mr. BLINKEN. Because they have, as we discussed, they have internal politics that are incredibly challenging. And, anything that 

we do that reinforces the hands of those who absolutely do not 

want to deal under any circumstances is going to weaken their 

hand and make it less likely that we get to an agreement that advances our own national security interests. 

Senator COTTON. My time has expired, Mr. Chairman. 

Chairman SHELBY. Senator Donnelly. 

Senator DONNELLY. Thank you, Mr. Chairman, and I thank the 

witnesses. 

You know, I am hopeful we can get to a good deal, but the question is, what is a good deal for the United States? So, when we look 

at what is our goal in negotiation, is our goal the 1-year break-out 

time you mentioned, or is it the practical needs for Iran to have 

a domestic energy program. 

Mr. BLINKEN. Thank you, Senator. The way we have thought 

about this consistently from the start is that Iran has basically four 

ways it can get to enough fissile material for a nuclear weapon. It 

can do that through a uranium enrichment program, which it has 

at Natanz and Fordow. Fordow is particularly challenging. That is 

the site that is buried, and that is where they were producing, before we stopped them, 20 percent. And, you will remember, for example, when Prime Minister Netanyahu came before the United 

Nations a couple years ago and he held up a picture of a bomb that 

was being filled to a red line. 

Senator DONNELLY. Right. 

Mr. BLINKEN. That was the 20 percent. We stopped that. We 

have eliminated that stockpile. Any agreement has to deal with 

that definitively. 

You have to also deal with the pathway at Natanz, which is not 

20 percent, but a larger and larger number of centrifuges and a 

bigger nuclear stockpile. 

Senator DONNELLY. But, will——

Mr. BLINKEN. And, then, Iraq—excuse me, the plutonium process 

is another pathway, and the COBER [phonetic] is another. The test 


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of any deal is whether, as a practical matter, we have been able 

to cutoff those pathways and give ourselves enough time if they try 

and get back on them——

Senator DONNELLY. Well, let me get back to my definition of 

practical needs to run a domestic energy program. How many centrifuges do they need to do that? 

Mr. BLINKEN. It depends entirely on the size of their domestic 

program. They could make an argument that if they wanted to 

have an expansive civil nuclear power program, which, again, we 

think they do not need——

Senator DONNELLY. Well, what is your view of how many centrifuges are needed to run a domestic energy program for Iran? 

Mr. BLINKEN. It depends on the size of the program. 

Senator DONNELLY. So, you are not going to give me an answer 

as to what you think? 

Mr. BLINKEN. No. I think, again, what is critical is—the centrifuges are a critical component of their ability to enrich uranium 

in a certain period of time that would be a real problem for us, that 

would get below that 1-year threshold I talked about. But, the 

other elements that are critical are the types of centrifuges, the 

configuration of the centrifuges, the amount of the stockpile. You 

have to put all of those elements together——

Senator DONNELLY. No, I understand there are many elements 

to this. 

Mr. BLINKEN.——and depending on that——

Senator DONNELLY. But, there is also is it a 1-year breakout or 

is it a domestic energy program, and when I was in the Middle 

East last week seeing some of our Arab friends, they said, look, the 

only thing that we want, we expect out of this, is just enough to 

meet practical needs. They did not talk about a 1-year breakout. 

They talked about practical needs. And, in their mind, they talked 

about a number of centrifuges in the hundreds. Is that the kind of 

parameters that we are talking about now? 

Mr. BLINKEN. I would be happy, Senator, in a——

Senator DONNELLY. In a closed session? OK. 

Mr. BLINKEN. Happy to do that. 

Senator DONNELLY. Well, let me ask you, in addition to that, that 

around the edges, Iran—the reports are that they continue to keep 

moving forward and that as we look at this, as time goes on, month 

after month after month, they continue to keep working around the 

edges. And, you know, it has been asked by others here, also, by 

the end of June, we will have been at this a year and a half. We 

want to succeed and we want to succeed in a way that our partners 

and friends, not only the P5+1, but our friends in the Middle East 

look at and say, it makes sense. So, is that, as you look at it—and 

this is following up on Senator Merkley’s question—the end of the 

line, or—and I know you keep saying, hey, if we find a couple 

things, we can keep going. Is there an end to this? 

Mr. BLINKEN. Yes, I think there is an end to it. If we make a 

determination that they are, as I said, unwilling or unable to get 

to an agreement that meets the national security needs of the 

United States and our partners, then there is clearly going to be 

an end to the process. And, as I said, our goal is to see if we can 

reach an understanding on the basic elements of a deal by the end 


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of March. I think we will have a pretty good picture by then about 

whether they are actually able to get to ‘‘yes.’’ That really is the 

big question. We have seen enough movement, enough progress, 

enough seriousness of purpose to warrant continuing, especially because the core pathways to a bomb have been—to enough fissile 

material for a bomb—have, in effect, been frozen under the interim 

agreement. 

Senator DONNELLY. Let me ask one more question, because I am 

almost out of time, and it is this. Following up on Senator Cotton’s 

comments in regards to Iranian soldiers in the Golan Heights, one 

action after another after another, and that is what is so concerning to our friends in the Middle East, is to see almost them 

being surrounded in this process. And, so, we see that throughout 

these negotiations. And yet, on the other side, we are told, look, if 

we talk about potential sanctions at some future point, they will be 

highly offended and walk away. These are grown-ups, as well. Why 

are we so afraid of—it seems to me if you want an excuse, you can 

find an excuse. If you want a deal, you can make a deal. And, we 

are still at the table plugging away, despite seeing one event after 

another. It seems to me what we are simply saying is we will basically do anything to not provide them with any excuse. 

Mr. BLINKEN. I would say, Senator, just two things, very quickly. 

First of all—and I appreciate very much the trip that you took with 

some of your colleagues—the security of our partners is paramount 

to us, so that is exactly why, when Iran has been acting out and 

acting aggressively——

Senator DONNELLY. And, not to interrupt you——

Mr. BLINKEN. Please. 

Senator DONNELLY.——but just to say, and they are extraordinarily concerned. 

Mr. BLINKEN. Well, one of the things that we have done over the 

duration of this Administration is to significantly increase their 

own capacity to deal with aggression from Iran. One of the things 

that is, as you probably heard when you were there, that we have 

done is we have significantly, for example, enhanced ballistic missile defense cooperation, including through a Gulf-wide cooperative 

system. We have designated the Gulf Cooperation Council as eligible for foreign military sales. They can buy weapons as an entity. 

We have, as you know, significant weapons sales to them. And, of 

course, we have a sustained program of consultations, security dialogs, planning, exercises. All of that goes to reinforcing their security. But, at the end of the day, all of this comes down to, I think, 

the question, as compared to what? 

Senator DONNELLY. Right. 

Mr. BLINKEN. So, that is really what we have to—I think, the 

question we have to answer. Now, if we could sustain in perpetuity, 

under any circumstances, the most draconian sanctions regime that 

we have been able to implement, that is an important element. 

But, the question we have to ask ourselves is, can we sustain it, 

and what would go into sustaining it or not sustaining it? Is military action the best alternative if we cannot sustain it? That is another question. So, none of these things, and this agreement, if we 

are to reach it, you cannot see it in isolation. You have to ask yourVerDate 0ct 09 2002 16:32 Jan 21, 2016 Jkt 000000 PO 00000 Frm 00053 Fmt 6633 Sfmt 6633 S:\DOCS\94013.TXT SHERYL

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self, compared to what, and then you rightly have to ask, what is 

the substance of the agreement. 

Senator DONNELLY. And, I know my time is up, Mr. Chairman. 

I just want to make one other comment, which is this, and I am 

sure you realize that if this agreement does not hit something close 

to practical needs, you may well have a regional arms race on your 

hands in the Middle East. 

Mr. BLINKEN. You know, Senator, I think where we would certainly have an arms race is if Iran gets a nuclear weapon, which 

is exactly—one of the reasons we are fundamentally determined 

that that not happen. But, I have to say, I do not think anyone is 

going to emulate what Iran has done and say that, oh, if they are 

allowed, for example, to have some limited, very constrained enrichment, we should get it, too, because Iran has just gone through 

and continues to go through isolation, economic pressure, pariah 

status, and any agreement that we would reach with them would 

have to have such far-reaching and intrusive access, inspection, 

and monitoring that no other country is subject to or would be subject to that I certainly do not think it would set a model for anyone 

to spark an arms race. 

Senator DONNELLY. Well, I simply pass on to you conversations 

that occur. 

Mr. BLINKEN. I appreciate that. Thank you. 

Chairman SHELBY. Thank you, Senator Donnelly. 

A couple of observations here. It seems to me, and I hope I am 

wrong, that the Administration seems to be chasing this deal, in 

other words, wanting a deal perhaps more than Iran wants a deal. 

We do not know that. Perhaps you cannot answer that. 

And, what begs the question around here, and we hear it all the 

time, is the Administration, is the Obama administration’s policy 

at this point to slow down the ability of Iran to obtain nuclear 

weapons, or, on the other hand, is it to eliminate Iran’s ability to 

have nuclear weapons? I think there are two different questions 

here. And, the phrase is batted around a lot by this Administration 

and others that it is unacceptable—whatever that means—for Iran 

to have nuclear weapons, yet they are headed down that road to 

build nuclear weapons, maybe slowly, as Senator Cotton says, or 

protracted, as I use the word. 

But, I think we have to realize, for the most part, that whether 

or not Iran obtains nuclear weapons, and they were to be in a position to use them could be an existential question for our ally Israel. 

So, we cannot answer all those questions today, but I appreciate 

the panel today. I hope that we are able to work together. But, I 

hope that you will not just chase a deal that we know from history 

is not smart. Thank you. 

Mr. BLINKEN. Thank you very much, Mr. Chairman. 

Chairman SHELBY. Thank you both. 

Mr. BLINKEN. I just want to reassure you, we are not chasing any 

deals. In fact, if we had been chasing a deal, we could have taken 

a deal months ago. It is precisely because we have been very clear 

that no deal is far preferable to a bad deal, we are not going to 

take one. So, I just want to reassure you on that point. 


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Chairman SHELBY. I think if you get a bad deal, you are going 

to have a real volcanic eruption from the Congress, and I think the 

people at the State Department know that. 

Mr. BLINKEN. Thank you, sir. 

Chairman SHELBY. I hope so. Thank you. 

I want to call up our second panel. They have been very patient 

today. On the second panel today’s witnesses are Dr. Mark 

Dubowitz, Director, Center on Sanctions and Illicit Finance, Foundation for the Defense of Democracies, and Dr. Patrick Clawson, 

Director of Research, the Washington Institute for Near East Policy. 

Gentlemen, you have been, as I said, very patient here today. 

You have heard a lot of this testimony. You have heard a lot of 

questions and other observations from me and other Members of 

the Senate Banking Committee. Your written testimony will be 

made part of this hearing record, which is very important, and I 

wish you would sum up what you want to say, although we have 

lost a lot of Members from the Committee, as quickly as possible. 

Make your points. Thank you. 

Which one of you want to go first? Mr. Clawson? OK. 

STATEMENT OF PATRICK CLAWSON, PH.D., DIRECTOR OF RESEARCH, WASHINGTON INSTITUTE FOR NEAR EAST STUDIES 

Mr. CLAWSON. Thank you very much, Mr. Chairman. Thank you 

very much for submitting my statement in the record. 

Over time, Iran adapts to any level of sanctions, and the Iranian 

authorities have repeatedly persuaded themselves that the United 

States is sanctioned out. There is nothing more we can do. And, so, 

continuously adopting new sanctions is the best way that sanctions 

can affect Iran’s leaders to resolve a nuclear impasse. 

As Senator Corker referred to, I explained in my statement that 

Iran’s new budget shows that the authorities have decided that 

their Plan A is that there will not be a deal, and they have come 

up with a budget which fits that situation, and they have taken a 

lot of very tough measures. In the last few years, Iranian government employees have seen their real salaries reduced by more than 

30 percent and the government proposes slashing it even more this 

next year. 

But, they are preparing themselves to take steps that go much 

further than anything that the International Monetary Fund has 

proposed, that the Greeks take in their situation, and we know 

that the Greeks did not like it, but the Iranian leaders have decided that this is a political necessity for them. And, so, they are, 

in fact, going to take the steps that will adjust to a $40 per barrel 

oil, and I will outline what some of those are. 

I mean, for instance, by reducing the value of their currency, the 

Rial, relative to the dollar, they will generate more local currency 

from each dollar of oil sold, and that would make a big difference. 

And, as we heard Under Secretary Cohen say, they can suspend 

their payments into the rainy day fund, the National Development 

Fund of Iran, and that will get them down pretty much to where 

they need for $40 a barrel oil——

Chairman SHELBY. Is time on their side? 


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Mr. CLAWSON. They think that we do not have any—there is 

nothing more that we can do, and so long as they think there is 

nothing more that we can do, they think that time, in fact, is going 

to be on their side. And, the genius of the Obama administration 

in its early years——

Chairman SHELBY. Is the question what we could do or what we 

will do? 

Mr. CLAWSON. Fair enough. But, in the early years of the Obama 

administration, there were constantly additional measures being 

introduced all the time, and so we were able to persuade the Iranian leaders that if you think it is bad now, just wait. It is going 

to get worse and worse and worse. And, when we have been on this 

now more than a year where we have not really done that much 

more, the Iranian leaders think we have reached as far as we can 

go and that they have adjusted to what we have done, including 

they think that we conspired with the Saudis to reduce the price 

of oil. They think we have thrown everything we can at them. And, 

so, they do not think that we can do more. 

And, under these circumstances, the Supreme Leader Ayatollah 

Khamenei, his attitude is he does not care that much about the 

suffering of the Iranian people anyway and he thinks it is not so 

bad if Iran is reducing its reliance on oil and going toward a resistance economy. So, we have got a real problem trying to impress 

him with our actions, and I think the only way we can do it is if 

we show that we can continue to make things worse for Iran. 

And, so——

Chairman SHELBY. Is that how you really bring him to the table? 

Mr. CLAWSON. We have to show that we can make things worse 

for them economically, politically, militarily, in a variety of ways. 

My colleague, Dennis Ross, had a piece yesterday saying we ought 

to be pressuring them politically on issues like those that Senator 

Cotton was raising about their presence on the Golan and about 

their activities in Syria and their activities in Iraq. We have to find 

various ways to press them. Here, today, we are talking about 

sanctions. There are other means to press them, too. 

I think it is great, for instance, that the price of oil has declined. 

I think we should take credit for that, even if we do not deserve 

it. If I can get credit for the sun rising in the east, I will be happy 

to take it. So, I would like to be able to say to the Iranians, it is 

bad today. It is going to get worse tomorrow. That is the best way 

to impress them politically. 

Chairman SHELBY. Thank you. 

Mr. Dubowitz. 

STATEMENT OF MARK DUBOWITZ, EXECUTIVE DIRECTOR, 

FOUNDATION FOR DEFENSE OF DEMOCRACIES 

Mr. DUBOWITZ. Chairman Shelby, Ranking Member Brown, 

Members of the Committee, thank you very much for asking me to 

testify. 

I first want to honor my good friend, Alberto Nisman, who courageously led a decade-long investigation of Iranian terror networks 

throughout Latin America and the United States and revealed how 

the Supreme Leader uses terrorism as an instrument of foreign 

policy. As we negotiate a comprehensive nuclear deal with Iran, we 


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would be remiss if we did not heed the lessons from Alberto’s exhaustive work and ask questions about whether Tehran’s negotiating tactics are simply aimed at expanding Iranian power. 

The regime’s use of terror in Iraq, Syria, Yemen, Lebanon, Gaza, 

Golan, and elsewhere has strengthened its regional dominance. 

Facing insufficient push-back from the Obama administration, this 

Iranian offensive has increased the Supreme Leader’s nuclear negotiating leverage. Nuclear negotiations are entering the sixth year 

for the United States and the 12th year for the Europeans, yet 

Western leverage has diminished as the Administration has lowered its nuclear demands to accommodate Iranian red lines and 

provided a financial lifeline, which stabilized Iran’s economy and 

reduced the regime’s fears of an economic crisis, and that is the key 

point, reduce the regime’s fears of economic collapse. 

Now, as we heard, Congress has imposed many of the most 

impactful sanctions over the objections of the Administration. The 

White House raised many of the same arguments against those 

Congressional sanctions as we heard today. Let me briefly respond 

to their arguments against deadline-triggered sanctions. 

First of all, the JPOA has not halted Iran’s nuclear program. 

Glenn Kessler of the Washington Post actually gave the President 

‘‘three Pinocchios’’ for his State of the Union Address where he 

made such a claim. Following a strategy pursued by then-chief nuclear negotiator Hassan Rouhani between 2003 and 2005, Tehran 

has masterfully suspended only reversible aspects of the program 

that it has not perfected while retaining the freedom to work on 

aspects it has not yet mastered. These include the military dimensions of Iran’s program, the development of long-range ballistic 

missiles capable of carrying a nuclear warhead, the testing of advanced centrifuges, and the accumulation of more nuclear material 

easily reversible from oxide form. Again, those stockpiles are accumulating. It is not correct to say they are diminishing. 

Number two, the JPOA does not prohibit passage of sanctions to 

be imposed after the expiration of the deadline in the agreement. 

We have heard testimony to that effect. The President’s hands are 

not tied. He has got multiple 30-day waivers that he can use. 

Number three, the Iranian threat to walk away from the negotiations if deadline-triggered sanctions are imposed is, in fact, 

counter-historical. Despite escalating sanctions, Iran has remained 

at or returned to the negotiating table over the past decade using 

talks to legitimize its nuclear weapons program and to avoid a 

U.S.-led financial and trade embargo. Indeed, if Tehran terminated 

the talks, such a move could trigger a complete embargo that could 

cripple its economy and put the regime’s survival in question. This 

is something that Congress should contemplate. An Iranian walkaway would also raise questions about a future deal’s durability. 

And, any acquiescence to this threat now would hand Iran effective 

veto power over the actions of American lawmakers or the next 

U.S. President. 

Number four, we are a superpower, and as a superpower, the 

United States has escalation dominance through economic, military, cyber, and covert action means to respond to an Iranian attempt to restart and expand its nuclear program. Now, Iran knows 

this and has historically escalated its nuclear activities cautiously 


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and incrementally so as not to invite a military response or to trigger crippling sanctions. 

Number five, the introduction of deadline-triggered sanctions 

may increase tensions in the P5+1, but it will not do material damage to the international coalition. Do we really believe that the 

international coalition is as fragile as Under Secretary Cohen and 

Deputy Secretary Blinken have suggested? The Administration did 

assess correctly that Moscow would not leave the P5+1 talks despite Ukraine-related sanctions. So, I ask you, would Vladimir 

Putin now leave the talks over deadline-triggered sanctions on Iran 

when he did not after Washington imposed sanctions on his own 

country? Russia, China, and the Europeans are concerned about a 

nuclear armed Iran, and they see the negotiations as a way to protect their own interests. 

Number six, deadline-triggered sanctions will undercut, not empower, the hard-liners in Iran. Thanks to the JPOA, Iranian hardliners no longer fear the collapse of their economy, and they have 

financially benefited from sanctions relief. They preserved essential 

elements of their military-nuclear program and the freedom to advance those parts that they have not mastered. They are on the 

march regionally. The goal of deadline-triggered sanctions is to convince these hard-liners that continued nuclear intransigence will be 

met with massive and escalating pressure. 

Number seven, new sanctions are needed despite the fall in oil 

prices. Between 2010 and 2013, Iran experienced a sanctions-induced shock to its economy. It has lived for 2 years without full access to its overseas oil revenues. This, in fact, has blunted the impact of falling oil prices. It is the de-escalation of sanctions pressure that has enabled a modest economic recovery, projected to continue despite these lower oil prices. 

And, finally, increased economic pressure on Iran will diminish 

the chances of war. As the Administration acknowledges, sanctions 

are the reason Iran is negotiating, but Iran today can advance its 

nuclear program in critical areas. It can build greater economic resiliency and extend its regional dominance. Without enhanced pressure now, a future U.S. President actually may be left with insufficient economic leverage to respond to Iranian nuclear intransigence 

and may be forced to resort to military action. 

In conclusion, deadline-triggered sanctions strengthen U.S. negotiating leverage and actually may increase the likelihood of peaceful nuclear compromise. 

Thank you for inviting me to testify. 

Chairman SHELBY. I have a few questions, and I will try to be 

brief, but both of you are well into this subject. 

Dr. Clawson, would you support new sanctions that would take 

effect only if no final nuclear agreement is reached, or what is your 

view here? 

Mr. CLAWSON. My great concern is that the talks will be extended indefinitely and that——

Chairman SHELBY. Protracted talks sometimes lead nowhere, do 

they? 

Mr. CLAWSON. Well, one of the subjects that we cover at my Institute is the Israeli-Palestinian talks, which are now entering 

more than 20 years, and some people might think they have not 


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been so productive in the recent years, but nobody wants to call 

them off. And, I, frankly, do not think anyone is going to want to 

call off the nuclear negotiations with Iran, so I suspect——

Chairman SHELBY. Is that a——

Mr. CLAWSON.——they will go on forever. 

Chairman SHELBY.——these protracted talks, just on and on, 

kind of be a figment of our imagination? 

Mr. CLAWSON. It is a feature of the Middle East. 

Chairman SHELBY. OK. And, sometimes, maybe it is real, not 

just our imagination. 

Dr. Clawson, you have spoken about Iran’s adaptation to the existing sanctions regime, both of you have. If we are basing our negotiating leverage on existing sanctions, which are not as effective, 

as we all know, as they used to be, is it not likely that an acceptable agreement will be harder to reach unless we leverage new 

sanctions as an incentive? In other words, Iran has got to have a 

reason to stay at the table, no? 

Mr. CLAWSON. Absolutely, sir. We need to find some way to get 

more leverage, and I listened to the distinguished administrative 

spokesmen earlier. They were saying, ‘‘We have got lots of leverage.’’ Well, if we have got lots of leverage, why do we not have a 

deal? 

Chairman SHELBY. Mm-hmm. 

Mr. CLAWSON. And, I would think that the more leverage we 

have, the better deal we could get, and so we need to find more 

ways for leverage. If they do not think that sanctions are the right 

way to get leverage, I would be interested in hearing what proposals they have for how to get more leverage in these discussions. 

Chairman SHELBY. Mr. Dubowitz, the bill this Committee is considering now would only impose additional sanctions if no deal is 

reached by the current deadline. Even then, the bill would still permit the President to use as many consecutive 30-day waivers as he 

likes to delay sanctions. That is my reading of the bill. Some argue 

that this is a problem because the waiver requires certification that 

Iran is not cheating on its obligations on the Joint Plan of Action. 

My question: If the Obama administration thinks this certification is too onerous in the proposed bill, does that not mean it expects Iran to cheat? In other words, I would assume they would 

cheat. They have cheated in the past. If so, how can Congress have 

any confidence in a final agreement, I guess is my bottom line. 

Mr. DUBOWITZ. So, Chairman Shelby, that is exactly right. I 

mean, Iran has been cheating on its nuclear program for decades. 

So, the assumption that Iran is going to stop cheating is, I think, 

in the area of fantasy. The problem is that when Iran cheats, they 

cheat incrementally. The sum total of their incremental cheating is 

always egregious, but they are very legalistic about how they interpret agreements. They exploit ambiguities and loopholes. And, they 

cheat incrementally, and they have done that through the life of 

the JPOA, and cheating with them becomes in the eye of the beholder. 

And, it is often the case that when you negotiate an agreement, 

you become the biggest defender of the agreement that you negotiated and you do not want that agreement undercut, despite eviVerDate 0ct 09 2002 16:32 Jan 21, 2016 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 S:\DOCS\94013.TXT SHERYL

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dence that suggests it is being violated, and I think we have seen 

evidence of that during the JPOA process. 

I would say one more thing, and I just want to echo what Dr. 

Clawson said. I think the Administration’s Plan B is to perpetually 

roll over the JPOA until the end of the Obama administration. I 

think that is one of the major reasons that they do not like the 

sanctions bill, because this sanctions bill says deadlines are deadlines, and I believe that the Administration assumes that if they 

do not get an agreement by June of this year, then they will make 

the argument and lay the predicate to continue rolling over the 

JPOA agreement. It is echoed by Administration officials, including 

the President, who say that JPOA has halted or frozen Iran’s nuclear program. 

Well, if that were true, then it would be a great agreement. The 

problem is, it is not true, and I think it is worth——

Chairman SHELBY. And we all know it, too, do we not? 

Mr. DUBOWITZ. Well, again, I would—worth underscoring Glenn 

Kessler, of the Fact Checker blog at the Washington Post, gave it 

‘‘three Pinocchios’’ because that is a grossly misleading statement 

for a program that continues to advance in areas that the Iranians 

have not mastered and perfected. 

Chairman SHELBY. The U.S. nuclear cooperation agreements 

with friendly nations, like those under the Atomic Energy Act, require consultation periods of up to 90 continuous session days of 

Congress. Some argue that a period of even 30 continuous days for 

Congress to evaluate a nuclear deal with Iran is pretty long. If 

longer delays are routine for the nuclear cooperation agreements 

with friendly governments, should Congress ask for a much shorter 

period for a nuclear deal with a rogue proliferator like Iran? In 

other words, we are not dealing with the British or the French or 

some of our other allies. Looking at Iran’s history, what are your 

thoughts here? 

Mr. DUBOWITZ. Well, again, I was struck by Senator Corker’s 

statement that Congress has played a role in 27 nuclear 123 Agreements, many of those with allies. 

Chairman SHELBY. Mm-hmm. 

Mr. DUBOWITZ. And, again, if Congress has played a role in nuclear agreements with allies, if we have had a 90-day period to consider these agreements on the Hill with respect to nuclear agreements, peaceful nuclear agreements with allies, I find it quite remarkable that there are some who are claiming that a nuclear 

agreement with a leading state sponsor of terrorism, that continues 

to—that has killed thousands of Americans, that has engaged in 

nuclear mendacity, and that is a repressive regime, that that 

agreement, A, should not get a fair hearing on the Hill, a vote, and 

B, that agreement should not at least sit for 30 legislative days so 

that Congress can actually do a serious consideration of the merits 

of that deal. 

Chairman SHELBY. Who wants a deal here the most, us, the 

United States and our allies, or Iran, at the moment? What are 

your feelings, Dr. Clawson? 

Mr. CLAWSON. We certainly have effectively persuaded the Iranian leaders that we want the deal more than they do, and that, 

as a result——


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Chairman SHELBY. So, in a sense, we are chasing the deal, are 

we not? 

Mr. CLAWSON. Sir, and that is one of the main reasons we are 

not catching the deal——

Chairman SHELBY. Mm-hmm. 

Mr. CLAWSON.——is because the Iranian leaders keep thinking 

that they are going to get better and better terms from us, and so, 

therefore, I mean, why agree to something if you just wait another 

6 months and get something additional? So, Iran’s leaders—one of 

the biggest barriers to reaching a deal is that Iran’s leaders think 

we want a deal so badly that all they have to do is wait and we 

will agree to more concessions. 

Chairman SHELBY. Do you agree with that, sir? 

Mr. DUBOWITZ. I do. I mean, the blizzard of economic statistics 

that you heard today, I think it actually obfuscates one major 

point, and that is that Iran a year and a half ago was on the verge 

of economic collapse as a result of the escalation of sanctions. As 

the result of a decision to de-escalate the sanctions, and to provide 

direct sanctions relief, the Iranian economy that was on its back is 

now on its knees, and is getting up to its feet. Now, it may be getting up to its feet more slowly as a result of the drop in oil prices, 

but the economy has stabilized. GDP is still projected to be positive. The inflation rate has dropped in half. 

And, so, that is the real way to assess sanctions and sanctions 

relief: Is the Iranian economy on the verge of collapse today? It is 

not. The Supreme Leader has now a stabilizing economy with moderate, albeit fragile, growth. And, he and the hard-liners and the 

Revolutionary Guards are not feeling a threat to their economy and 

a threat to the survival of the regime. Without that kind of threat, 

why would they negotiate? Why would they compromise? And, as 

Patrick said, why would they agree to a deal now and give up the 

prospect of future concessions when they see a track record of the 

Administration lowering its nuclear demands as time goes on? 

Chairman SHELBY. Senator Sasse. 

Senator SASSE. Thank you, Mr. Chairman. Thank you both for 

being here. 

You heard the Administration lay out their argument about internal Iranian politics and how alleged moderates or pragmatists 

would be weakened by the passage of even conditional prospective 

sanctions. You obviously disagree with that. Could you respond by 

explaining in a little more detail your view of internal Iranian politics. 

Mr. CLAWSON. Well, Iran’s Supreme Leader is quite a clever politician, and so the approach he has taken to these negotiations and 

to past nuclear agreements has been to say, ‘‘Well, I do not approve 

of them, I do not like them, but I am not going to stand in the 

way.’’ And, that puts him in a position where, if the deal turns out 

to work out pretty well, he can claim credit. He did not stand in 

the way. But, on the other hand, if things do not work out well, 

he can say, ‘‘Well, I told you it was not going to work.’’ And 

Khamenei, he has a long history of undercutting new Iranian presidents. The last three presidents, he has only allowed to have about 

2 years before he started centralizing power into his own hands 

and stopped them with their own initiatives. 


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So, I, frankly, think it is going to be very hard for President 

Rouhani to be able to keep these negotiations going very much 

longer on his side after this summer, and he is going to feel the 

criticism from the Supreme Leader harder and harder. So, I wish 

the Obama administration luck in their strategy of playing out 

these talks for the next 2 years. I am not sure that is going to 

work. I do not think the Supreme Leader is going to cooperate. But, 

in many ways, what the Supreme Leader does is use these different factions as a way to help him be able to claim credit no matter what happens and to avoid blame no matter what happens. 

Senator SASSE. So, to be a little too blunt, I share your pessimistic view, but I think what I heard, and I just want to make sure 

I hear it correctly, we are negotiating with a party that does not 

actually have the power to conclude any kind of deal that we would 

actually want. 

Mr. CLAWSON. It is a clear way of negotiating, is to send forward 

somebody who clearly wants a deal, but you are not sure he is 

going to actually be able to implement it. And, indeed, Senator, it 

gets worse, because what Khomeini did the last time there was a 

nuclear deal—back in 2003—was, he let the deal go ahead, waited 

until Iran had gotten a lot of the benefits, the sanctions momentum 

had fallen apart, and then he walked away from the deal. So, 

Khamenei could allow the deal to go into effect, then wait 2 years 

and announce that the West has not delivered what it has promised and so Iran is going to tear it all up. And, it will be really hard 

for us to reconstruct the sanctions regime if we have dismantled it 

over that 2-year period. 

Senator SASSE. Right. Mr. Dubowitz. 

Mr. DUBOWITZ. Well, I agree with that, and I would go further. 

I mean, I think Mohammad Zarif, who is the chief nuclear negotiator and the Iranian Foreign Minister, has created a, almost a 

Zarif distortion field, where when you are in his field, you actually 

believe that Zarif represents the Iranian regime. And, Zarif is a 

very good negotiator. So, even if he is committed to a nuclear deal, 

he has used the threat of blackmail, because he is the one who has 

said, ‘‘I will walk away from the table,’’ in order to handcuff us, in 

order for us to be in a position where we are not willing to ratchet 

up the pressure. 

And, I would say that my assessment of the interfactional disputes within Iran, I would say that there are three camps. There 

is the Rouhani-Zarif camp, who may be pragmatic, who may want 

a nuclear weapon but have a different strategy to achieve it, a 

much more tactical, incremental strategy of creating the right political climate to get what they want. I think there are the hard-liners who do not want a nuclear deal under any circumstances. 

And, then I think there is a middle group, who want a deal on 

their terms, on Iran’s terms, and are prepared to wait to get those 

terms. And, I think that these deadline-triggered sanctions are designed to put pressure on that middle group, that middle group, 

and put them to a choice between compromise or economic collapse, 

and I think that is what we have to aim at. We have to stop talking about only two groups, the pragmatists and the hard-liners. 

There is a third group and they are hard-liners in the sense that 

they want a deal on Iranian terms, but they are also pragmatic in 


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the sense that if we are willing to precipitate an economic collapse 

that challenges their political survival, we may be able to break 

their nuclear will. 

Senator SASSE. That was helpful. And, do you believe the Administration’s view that our coalition is so fragile that regardless of 

what is actually happening in internal Iranian politics, they will be 

able to use it as an excuse and our allies will have also believed 

the U.S. precipitated this outcome? 

Mr. DUBOWITZ. I am very concerned to hear that from the Administration, because if our coalition is so fragile right now, then 

I am very concerned about what our coalition will look like after 

a deal, when Iran starts cheating on an agreement and countries 

have already started going back into Iran and sinking billions of 

dollars into that economy, because at that point, we will be hearing 

the same argument. The Iranians have violated the agreement, but 

we cannot call them on that violation because the reality is we are 

not going to be able to meaningfully snap back the sanctions. 

You heard from Deputy Secretary Blinken this notion that we 

will snap back sanctions. We can legally snap back sanctions very 

easily by reimposing them in law. But, practically speaking, once 

you have changed the market dynamic, once you have gotten companies more willing to go back into Iran, once domestic lobbies in 

European capitals and elsewhere are lobbying against snap-backs 

or against reimposing sanctions, that international coalition becomes much more difficult to keep together. 

So, if it is really that fragile before an agreement, I am very concerned about what that coalition will look like after agreement. My 

sense is that it is not that fragile. The Europeans will hold with 

us. The Russians have held with us, despite imposing sanctions on 

their own country. And, the Chinese are there because they want—

they do not want to see a nuclear armed Iran and they do not want 

to see the impact that will have on oil prices and on their energy 

dependent economy. 

Senator SASSE. My time has expired. Thank you, Mr. Chairman. 

Chairman SHELBY. Senator Cotton. 

Senator COTTON. During the first panel, I asked Deputy Secretary Blinken under what conditions the United States might 

walk away from the negotiations, be it in March or June, and he 

gave a rather abstract, high level answer. Can either of you envision circumstances in which the U.S. Government will walk away 

from these negotiations? 

Mr. CLAWSON. In a word, no. I think the history of the IsraeliPalestinian negotiations illustrates what happens when these kinds 

of negotiations hit a brick wall, which is to say everybody says, 

well, that proves why we have to just climb harder to get over that 

wall. 

And, by the way, sir, if, in fact, somebody walked away from the 

negotiations, arguably, that would be the basis for progress, because sometimes the best negotiations have happened when the negotiations have been suspended, because it is a lot easier, in fact, 

for the two sides to have those quiet side talks without the glare 

of international publicity and it is quiet side talks where the most 

progress has taken place. 


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Senator COTTON. Yes. We conduct diplomacy to protect our interests, not we have an interest in our diplomacy. 

Mr. CLAWSON. Look, the—one of the interests that we have is, 

of course, appearing reasonable to the rest of the world. And, arguably, one of the reasons we would continue the diplomacy with Iran 

is not because we thought there was a snowball’s chance in hell of 

reaching an agreement, but because we wanted to look reasonable 

to the rest of the world, and that would be a powerful argument 

made inside the Administration. 

Senator COTTON. Mr. Dubowitz. 

Mr. DUBOWITZ. Well, I think the Iranian negotiating strategy all 

along has been to turn the interim agreement into the final agreement. I think that that has been their strategy all along. I think 

it is a strategy that they employed between 2003 and 2005, which, 

again, is to make temporary concessions on reversible aspects of 

their program that they have perfected and mastered in exchange 

for time to work on those elements of the nuclear program that 

they have not mastered. 

So, today, we believe they have not mastered the development of 

long-range ballistic missiles capable of carrying a warhead. We believe that they have not mastered the other military dimensions of 

the program. We believe they have not mastered the operation of 

advanced centrifuges capable of enriching uranium to weapons 

grade much more quickly, and, therefore, requiring smaller numbers, thereby facilitating a clandestine breakout. These are areas 

that we believe they have not mastered, which, by the way, happen 

to be the exact areas that are not adequately covered by the JPOA, 

or not even covered by the JPOA in some cases. 

So, those are the elements of the program they continue to move 

along that are not covered by the JPOA. And, in return, they did 

not get small, direct, reversible sanctions relief. What they got was 

an economy that is no longer collapsing, that is now stabilizing, 

and is projected to grow. So, from Iran’s perspective, they have 

walked out of this interim agreement getting exactly what they 

want. Now, if they can turn the interim agreement into the final 

agreement, then they have exactly what they want, because then 

they can get a bomb and a growing economy and regional dominance altogether. 

Senator COTTON. So, hard to imagine our Government walking 

away. Another argument that we have heard is imposing even conditional prospective sanctions at some point in the future would be 

misperceived by Iran. Does Ayatollah Khamenei and his key counselors have such an unsophisticated understanding of American 

law that they cannot understand the difference between immediate 

and prospective conditional sanctions? 

Mr. CLAWSON. Unfortunately, they have an extraordinarily poor 

understanding of American society and they have repeatedly miscalculated what we would do. And, so, I would assume ignorance 

on their part when it comes to American procedures and how the 

American system is working, I mean, these breathtakingly stupid 

statements that they will make on a regular basis and sincerely believe about American motivations and American actions. 

Senator COTTON. Mr. Dubowitz. 


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Mr. DUBOWITZ. Again, it is hard to know exactly what they understand. I think Zarif and Rouhani understand the difference. 

They understand the difference between deadline-triggered sanctions and sanctions that we are going to drop on you right today. 

So, I think that it is an important distinction. It is important for 

our Administration to make it very clear to the Iranians and to our 

allies that this is not a violation of the JPOA. And, I think, again, 

it is important for our Administration to make it very clear that 

we have a strong and vibrant international coalition that can withstand prospective sanctions. 

And, I think the Administration’s arguments are helping Iran. I 

understand the temptation the Administration has to use these arguments because it disagrees with the approach that is taken by 

Congress. But, in making these arguments, these arguments run 

the risk of backfiring on the Administration, being used against the 

Administration by the Iranians today or at a later stage, and I 

think it is undercutting our negotiating leverage and it is making 

it less likely that we are going to see a comprehensive agreement. 

Senator COTTON. Well——

Mr. CLAWSON. If I may add to that just very quickly, you saw 

that the Administration witnesses were much more quick to explain why the Iranians think the way they do than it is to put forward the American arguments as to why they are wrong. 

Senator COTTON. Yes. 

Mr. CLAWSON. And, so, what we have seen repeatedly is the Administration to say, ‘‘oh, the Iranians might think this,’’ instead of 

saying, ‘‘the Iranians might wrongly think this.’’ So, rather than 

‘‘they incorrectly perceive this,’’ they say, ‘‘the Iranians might think 

this.’’

Senator COTTON. Well, given that, would it be fair to say that 

perhaps the Administration opposes conditional prospective sanctions, not because they fear Iran does not want a deadline, but because they do not want a deadline? 

Mr. CLAWSON. I think the Administration does not want a deadline. 

Senator COTTON. Mr. Dubowitz. 

Mr. DUBOWITZ. Absolutely. I mean, if your goal—if your Plan B—

knowing what they know now, I think the Administration, if they 

were to take a really hard, honest look at these negotiations, has 

probably assessed that they are not going to get a full comprehensive agreement. So, if they are looking at a Plan B, I think their 

Plan B today is, well, at least we can just perpetually roll over the 

interim agreement, and we can do it for 2 years and then this will 

be the next Administration’s problem. I think with that in mind, 

they do not want a piece of legislation with deadline-triggered sanctions, which in any way would block that rollover. 

Now, again, the rollover—and, why do I think this? Because the 

President of the United States in his State of the Union Address 

said the interim agreement halted Iran’s nuclear program. Well, if 

that is true, if it did halt the program, then we should all want a 

rollover of the interim agreement. But, if we—as I have said and 

others have said, this has not been a halted program. It has been 

a program that essentially has provided the Iranians with the opportunity to move down multiple pathways, particularly the miliVerDate 0ct 09 2002 16:32 Jan 21, 2016 Jkt 000000 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 S:\DOCS\94013.TXT SHERYL

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tary nuclear pathways of the program that they have not mastered, 

in exchange for temporary reversible concessions on technical elements that they have mastered. Then, I think that we do not want 

the interim agreement to become the final agreement and I hope 

the Administration does not, either. 

Senator COTTON. Thank you both for your time and efforts. 

Chairman SHELBY. One last observation, perhaps a question. I 

know your time is valuable and it is getting late. March 24, you 

know, you have heard that date bandied around here, the Administration is saying to Congress, do not do anything until then. You 

will upset the negotiations and so forth. What is your judgment—

and I am sure you do not know for sure—of the prospects for us 

reaching a strong agreement, a good one, with Iran, where they 

would forsake nuclear weapons, basically, by March 24? 

Mr. CLAWSON. Iran is not going to forsake the pursuit of nuclear 

weapons capability. 

Chairman SHELBY. Yes. 

Mr. CLAWSON. They might agree to park it for a while——

Chairman SHELBY. OK. 

Mr. CLAWSON.——and let it wait for a period of time. But, they 

are not going to forsake it. That is not going to happen. 

Chairman SHELBY. It is just a slow walk, is it not? 

Mr. CLAWSON. Well, if there is an agreement before March 24, 

then I suspect both sides will pretend it is a big agreement when, 

actually, it is going to be a very tiny one. And, so, we may pretend 

to reach an agreement, but we are not going to reach a real agreement. 

Chairman SHELBY. Do you agree with that, Mr. Dubowitz? 

Mr. DUBOWITZ. Well, I do agree with that assessment. I mean, 

I think the only way we get a deal by March 24, with the technical 

details to be worked out by June, is if the Administration continues 

to lower its nuclear demands. I think if the Administration does, 

we will see a deal. But, we have effectively gone from a previous 

position of dismantle and disclose, right, dismantle the program 

and disclose the possible military dimensions of Iran’s program, to 

where we are today, which is disconnect, defer, and discuss. 

Chairman SHELBY. So, if this Administration ultimately wants a 

deal more than Iran, it is not going to be a good deal. 

Mr. DUBOWITZ. Well, I think, by definition. I mean, I hope that 

is not the case. I hope the Administration continues——

Chairman SHELBY. I do, too. 

Mr. DUBOWITZ.——to hold the line. But, I feel the Administration—they deserve some credit. They have come up with lots of creative proposals to try and accommodate Ali Khamenei’s red lines. 

But, the problem is that Ali Khamenei, he is keeping to his red 

lines. He is not moving those red lines. In fact, he is demanding 

that those red lines, in fact, be even brighter in escalating the capacity of the program. And, the Administration has tried to figure 

out a technical way to accommodate those red lines. But, again, at 

some point, we exhaust our creativity. We have to acknowledge 

that there is no zone of possible agreement with the Supreme 

Leader of Iran. 

Mr. CLAWSON. Sir, it is even worse. So long as we keep saying 

that that is the only rug we want and it is a beautiful rug and it 


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is a magnificent rug and we have really got to have that rug, the 

more the price goes up. 

Chairman SHELBY. And, they know we want that rug, right? 

Mr. CLAWSON. We keep telling them they want that rug. 

Mr. DUBOWITZ. Well, it is worse than that——

Mr. CLAWSON. The price goes up, and so we will not reach a deal. 

Mr. DUBOWITZ. Right. It is worse than we tell them that we want 

the——

Chairman SHELBY. We had better stay out of the bazaar, had we 

not? Thank you very much. 

Mr. CLAWSON. Thank you. 

Mr. DUBOWITZ. Thank you. 

Chairman SHELBY. The Committee is adjourned. [Whereupon, at 

1:17 p.m., the hearing was adjourned.] 

[Prepared statements, responses to written questions, and additional material supplied for the record follow:] 


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PREPARED STATEMENT OF SENATOR MARK KIRK 

With Iran’s nuclear threat continuing to grow with each passing day, I am grateful that the Senate Banking Committee today is holding a hearing to examine the 

effects of sanctions relief on Iran’s economy, to assess the state of nuclear negotiations with Iran, and to hear views from the Administration and experts on the strategic necessity of additional Iran sanctions. Chairman Shelby, I thank you for your 

leadership, and for your willingness to prioritize this important issue. 

Time is not on our side when it comes to stopping the clock on Iran’s nuclear 

bomb. In April of last year, Secretary of State John Kerry warned the Senate that 

Iran is technically ‘‘two months’’ away from a nuclear breakout. Yet, on July 18, 

2014, the Administration decided to extend nuclear negotiations for another 4 

months. Moreover, on November 24, 2014, the Administration granted Iran’s nuclear program yet another extension, this time for 7 months. 

While the Administration has now set a deadline of June 30, 2015, for a final nuclear deal with Iran, it’s far from certain that Iran will sign a comprehensive agreement before July, let alone agree to a ‘‘good deal’’ that can dismantle the Iranian 

terror state’s nuclear bomb-making capabilities and can ensure that our children 

never witness an Iranian-sparked nuclear war in the Middle East. 

What is clear, however, is that Iran’s economy continues to benefit significantly 

from the interim nuclear deal’s package of sanctions relief. On December 10, 2013, 

days after the Administration first announced the interim nuclear deal with Iran, 

Under Secretary of the Treasury for Terrorism and Financial Intelligence David S. 

Cohen wrote in the Wall Street Journal that ‘‘the relief package in this interim deal 

is economically insignificant to Iran.’’ Cohen added: ‘‘Iran will be even deeper in the 

hole 6 months from now, when the deal expires, than it is today.’’

But more than 12 months after Under Secretary Cohen wrote those words, we see 

now that Iran is far from being ‘‘deeper in the hole.’’ On December 24, 2014, Iranian 

President Hassan Rouhani bragged publicly that Iran’s economy had benefited 

greatly from the interim deal’s sanctions relief package. ‘‘The country’s economic 

growth was minus 6.8 percent 2 years ago, but the statistics issued by the Central 

Bank last night showed a 4-percent positive growth during the 6 months of the current [Iranian] year,’’ Rouhani said in a speech. ‘‘We have now finally managed to 

reduce the 40 percent inflation down to 17 percent.’’

Even if Rouhani is exaggerating Iran’s 4-percent growth rate over the last 6 

months, it’s obvious that Iran’s economy is growing rapidly. In fact, the International Monetary Fund (IMF) is projecting that Iran’s economy will grow by 2.2 

percent in 2015. In the United States, we would call a 2.2 percent growth rate a 

‘‘recovery’’ and 4-percent growth over the last 6 months an ‘‘economic boom.’’

It is precisely because the interim deal’s sanctions relief package is economically 

significant to Iran that we are no closer to a ‘‘good deal.’’ It is obvious that, without 

the threat of significant pressure and significant consequences, Iranian Supreme 

Leader Ali Khamenei will not make any significant concessions to decisively end 

Iran’s nuclear threat. 

Mindful of President Obama’s own admonition that ‘‘no deal is better than a bad 

deal’’ with Iran, Senator Bob Menendez and I are therefore working to introduce 

very soon bipartisan legislation that will lay down, as a Sense of Congress, parameters for what constitutes a ‘‘good deal’’ with Iran, impose a series of crippling sanctions measures if Iran fails to agree to a comprehensive agreement by June 30, 

2015, and create the time and space for Congress to review any new agreement with 

Iran and ensure that we have a ‘‘good deal.’’

Even the President conceded in the 2014 State of the Union that sanctions laws 

passed by the U.S. Congress with bipartisan veto-proof majorities forced Iran back 

to the negotiating table. It’s time for Congress to act once again. 

I look forward to working with Senator Menendez, Chairman Shelby, and other 

Members of this Committee to build a bipartisan veto-proof majority to enact the 

Kirk-Menendez Iran legislation to decisively end Iran’s nuclear threat once and for 

all. 

PREPARED STATEMENT OF SENATOR BEN SASSE 

Thank you, Mr. Chairman, for calling this hearing and making the Strategic Necessity of Iran Sanctions your first priority as Chairman. 

I look forward to serving on this Committee and constructively addressing the 

many important issues within its jurisdiction. 

I believe timing is absolutely critical on the issue of Iran Sanctions in particular 

and my hope is that today’s hearing will be a good first step toward improving the 


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outlook for our ongoing negotiations with Iran and successfully pursing our interests 

in the region. 

I commend Senators Kirk and Menendez for their leadership on this issue and 

was pleased to add my support to their legislation. 

First, we must bear in mind that preventing Iran from developing a nuclear weapon is one of the many national security issues the United States faces when crafting 

policies on Iran. 

The regime supports terrorism and terrorist groups throughout the Middle East, 

promotes sectarian violence where doing so serves its interests, and brutally represses its own people. 

As my colleagues know, Iran was first placed on the list of state sponsors of terrorism 30 years ago last year and continues to provide training, weapons, and funding to terrorist groups throughout the Middle East. 

Second, the regime’s radical theocratic ideology targets Christians, Jews, Baha’i 

and other religious minorities and subjects them to torture and death because of 

their religious beliefs. 

Deputy Secretary Blinken’s submitted testimony appropriately mentions Saeed 

Abedina, an American pastor who remains in an Iranian prison, and there are many 

others who are similarly detained or missing. 

According to the United State Commission on International Religious Freedom’s 

Annual Report 2014, the Iranian regime has arrested 400 Christians since 2010. 

The Report further noted that as of February 2014, at least 40 Christians were imprisoned, detained, or awaiting trial in Iran because of their religious beliefs and 

practices. 

I’m describing a regime that tortures and kills people because of their religion—

inside its own borders—and if permitted, will systematically exercise the same intolerance—and worse—beyond them. 

With respect to economic sanctions and their relationship to ongoing negotiations 

with Iran, I think the issue that faces us is rather straightforward, and I’m going 

to be blunt: 

I’m deeply concerned that the U.S. leverage in the negotiations over Iran’s nuclear 

weapons program is decreasing while the Iranian posture is growing stronger. 

Worse still is the impression that with the passage of time, and with each succeeding extension and missed deadline, the United States grows more willing to accept an agreement with terms that are corrosive to U.S. interests. 

Our job today, therefore—in this hearing, and moving forward with legislation—

is to examine how Congress can change, for the better, the trajectory of the negotiations. 

I support strong sanctions because sanctions—in the case of Iran—make diplomatic efforts effective, and Congress must do everything that it can to equip our 

negotiators with the tools necessary to maximize what is achievable through ongoing talks and forthcoming agreements. 

Economic sanctions are never the only tool, but they can be a very powerful 

motivator, as the history of negotiations with the Iranians demonstrates. 

Thank you, Mr. Chairman. 

PREPARED STATEMENT OF SENATOR MIKE ROUNDS 

Mr. Chairman, Ranking Member Brown, and distinguished Members of the panel. 

I welcome the opportunity to participate in this hearing. 

The history of sanctions on Iran is long and complicated and one in which this 

Committee has participated for two decades. As Governor of South Dakota in 2010, 

I joined our Legislature’s efforts toward this end when I signed a Divestment bill 

directing our State’s pension fund to divest itself from companies doing business in 

Iran. Yet, for too many years, the United States has been alone in the effort to try 

and end Iran’s nuclear program. Only recently has the wider international community embraced the idea of enacting economic sanctions against Iran to do the same. 

While we are negotiating with Iran, we must be clear: Iran cannot be allowed to 

obtain nuclear weapons. This is unacceptable. 

In 2012 and 2013 however, the United States and our allies, the P5+1, offered 

Iran significant sanctions relief in exchange for Tehran’s termination of limited specific nuclear-related activity and its commitment to transparency. After initially refusing to accept the offer, Iran accepted the November 2013 Joint Plan of Action. 

November 24, 2014, the P5+1 granted another 7-month extension of the current 

talks with Iran providing them with an additional access to $700 million a month 

in their sequestered oil revenues held in foreign accounts. 


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Iran came to these negotiations with the P5+1 in large measure because U.S.-led 

sanctions were beginning to cripple the Iranian economy. Yet sanctions relief given 

to Iran as a result of these negotiations has reduced the pressure on them to negotiate in good faith. We have been lenient with Iran in these negotiations. More must 

be done. 

During the negotiations, Iran rejected the P5+1 offers and stuck to their hardline 

positions. ‘‘The centrifuges are spinning and will never stop,’’ Iranian President Hassan Rouhani said on state television after the extension was announced in November 2014. 

Iranian Foreign Minister Javad Zarif, the man with whom Secretary of State 

Kerry is negotiating said, ‘‘I’m confident that any final deal will have a serious and 

not a token Iranian enrichment program coupled with removal of sanctions.’’

Despite comments like this, some will advocate easing the pressure on Iran to 

give it room to negotiate. I disagree. Iran’s history of negotiations with the allies 

shows that when you give them an inch, they take a mile. Any sign of weakness 

on our part emboldens Iran. 

Iran will not negotiate in good faith until the United States and its allies make 

it clear through strong action that if they do not agree to suspend their program 

leading to nuclear weapons, punishing economic sanctions will be re-imposed. These 

sanctions should be prospective and come into effect only if Iran does not agree to 

a deal. Without renewed pressure, Iran is unlikely to modify its course. It will continue its efforts to circumvent sanctions, divide the international coalition and continue advancing its nuclear program. 

Furthermore, the President should have the power to conclude this agreement 

with Iran provided that a majority of the Senate and a majority of the House concurs with the agreement. 

I look forward to the work of this Committee on this and all the other issues that 

come before it and I am grateful for the opportunity to contribute. 

Thank you Mr. Chairman. 

PREPARED STATEMENT OF ANTONY BLINKEN

DEPUTY SECRETARY OF STATE, DEPARTMENT OF STATE

JANUARY 27, 2015

Good morning, Chairman Shelby, Ranking Member Brown and Senators. I appreciate the opportunity to discuss with you the status of negotiations related to Iran’s 

nuclear program. 

It is appropriate that we are gathered here today for what will be this Committee’s first hearing this year and its first hearing under the new 114th Congress to 

discuss Iran’s nuclear program. The challenge posed by Iran’s nuclear program has 

long been one of our country’s foremost national security priorities, and it has been 

a primary focus of both the Congress and the Administration. The international 

community shares our serious concerns about Iran’s nuclear program. Together with 

our partners in the P5+1 and the EU we have been unified in pursuing a comprehensive solution that lays these concerns to rest—consistent with the President’s 

firm commitment to prevent Iran from acquiring a nuclear weapon. 

It was with that challenge in mind that Secretary Kerry and our lead negotiator 

Under Secretary Sherman traveled to Geneva earlier this month as part of our latest efforts to reach a long-term comprehensive plan of action with Iran that would 

verifiably ensure Iran’s nuclear program will be exclusively peaceful going forward. 

Today I plan to update you on our goals for and the status of the negotiations. 

There are, of course, some details that I will not be able to discuss in an unclassified 

setting—the negotiations are ongoing and cannot be conducted in public. But I will 

give you as much detail as I can in this setting because we all understand the vital 

role Congress and this Committee play in shaping U.S. policy toward Iran. We remain committed to continue—and when necessary, to expand—regular consultations. We all have the same goal—to make the world a safer place by resolving the 

international community’s concerns with Iran’s nuclear program. 

We continue to believe that the best way to do that is to negotiate a comprehensive plan of action that, when implemented, will ensure that, as a practical matter, 

Iran cannot acquire a nuclear weapon and that Iran’s nuclear program is exclusively 

peaceful. 

Any comprehensive deal must effectively cutoff the four pathways Iran could take 

to obtain enough fissile material for a nuclear weapon: two uranium pathways, 

through its activities at Natanz and Fordow; a plutonium pathway, through the 

Arak heavy water reactor; and a potential covert pathway. It must include tight conVerDate 0ct 09 2002 16:32 Jan 21, 2016 Jkt 000000 PO 00000 Frm 00070 Fmt 6621 Sfmt 6621 S:\DOCS\94013.TXT SHERYL

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straints and strict curbs on Iran’s nuclear program. And finally, it must require robust monitoring and transparency measures to maximize the international community’s ability to detect quickly any attempt by Iran to break out overtly or covertly. 

In exchange, the international community would provide Iran with phased sanctions relief tied to verifiable actions on its part. Such relief would be structured to 

be easily reversed so that sanctions could be quickly re-imposed if Iran were to violate its commitments. 

We never expected this to be an easy process, and so far those expectations have 

proved correct. It is also a process that cannot be rushed. After 35 years without 

diplomatic relations, and after more than 10 years of attempts to put a halt to Iran’s 

proliferation of sensitive nuclear activities, we are now trying to see if we can work 

through a multitude of complicated issues in order for us and the international community to be assured of the exclusively peaceful nature of Iran’s nuclear program. 

Our goal is to conclude the major elements of the deal by the end of March and 

then to complete the technical details by June. 

The most recent discussions were serious, useful, and businesslike. We have made 

progress on some issues but gaps remain on others. I, or our lead negotiator, Under 

Secretary of State Wendy Sherman, would be happy to provide further information 

in a classified setting. 

Overall, however, we assess that we still have a credible chance of reaching a deal 

that is in the best interest of America’s security, as well as the security of our allies. 

If Iran’s leaders choose not to move forward, we will work with Congress to increase 

pressure. But while we remain engaged in these negotiations, it is important to 

demonstrate to our partners as well as to Iran that Washington is united in support 

of a comprehensive solution that would ensure that Iran does not acquire a nuclear 

weapon, and that its nuclear program is exclusively peaceful. I know this is a goal 

we all share. 

The U.S. Congress has played a vital role in getting us to where we are today 

and will undoubtedly play an important role going forward. Sanctions were instrumental in bringing Iran to the table. But Iran’s program continued until negotiations made the Joint Plan of Action (JPOA) possible. Sanctions did not stop the advance of Iran’s nuclear program. Negotiations did, and it is in our interest not to 

deny ourselves the chance to achieve a long-term, comprehensive solution that 

would prevent Iran from acquiring a nuclear weapon. 

Let me talk about that progress we have achieved so far. 

Before the JPOA, despite an unprecedented sanctions regime, Iran’s nuclear program was rushing toward larger enriched uranium stockpiles, greater enrichment 

capacity, the production of plutonium that could be used in a nuclear weapon, and 

ever shorter breakout time. Today, as the result of the constraints in the JPOA, 

Iran has halted progress on its nuclear program and it has rolled it back in key 

areas for the first time in a decade, and it has allowed us to have greater insight 

and visibility through more intrusive and more frequent inspections. 

Before the JPOA, Iran had about 200 kilograms of 20 percent enriched uranium 

in a form that could be quickly enriched into a weapons-grade level. It produced 

much of that material at the Fordow facility, buried deep underground. Today, Iran 

has no such 20 percent enriched uranium—zero, none. It has diluted or converted 

every ounce, suspended all uranium enrichment above 5 percent and removed the 

connections among centrifuges at Fordow that allowed them to produce 20 percent 

enriched uranium. 

Before the JPOA, Iran was making progress on the Arak reactor, which, if it had 

become operational, and together with a reprocessing facility, would have provided 

Iran with a plutonium path to a nuclear weapon. Once fueled, the Arak facility 

would be challenging to deal with militarily. Today, Arak is frozen in place. 

Before the JPOA, Iran was enriching uranium with roughly 10,000 centrifuges 

and had another roughly 9,000 installed centrifuges ready to bring into operation. 

The JPOA froze Iran’s enrichment capacity and those 9,000 additional centrifuges 

are still not operating. 

Before the JPOA, inspectors had less frequent access to Iran’s nuclear facilities. 

Today, the JPOA has enabled IAEA inspectors to have daily access to Iran’s enrichment facilities and a far deeper understanding of Iran’s nuclear program. They have 

been able to learn things about Iran’s centrifuge production, uranium mines, and 

other facilities that are important to monitoring Iran’s program going forward and 

to detecting any attempts to break out. And the IAEA has consistently reported that 

Iran has lived up to its commitments under the JPOA. 

Just as we have asked Iran to uphold its commitments under the JPOA, we have 

lived up to our commitment of providing Iran with limited relief—about $14 to $15 

billion from the start of the JPOA through this June. But that relief is dwarfed by 

the vast amounts denied to Iran under the existing sanctions regime. For example, 


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in 2014 alone, oil sanctions deprived Iran of more than $40 billion in oil revenue—

well over twice the estimated value of the relief under the JPOA. And what oil revenues Iran is allowed to generate go into heavily restricted accounts that now encumber more than $100 billion dollars. Virtually the entire sanctions architecture remains in place. Indeed, throughout the existence of the JPOA, sanctions pressure 

on Iran has not decreased—it has increased. 

Congress is now considering legislation to impose additional sanctions on Iran, to 

be triggered by the failure of negotiations. I know that the intent of this legislation 

is to further increase pressure on Iran and, in so doing, to strengthen the hand of 

our negotiators to reach a comprehensive settlement. While the Administration appreciates that intent, it is our considered judgment and strongly held view that new 

sanctions, at this time, are unnecessary and, far from enhancing the prospects for 

successful negotiations, risk fatally undermining our diplomacy and unraveling the 

sanctions regime so many in this body have worked so hard to establish. 

New sanctions are unnecessary because, as I noted a moment ago, Iran already 

is under acute pressure from the application of the existing sanctions regime. In recent months, that pressure has only grown stronger with the dramatic drop in oil 

prices. 

Should Iran refuse a reasonable deal or cheat on its current commitments under 

the JPOA, the Senate and House could impose additional measures in a matter of 

hours. The Administration would strongly support such action. Iran is well aware 

that an even sharper Sword of Damocles hangs over its head. It needs no further 

motivation. 

So new sanctions are not necessary. And their passage now would put at risk the 

possibility of getting a final deal over the next several months. Let me explain why. 

As part of the JPOA we also committed, within the bounds of our system, not to 

impose new nuclear-related sanctions while the JPOA is in effect. Absent a breach 

by Iran, any new sanctions enacted by Congress would be viewed by Iran and the 

international community as the United States breaking out of the understandings 

of the JPOA. This includes ‘‘trigger’’ legislation that would tie the actual implementation of new sanctions to the failure to reach a final arrangement. Even if such 

sanctions are not, arguably, a technical violation of the JPOA, we believe they would 

be perceived as such by Iran and many of our partners around the world. This could 

produce one of several serious unintended consequences that, far from enhancing 

America’s security, would undermine it. 

First, the passage of new sanctions could provoke Iran to walk away from the negotiating table, violate the JPOA and start moving its nuclear program forward 

again. Instead of keeping its uranium enrichment at under 5 percent, as it has since 

the JPOA was signed, Iran could start enriching again at 20 percent, or even higher. Instead of capping its stockpile of roughly 4 percent low enriched uranium at 

pre-JPOA levels, Iran could grow it rapidly. Instead of suspending substantive work 

on the Arak heavy water reactor, Iran could restart its efforts to bring this reactor 

on line. Instead of providing unprecedented access to international inspectors at its 

nuclear facilities, it could curtail/reduce IAEA access, inhibiting our ability to detect 

a breakout attempt. Instead of limiting work on advanced centrifuges, it could resume its efforts to increase and significantly improve its nuclear capabilities in a 

relatively short timeframe. 

Second, even if Iran does not walk away or promptly returns to the table, its negotiators are likely to adopt more extreme positions in response, making a final deal 

even more difficult if not impossible to achieve. 

Third, if our international partners believe that the United States has acted prematurely by adding new sanctions now in the absence of a provocation or a violation 

by Iran—as most countries surely would—their willingness to enforce the exiting 

sanctions regime or to add to it in the event negotiations fail will wane. Their support is crucial. Without it, the sanctions regime would be dramatically diluted. Up 

until now, we’ve kept other countries on board—despite it being against their economic interest—in large part because we’ve demonstrated we are serious about trying to reach a diplomatic solution. If they lose that conviction, the United States, 

not Iran, would be isolated, the sanctions regime would collapse and Iran could turn 

on everything it turned off under the JPOA without fear of effective, international 

sanctions pressure in response. 

We can debate whether any or all of these things would happen. What I can tell 

you today is that those who are best placed to know—the diplomatic professionals 

who have been leading these negotiations and dealing directly with the Iranians and 

our international partners for the past several years—believe that the risks are real, 

serious and totally unnecessary. That is their best judgment. Why run those risks 

and jeopardize the prospects for a deal that will either come together—or not—over 

the next 2 months? Why not be patient for a few more months to fully test diploVerDate 0ct 09 2002 16:32 Jan 21, 2016 Jkt 000000 PO 00000 Frm 00072 Fmt 6621 Sfmt 6621 S:\DOCS\94013.TXT SHERYL

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macy? There is nothing to be gained—and everything to be lost—by acting precipitously. 

That judgment is shared by our closest allies. Just 2 weeks ago, Prime Minister 

Cameron could not have been clearer: ‘‘ . . . It is the opinion of the United Kingdom 

that further sanctions or further threat of sanctions at this point won’t actually help 

to bring the talks to a successful conclusion and they could fracture the international unity . . . which has been so valuable in presenting a united front to Iran.’’

So we must continue to work together. We have briefed Congress extensively and 

frequently on Iran talks over the past year. We have had, and will continue to have, 

extensive discussions with Congress about the status of the P5+1 negotiations. We 

will continue to keep Congress fully informed about these negotiations through a 

combination of open hearings and closed briefings. I look forward to continuing that 

conversation with all of you and your colleagues today, and in the remaining 

months. 

Before I finish, I want to emphasize that, even as we engage Iran on the nuclear 

issue and continue to apply pressure under the existing sanctions regime, we also 

continue to hold it accountable for its actions on other fronts. We continue to insist 

that Iran release Saeed Abedini, Amir Hekmati, and Jason Rezaian from detention 

so they can come home to their families. Likewise, we continue to call on Iran to 

work cooperatively with us so that we can find Robert Levinson and bring him 

home. This March will unfortunately mark 8 years since his disappearance on Iran’s 

Kish Island. Secretary Kerry and Under Secretary Sherman have spoken to Iran 

about our concerns for the fate of these U.S. citizens as recently as last week, and 

will continue to do so until all of them are back home. 

We also continue to raise our voice in support of the talented and brave Iranian 

people, and support their desire for greater respect for universal human rights and 

the rule of law. We have spoken up clearly and consistently against human rights 

violations in Iran and have called on the Iranian government to guarantee the 

rights and freedoms of its citizens. We have done this in reports requested by this 

legislative body, such as the Human Rights Report, through statements on individual cases where our voice can support those inside Iran, and via international 

organizations, such as our work to support the mandate of the U.N. Special 

Rapporteur on human rights in Iran. We have also used our Virtual Embassy 

Tehran online platform to promote freedom of expression and respect for human 

rights, and our programming to support the rights of average citizens in Iran. Regardless of the outcome of ongoing nuclear negotiations with Iran, we will not relax 

our efforts to hold Iran accountable for its human rights violations. 

We will also continue to confront Iran’s destabilizing activities, promotion of sectarian divisions, and support for nonstate actors and terrorists throughout the Middle East. Our positions on Palestinian terrorist groups, such as Hamas and the Palestinian Islamic Jihad, and Lebanese Hezbollah, for example, have in no way 

changed—and will not change. We have very clearly and consistently spoken out 

against these designated foreign terrorist organizations, as well as Iran’s support for 

them. And we will continue to find ways to support those in the region who are 

working to counter the destabilizing actions of these groups—including building 

partner capacity—as we simultaneously reinforce the robust regional security architecture we’ve already built. Similarly, we have called out Iran for its support of the 

brutal regime of Bashar al-Asad in Syria. We hope that Iran soon recognizes that 

there is much more to be gained through constructive engagement in the region and 

promotion of inclusivity than through disruptive policies. 

The challenges posed by Iran are numerous and complicated. We have confronted 

them, and will continue to do so. On the challenge of Iran’s nuclear program, we 

face a historic opportunity to resolve this concern through clear eyed, principled and 

disciplined diplomacy. We do not yet know if diplomacy will be successful—as the 

President has stated the chances are probably less than 50–50—but it is of the utmost importance that we give it every opportunity to succeed. 

Thank you. 

PREPARED STATEMENT OF DAVID S. COHEN

UNDER SECRETARY FOR TERRORISM AND FINANCIAL INTELLIGENCE

DEPARTMENT OF THE TREASURY

JANUARY 27, 2015

Good morning. Chairman Shelby, Ranking Member Brown, and distinguished 

Members of the Committee: Thank you for the invitation to appear before you to 

discuss the state of sanctions on Iran, and whether our efforts to achieve a diploVerDate 0ct 09 2002 16:32 Jan 21, 2016 Jkt 000000 PO 00000 Frm 00073 Fmt 6621 Sfmt 6621 S:\DOCS\94013.TXT SHERYL

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matic solution to one of the most difficult and enduring national security problems 

that we face—Iran’s nuclear program—would be advanced if Congress were to enact 

new sanctions legislation at this time. 

I will focus my testimony today on the robust international sanctions regime that 

helped bring Iran to the negotiating table, the intense pressure that sanctions continue to place on the Iranian economy, and our continued vigorous enforcement of 

those sanctions over the course of the Joint Plan of Action (JPOA). And I will explain why new sanctions legislation now—even if implementation were delayed—

would more likely hinder, rather than advance, the prospects for a diplomatic solution that verifiably prevents Iran from obtaining a nuclear weapon. 

At the outset, let me reiterate that no issue is of greater concern or urgency to 

the United States, and no issue occupies more of the time and attention of my team 

at the Department of the Treasury, than ensuring that Iran does not acquire a nuclear weapon. Iran in possession of a nuclear weapon would directly threaten U.S. 

and international security, increase the risk of nuclear terrorism, undermine the 

global nonproliferation regime, and risk setting off an arms race in the Middle East. 

From the outset of his Administration, President Obama has made clear that we 

will do everything in our power to prevent Iran from obtaining a nuclear weapon. 

For us at Treasury, that has meant working within the Administration, with Congress, and with partners around the world to impose the most effective set of financial and economic sanctions in history. The sanctions have impeded Iran’s ability 

to acquire material for its nuclear program, isolated it from the international financial system, drastically slashed its oil exports, deprived it of access to a sizable portion of its oil revenues and foreign reserves, and severely constrained its overall 

economy. 

In many respects, the global sanctions regime has achieved exactly what it was 

designed to do: encourage Iran to come to the negotiating table, not to posture, pontificate, and procrastinate, but to engage in serious diplomacy over its nuclear program. Iran is negotiating because it knows that relief from the sanctions can come 

only in exchange for taking concrete and verifiable steps that will guarantee that 

it cannot produce a nuclear weapon. 

As this Committee knows, those negotiations are ongoing. They began when we 

negotiated the JPOA, which was reached on November 2013. In November 2014, the 

P5+1 and Iran decided to extend the talks for another 7 months. We agreed to the 

extension because our negotiators have made meaningful progress, and because it 

takes time to conduct the highly technical deliberations necessary to get a comprehensive solution that will cutoff each of Iran’s possible pathways to a nuclear 

weapon. 

We may ultimately reach a comprehensive solution; we may not. The President 

last week reiterated that the chances that we get a deal are probably less than 50 

percent. But we, like you, are committed to testing fully the diplomatic path. 

That is why we have continued to maintain throughout the JPOA period the intense financial and economic pressure that brought Iran to the table in the first 

place. And that is also why we must give our negotiators the time and space they 

need to pursue the possibility of a comprehensive solution, without undercutting 

their efforts, fracturing the coalition, or, with the best of intentions, sending mixed 

signals about the interest of the United States in a diplomatic resolution. 

The International Sanctions Regime Remains Robust and Vigorously Enforced 

When Iran and the P5+1 concluded the JPOA in November 2013, Iran committed 

to halt progress on its nuclear program, roll it back in important respects, and provide unprecedented access to and inspections of its enrichment facilities. In exchange, Iran received limited, targeted, and reversible relief from some nuclear-related sanctions. 

Importantly, the JPOA left in place the full architecture of our financial, banking, 

oil, and trade sanctions; our sanctions focused on Iran’s support for terrorism and 

its violation of human rights; and our own domestic embargo. 

I’d like briefly to review the breadth of that sanctions architecture—painstakingly 

designed by the Administration, Congress, and our international partners over 

many years—because it provides an important backdrop to any discussion of imposing additional sanctions. First, Iran remains subject to sweeping sanctions by the 

United States and our allies on its financial and banking sectors:

• Iran continues to be almost completely isolated from the international financial 

system, with its most significant private and state-owned banks, including its 

central bank, subject to U.S. sanctions and cutoff from international payment 

messaging systems.


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• Any foreign bank that transacts with designated Iranian banks—or with most 

other designated Iranian individuals or entities—can lose access to the U.S. financial system. That means losing the ability to facilitate transactions in the 

dollar, a death penalty for any international bank.

• It remains sanctionable to provide physical U.S. dollar banknotes to the Iranian 

government.

Second, our sanctions have targeted Iran’s key economic engine, its energy sector:

• Our sanctions have drastically driven down Iran’s oil exports. In 2012, Iran was 

exporting approximately 2.5 million barrels of oil a day to some 20 countries; 

today, it exports only around 1.1 million barrels, and only to six countries. 

Under the JPOA, moreover, Iran’s six remaining oil customers may not exceed 

their current purchase levels.

• Additionally, payment for oil purchased from Iran by these six countries must 

be paid into accounts that can be used only to facilitate humanitarian transactions or bilateral trade between the importing country and Iran. With the exception of funds released under the JPOA, this Iranian oil revenue can neither 

be brought back to Iran nor transferred to third countries. And because the accounts into which Iran receives oil revenue already hold more funds than Iran 

spends on bilateral or humanitarian trade, the effective value of those oil sales 

to Iran is far less than 100 cents on the dollar.

• We also have broad authorities targeting the provision of goods and services to 

the Iranian energy sector or investment in that sector. Any entity that is itself 

part of Iran’s energy sector is subject to sanctions.

• Because Iran cannot access Western technology and services, and because it has 

been forced to sharply cut its oil exports, we have also seen a significant decline 

in its production of oil. Independent experts report that Iran produced fewer 

than 2.8 million barrels a day in December, down from almost 3.6 million barrels a day in 2011.

Third, there are sanctions on other important sectors of the Iranian economy. We 

have broad tools that target Iran’s petrochemical, insurance, ports, shipping, and 

shipbuilding sectors, as well as its trade in certain crucial metals and industrial materials.

Fourth, beyond these sector-focused sanctions, we have a range of other sanctions 

authorities that we use to intensify the pressure on the Iranian regime.

• It is sanctionable to act on behalf of the Government of Iran, as well as to provide the Government of Iran or the Iranian individuals and entities on OFAC’s 

sanctions list with financial, material, or technological support.

• Under our counter-terrorism, counter-proliferation, human rights, and other 

Iran-related authorities, we have imposed sanctions on more than 700 Iran-related individuals and entities, almost 15 percent of which have been designated 

since the signing of the JPOA. And importantly, anyone who conducts business 

with these individuals or entities, or any other designated Iranian entity, is at 

risk of being targeted for sanctions.

Last but not least, broad limitations on U.S. trade with Iran remain in place, meaning that Iran continues to be shut out of the world’s largest and most vibrant economy and remains unable to access the U.S. financial system. 

These sanctions are not just words on the books—we vigorously enforce them. 

Over the course of the JPOA, we have repeatedly reaffirmed the point, in word and 

deed, that Iran is not open for business. 

Since the signing of the JPOA, the United States has sanctioned nearly 100 individuals and entities that were helping Iran evade our sanctions, aiding Iranian nuclear and missile proliferation, supporting Iranian-sponsored terrorism, or carrying 

out Iran-related human rights abuses. Nine of those designations came less than a 

month ago, on December 30, including sanctions on six individuals and one entity 

that were working with the Iranian government to obtain U.S. dollars. We have also 

imposed more than $350 million in penalties on those who have violated the sanctions. These targeting and enforcement efforts will continue throughout the course 

of the JPOA extension. 

We have also engaged extensively with foreign governments and companies to 

make clear the limited scope of the JPOA’s sanctions relief and our continued vigilance against any breaches of our sanctions. These outreach efforts, while quieter 

than enforcement actions, are equally critical to our efforts to pressure Iran. 

And as we sit here, members of my staff are poring over reams of financial intelligence searching for signs of sanctions evasion, working with banks and businesses 


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to help them better comply with sanctions, and engaging directly with foreign governments, foreign regulators, foreign businesses, and individuals around the world 

to make certain that they understand the consequences of violating our sanctions. 

And although I will depart the Treasury Department in a few weeks, everyone 

should rest assured that vigorous enforcement of our sanctions will continue 

unabated. 

Through all of these efforts, we make it abundantly clear to Iran that its only 

hope for real relief from sanctions is to enter into a comprehensive arrangement 

that guarantees that it cannot produce a nuclear weapon. 

The State of the Iranian Economy 

In light of the extensive sanctions that remain firmly in place and are being vigorously enforced, it should come as no surprise that the Iranian economy remains in 

a deep hole. 

When I testified before the Senate Foreign Relations Committee in July, I suggested three metrics by which to judge Iran’s economic distress—its oil revenues, 

the value of its currency, and its foreign reserves. By all three measures, Iran continues to be worse off today than it was when it entered into the JPOA. 

Revenues: The overall health of the Iranian economy and the Iranian government’s balance sheet depend heavily on oil revenues, and our sanctions have cut 

deeply into those revenues. As I noted earlier, our sanctions have caused Iran’s oil 

exports to drop almost 60 percent, from approximately 2.5 million barrels per day 

in 2012 to approximately 1.1 million today. Because of this dramatic decline in 

sales, in 2014 alone our oil sanctions deprived Iran of over $40 billion, which is well 

over twice the total estimated value to Iran of the limited sanctions relief in the 

JPOA—and that is money Iran can never recover, because it represents sales that 

were not made. Altogether, since 2012, our oil sanctions have denied Iran access to 

more than $200 billion in lost exports and funds it cannot freely use. 

Furthermore, for the 7-month period of the JPOA extension, from December 2014 

to June 2015, we estimate that Iran will be forced to endure another $15 billion in 

lost sales. Moreover, of the estimated $12 billion that Iran may continue to earn in 

oil revenue during this JPOA extension, our sanctions mean that Iran will only be 

able to access a limited amount of this revenue, since much of it will remain restricted in overseas accounts. 

Meanwhile, the current sustained decline in oil prices is, in the words of Iranian 

officials, imposing an additional set of sanctions on Iran. Over the past year, the 

average price of a barrel of oil has dropped by more than 50 percent; it is trading 

today at slightly under $50 per barrel. If oil prices remain at current levels, Iran 

will lose an additional $11 billion in oil revenue from what it was expecting to take 

in during this most recent 7-month extension of the JPOA. 

All of this is creating havoc with Iran’s budget. For its current fiscal year (March 

2014 to March 2015), Iran assumed that oil would sell for $100 per barrel. It has 

not, which has cut into its revenues for this year. And next year will be even 

bleaker. 

In December, President Rouhani proposed a budget for the coming fiscal year that 

assumed oil would sell for $72 per barrel and that included proposals to cancel subsidies, raise taxes, reduce contributions to its sovereign wealth fund, and scrap 

projects. But that draft budget already has proved overly optimistic, and just last 

week, the Iranian Finance and Economy Minister revealed that Iran is revising 

downward its budget because it is now assuming a price of $40 per barrel. This will 

likely result in more spending cuts, fewer services, and higher taxes. 

Rial: Iran’s currency, the rial, has depreciated by about 56 percent since January 

2012, including a decline of about 16 percent just since November 2013, when the 

JPOA was signed. This makes imported goods more expensive, disrupts plans for 

investment in Iran, causes the general inflation rate to rise, and hurts the Iranian 

economy by causing significant uncertainty about future prices. 

Reserves: The vast majority of Iran’s approximately $100 billion in foreign currency reserves remain inaccessible or restricted by sanctions. Iran can use most of 

this money only to pay for permissible bilateral trade between the six remaining oil 

importing countries and Iran, as well as for humanitarian purposes. Without hard 

currency reserves, Iran is limited in its ability to intervene in its currency market 

to stabilize the rial, and it also becomes more difficult to conduct foreign trade. 

If you take a step back and look at Iran’s broader economy, the picture is no less 

dismal. Despite some signs of an uptick in Iran’s GDP, Iran’s economy is performing 

far below its potential. Iran’s GDP shrank by roughly 9 percent in the 2 years ending in March 2014, and its economy today is 15 to 20 percent smaller than what 

it would be had it remained on its pre-2012 growth trajectory. Moreover, at 17 percent, Iran’s inflation rate is one of the highest in the world. 


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The dire predictions we heard that the limited sanctions relief in the JPOA would 

lead to a collapse of the sanctions regime and reduce pressure on Iran clearly have 

not materialized. The sanctions structure has held up just fine. We estimate that 

the total value to Iran of the JPOA sanctions relief, which comes largely from enabling Iran to access some of its own restricted oil revenues held overseas, will add 

up to approximately $14 to $15 billion by June 2015. This relief pales in comparison 

to the significant revenues that Iran has forgone as a result of sanctions, and it cannot make up for Iran’s systemic economic weaknesses and imbalances. 

Put simply, Iran’s economy is significantly impaired, and it will remain that way 

as long as our sanctions are in place—and Iran’s leaders know this. Thanks to cooperation on the international stage between the United States and its allies, and 

the joint work of Congress and this Administration, Iran is negotiating with its back 

against the wall. So long as we continue to maintain our current pressure on Iran—

and we are committed to doing just that—its leaders have every incentive to come 

to a comprehensive solution and resolve this issue peacefully. 

Additional Sanctions Legislation Now Is Unnecessary and Potentially 

Harmful 

Because of the scope and intensity of the sanctions Iran currently is subject to, 

and because of the economic pressure those sanctions continue to apply, we believe 

that new sanctions are not needed at this time. To the contrary, new sanctions at 

this time—even with a delayed trigger—are more likely to undermine, rather than 

enhance, the chances of achieving a comprehensive solution, and are more likely to 

reduce, rather than increase, the chances of sustaining and increasing pressure on 

Iran if the negotiations fail. 

In our efforts to prevent Iran from obtaining a nuclear weapon, sanctions were 

never an end in themselves. Sanctions alone were never going to stop Iran from installing centrifuges or enriching uranium. Instead, sanctions always were intended 

principally as a means to persuade Iran to negotiate in earnest. 

And that has worked. We now have a situation in which Iran is engaged in a serious negotiation with the P5+1, while progress on its nuclear program is frozen, certain aspects of the program have been rolled back, and we have unprecedented insight into its nuclear activities. And, furthermore, its economy remains under enormous pressure, in large measure because we have been able to hold together the 

international coalition that has joined us in imposing crippling sanctions. 

Enacting additional sanctions legislation at this point threatens to unravel this 

situation. In our judgment—a judgment that is shared by our international partners—new sanctions legislation now is substantially more likely to impede progress 

at the negotiating table than to induce Iran to offer additional concessions. 

Moreover, if Congress enacts new sanctions now and the negotiations ultimately 

prove unsuccessful, our international partners may hold us, not Iran, responsible for 

the breakdown in the talks. While it is difficult to predict exactly what would then 

unfold, it is quite possible that some current members of the international sanctions 

coalition—whose companies are eager to resume business with Iran, but have been 

held off—would reevaluate their cooperation with us on pressuring Iran, making it 

more difficult to maintain existing pressure. If overall support for the sanctions regime declined, it also would make it more difficult to intensify sanctions pressure. 

Finally, if a breakdown in talks led to the demise of the JPOA, we would lose the 

additional insight into Iran’s nuclear program and restrictions on development that 

the JPOA has given us. 

In our view, these risks make new sanctions legislation inadvisable at this moment. But even putting aside the risks, we see no compelling reason to impose new 

sanctions now, considering the extent to which Iran already faces substantial financial and economic pressure. 

This conclusion is reinforced, moreover, by the fact that this Congress and this 

Administration would move quickly to enact new sanctions if Iran were to walk 

away from the talks or if we concluded that a comprehensive deal was no longer 

within reach. As the President said just last Friday, ‘‘if Iran ends up ultimately not 

being able to say yes, if they cannot provide us the kind of assurances that would 

lead [us] to conclude that they are not obtaining a nuclear weapon, then we’re going 

to have to explore other options,’’ including new sanctions legislation. As has been 

the case with prior sanctions legislation, that legislation could go into effect in a 

matter of days. The Iranians know this, just as they know that the President has 

‘‘consistently said [that] we leave all options on the table.’’

Make no mistake: This Administration understands and embraces the power of 

sanctions. Sanctions are a key component of many of our most important national 

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on to our efforts to degrade and ultimately destroy the Islamic State in Iraq and 

Levant. We are not sanctions doubters. 

But neither do we believe that layering on additional sanctions is always the right 

move. Sanctions are one tool in our toolkit, as is diplomacy, as is military action, 

as are the myriad other ways that we project U.S. power to advance our interests, 

protect our allies, and defend ourselves. If diplomacy does not succeed, as the President said, he ‘‘will be the first one to come to Congress and say we need to tighten 

the screws.’’ But in our view, now is the time to give diplomacy every chance to succeed, not to create a new sanctions tool. 

Conclusion 

In closing, I want to assure this Committee that as we seek a comprehensive solution with Iran, the Treasury Department, like the rest of this Administration, is 

fully committed to maintaining intense financial and economic pressure on Iran. We 

have not, and we will not, let up one iota in our sanctions enforcement efforts, and 

we will continue to take action against anyone, anywhere, who violates or attempts 

to violate our sanctions. 

Thank you. 

PREPARED STATEMENT OF PATRICK CLAWSON, PH.D.

DIRECTOR OF RESEARCH

THE WASHINGTON INSTITUTE FOR NEAR EAST STUDIES

JANUARY 27, 2015

Iran Adapts to Sanctions in the Absence of New Measures

Over time, Iran adapts to any level of sanctions. And Iranian authorities have repeatedly persuaded themselves that the United States is ‘‘sanctioned out,’’ i.e., that 

Washington cannot step up the pressure. Continuously adopting new measures is 

the best way sanctions can effectively move Iran’s leaders to resolve the nuclear impasse. 

Iran’s Plan A is No Nuclear Deal 

Iran’s new budget shows that the authorities see no urgent need for relief from 

the current sanctions. They correctly feel that they have learned to live with those 

sanctions. The 2015/16 budget submitted to the Majlis by President Hassan Rouhani 

is based on 1.3 million barrels a day in oil exports, only slightly above the average 

level in 2014—a rise which is consistent with the Joint Plan of Action as interpreted 

by the Administration, in that Iran expects to increase its exports of oil condensates 

which the Administration does not consider to be crude oil. Iran’s proposed 2015/

16 budget also does not assume any sharp pickup in economic activity, such as some 

have forecast would occur in the aftermath of a nuclear deal. 

Instead of assuming sanctions relief, the new budget proposes a range of painful 

measures to live with the existing situation, such as increased taxes and continuing 

erosion of both government salaries and the monthly payment to families introduced 

when subsidies were slashed in 2011. These will be painful measures, hitting hard 

at Iran’s middle and lower classes. They would come on top of several years of impressive adjustments which go far beyond anything the International Monetary 

Fund has recommended to hard-hit countries like Greece. In effect, the 2015/16 

budget continues the path of recent policy: do what is needed to reduce vulnerability 

to external pressure, even if that imposes great pain. 

And the budget-balancing measures are not paper solutions like those favored by 

former president Mahmoud Ahmadinejad. Instead, the Rouhani government has 

been implementing real steps to improve tax collection and has announced plans to 

increase tax rates. It has also been getting tougher about those (mostly industrial 

firms) not paying the higher electricity and natural gas rates adopted in 2012. Another sign that the budget is a serious document is that rather than unrealistically 

underestimating spending, the government has left room for priority expenditure increases, which in this case means dramatically higher spending for the military and 

intelligence apparatus. 

The budget made what seemed when it was proposed in early December the conservative assumption that the price of oil in April 2015 to March 2016 would average $72 per barrel oil. For 474 million barrels of oil exports (1.3 million barrels a 

day), that would generate $34 billion. When the price of oil declines, that hits Iran’s 

budget hard. That is true irrespective of sanctions which complicate Iran’s access 

to its oil export earnings. Those sanctions impact how Iran manages its foreign exchange, which is an entirely different manner from budget revenue. When the NaVerDate 0ct 09 2002 16:32 Jan 21, 2016 Jkt 000000 PO 00000 Frm 00078 Fmt 6621 Sfmt 6621 S:\DOCS\94013.TXT SHERYL

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1 Among the many complications in analyzing Iran’s budget, the oil and gas revenue figure 

it shows is partly from sales at home. So not all of the projected IR711 trillion comes from oil 

exports. 

tional Iranian Oil Company (NIOC) sells oil abroad, it earns dollars which it then 

hands over to the Central Bank of Iran (CBI) in return for Iranian rials. The CBI 

faces the challenge of how to manage those dollars, that is, how to ensure that Iranians wishing to import goods have access to the dollars they need. Meanwhile, 

NIOC takes the rials provided by CBI and, as provided by law, deducts 14.5 percent 

for its expenses, and hands the rest to the government. The government, by law, 

deposits 20 percent of the total export earnings in the National Development Fund 

of Iran (NDFI), directs 2 percent to the provinces, and uses 63.5 percent for the 

budget. Under that formula, the budget’s share of 1.3 million barrels a day at $72 

a barrel is $21.7 billion. 

Faced with the oil price decline, Iran is preparing to take additional measures. 

On January 15, Economic and Finance Minister Ali Tayeb Nia announced that a 

revised budget would be based on $40 per barrel oil—which is well below what the 

U.S. Department of Energy and most observers predict will be the average price in 

the period April 2015–March 2016. Iran has many alternatives available for adjusting to such a price level. Besides reducing expenditures and raising taxes, the two 

most obvious are: 

Suspending payments into the NDFI. The NDFI is partly a rainy day fund, which 

was the explicit purpose of its predecessor, the now effectively defunct Oil Stabilization Fund (the NDFI is also partly a reserve fund for the post-oil future). If the government suspended payments into the NDFI, then in order to produce budget revenue of $21.7 billion, NIOC would have to sell only $26 billion in oil, which means 

an oil price of $55. 

Depreciating the currency, which would generate more Iranian rials for each dollar of oil exports. The Rouhani government has kept the dollar/rial rate more or less 

constant. That is inappropriate given that Iran’s high inflation rate drives up costs 

for Iranian producers. A constant exchange rate makes domestic products more expensive relative to imports and makes exporting less attractive. A better policy 

would be to let the rial depreciate in line with inflation. The budget assumes a very 

modest decline in the exchange rate to IR28,500 per dollar compared to IR26,500 

now. At that level, the $21.7 billion in oil export revenue for the budget produces 

IR618 trillion.1 If instead the exchange rate declined to reflect the inflation of the 

last 2 years, the rate would be at least IR40,000 per dollar. That would stimulate 

production in Iran, both for exports and to replace imports. It would also generate 

the IR618 trillion for the budget from $15.5 billion, which would be the equivalent 

of an oil price of $52 per barrel if the government continues payments into the 

NDFI or $39 if it suspends those payments. In the likely situation that the oil price 

were higher than $52 (or $39), then the government would have room to increase 

spending a bit to accommodate the higher prices post-depreciation. 

In addition, the government could draw down the balance in the NDFI, though 

it is not clear how much remains in that account. Or it could simply borrow more 

at home (it claims the current budget is balanced, but that is by using creative accounting). Iran’s government has much room to borrow. Iran’s government debt is 

low. Rouhani’s finance minister, in his complaints about what a terrible situation 

he inherited, has claimed that the government debt was run up to 25 percent of 

GDP, which is probably an exaggeration, but even if true is only a third of the U.S. 

level. Vast sums sit in the various public pension plans, all of which have been and 

could be again drawn on to fund government programs (usually off-budget programs). And if that is not enough, Tehran can rely on the banking system—almost 

all government-owned—to carry out what is in reality government spending loans, 

much as the Ahmadinejad administration did with the massive Mehr social housing 

program. 

So Iran can finance its government despite sanctions and low oil prices. It can 

also generate the foreign exchange it needs to pay for imports, so long as it can access that foreign exchange. The last year for which we have solid numbers, thanks 

to the International Monetary Fund, is 2013/14. In that year, non-oil exports of 

goods and services generated $46 billion, when imports of goods and services were 

$73 billion. That left a gap of $27 billion, while Iran’s foreign exchange reserves at 

the start of the year were $104 billion. With modest oil exports, Iran was able to 

increase its reserves in 2013/14. Iran’s statistics for what is happening in 2014/15 

show that non-oil exports are up, imports are down, and reserves are up—all of 

which fits well with what we know about how Iran’s economy is performing. So Iran 

has less and less need for oil export earnings to pay for imports. And if Iran can 

export 474 million barrels of oil even at a price as low as $40 per barrel, that would 


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produce $19 billion, which—if available for Iran to use—would probably be close to 

enough to fill the gap between imports and non-oil exports. Or looked at another 

way, Iran’s reserves are enough to fill that gap for about 5 years even without any 

oil exports, if Iran has access to those reserves. 

Of course, the foreign exchange problem Iran faces is that it has only limited access to its oil export proceeds and to its foreign exchange reserves, thanks to restrictions by the United States and its allies on Iran’s access to international financial 

markets. Iran’s excellent trade balance and substantial reserves show how the restrictions on its access to financial markets are the most effective pressure point on 

the Iranian economy. Those restrictions have remained effective only because new 

measures are continuously being taken—both enforcement steps aimed at new shadow entities and extension measures blocking channels Iran is using to evade restrictions on the usual paths for financial transactions. Iran has shown great creativity 

at evading financial restrictions. Standing still means falling behind: constantly taking new steps is the only way to keep up with Iran’s latest evasions. 

Resistance Economy? 

Convincing Supreme Leader Ali Khamenei to pay attention to sanctions is not 

easy. He does not care much about the economic well-being of Iranians, especially 

when his closest supporters are doing well. That is part of the reason he has supported tough adjustment measures, despite the pain they inflict on the lower and 

middle classes. But he firmly believes that Iran would be better advised to adopt 

what he calls a ‘‘resistance economy.’’

Khamenei’s call for a ‘‘resistance economy’’ is mostly nonsense but partly good advice. The nonsense is that Iran should, or can, cut itself off from the world economy. 

The pursuit of self-sufficiency has led into one dead-end after another. High barriers 

to imports has protected inefficient Iranian producers, raising prices for consumers 

and creating opportunities for corruption by those who can use political ties to get 

imported goods at a fraction of the price at which those goods are selling on the 

local market. Those who benefits from the barriers to imports form an important, 

politically well-connected group which are scared at the prospect of Iran opening up 

to the world. They fear that lessened political tensions with the West will mean a 

more open economy in which they will do poorly. Because of the political strength 

of this group, it is not easy to make sanctions painful enough to overcome hardline 

objections to resolving the nuclear impasse. 

The good advice in Khamenei’s call for a ‘‘resistance economy’’ is his call for Iran 

to rely less on oil income. Iran is richly endowed with many resources, not least its 

talented and increasingly well-educated work force. To a considerable extent, Iran 

used the last decade’s oil windfall to expand its non-oil economy, including substantial export-oriented activities from iron mining to high-value fruit agriculture, petrochemicals, and light industry. Iran now has a better-rounded middle-income economy in which oil is important but by no means all-important, with oil’s role dropping by the year. That is a sound economic policy for many reasons: it creates jobs, 

it makes the economy less vulnerable to oil price swings, it rewards productive economic activity instead of influence-peddling, and it makes Tehran less and less vulnerable to oil-centered economic sanctions. Of course, the transition has only gone 

part-way: government revenue and export earnings are still oil-intensive, and oil income still fuels breath-taking corruption. But the Islamic Republic looks more and 

more like the Shah’s economy: a vibrant non-oil economy with oil providing the lubrication for a corrupt government bent on regional domination. 

The ‘‘resistance economy’’ strategy—both the parts that hurts Iran’s economic development and the parts that help it—reduces the impact sanctions have on the 

thinking of Iran’s leaders. That fact should cause us to redouble our efforts, not to 

give up. 

Ratchet Up the Pressure 

Sanctions are more likely to have impact, both on Iran’s economy and more importantly on its political leadership if they continuously get tougher. We need to convince Iran’s leaders that the longer the nuclear impasse persists, the worse the pain 

will be. 

Like many of us, Iran’s leaders are naturally optimistic. Frequently, they have 

thought that the United States was ‘‘sanctioned out,’’ that there were no new measures that Washington could apply on Tehran. The early Obama administration well 

understood how constant tightening of sanctions sent a clear message that the nuclear impasse would get costlier and costlier. Their approach was to use three simultaneous avenues for tightening sanctions: 

First and foremost was tougher enforcement of the measures nominally in place. 

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orously pursue financial institutions which were ignoring U.S. sanctions regulations. 

The resulting billions of dollars in fines collected from banks has had a dramatic 

impact on the attitudes in the financial community, which have decided that transactions with Iran are not worth the risk. 

In addition, the Obama team pushed hard for allies to step up their sanctions on 

Iran, helped by the outrageous rhetoric from the Ahmadinejad administration. The 

careful incorporation into the 2010 U.N. Security Council Resolution 1929, building 

on the 2008 Resolution 1803, of language about ‘‘exercising vigilance’’ about a range 

of Iranian activities provided a way to present the complementary measures by allies, especially the European Union (EU), as being within the framework of Security 

Council actions, something important for many of those allies. The quiet support 

from many other governments to U.S. restrictions on financial transactions strongly 

influenced financial institutions to fall in line with those restrictions rather than to 

complain about U.S. perceived extraterritorial action. 

And new sanctions were adopted that built on and extended existing sanctions. 

Repeatedly, the Administration complained about new sanctions measures being 

considered by Congress only to proclaim, months after similar measures were enacted into law, that such steps had been important contributions to Iran’s leaders’ 

reconsideration of their previous stance. 

We can debate the relative contribution of each of these approaches. In any case, 

the end result was to shock Iran’s leaders at our ability to turn up the heat, as well 

as to feed popular discontent with a hardline nuclear stance perceived correctly as 

standing in the way of Iran taking advantage of the many opportunities that greater 

integration into the world economy offers it. 

Our challenge now is to find a new mix of policies that will once again shock the 

Iranian leaders. A powerful assist to this end has come from an unexpected direction, namely, the ample supply conditions in world oil markets. To a person, Iranian 

leaders are convinced that the recent oil price decline has been a deliberate SaudiAmerican plot to harm the Islamic Republic. Saudi Oil Minister Naimi’s several 

interviews proclaiming that oil prices may have to go much lower and stay there 

for a prolonged period, irrespective of the impact on Iran among others, is read as 

proof of the political motivations behind the price decline. Khamenei’s extended January 24 remarks on how the oil price decline was an American-sponsored plot 

against the Islamic Republic drew his usual policy recommendation: ‘‘blows will be 

met with blows.’’

The historical analogy which resonates with the current generation of Iranian 

leaders is the 1986 price collapse (when the Dubai spot crude price fell from $27.53 

per barrel in 1985 to $13.10 in 1986 and stayed at about that level for years). The 

resulting loss of revenue was a central element in Iran’s decision that it could not 

afford to pursue the war with Iraq, which had to be abandoned with little show for 

150,000 Iranian dead. Iranian leaders have always thought that the Saudi decision 

to step up oil production from 3.6 million barrels per day in 1985 to 5.2 million in 

1986, which was the main reason for the price collapse, was aimed at the Islamic 

Republic, as part of the multifaceted Saudi effort to stave off Iran’s battlefield successes against Iraq. 

It is no secret that the Saudi leadership wants to see Iran pressed harder, both 

to resolve the nuclear impasse and to pull back from Iran’s active role supporting 

Shia fighters in Syria, Iraq, and Yemen (and the Saudis would add, Bahrain). That 

fact and their reading of the 1980s history only contributes to the Iranian leaders’ 

conviction that the Saudis are doing what they would do were they in the Saudis’ 

shoes, namely, driving oil prices lower to press Iran. We may doubt that this is an 

accurate reading, but both in public and in discussion with Tehran, the U.S. Government should hint that low oil prices are part of Washington’s plan. Since people 

in the Middle East are often ready to see the United States as all-powerful, we 

should find ways to make that work to our advantage. If we can get credit for the 

sun rising in the east, take it. 

Just as the years of high oil income were a good time to shock Iran by showing 

the high price it paid for not being able to export much of its oil, now is a good 

time to shock Iran by showing that since the world economy does not need their 

oil, we are prepared to take tougher measures against Iran unless the nuclear impasse is resolved. The impact of the last rounds of sanctions has faded; a new round 

is needed to show that the United States is not ‘‘sanctioned out.’’ My intent today 

is not to address what should be the character of that new round of sanctions; my 

role instead is to point out why it is needed. 

Patrick Clawson is Director of Research at The Washington Institute for Near East 

Studies. He was formerly a senior economist at the International Monetary Fund and 

the World Bank. He is the author or editor of 30 monographs and books about Iran. 


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He was the recipient of the Middle East Studies Association’s Pourshariati Award 

for best book about Iran in 2014.


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RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY 

FROM ANTONY BLINKEN 

Q.1.a. In your testimony you declared that any deal with Iran must 

address not only centrifuge research and development and the possible military dimensions issues but also Iran’s possession of ‘‘missiles capable of mating a nuclear weapon to a missile.’’ You also acknowledged that no agreement with Iran can be acceptable unless 

it constrains Iranian missile development and centrifuge research 

and development (R&D), and unless it resolves all questions about 

weaponization work. These three areas of concern, however, are 

unaddressed by the Joint Plan of Action (JPOA) and Iran apparently continues to work in all three areas, according to U.S. Government statements, including the imposition of penalties against 

Iranian entities in 2014 for weaponization-related procurement. 

How much progress has Iran made on these three fronts during 

the course of the JPOA so far?

A.1.a. The Joint Plan of Action (JPOA) has proven successful in 

halting the advance of Iran’s nuclear program and rolling it back 

in key respects as we seek to achieve a long-term comprehensive 

solution which prevents Iran from acquiring a nuclear weapon and 

ensures that its nuclear program is exclusively peaceful. Iran has 

provided the International Atomic Energy Agency (IAEA) with enhanced transparency and intrusive monitoring of its nuclear program, and the IAEA has verified Iran’s fulfillment of its nuclearrelated commitments under the JPOA. While the JPOA begins to 

address some of our most urgent concerns regarding Iran’s nuclear 

program, there are many issues Iran must address as part of a 

long-term comprehensive solution. We have been clear that a comprehensive solution must cutoff all of Iran’s pathways to a nuclear 

weapon and such a deal will involve a variety of constraints and 

extensive monitoring measures to ensure the exclusively peaceful 

nature of Iran’s nuclear program.

Q.1.b. What additional advances can Iran make if the JPOA is extended again on its present terms?

A.1.b. The JPOA has created time and space for the negotiation of 

a comprehensive solution that would prevent Iran from acquiring 

a nuclear weapon and ensures that its nuclear program is exclusively peaceful. Still, we won’t go on negotiating forever, and it 

would be very difficult to extend these negotiations past the end of 

June, if we do not see the outline of a political framework agreement by the end of March. As the President has said, a further extension would not be useful if Iran has not agreed to the basic formulation and the bottom line that the world requires to have confidence that Iran is not pursuing a nuclear weapon.

Q.2.a.–b. You testified that Iran has ‘‘tried outside of the agreement . . . every single day to do all sorts of things to advance their 


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program.’’ You also said that the United States works diligently at 

‘‘cracking down on their [Iranian] efforts to procure for their weapons of mass destruction program.’’ As recently as last August, Departments of State and Treasury designated Iranian entities for 

WMD-related procurement. 

How can you reconcile the Administration’s statement that Iran’s 

nuclear weapons work stopped in 2003 with Iran’s recent efforts to 

purchase equipment for nuclear weapons? 

How can you reconcile the 2007 U.S. National Intelligence Estimate on Iran declaration that in 2003 ‘‘Tehran halted its nuclear 

weapons program’’ with Iran’s recent efforts to purchase equipment 

for nuclear weapons?

A.2.a.–b. Our diplomatic efforts thus far have proven successful in 

temporarily halting the advance of Iran’s nuclear program and rolling it back in key respects as part of the Joint Plan of Action 

(JPOA). Iran’s illicit procurement activities have not allowed it to 

circumvent the limits in place on its nuclear program under the 

JPOA. Nonetheless, we remain concerned about Iran’s ongoing illicit procurement activities and continue to work with partners to 

stop shipments destined for Iran’s nuclear program and ballistic 

missile program. Furthermore, we continue to impose sanctions 

against entities engaged in such activities and to press states to 

robustly enforce relevant United Nations Security Council (UNSC) 

sanctions. 

We know there are many more steps beyond those in the JPOA 

Iran needs to take to resolve the international community’s concerns regarding its nuclear program, which is why we are working 

toward a comprehensive solution which will ensure that Iran cannot acquire a nuclear weapon and that Iran’s nuclear program is 

exclusively peaceful. We can discuss Iran’s procurement efforts in 

more detail in a classified setting, but Iran’s procurement efforts do 

not contradict either the Administration’s statements on the Iranian nuclear program nor the 2007 National Intelligence Estimate. 

We would refer you to the Office of the Director of National Intelligence for an assessment of Iran’s nuclear capabilities and intentions.

Q.2.c. How can you assure the U.S. Congress that the Administration can negotiate a solid deal with Iran if Iran continues to prepare itself for nuclear weaponization even during the negotiations?

A.2.c. We have long said that any deal will not be based on trust. 

This is why we are seeking a durable and verifiable deal. We have 

also been clear that any deal must include initial suspension of 

sanctions—vice termination—so that we can quickly snap them 

back into place should Iran violate its commitments. A comprehensive deal would commit Iran to enhanced transparency and monitoring measures, including ratifying the IAEA Additional Protocol 

(AP), to verify the exclusively peaceful nature of its nuclear program and to quickly detect any attempts by Iran to break out. Implementing the AP would provide the IAEA with expanded access 

to sites and facilities in Iran and impose additional reporting requirements on Iran’s nuclear program. 

How exactly the transparency and monitoring framework will 

look beyond the AP is still under negotiation. We continue to place 


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a high priority on rigorous monitoring measures in order to detect 

any violation of a comprehensive deal promptly and retain an ability to snap sanctions back in place should violations occur. In addition, we are pressing Iran to fully cooperate with the IAEA to address all outstanding issues, particularly those that give rise to 

concerns regarding the possible military dimensions (PMD) of 

Iran’s nuclear program. This includes providing access to facilities, 

individuals, and documents requested by the IAEA. We believe a 

comprehensive deal should facilitate the IAEA’s investigation of 

PMD and ensure there are no ongoing weaponization activities. 

This is one of the issues we are working to address in the negotiations.

Q.3. The International Atomic Energy Agency (IAEA) admitted 

years ago that in order to have reasonable confidence about the absence of undeclared nuclear activities in Iran, the IAEA requires 

legal authorities that go beyond those of the IAEA Additional Protocol. Would you agree with the IAEA’s conclusion that the Additional Protocol is inadequate, and if so, how?

A.3. International Atomic Energy Agency (IAEA) officials have 

stated repeatedly since the approval of the Model Additional Protocol (AP) in 1997 that APs are essential to ensure that the IAEA 

can detect undeclared nuclear activities in a state. That is why, 

without implementation of the AP, the IAEA does not provide a 

conclusion about the absence of such undeclared activities. The 

United States believes that the combination of an IAEA comprehensive safeguards agreement (CSA) and an AP has become the 

international standard for safeguards and verification under the 

Nuclear Non-Proliferation Treaty. 

A comprehensive deal would commit Iran to enhanced transparency and monitoring measures, including ratifying the AP, to 

verify the exclusively peaceful nature of its nuclear program and to 

quickly detect any attempts by Iran to break out. Implementing the 

AP would provide the IAEA with expanded access to sites and facilities in Iran and impose additional reporting requirements on 

Iran’s nuclear program. However, given Iran’s past behavior, we 

are seeking enhanced transparency and monitoring measures beyond the AP. 

How exactly the transparency and monitoring framework will 

look beyond the AP is still under negotiation. We continue to place 

a high priority on rigorous monitoring measures in order to detect 

any violation of a comprehensive deal promptly and retain an ability to snap sanctions back in place should violations occur. Our 

team continues to work toward a package that will best achieve our 

goals of preventing Iran from acquiring a nuclear weapon and ensuring that Iran’s nuclear program is used for exclusively peaceful 

purposes. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR BROWN 

FROM ANTONY BLINKEN 

Q.1. Breakout time is the amount of time Iran would need to create 

enough weapons-grade uranium for a single nuclear weapon, if it 

failed to observe an agreement. While many overlook the fact that 

considerable additional time would be needed to actually fabricate 


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a nuclear weapon, break-out capacity is widely accepted as the 

‘‘long pole in the tent’’ of making a nuclear weapon. By focusing on 

breakout time the agreement would give the international community a year or more to react. 

Are you confident that any agreement to which the United States 

is a party will provide us and our allies sufficient time to respond, 

including militarily if necessary and a last resort, Iran makes an 

overt or covert breakout move toward a weapon?

A.1. A comprehensive deal would commit Iran to enhanced transparency and monitoring measures to verify the exclusively peaceful 

nature of its nuclear program and to quickly detect any attempts 

by Iran to break out. We continue to place a high priority on rigorous monitoring measures in order to detect violations promptly 

and retain an ability to snap sanctions back in place should violations occur. 

We are confident that the United States would have sufficient 

time to respond to an Iranian breakout effort, should Iran take a 

decision to do so. Should Iran take such a decision, the President 

has been clear that the United States will do what it must to prevent Iran from acquiring a nuclear weapon.

Q.2. The President noted recently that we have frozen Iran’s nuclear program, rolled back stockpiles of material already accumulated, and been provided unprecedented insight into their activities. And he said that was not just our assessment, but the assessment of intelligence agencies worldwide, including in Israel. 

I know we’ll hear about verification in greater detail in upcoming 

classified briefings, but can you describe generally how the United 

States is ensuring that Iran is complying with the terms of the 

Joint Plan of Action, and describe the different verification and 

monitoring roles, both now and under a comprehensive deal, played 

by the State Department, the U.S. intelligence community, the 

IAEA, and others?

A.2. As a result of the Joint Plan of Action (JPOA), Iran’s nuclear 

program is more constrained and transparent than it has been in 

years. In particular, a significant benefit of the JPOA is that the 

International Atomic Energy Agency (IAEA) has obtained greater 

access into and information on Iran’s nuclear program. The IAEA 

is playing the essential role in verifying Iran’s fulfillment of its nuclear-related commitments under the JPOA, consistent with its ongoing monitoring and verification role in Iran pursuant to the Nuclear Non-Proliferation Treaty. The IAEA has confirmed that Iran 

is fulfilling its nuclear-related commitments under the JPOA. We 

have complete confidence in the ability of the IAEA and its cadre 

of professional inspectors to continue in its enhanced verification 

role under the JPOA. 

A comprehensive deal would commit Iran to enhanced transparency and monitoring measures, including ratifying the IAEA 

Additional Protocol (AP), to verify the exclusively peaceful nature 

of its nuclear program and to quickly detect any attempts by Iran 

to break out. Implementing the AP would provide the IAEA with 

expanded access to sites and facilities in Iran and impose additional reporting requirements on Iran’s nuclear program. How exactly the transparency and monitoring framework will look beyond 


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the AP is still under negotiation. We continue to place a high priority on rigorous monitoring measures in order to detect any violation of a comprehensive deal promptly and retain an ability to snap 

sanctions back in place should violations occur. 

We would refer you to the Office of the Director of National Intelligence for a more detailed assessment of our capabilities to detect 

undeclared nuclear facilities in Iran and the Intelligence Community’s prospective role in verifying a comprehensive deal.

Q.3. I know this debate is ultimately less about the details of this 

bill than about whether to pass a bill at all while negotiations are 

ongoing. Even so, the legislation we’ll be considering this week requires that any new sanctions relief provided for in a final agreement could not be given by the United States for a period of at 

least 30 consecutive legislative days—which could, if a deal is finalized in late June, stretch for over 2 months, beyond mid-September. What do you see as the major risks of that approach, which 

would likely violate any long-term agreement, and how do you 

think our allies and Iran would react if such a temporary prohibition against new sanctions relief were in place?

A.3. Our ability to offer timely sanctions relief is critical to getting 

Iran to take the nuclear steps necessary to assure the international 

community that its nuclear program is exclusively peaceful (including through implementation of stringent transparency and 

verification measures). Legislation that would require an affirmative vote to approve a comprehensive deal would likely have a profoundly negative impact on the ongoing negotiations—emboldening 

Iranian hard-liners, inviting a counter-productive response from 

the Iranian majiles. Such legislation would differentiate the U.S. 

position from our allies in the negotiations, and once again call into 

question our ability to negotiate this deal. 

Moreover, if congressional action is perceived as preventing us 

from implementing a deal, it will create divisions within the international community, putting at risk the very international cooperation that has been essential to our ability to pressure Iran. In addition, it would potentially make it difficult to secure international 

cooperation for additional sanctions in the future if Iran failed to 

make the necessary concessions in the negotiations or failed to 

comply with a comprehensive deal. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR KIRK FROM 

ANTONY BLINKEN 

Q.1. Under Secretary Cohen wrote in the Wall Street Journal in 

December 10, 2013, that ‘‘the relief package in this interim deal is 

economically insignificant to Iran,’’ adding: ‘‘Iran will be even deeper in the hole 6 months from now, when the deal expires, than it 

is today.’’

Twelve months later, Iran is far from being ‘‘deeper in the hole.’’ 

On December 24, 2014, Iranian President Hassan Rouhani publicly 

announced that Iran’s economy is benefiting greatly from the interim deal’s sanctions relief package. ‘‘The country’s economic 

growth was minus 6.8 percent 2 years ago, but the statistics issued 

by the Central Bank last night showed a 4-percent positive growth 

during the 6 months of the current [Iranian] year,’’ Rouhani said 


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in a speech, adding: ‘‘We have now finally managed to reduce the 

40 percent inflation down to 17 percent.’’

Even if Rouhani is exaggerating about Iran’s 4-percent growth 

rate in the last 6 months, the International Monetary Fund is projecting that Iran’s economy will grow by 2.2 percent in 2015. 

Do you still claim today that the interim deal’s sanctions relief 

package is ‘‘economically insignificant to Iran’’? In the United 

States, we’d call Iran’s 2.2 percent growth rate a ‘‘recovery’’ and 

Iran’s alleged 4 percent growth in the last 6 months an ‘‘economic 

boom.’’

A.1. Contrary to some reports, Iran has not received significant 

economic benefit from the Joint Plan of Action (JPOA). 

The JPOA is structured so that the overwhelming majority of 

sanctions—including the key oil, banking, and financial sanctions 

architecture—remain firmly in place. As a result of our sanctions, 

exacerbated by the recent drop in oil prices, Iran’s economy remains under intense and sustained pressure. Throughout the 

JPOA period, we have sanctioned almost 100 entities and levied 

$350 million in civil penalties against companies for doing business 

with Iran in violation of our sanctions. 

The total value to Iran of the JPOA—which we estimate could 

be up to approximately $14 billion to $15 billion through June 

2015—pales in comparison to the amount of revenue Iran has lost 

from the sanctions currently in place and years of GDP contraction. 

In 2014, our oil sanctions alone deprived Iran of over $40 billion 

in oil revenue—at least four times the value of the JPOA during 

that period. The vast majority of Iran’s approximately $100 billion 

in foreign exchange holdings still remain inaccessible or restricted 

by sanctions. 

While the Iranian economy grew at a rate of around 2 percent 

between March and September 2014, this growth occurred after 2 

years of painful GDP contraction. Iran’s economy is 25 percent 

smaller today than what it would have been had it remained on its 

pre-2011 growth trajectory, and low investment and investor wariness will limit a potential recovery.

Q.2. Is it the Administration’s position that Iran’s recent economic 

growth, driven in no small part by the interim deal’s sanctions relief package, has actually strengthened, not weakened, our hand in 

negotiations—that it’s actually made Iran’s ultimate decider, Supreme Leader Ali Khamenei, more likely, not less, to make significant concessions to the West on eliminating Iran’s uranium enrichment program, completely dismantling the Arak heavy water reactor that former Administration official Bob Einhorn dubbed ‘‘plutonium-bomb factory,’’ and on coming completely clean about the Iranian nuclear program’s military dimensions?

A.2. The efforts of Congress and the Administration to impose 

stringent and comprehensive sanctions have imposed significant 

economic pain on Iran and have been critical in bringing Iran to 

the negotiating table. 

Our ability to provide relief from these economic sanctions is critical to providing Iran with an incentive to take the nuclear steps 

necessary to assure the international community that its nuclear 

program is exclusively peaceful. 


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That said, we do not assess Iran’s economic improvements during 

the last year were a result of the Joint Plan of Action. Despite nascent signs of improvement, brought about largely by improved economic management, Iran’s economy will remain far below its potential in the coming year. 

The Joint Plan of Action is structured so that the overwhelming 

majority of sanctions—including the key oil, banking, and financial 

sanctions architecture—remain firmly in place. As a result of our 

sanctions, exacerbated by the recent drop in oil prices, Iran’s economy remains under intense and sustained pressure. 

The total value to Iran of the JPOA—which we estimate could 

be up to approximately $14 billion to $15 billion through June 

2015—cannot make up for Iran’s systemic economic weaknesses 

and imbalances, which include lack of economic diversification, a 

suppressed manufacturing base, pervasive unemployment and 

underemployment, and approximately 16 percent inflation. The Administration is committed to ensuring that Iran remains under 

powerful economic pressure as we continue negotiations.

Q.3. When Secretary of State John Kerry announced a 7-month extension for the nuclear talks with Iran on November 24, 2014, he 

also announced a March 24, 2015, deadline for a ‘‘political agreement’’ with Iran. 

Will the ‘‘political agreement’’ with Iran due on March 24, 2015, 

be a written agreement? I request that any answer you give begin 

with a ‘‘yes’’ or a ‘‘no.’’

A.3. The Administration is committed to sharing the details and 

technical documents related to a long-term comprehensive deal 

with Congress. If we successfully negotiate a framework by the end 

of March, and a final deal by the end of June, we expect a robust 

debate in Congress. We will aggressively seek public and congressional support for a deal if we reach one because we believe a good 

deal is far better than the alternatives available to the United 

States. Because we do not have a deal yet, it would be premature 

to speculate what form it would take. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR TESTER 

FROM ANTONY BLINKEN 

Q.1. Could you lay out the broader national security consequences 

of Congress passing new sanctions—even with a so-called ‘‘trigger’’—beyond the P5+ 1 negotiations with Iran? What regional consequences would such legislation have on U.S. efforts to combat the 

Islamic State of Iraq and the Levant (ISIL) in the region, should 

it pass with a veto-proof majority? What further implications for 

the United States and our coalition partners in the region would 

the passage of such sanctions legislation have?

A.1. Any new sanctions—including trigger sanctions—would be inconsistent with our commitments under the Joint Plan of Action 

(JPOA). New sanctions could undermine our sanctions coalition, 

create tensions within the P5+ 1, and provoke Iran into walking 

away from the negotiating table while blaming the failure on us. 

Moreover, our ability to follow through on our commitments will 

have longstanding implications well beyond P5+ 1 negotiations 

with Iran. If any Administration—Democrat or Republican—does 


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not have the ability to conclude agreements that advance our national security interests, this will undermine our ability to implement all aspects of our foreign policy, including undermining our 

credibility with our partners in the region who are working with 

us to combat ISIL.

Q.2. What gives the Administration confidence that a political 

agreement between the P5+ 1 and Iran will be reached by the 

March 24 deadline? Are our P5+ 1 coalition partners equally confident that a political agreement can be reached by this deadline? 

What further obstacles remain in place?

A.2. We are seeking to outline the major elements of a deal by the 

end of March. We will use the remaining time until the end of the 

current extension period to complete the technical details. We have 

made incremental but real progress through intense diplomatic and 

technical work on the key issues that form the basis for a comprehensive deal. These negotiations have been serious and substantive, and we are working hard to find ways to resolve our concerns while maintaining the imperative that all pathways to a nuclear weapon must be cutoff. There may be multiple ways to accomplish that objective, but this principle is non-negotiable. 

If by the end of March we have not decided on the major elements and do not see a clear path forward, then we can revisit how 

to proceed. We cannot continue this process forever, and we will 

have all the same options we have today at the end of this process. 

We will not take a bad deal and if we conclude that Iran is unable 

to unwilling to take the necessary steps to resolve our concerns, we 

will walk away from these negotiations.

Q.3. In your estimation, what would a sturdy yet workable inspection and verification regime look like from the U.S. negotiator perspective? Do you envision U.S. inspectors taking part in this regime? Are you confident that a final agreement will permit inspectors unfettered and unrestricted access to sites in Fordow, Natanz, 

Arak, Isfahan, Bushehr, and Parchin? Do our coalition partners 

share this view?

A.3. A comprehensive deal must ensure that Iran is subject to significantly enhanced transparency and monitoring measures to 

verify the exclusively peaceful nature of its nuclear program and to 

quickly detect any attempts by Iran to break out. How exactly that 

framework will look is still under negotiation and our team continues to work toward a package that will best achieve our goals 

of preventing Iran from acquiring a nuclear weapon and ensuring 

that Iran’s nuclear program is used for exclusively peaceful purposes. Regardless, the Administration is insisting on verification 

measures to help ensure that violations will be detected promptly. 

We continue to place a high priority on strict monitoring and 

verification measures in order to detect violations and retain an 

ability to snap sanctions back in place should violations occur.


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