```

[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]

                        MOVING THE MONEY PART 2:
                     GETTING ANSWERS FROM THE BIDEN
                     ADMINISTRATION ON THE IRANIAN
                     REGIME'S SUPPORT OF TERRORISM

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

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT
                           AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           DECEMBER 13, 2023

                               __________

       Printed for the use of the Committee on Financial Services
       
                           Serial No. 118-65
                           
 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
 

                                __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
55-958 PDF                  WASHINGTON : 2024                    
          
-----------------------------------------------------------------------------------     

                 HOUSE COMMITTEE ON FINANCIAL SERVICES

               PATRICK McHENRY, North Carolina, Chairman

FRANK D. LUCAS, Oklahoma             MAXINE WATERS, California, Ranking 
PETE SESSIONS, Texas                     Member
BILL POSEY, Florida                  NYDIA M. VELAZQUEZ, New York
BLAINE LUETKEMEYER, Missouri         BRAD SHERMAN, California
BILL HUIZENGA, Michigan              GREGORY W. MEEKS, New York
ANN WAGNER, Missouri                 DAVID SCOTT, Georgia
ANDY BARR, Kentucky                  STEPHEN F. LYNCH, Massachusetts
ROGER WILLIAMS, Texas                AL GREEN, Texas
FRENCH HILL, Arkansas, Vice          EMANUEL CLEAVER, Missouri
    Chairman                         JIM A. HIMES, Connecticut
TOM EMMER, Minnesota                 BILL FOSTER, Illinois
BARRY LOUDERMILK, Georgia            JOYCE BEATTY, Ohio
ALEXANDER X. MOONEY, West Virginia   JUAN VARGAS, California
WARREN DAVIDSON, Ohio                JOSH GOTTHEIMER, New Jersey
JOHN ROSE, Tennessee                 VICENTE GONZALEZ, Texas
BRYAN STEIL, Wisconsin               SEAN CASTEN, Illinois
WILLIAM TIMMONS, South Carolina      AYANNA PRESSLEY, Massachusetts
RALPH NORMAN, South Carolina         STEVEN HORSFORD, Nevada
DAN MEUSER, Pennsylvania             RASHIDA TLAIB, Michigan
SCOTT FITZGERALD, Wisconsin          RITCHIE TORRES, New York
ANDREW GARBARINO, New York           SYLVIA GARCIA, Texas
YOUNG KIM, California                NIKEMA WILLIAMS, Georgia
BYRON DONALDS, Florida               WILEY NICKEL, North Carolina
MIKE FLOOD, Nebraska                 BRITTANY PETTERSEN, Colorado
MIKE LAWLER, New York
ZACH NUNN, Iowa
MONICA DE LA CRUZ, Texas
ERIN HOUCHIN, Indiana
ANDY OGLES, Tennessee

                     Matt Hoffmann, Staff Director
              Subcommittee on Oversight and Investigations

                   BILL HUIZENGA, Michigan, Chairman

PETE SESSIONS, Texas                 AL GREEN, Texas, Ranking Member
ANN WAGNER, Missouri                 STEVEN HORSFORD, Nevada
ALEXANDER X. MOONEY, West Virginia   RASHIDA TLAIB, Michigan
JOHN ROSE, Tennessee, Vice Chairman  SYLVIA GARCIA, Texas
DAN MEUSER, Pennsylvania             NIKEMA WILLIAMS, Georgia
ANDY OGLES, Tennessee
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    December 13, 2023............................................     1
Appendix:
    December 13, 2023............................................    27

                               WITNESSES
                      Wednesday, December 13, 2023

Paley, Abram, Deputy Special Envoy for Iran, U.S. Department of 
  State..........................................................     6
Rosenberg, Elizabeth, Assistant Secretary, Terrorist Financing 
  and Financial Crimes, U.S. Department of the Treasury..........     5

                                APPENDIX

Prepared statements:
    Paley, Abram.................................................    28
    Rosenberg, Elizabeth.........................................    32

              Additional Material Submitted for the Record

Green, Hon. Al:
    CNN, ``Qatar sent millions to Gaza for years-with Israel's 
      backing. Here's what we know about the controversial 
      deal.'', dated December 12, 2023...........................    37
Rosenberg, Elizabeth:
    Written responses to questions for the record from 
      Representative Huizenga....................................    43
    Written responses to questions for the record from 
      Representative Rose........................................    52
    Written responses to questions for the record from 
      Representative Waters......................................    47

 
                        MOVING THE MONEY PART 2:
                     GETTING ANSWERS FROM THE BIDEN
                     ADMINISTRATION ON THE IRANIAN
                     REGIME'S SUPPORT OF TERRORISM

                              ----------                              

                      Wednesday, December 13, 2023

             U.S. House of Representatives,
                          Subcommittee on Oversight
                                and Investigations,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 9:07 a.m., in 
room 2128, Rayburn House Office Building, Hon. Bill Huizenga 
[chairman of the subcommittee] presiding.
    Members present: Representatives Huizenga, Sessions, Rose, 
Meuser; Green and Garcia.
    Ex officio present: Representative Waters.
    Also present: Representative Nunn.
    Chairman Huizenga. The Subcommittee on Oversight and 
Investigations will come to order.
    Without objection, the Chair is authorized to declare a 
recess of the subcommittee at any time.
    I do want to take a moment, a point of personal privilege, 
and then offer that up to my colleague, Mr. Green, as well. But 
I want to acknowledge somebody who has been an integral part of 
our team here at the Oversight Subcommittee, Rachel Kaldahl.
    Rachel has been our Chief Oversight Counsel for the past 16 
months. She previously had been with the House Ways and Means 
Committee. She is going to some other place a little north of 
us. I hear it is on a campus, some other building over there 
where they might do some important stuff too called the Senate, 
and she is going to be going over to the Senate Banking 
Committee.
    And we deeply appreciate your service, Rachel. You have 
been a pleasure to work with. You have been an amazing 
professional in how you have worked through some tough issues 
and we just want to say thank you on behalf of myself, 
personally, Sean, my team, and the entire committee.
    We just want to say, thank you for your service. We know 
you are not going far, and I am sure our paths will be crossing 
again. So, blessings, and all the best for your future.
    And with that, I am happy to acknowledge my colleague, Mr. 
Green, as well.
    Mr. Green. Thank you, Mr. Chairman, and this is one of 
those moments of bipartisanship. I am honored to acknowledge 
her outstanding work, and I also wish her well. Thank you, 
Rachel, for your service.
    Chairman Huizenga. And as a former staffer, I know you are 
only as good as the people you surround yourself with, and she 
has been excellent. So, thank you again.
    With that, this hearing is entitled, ``Moving the Money 
Part 2: Getting Answers from the Biden Administration on the 
Iranian Regime's Support of Terrorism.''
    I now recognize myself for 5 minutes to give an opening 
statement.
    Assistant Secretary Rosenberg, and Deputy Special Envoy 
Paley, thank you for appearing before our subcommittee this 
morning. Your testimony is significant to this subcommittee as 
we continue to investigate how the Iranian regime accesses 
money around the world due to relaxed sanction enforcement and 
waivers.
    Additionally, we hope that you can shed light on why a new 
waiver was necessary for the Iraqi electricity sales, and how 
the Biden Administration monitors compliance of sanctions 
around the world. And as I said during our last hearing, I do 
not believe this topic should be partisan. However, I do 
believe in accountability.
    It is vital that our oversight work is informed with 
collaboration and testimony directly from the agencies in an 
open and transparent setting, not behind closed doors. Again, 
thank you for your willingness to be here today.
    As we documented in our previous hearing, Iran continues to 
be a leading state sponsor of terrorism, facilitating a wide 
range of attacks and other illicit activities around the globe, 
and we are seeing these reports daily regarding our own troops 
in the region.
    October's attack on our ally, Israel, is a stark reminder 
that in order to prevent further atrocities, we must increase, 
not relax, pressure on the Iranian regime. Iran sanctions have 
been a significant component of U.S. policy since Iran's 1979 
Islamic revolution and history tells us that they work. For 
example, the previous Administration's maximum pressure 
campaign cut oil exports from Iran, significantly reducing 
Tehran's ability to fund attacks against Americans and our 
allies.
    In contrast, the current Administration has adopted a 
different strategy. This past September, as part of a deal with 
the Iranian regime to free American hostages, President Biden 
waived U.S. sanctions to allow for the transfer of $6 billion 
of Iranian funds from accounts in South Korea to Qatar. While 
the funds were only to be used for humanitarian purposes such 
as food and medicine, there are reports that the Iranian regime 
has found and exploited ways around those restrictions.
    Regardless of what restrictions are placed on these 
transferred funds, Iranian officials themselves have signaled 
that this money is fungible, which is confirmed by Iranian 
President Ebrahim Raisi, who stated, ``This money belongs to 
the Iranian people, the Iranian Government. So, the Islamic 
Republic of Iran will decide what to do with this money.''
    Believing that the money will go to benefit Iranian 
citizens may be a bit naive. The White House and my colleagues 
on the other side of the aisle may attempt to dismiss the 
significance of these waivers, assuring us that Iran will not 
gain access to these transferred funds. The reality is they 
likely will at some point, if they haven't already. My 
colleagues will use this opportunity to point fingers at the 
past Administration instead of acknowledging that under this 
President, Iran has gained ground and grown in their influence.
    I will note that the Obama Administration and the Trump 
Administration had been operating under this, but we saw a 
decrease in those sales, and that is what this whole program 
was about: to wean places like Korea off of Iranian oil.
    The American people expect their Representatives in 
Washington to stand up to those who wish us harm. As we speak, 
Iranian proxies continue to attack American troops and our 
allies with little if any accountability or responsibility from 
this Administration, in my opinion.
    So as Chair of this subcommittee, I intend to use Congress' 
oversight authority to hold our government and the Biden 
Administration accountable. The status quo is not acceptable. 
American lives have been lost--66 troops and contractors have 
been killed in recent days.
    So, I look forward to having an open and honest dialogue 
this morning. And with that, I am going to yield back the 
balance of my time.
    The Chair now recognizes the ranking member of the 
subcommittee, the gentleman from Texas, Mr. Green, for his 
requested 4 minutes for an opening statement.
    Mr. Green. Thank you, Mr. Chairman. I greatly appreciate 
your desire for accountability. And I greatly respect your 
desire to investigate fungibility.
    I do believe that President Biden is an honorable man. I 
believe that President Biden has followed the law. I believe 
that what he has done for humanitarian purposes is something 
that other Presidents have done in a similar way.
    I believe that the $6 billion has not gone--and I think we 
will get evidence of that--to Iran. The money would never go to 
Iran. It would be utilized to make purchases for humanitarian 
purposes that could benefit people in Iran.
    I think that this quest for accountability is something 
that we should pursue. I do not think we should stop with just 
a second hearing, however. I think we need a third hearing, 
because we need to take a look at the money that has gone to 
Hamas.
    In a CNN news story in 2018, Qatar--the same country that 
would aid and assist with the humanitarian support to the 
people in Iran--began making monthly payments to the Gaza 
Strip. Some $15 million was sent into Gaza in cash-filled 
suitcases. And this cash money going into the Gaza Strip, into 
the hands of Hamas, was delivered by the Qataris through 
Israeli territory after months of negotiation with Israel.
    Now, what is interesting about this is that $15 million--
and by the way, when I say, ``dollars,'' I literally mean U.S. 
dollars, not Canadian dollars--is that the U.S. was aware of 
the Qatari payments, and this was on President Trump's watch, 
to Hamas. This is per a former senior State Department 
official.
    And also, this allowed Prime Minister Netanyahu to avoid 
the pressure of peace talks because he could indirectly keep 
Hamas in power, and in so doing, he would have the perfect 
enemy, the perfect scapegoat, somebody that does not want 
Israel to exist, and as a result of not wanting Israel to 
exist, he could always say, I do not have a partner with whom 
to negotiate.
    But while he is saying this, he is allowing millions in 
cash--we do not have to talk about fungibility--to go directly 
to Hamas. I think that we ought to investigate Mr. Trump's 
actions or the Administration's actions.
    I do not think we can limit these things to the lawful 
actions of President Biden. There is more than probable cause 
to investigate.
    I would hope, Mr. Chairman, that we would treat the Trump 
Administration with a similar desire to have accountability and 
find out what happened to those suitcases of cash. I yield 
back.
    Chairman Huizenga. The gentleman yields back. I will note 
that I believe Ms. Rosenberg, and I am not sure about Mr. 
Paley, are career employees, correct? No, I had it reversed. I 
think Mr. Paley is, so, you may have the ability to ask them 
that.
    The Chair now recognizes the ranking member of the full 
Financial Services Committee, Ms. Waters, for one minute for an 
opening statement.
    Ms. Waters. Thank you very much, Mr. Chairman.
    Under the Biden Administration, the United States has 
maintained the most-extensive set of comprehensive sanctions on 
Iran. In fact, the Biden Administration has ramped up pressure 
significantly since the Trump Administration by designing 
sanctions for hundreds of additional entities for activity 
related to Iran, including illicit sale of Iranian oil.
    Further, President Biden successfully negotiated a 
temporary ceasefire and the return of hostages taken by Hamas. 
This is the kind of steady leadership that America needs in an 
increasingly-unsteady world.
    While I am interested in working across the aisle with the 
Administration to ratchet up pressure against Iran in any way 
possible, the accusations that the Biden Administration has 
somehow weakened sanctions against Iran are simply false and 
are not conducive to productive conversation on these issues.
    I hope we can clear up much of that misinformation. I thank 
you, and I yield back.
    Chairman Huizenga. The gentlelady's time has expired.
    Today, we welcome the testimony of Elizabeth Rosenberg, the 
Assistant Secretary for Terrorist Financing and Financial 
Crimes at the Treasury Department; and Abram Paley, the Deputy 
Special Envoy for Iran at the State Department.
    We want to thank you both for taking the time to be here in 
person today. You will each be recognized for 5 minutes for an 
oral presentation of your testimony. And without objection, 
your written statements will be made a part of the record.
    Assistant Secretary Rosenberg, you are now recognized for 5 
minutes for your oral remarks.

    STATEMENT OF ELIZABETH ROSENBERG, ASSISTANT SECRETARY, 
 TERRORIST FINANCING AND FINANCIAL CRIMES, U.S. DEPARTMENT OF 
                          THE TREASURY

    Ms. Rosenberg. Thank you, Chairman Huizenga, Ranking Member 
Green, and distinguished members of the subcommittee. I 
appreciate the opportunity to speak on what the U.S. Department 
of the Treasury is doing to combat terrorist financing.
    October 7th was a day of horror. The brutality of the 
terrorist attacks carried out by Hamas against Israel, killing 
indiscriminately, sparing neither children nor the elderly, was 
an affront to our shared humanity and a somber reminder of the 
threat posed by terrorist organizations like Hamas.
    It is my responsibility as the Assistant Secretary for 
Terrorist Financing and Financial Crimes to identify and 
disrupt terrorist financing in the United States and abroad. 
Since the attacks, Treasury has redoubled its efforts to 
identify and freeze the finances of Hamas and other Iran-backed 
terrorist groups. Hamas has traditionally been able to raise 
funds for its terrorist activities from an array of sources 
including taxation, donations, a portfolio of investments 
across Africa and the Middle East, and direct support from 
Iran.
    The U.S. Treasury Department has historically used the full 
scope of its authorities to impede Hamas' funding. Sanctions 
designations of the group's leaders and investments span over 2 
decades. Recognizing the dangerous role that Iran plays in 
destabilizing the region more broadly, Treasury has sanctioned 
nearly 1,000 individuals and entities connected to the Iranian 
regime and its proxies to date.
    Since the October attacks, Treasury has released 3 separate 
sanctions tranches focused on Hamas, designating over 50 
additional individuals and entities linked to Hamas and Iran 
across multiple jurisdictions. And just this morning, Treasury 
has announced another tranche of sanctions on Hamas entities in 
connection with international partners.
    However, Hamas leaders live and move freely in Turkey, 
Qatar, and elsewhere, publicly solicit funds, and enjoy 
financial services. Therefore, in addition to sanctions, 
designations disrupting Hamas' international financial networks 
require international action.
    In the wake of the Hamas attacks, Treasury reached out to 
counterparts across the Middle East and Europe to convey the 
Administration's support for Israel and the intent to use all 
the tools at our disposal to expose and disrupt Hamas, 
including the terrorist financing targeting center, which we 
promptly convened among a number of Gulf partners in Riyadh, 
Saudi Arabia, in October.
    Additionally, Treasury Under Secretary Nelson recently 
traveled to Turkey to discuss the urgent need for Turkish 
efforts to freeze Hamas funds. Deputy Secretary Adeyemo also 
spoke with his European counterparts in late October to press 
our partners to investigate entities with possible ties to 
Hamas.
    Treasury has also had substantive technical outreach to our 
partners around the world, which has led to complementary 
sanctions actions by Australia, the European Union, Japan, the 
United Kingdom, and others, to designate Hamas-related targets 
through their own domestic authorities. Treasury has also 
engaged the private sector both in the United States and abroad 
to refine the red flags and indicators of terrorist financing 
and underscore the imperative to report and freeze terrorist 
funds.
    Alongside these counter-illicit finance activities, 
Treasury has a significant role to play in addressing the 
ongoing humanitarian crisis in Gaza to ensure that our 
financial measures do not negatively impact legitimate aid 
going to the people of Gaza. Treasury has had close engagement 
with representatives of non-governmental organizations (NGOs), 
international organizations, and U.S. Government implementers 
of humanitarian assistance on these matters.
    In sum, Treasury's response to Hamas and its funders over 
decades has been broad and aggressive. As this committee fully 
appreciates, Hamas' attacks and their relationship with Iran 
pose a threat to the safety and stability not only of Israel, 
but of the region more broadly, and to American interests.
    All of us here share a common interest: preventing acts of 
terror. Secretary Yellen and Deputy Secretary Adeyemo have 
previously spoken about how to confront these challenges by 
maintaining U.S. leadership abroad, meeting all of our 
financial commitments, and adapting our laws to meet the 
challenges posed by new and emerging financial technologies.
    I look forward to working with the members of this 
committee on these issues, and I would be happy to answer your 
questions.
    Thank you.
    [The prepared statement of Assistant Secretary Rosenberg 
can be found on page 32 of the appendix.]
    Chairman Huizenga. Thank you.
    Mr. Paley, you are now recognized for 5 minutes.

 STATEMENT OF ABRAM PALEY, DEPUTY SPECIAL ENVOY FOR IRAN, U.S. 
                      DEPARTMENT OF STATE

    Mr. Paley. Thank you.
    Chairman Huizenga, Ranking Member Green, and members of the 
subcommittee, thank you for inviting us here today. We welcome 
this opportunity to discuss Iran, one of the most-persistent 
threats we face as a country.
    The Biden Administration views Iran as an adversary and the 
leading state sponsor of terrorism. We are clear-eyed about 
Iran and will continue to take the actions necessary to counter 
the threats it poses, and our approach is framed within this 
context. Across the Federal Government, we are confronting Iran 
and pushing back against its destabilizing activities. We are 
coordinating closely with allies and partners to enhance our 
already-strong military deterrent.
    We are implementing biting sanctions and economic pressure 
and we are utilizing strategic messaging to make clear Iran's 
behavior will not be tolerated, will be punished, and that 
Tehran will continue to be treated as a pariah on the 
international stage absent a shift in its policies.
    This resolve in countering Iran has been on full display 
since the horrific Hamas terrorist attacks on Israel on October 
7th, the subsequent attacks by Iranian-backed proxies on U.S. 
personnel and facilities in the region, and the Iran-enabled 
Houthi attacks on Israel and on commercial shipping in the Red 
Sea. We view Iran as complicit in Hamas' barbaric terrorist 
attack, and the attacks against us by its proxies, and we will 
continue to hold it accountable.
    The President and the Secretary of State have been 
unequivocal about our support for Israel and Israel's right to 
defend itself against terrorism, and the Biden Administration 
has also been consistent in our efforts to counter Iran's long-
standing support for Hamas, Hezbollah, the Houthis, and militia 
groups in Iraq and Syria.
    Our bolstered presence in the region has sent a clear 
message that this is not the time to take advantage of the 
situation, and President Biden has shown he is prepared to 
defend U.S. personnel and interests time and time again.
    While our priority right now remains supporting Israel, 
countering Iran's support for terrorism in the region, and 
addressing the humanitarian situation in Gaza, we also continue 
to counter the full range of the Iranian regime's activities 
that are antithetical to our interests and our values. We are 
confronting the Iranian regime's lethal plotting against 
current and former U.S. officials, as well as the transnational 
repression of dissidents, journalists, and human rights 
defenders, including on U.S. soil.
    We are using all of the tools at our disposal to expose and 
disrupt Iran's expanding military partnership with Russia, 
alongside our allies and partners. We are standing with the 
people of Iran in the face of continued oppression and 
violence. And on the nuclear front, President Biden is 
absolutely committed to never allowing Iran to acquire a 
nuclear weapon and has been clear that we remain postured and 
prepared to use all appropriate measures to do so.
    Iran's unjust detention of our citizens for political 
leverage also represents a threat, and that is why we continue 
to stress to all Americans to not go to Iran.
    President Biden and Secretary of State Blinken have been 
clear that there is no higher priority than the safety and 
security of Americans, and the Administration stands by our 
deal that brought five innocent Americans and two of their 
family members home. This deal was about reuniting these 
Americans with their loved ones.
    As part of this arrangement, we facilitated the transfer of 
$6 billion in restricted Iranian funds held in South Korea to 
restricted accounts in Qatar for humanitarian use only. Not a 
penny of this money has been spent, and these funds will not go 
anywhere anytime soon. This does not change anything about our 
approach to Iran. Iran remains an adversary and we will 
continue to confront it as such.
    With respect to Qatar, its relationship with Hamas has been 
well known to multiple Israeli governments, including the 
current government, going back many years. It has been and 
remains extremely helpful in securing hostage releases. At the 
same time, we have discussed with Qatari leaders that there is 
no going back to the status quo of October 6th and they have 
expressed their agreement with that.
    With respect to the waiver Secretary Blinken signed on 
November 14th, the 21st such waiver across multiple 
Administrations for Iraq to pay for electricity imports and in 
support of Iraq's energy independence, under these waivers, no 
money has been or will be permitted to enter Iran, and any 
notion to the contrary is false. These Iranian funds can only 
be used for the purchase of food, agricultural commodities, 
medicine, medical devices, and other non-sanctionable 
transactions. We do not believe that restricting the 
availability of humanitarian goods to the Iranian people would 
decrease Iran's support for terrorism.
    Iran has proven that it prioritizes destabilizing 
activities and terrorism regardless of the country's 
macroeconomic conditions, and since we do not expect any change 
in Iran's behavior from these steps, our approach to Iran is 
similarly not going to change.
    I close by reaffirming the Administration's commitment to 
addressing Iran's continued destabilizing behavior unilaterally 
and with our partners.
    Thank you.
    [The prepared statement of Deputy Special Envoy Paley can 
be found on page 28 of the appendix.]
    Chairman Huizenga. Thank you for that.
    And before I get into my questions, I want to emphasize as 
well that the fact that U.S. citizens still go to Iran is 
stunning to me. Recently, I had the Swiss Ambassador to Iran in 
my office. She and the Swiss act as our on-the-ground liaison 
since we do not have diplomatic relations with Iran. They know 
of tens of thousands of our citizens who are there, and they 
suspect that there may be more. So, if anything, if we want to 
talk about bipartisan agreement, please do not go to Iran so 
that we, the government, and we, as citizens, are not ever put 
in that situation.
    I wanted to emphasize that. That is a public service 
announcement from the Oversight Subcommittee, if that is okay 
with the ranking member.
    I am going to start my questions with Assistant Secretary 
Rosenberg.
    What is the Biden Administration's policy reason for 
allowing the transfer of money from Iraqi banks, in Iraqi 
dinar, to France, Germany, Italy, and Oman--the last two 
waivers covered those--and to be then converted from dinar to 
euros?
    Basically, what I want to know is: first, why; and second, 
who requested this move?
    Ms. Rosenberg. Thank you very much for the question. I 
appreciate the opportunity to speak to this. As a point of 
clarification, the money was earned in euros, so it never 
changed. There was never an FX transaction. It was earned in 
euros and----
    Chairman Huizenga. What do you mean by earned in euros? 
This was electricity that was sent from Iran to Iraq and the 
Iraqis paid for it in euros?
    Ms. Rosenberg. That is correct.
    Chairman Huizenga. So, it was never in Iraqi dinar?
    Ms. Rosenberg. That is correct.
    Chairman Huizenga. Okay. It is my understanding, though, 
that the law says that it is meant and intended to be in the 
local denomination.
    Ms. Rosenberg. I will defer to my colleague from the State 
Department to discuss the waivers that were put in place 
originally by the last Administration that allow for Iraq to 
purchase energy from Iran.
    Chairman Huizenga. So, they have not been converted to 
euros, because they were in euros, is your testimony?
    Ms. Rosenberg. Yes, and----
    Chairman Huizenga. Okay. Why is that necessary?
    Ms. Rosenberg. The Iraqis have the opportunity to pay for 
that in either dinar or euros and they paid for it in euros.
    Chairman Huizenga. Okay. As we have discussed, Oman is one 
of the countries. So, the money--whether it is in Italy, 
France, Germany, or Oman--is in euros, is your understanding?
    Ms. Rosenberg. It is in euros.
    Chairman Huizenga. Okay. Why is Oman one of the countries 
granted a waiver to receive Iranian funds from Iraq? Why Oman?
    Ms. Rosenberg. We have worked with the financial 
institutions in Oman to create the structure for restrictions 
on these finances.
    Chairman Huizenga. Do you have greater confidence in the 
Omani banking system than you do in the Qatari banking system 
or the Italian banking system or the French banking system?
    Ms. Rosenberg. Speaking specifically to the funds in 
question--I think that we are here today to discuss the funds 
in Qatar and the funds in Oman. We have worked very carefully 
with----
    Chairman Huizenga. But the waiver says, Italy and France, 
France twice, and the last two waivers in Germany. I am curious 
why Germany is no longer in that waiver, and maybe Mr. Paley is 
going to have to answer that. But I want to continue with you.
    Ms. Rosenberg. I happily defer to Mr. Paley. These are 
State Department waivers, so I would happily defer to my 
colleague to speak to the text of the waiver.
    Chairman Huizenga. Okay.
    Ms. Rosenberg. But with respect to the confidence that we 
have in the financial institutions in Qatar and in Oman that 
hold this money, we have worked on creating a structure for the 
restriction of these funds and a whole series of levels of 
compliance in order to examine the money and any potential 
requests for transferring that money.
    Chairman Huizenga. And we had testimony previously that 
there is no written agreement on that. There is no letter--or 
there is a letter, but not a written agreement. But have there 
been any humanitarian transactions facilitated from the Iranian 
funds held in Oman?
    Ms. Rosenberg. There have been two transactions.
    Chairman Huizenga. Two transactions. Okay. I know Mr. Paley 
had said there had been none out of Qatar, but there have been 
out of Oman.
    Have there been any issues or problems identified in the 
transactions facilitated from the Iranian funds held in Oman?
    Ms. Rosenberg. I am familiar with the request from the 
Chair regarding some matters related to the financial 
institutions. We have prepared a response to that, which will 
be forthcoming--I believe today.
    It would be inappropriate for me to speak in an open 
setting here about the financial institutions in detail, 
although we would be happy to, in a closed setting, speak more 
about that particular matter.
    Chairman Huizenga. This is a yes-or-no question; you are 
not giving us any information. Have there been problems or 
issues with those transfers?
    Ms. Rosenberg. The transactions themselves?
    Chairman Huizenga. Yes.
    Ms. Rosenberg. We have confidence in the series of 
restrictions that we have in place and the due diligence 
around----
    Chairman Huizenga. Ms. Rosenberg, you are sliding into 
bureaucrat speak now. You are going soft around the edges on 
this. It is a simple question. Your answer, what I interpret it 
as is, I cannot answer it in this open setting. But have there 
been problems?
    Ms. Rosenberg. I appreciate the question and we would be 
happy to, in a closed setting, speak to you more about the 
particular transactions.
    Chairman Huizenga. So, we will take that as a, yes. My time 
has expired.
    I am now going to recognize, at the request of the ranking 
member of the subcommittee, the ranking member of the Full 
Committee, the gentlewoman from California, Ms. Waters, for 5 
minutes.
    Ms. Waters. Thank you very much.
    Mr. Paley, and Ms. Rosenberg, the United States had a long-
standing bipartisan policy to explicitly exclude certain 
humanitarian activities from sanctions restrictions. 
Specifically, humanitarian exceptions allow for trade in 
agricultural commodities, medicine, and medical devices. Such 
exceptions are reflected in legislation and Executive Orders 
that form the United States sanctions programs, including those 
related to Iran.
    These humanitarian exceptions reflect basic respect for all 
human life and they are also important to our broader national 
security interests. Right now, there is a very serious 
humanitarian crisis occurring in Gaza, and although the Biden 
Administration was able to successfully negotiate a temporary 
ceasefire to allow for more humanitarian assistance, much more 
is needed.
    Mr. Paley, Ms. Rosenberg, can you discuss the importance of 
humanitarian exceptions in the context of what is happening in 
Gaza, and U.S. strategic interests in the broader region? What 
would an elimination of humanitarian exceptions to sanctions 
mean for the innocent civilians in Gaza?
    Ms. Rosenberg. Thank you very much for the question.
    It is correct that the exceptions that exist to pay for 
agricultural commodities, medicine, and medical devices are a 
matter of long-standing policy.
    They are enshrined in congressional statute over years, 
over many programs, over successive Congresses. They are 
enshrined in executive authority as well, over a variety of 
Administrations, and as you say, it reflects respect for human 
life, and it respects the core values of Congress, and of the 
Administration about providing for meeting basic human needs.
    These exceptions that exist, the ability to pay for 
humanitarian goods, apply across an array of sanctions programs 
and so to the extent that there is--where there is a need, for 
example, you were noting that in Gaza, our exceptions exist 
there as well, which is to say that sanctions should not, and 
we will work to ensure that there cannot be restrictions on the 
provision of humanitarian assistance there and elsewhere.
    One note I would add, given that we are here to discuss 
Iran and its support for terror, including through proxy groups 
in the region, and our concern about the potential for 
diversion of humanitarian aid, is it creates the necessity for 
us to work diligently to ensure that humanitarian aid, in a 
number of circumstances, is restricted and we have great 
clarity on the fact that it shall be used for humanitarian aid 
and not diverted.
    Ms. Waters. Thank you.
    Mr. Paley?
    Mr. Paley. Thank you very much.
    I would reiterate what Assistant Secretary Rosenberg said 
in terms of this Administration's commitment of support on 
humanitarian issues, which echoes support across multiple 
Administrations for addressing humanitarian issues and also 
having these humanitarian carve-outs in our legislation that 
allow, with the proper due diligence, for humanitarian 
transactions to go to people across the world including in 
areas where we have very strong disagreements about their 
policy approaches.
    Since October 7th, President Biden and Secretary Blinken 
have emphasized their support for Israel and Israel's right to 
defend themselves including against Iranian-backed terrorism.
    At the same time, President Biden and Secretary Blinken 
have also emphasized their focus on humanitarian support to 
Gaza.
    Ms. Waters. Thank you. My colleagues on the other side of 
the aisle have alleged that President Biden has weakened Iran 
sanctions. But my understanding is that President Biden has 
only increased sanctions since the Trump Administration. In 
fact, the two transactions waivers that are the focus of this 
hearing are actually carried over from the Trump 
Administration.
    Can you please confirm that these are the same sanctions 
waivers from the Trump Administration, that have been continued 
by the Biden Administration? Is that true?
    Mr. Paley. Thank you very much.
    Yes, in terms of the waiver with regards to Iraq and Iraq's 
purchases of electricity from Iran, this is the 21st time that 
this waiver has been issued, the 20th renewal across 
Administrations.
    This Administration has been very clear about our support 
for Iraq and that is what this waiver is about. I am happy to 
get into more detail. And as Ms. Rosenberg said, our support 
for----
    Chairman Huizenga. The gentlelady's time has expired.
    Mr. Paley. Excuse me?
    Chairman Huizenga. I will let you finish the sentence, but 
the gentlelady's time has expired.
    Mr. Paley. Okay. Thank you very much.
    Ms. Waters. Thank you very much. I yield back.
    Chairman Huizenga. With that, the gentleman from Texas, Mr. 
Sessions, is recognized for 5 minutes.
    Mr. Sessions. Mr. Chairman, thank you very much.
    What is happening today is that this subcommittee, under 
the leadership of our young chairman, is trying to ask 
questions, because, as you know, as required by law, there is a 
report that was issued to Congress. There was only one sentence 
in the report regarding the payment transfer of authority in 
the most recent November Iraqi electric waiver.
    I have a copy of your statement here, and the statement 
says the Secretary also certifies that France, Italy, and Oman 
faced exceptional circumstances--exceptional circumstances--
preventing them from significantly reducing their petroleum 
product purchases from Iran.
    Well, look, I get it with France, but Italy has reserves of 
1.3 percent of what it already uses. I do not know what the 
exceptional circumstances are there. Oman has proven reserves 
of 79.4 times its annual consumption, and yet, this Secretary 
has chosen to fool the United States Congress into believing 
significant and exceptional rather than providing the data and 
information.
    The problem is that we have been around for a while, and 
remember that the Obama Administration, 5 different times, 
argued the case they could only give Iran cash--billions of 
dollars--and the only way they could do it is in cash. We know 
that you cannot follow the cash. We do not know where that 
went. The Obama Administration argued, oh, we are for the 
Israelis, but kept giving billions of dollars in cash.
    Hamas only makes--has about $500 million a year and yet 
these Administrations from, granted, the Democratic side, give 
billions of dollars in cash to the Iranians where it is just 
slush money. Just go give it out. There is no way to follow the 
money.
    Mr. Paley, there was no explanation in this report as to 
why it necessitated the payment transfers. I will give you 2 
minutes, and I would like for you to answer the question of, 
what should have been in this report?
    Mr. Paley. Thank you very much, Congressman, and thank you 
for the opportunity to----
    Mr. Sessions. I am sure you are delighted with it.
    Mr. Paley. We welcome the opportunity, because at the heart 
of it, what this waiver is about is our support for Iraq. 
Across Administrations, we have issued and renewed these 
waivers to----
    Mr. Sessions. Then, why did you blame Oman? And exceptional 
circumstances and significant--why did you use those terms for 
a country that has 79 times what their annual needs require?
    Mr. Paley. Thanks very much for the question. Over time, 
multiple Administrations have approved and renewed these 
waivers to allow Iraq to continue to purchase electricity from 
Iran. Over time, money has accrued in these accounts that are 
in Iraq and that are subject to all the restrictions that have 
remained in place because we have not lifted any sanctions 
against Iran.
    Over time, as this money has accrued, Iran has sought to 
use this as a point of leverage over Iraq and pressured Iraq to 
release this money, to give it back in certain ways, and Iraq 
has stood firm.
    So, we, with this waiver and with the previous waiver, have 
sought to stand firm with Iraq as it continues to improve its 
energy independence, but work with Iraq to get these Iranian 
funds out of the restricted accounts in Iraq where Iran is able 
to leverage Iraq to release this money or transfer it in a way 
that would potentially not be subject to all of the 
restrictions that are in place to move it out of Iraq----
    Mr. Sessions. Mr. Paley, I think your use of terms and 
hiding, in my opinion, behind this need for humanitarian aid to 
support Iraq and all of these things--we are dealing with 
America's greatest terror, and that is the Iranians, and you 
are giving them cash.
    Mr. Chairman, I yield back.
    Chairman Huizenga. Thank you. The gentleman's time has 
expired.
    The gentlewoman from Texas, Ms. Garcia, is recognized for 5 
minutes.
    Ms. Garcia. Thank you, Mr. Chairman, and thank you for the 
witnesses' presence today. I echo many of the comments made by 
some of my colleagues in condemning the rise of anti-Semitism, 
Islamophobia, and hate in all forms here in the United States 
and abroad.
    Everyone in this room and across the world saw the gruesome 
images and heard the heartbreaking stories of those impacted by 
the October 7th attack on Israel by Hamas. Attacks like these 
reinforce that the United States must maintain its steady 
global leadership abroad and that has only strengthened during 
the Biden Administration.
    Terrorist groups like Hamas and Hezbollah are financed by 
Iran--there is no question about that--making U.S. sanctions on 
Iran critically important.
    We heard testimony today that places focus on two sanctions 
waivers granted by the United States earlier this year. I want 
to inquire specifically about the $6 billion in Iranian funds 
transferred from South Korean banks to Qatar.
    Ms. Rosenberg, Deputy Secretary Wally Adeyemo told Congress 
that the U.S. and Qatar have agreed to effectively block the 
funds that--and that on case-by-case applications, the money 
that would be spent under the current arrangement will be 
denied for the foreseeable future.
    Could you provide specific examples of oversight mechanisms 
in place, whether the humanitarian channels are in place to 
prevent any funds from being used for terrorist financing? I 
think Mr. Paley said that not one penny has been spent.
    Ms. Rosenberg. Thank you for the question.
    It is the case that there have been no transfers out of 
this from the $6 billion sum held in Qatari financial 
institutions. So, I will offer an explanation of the measures 
in place to prevent the diversion to non-humanitarian purposes.
    There are, I think, three levels of controls on this 
restricted fund. In the first instance, the financial 
institutions themselves apply their own Know Your Customer 
(KYC) and due diligence requirements for the funds. In certain 
instances, they have adopted a policy to prevet potential 
recipients of funds. These would be firms engaged in 
agricultural activity, medicine, and medical device supply 
companies, for example.
    The financial institutions have also adopted a policy of 
only letting existing account holders be in the position to 
receive the funds, which is to say those that have already been 
onboarded and vetted for customer awareness. So, that is one 
level, the intensive and enhanced due diligence at the 
financial institutions.
    On top of that comes the restrictions from the European 
Union (EU). These are the kinds of controls--Know Your Customer 
(KYC) and Anti-Money Laundering (AML) controls--incumbent upon 
institutions that operate within the European Union.
    This is because, as noted previously in questions with the 
Chair, the funds are in euros, which means that there is a 
necessity to, when clearing euro transactions, be in line with 
European policies on anti-money laundering and countering the 
financing of terrorism.
    A second layer of controls has to do with European 
standards. And a third level of controls has to do with the 
United States and the restrictions that we and the Treasury 
Department place on these restricted funds.
    I will note that there is no U.S. nexus to these funds nor 
has there been at any point. Nevertheless, we have imposed our 
own restrictions on these accounts in these Qatari 
institutions, which involves our own anti-money laundering and 
countering the financing of terrorism restrictions. It requires 
the financial institutions to notify the U.S. Treasury 
Department whenever they seek to engage in any transfer, and 
back to the original point, no transfers have occurred so far.
    Ms. Garcia. No transfers have occurred?
    Ms. Rosenberg. That is correct.
    Ms. Garcia. Mr. Paley, do you concur or have anything to 
add to Ms. Rosenberg's response?
    Mr. Paley. I concur with her response. Thank you.
    Ms. Garcia. Okay. And you said earlier that not one penny 
has been spent?
    Mr. Paley. That is correct.
    Ms. Garcia. Not one penny?
    Mr. Paley. Correct.
    Ms. Garcia. I think it is worth repeating, because that 
seems to be a point that some do not seem to hear, and I want 
to make sure that the public heard that: Not one penny has been 
spent.
    Mr. Paley. Exactly. Not one penny has been spent from----
    Ms. Garcia. Okay. Thank you, and I see my time is running 
out, so I yield back.
    Chairman Huizenga. The gentlelady's time has expired.
    With that, the Vice Chair of the subcommittee, the 
gentleman from Tennessee, Mr. Rose, is recognized for 5 
minutes.
    Mr. Rose. Thank you, Mr. Chairman, and thank you to our 
witnesses for being here with us today.
    Mr. Paley, how has the placing of U.S. Special Envoy to 
Iran, Robert Malley, on unpaid leave affected your office's 
ability to effectively function?
    Mr. Paley. Thanks very much for the question.
    As the Deputy Special Envoy for Iran at the State 
Department, I am in charge of the day to day implementation of 
our Iran policy at the Department and nothing has changed in 
terms of our implementation of that policy.
    We work across the Department and across the agencies to 
continue to advance President Biden and Secretary Blinken's 
focus on countering Iran, which remains a top adversary and 
state sponsor of terrorism.
    Mr. Rose. Can you provide any clarity as to why Mr. 
Malley's security clearance was suspended?
    Mr. Paley. Unfortunately, I am not in a position today to 
speak to personnel or security clearance issues.
    Mr. Rose. Is that something that perhaps you could answer 
in a classified setting?
    Mr. Paley. I know that the Department is engaged with this 
committee and other committees on certain issues related to 
this case. But today, again, I am not in a position to speak to 
security questions.
    Mr. Rose. If it is possible to get more clarity on that in 
a classified setting, we would certainly appreciate it. I know 
that I would.
    Mr. Paley. We will certainly take the question back. Thank 
you.
    Mr. Rose. Okay.
    In September, the Department of the Treasury established 
what it called a humanitarian channel in Qatar--I think we are 
all familiar with that action--to administer $6 billion in 
Iranian assets from South Korea. It is described as a way to, 
``further facilitate the flow of humanitarian assistance to the 
people of Iran.''
    Assistant Secretary Rosenberg, why did Treasury decide to 
create a, ``humanitarian channel,'' and is this a common 
mechanism for Treasury?
    Ms. Rosenberg. Thank you for the question.
    As to the why, I would be very happy to defer to my State 
Department colleague, given that the creation of this 
particular mechanism was pursuant to a deal on the exchange of 
detainees between Iran and the United States. I will defer on 
that.
    With regard to, is this a common practice, is there a 
precedent for this, in the last Administration, there was an 
establishment of a Swiss humanitarian channel to pursue the 
same goal, which is to say, to take Iranian funds, highly 
restricted, that could be used only for humanitarian purposes, 
subject to intense vetting akin to what I just described in the 
prior questioning.
    So, there is a precedent for this. This is another example 
that builds on lessons learned and is in a different 
jurisdiction.
    Mr. Rose. Mr. Paley, I will let you clarify as well, but is 
there a stark difference between a humanitarian channel and 
other escrow accounts that are available to Iran for 
humanitarian trade purposes? Either one of you?
    Ms. Rosenberg. I can answer that. It is the case that there 
are special conditions around a humanitarian channel understood 
as such, which is to say the establishment of such a channel is 
designed and established exclusively for humanitarian payments, 
and as I was noting before, it can be the case that certain 
potential recipients of the funds are pre-vetted.
    They can only be customers of an institution. It is 
designed for that purpose. Generally speaking, the U.S. law, 
policy, and sanctions allow for payments, Iran as well as for 
other countries subject to intensive sanctions and other 
programs to be able to pay for humanitarian transactions.
    But this is a particularized channel established with 
conditionality around it even though it could be permitted to 
pay for humanitarian goods in a different account but subject 
to--that would not be an account established exclusively for 
humanitarian purposes.
    Mr. Rose. And give us some greater sense of what data 
Treasury is relying on to ensure that the humanitarian channels 
are the most effective way to get the appropriate assistance to 
Iranian citizens. How are you measuring that? What is the data 
source that you use to measure that effectively?
    Ms. Rosenberg. That is an interesting question. I would 
offer that our highest purpose here, and the purpose that 
guides our policy overall is to ensure that Iran does not have 
access to money it can use for terror and destabilization.
    Mr. Rose. My time has expired, but I would appreciate it if 
you might expand on that for the record.
    Thank you. I yield back.
    Chairman Huizenga. The gentleman yields back. The ranking 
member of the subcommittee, the gentleman from Texas, Mr. 
Green, is recognized for 5 minutes.
    Mr. Green. I will reserve and ask that you go to the next 
Member who is available for questioning.
    Chairman Huizenga. Mr. Green, we are going to have you--
this will be our last questioner, unless we are willing to do a 
second round, which I am happy to do. I know there are more 
questions.
    Mr. Green. Mr. Chairman, I would refer you to the committee 
rules and I will quote, ``The Chair shall so far as practicable 
defer to the ranking member with respect to the order of 
recognition for Minority Members.'' I have no additional 
Minority Members, and I reserve, and I ask that you go to a 
Member who is prepared to speak on your side.
    Chairman Huizenga. I am happy to engage in this 
conversation about our rules. You have control of your side of 
the aisle. If you do not have any more Members, you are the 
last one, so, therefore, it is your turn.
    I have more Members on my side, and that is the discretion 
of the Chair. So, I am not doing anything funky with the rules. 
It is your turn. I know you would like to have the last word, 
but that is not how this works.
    We have more Members over on this side. The Majority is 
going to get the last word. So, the gentleman can bypass his 
ability to ask a question. I am happy to go to a second round 
of questioning, because I know I certainly have more questions. 
So, does the gentleman agree to a second round?
    Mr. Green. The gentleman would ask that the Chair adhere to 
the rules, and in so doing respect my right to pass, and I 
appreciate your highly technical terminology of, ``funky,'' but 
this is, in my opinion, something that is appropriate under the 
rules. I reserve.
    Chairman Huizenga. The gentleman will understand that I am 
adhering to the rules, which is what you get to determine. You 
had the ranking member of the Full Committee go first. You 
always nicely defer to your Members and always go last on your 
side of the aisle.
    If we are ending this hearing, it is the Majority's not 
only right, but because we have enough people over here as we 
alternate, the gentleman from Pennsylvania is going to go last.
    So, it is the ranking member's choice as to whether he 
wants to claim his 5-minute time.
    We have deferred to the ranking member on his side. We have 
given him the ability to choose to have their Full Committee 
ranking member--hold up. Please tell me that you recognize how 
foolish and childish this is.
    Mr. Green. I recognize----
    Chairman Huizenga. No. Sir----
    Mr. Green. Excuse me. Allow me to respond to that.
    It was not necessary for you to use the terms, ``foolish,'' 
and, ``childish.''
    Chairman Huizenga. Okay. So, the Chair shall so far as 
practicable----
    Mr. Green. Hold on just a moment. I have been very 
respectful of you. Now, you will respect me. Respect me, if you 
do not respect the rules.
    Chairman Huizenga. The gentleman knows I have full respect 
for----
    Mr. Green. Well, then, ``foolish,'' and, ``childish,'' is 
not the way to address a Member of Congress.
    Chairman Huizenga. Excuse me, sir. I was actually referring 
to the staff behind us that was interrupting our proceedings.
    Mr. Green. Well, I will defend the staff. I do not think 
you referred to the staff as foolish and----
    Chairman Huizenga. Actually, I did, as I turned around 
looking at----
    Mr. Green. Well, you can do it, but I would say to you that 
that is an inappropriate way for a Member of Congress to refer 
to staff.
    Chairman Huizenga. Okay. So, would the gentleman like to 
proceed or would you like to continue arguing about the 
process?
    Mr. Green. I reserve----
    Chairman Huizenga. Just to be clear, the ruling of the 
Chair will be that the gentleman is forfeiting his 5 minutes. 
The gentleman from Pennsylvania will be recognized, and then, 
that will be the end of the hearing. That is your choice.
    Mr. Green. I appeal the ruling of the Chair.
    Chairman Huizenga. That is your choice.
    Mr. Green. I appeal the ruling of the Chair.
    Chairman Huizenga. I have not done anything yet. I am 
giving you your options. Or we can continue on with a second 
round. I am happy to then go back, if you would like to get 
Ranking Member Waters or Ms. Garcia or any of your other 
Members here, I am happy to do that.
    But either I am going to recognize you for your 5 minutes, 
or I am going to recognize the gentleman from Pennsylvania for 
his 5 minutes, and when the gentleman from Pennsylvania is 
done, the hearing is done. What is your choice?
    Mr. Green. So, you are saying--may I ask you a question? 
Would you be so kind as to receive a question as Chair?
    Chairman Huizenga. Absolutely.
    Mr. Green. So, your contention is that the gentleman from 
Pennsylvania will be the very last person?
    Chairman Huizenga. Unless we have more Members on our side 
or your side show up.
    Mr. Green. Would you hold for a moment?
    Chairman Huizenga. I would be happy to.
    [pause]
    Chairman Huizenga. Okay. For the fine folks on C-SPAN who 
are riveted by what has been going on with the discussion of 
our committee rules, tradition is that we alternate Majority to 
Minority. The Majority always starts, and the Majority always 
closes. There is a request to change that. I have an 
understanding with the ranking member now that we will be, at 
his request, running through the rest of our committee 
members--the Republican committee members.
    He will then claim the last 5 minutes of questioning, at 
which point I will grant him an extended time for closing 
remarks, at which point I will have that same amount of time 
for my closing remarks to end the hearing.
    So, after lots of back and forth, the gentleman from 
Pennsylvania, Mr. Meuser, is recognized for 5 minutes.
    Mr. Meuser. Thank you, Mr. Chairman.
    Mr. Paley, and Ms. Rosenberg, do you think the $6 billion 
will be only used for humanitarian purposes? You pretty much 
stated that, even though Iranian President Raisi said they will 
use it for whatever they want, whenever they need it? Is the 
Iranian president not to be trusted in his words?
    Mr. Paley. I would certainly not believe everything that 
the Iranian president says.
    Mr. Meuser. Okay. So, the Iranian president should not be 
believed in this case or do you just pick and choose when you 
believe him and when you do not believe him?
    Mr. Paley. We do not trust the Iranians. We view them as an 
adversary and a state sponsor of terrorism.
    Mr. Meuser. Okay. Why do you think then that the aid would 
not be used for other purposes? Do you understand what the 
term, ``fungible,'' means? You probably do. You are pretty 
educated, right? Do you know what, ``fungible,'' means?
    Okay. So if Iran has $50 million, and they get $50 million, 
and they were going to use that $50 million for food, and then 
they get an additional $50 million, they can use the additional 
$50 million for food and use the old $50 million to buy weapons 
for terrorists. You get that, right, sir?
    So, why do you not think that is going to happen, if you do 
not trust them?
    Mr. Paley. Thanks very much for the question.
    I have full confidence in the due diligence measures that 
Assistant Secretary Rosenberg has outlined for this money. It 
can only be used for humanitarian----
    Mr. Meuser. There is an expression where I'm from that 
there is a bridge in Brooklyn that I would like to show you and 
see if you are interested in. That is just absurd, and I think 
you know it, and in your memoirs, you will probably write it 
that way.
    What about the $10 billion from Iraq? That is not fungible 
either? That will be highly monitored and we will watch where 
every penny goes?
    Mr. Paley. In terms of the due diligence, both of these 
sets of funds can only be used for humanitarian transactions--
--
    Mr. Meuser. Yes. Sure, in words.
    Mr. Paley. ----and we have a great deal of----
    Mr. Meuser. In theory. In weak theory, against a regime 
that we do not trust, that we know is bombing American forces 
as we speak.
    You love saying, not one penny, not one penny, not one 
penny. Okay. Is that permanent? Is it permanent that not one 
penny of that $6 billion will go to Iran?
    Mr. Paley. As we have said, we do not expect this money to 
go anywhere anytime----
    Mr. Meuser. Okay. But can you guarantee me that it is 
permanent?
    Mr. Paley. What we have said, and this is based on U.S. 
law----
    Mr. Meuser. It is not. So really, you should have said, 
``yet.'' Not one penny has gone to the Iranian terrorist regime 
yet. That is more of a correct statement.
    You are stating that the sanctions on Iran now are stronger 
than during the previous Administration, even though Iran's 
reserves went from $4 billion to God knows where, $80 billion. 
Even though that is a fact, you are going to sit there and tell 
me, tell us, tell the world that the sanctions today are 
stronger than they were under the previous Administration, even 
though there has been a reversal of fortune?
    Mr. Paley. This Administration--we have not lifted any 
sanctions against Iran, and in fact, we have actually rolled 
out countless----
    Mr. Meuser. You have not enforced the sanctions, however.
    Mr. Paley. ----numbers of sanctions.
    Mr. Meuser. Is it true that the amount of oil exported from 
Iran is nearly 10 times what it was 4 years ago?
    Mr. Paley. We continue to closely monitor their oil 
exports.
    Mr. Meuser. I am asking you a question. Is it true or 
false? Is it true that the amount of oil being exported from 
Iran is nearly 10 times more than it was 4 years ago?
    Mr. Paley. The oil export----
    Mr. Meuser. Even though you did not change the sanctions--
--
    Ms. Waters. Mr. Chairman----
    Mr. Meuser. ----is that true?
    Mr. Paley. Congressman, the oil exports from Iran have 
fluctuated over time. There are a variety of reasons for that. 
But what does remain in place is all of our sanctions, which we 
continue to enforce.
    Mr. Meuser. Okay. But the sanctions are clearly not 
working. In fact, they are one-tenth what they were before in 
enforcement. The International Atomic Energy Agency (IAEA) 
found many violations--I was there--of the uranium enrichment 
taking place in Iran. Many violations.
    Can Iran be trusted to abide by those so-called rules that 
are trying to be worked out with the Biden Administration, with 
no surprise inspections in place?
    Mr. Paley. Thanks for the question.
    The Biden Administration has been clear that we will never 
let Iran get a nuclear weapon. One of the things that we have 
done is continue to encourage our partners and allies to press 
Iran to cooperate more fully with the IAEA. We engage regularly 
with the IAEA and this is one of our top priorities.
    Mr. Meuser. I hope so.
    Do you agree that Iran is the primary supporter of 
terrorism and the number-one supporter of Hamas, Hezbollah, and 
the Houthis, and is behind the nearly 100 attacks on American 
forces in the last 2 months?
    Mr. Paley. We have minced no words about our concerns about 
Iran's support for terrorist groups.
    Mr. Meuser. Thank you. I yield back.
    Chairman Huizenga. The gentleman's time has expired, and 
per the ranking member's request, we will once again go to a 
Republican Member on this side.
    The gentleman from Iowa, Mr. Nunn, is recognized for 5 
minutes.
    Mr. Nunn. Thank you, Mr. Chairman. I appreciate the 
opportunity to have this conversation.
    I know everyone in this room is committed to protecting the 
United States, and I appreciate your public service and the 
bipartisan work of this committee to hold Iran accountable.
    There is work that needs to continue here, and this is one 
of the reasons we are in the Financial Services Committee 
today, because on October 7th, the attack on Israel was one of 
the most heinous elements that we have seen, and we can all 
agree that Iran was one of the primary funders for this attack 
to occur by Hamas.
    Challengingly, though, the United States has stalled in 
freezing Iran assets. The $6 billion in illegal oil sales, we 
have been good on this committee, and I am proud to lead the 
commitment that we will never transfer that money to Iran. 
However, they are continuing to move an unprecedented amount of 
oil out of the country for sale through a ghost armada.
    We have been briefed on this in both a classified setting 
and a public setting, so today we will talk at the unclassified 
level.
    We understand that this amount of new funding, over $80 
billion, or to put that another way, a 400-percent increase 
since these tough sanctions we have talked about, has actually 
increased and it has precipitated a number of threats to the 
region, not just Israel but to our own forces right in the 
Middle East--areas where I have flown multiple combat 
operations out of, have received over 100 attacks, as been 
highlighted today, in just the last weeks alone.
    And during my time as a counterintelligence officer, I 
personally witnessed the shady tactics of the Iranian regime 
and their work to combat U.S. interests in the region as well 
as our allies by undermining them through nefarious 
relationships with Hamas, Hezbollah, the Houthi rebels, and 
ultimately through the Iranian Revolutionary Guards Corps.
    So, let us get started. I want to talk to you, Ms. 
Rosenberg. Talk to us about, first of all, how the Iranians--
you work for Treasury--are able to get oil out of Iran, 
bypassing these sanctions by using ships that fly under a false 
flag.
    Ms. Rosenberg. Thank you very much for the question.
    Iran uses a variety of methods in order to try and earn 
money.
    Mr. Nunn. Talk to me specifically about the ships. Let us 
get to it.
    Ms. Rosenberg. Using obscured means--front companies, a 
network of individuals who are not who they say they are. They 
look to flag registries and insurance providers that do not 
look very closely to the----
    Mr. Nunn. That is an interesting point, particularly on the 
insurance providers. What has Treasury done to clamp down on 
these ships? Because ultimately, while they fly under false 
flags, the insurance companies are the ones who have the 
ability to help stop this. What have you done to stop the 
insurance providers?
    Ms. Rosenberg. If they have any touch point to U.S. 
jurisdiction, we have opportunities.
    Mr. Nunn. Great. How many have we shut down?
    Ms. Rosenberg. The issue that you are getting at here is 
that Iran looks to fly-by-night providers that would seriously 
concern all of us in terms of their ability to pay out if there 
is a spill or any security situation.
    Mr. Nunn. I would agree.
    Ms. Rosenberg. Yes.
    Mr. Nunn. Have we identified any of the insurance providers 
and taken action?
    Ms. Rosenberg. Iran uses its own insurance provision here 
which is----
    Mr. Nunn. According to United Against Nuclear Iran (UANI), 
there is a U.S. company, the American Steamship Company, that 
is providing that insurance. What actions have we taken against 
the American Steamship Company, right here on U.S. soil?
    Ms. Rosenberg. Getting to your point, any U.S. person--
insurance provider, shipbroker, flagging authority, trader--
anyone involved in the movement of Iranian oil has obligations 
and liabilities in our jurisdiction.
    Mr. Nunn. I understand that. We all do. So, what have you 
done to hold them accountable?
    Ms. Rosenberg. On the specific entity that you asked about, 
I do not have an answer for you, but I would be happy to follow 
up with you.
    Mr. Nunn. It's beyond the pale. We have asked this question 
multiple times. You are Treasury. What other U.S. entities are 
providing insurance to Iranian ghost fleet ships?
    Ms. Rosenberg. None, of which I am aware.
    Mr. Nunn. Okay. I am going to hold you to that.
    Mr. Paley, are you aware that Iran has a history of freeing 
up funds to provide assistance to proxies in the region for 
terrorist purposes?
    Mr. Paley. Yes. We have long expressed our concern about 
Iran's support for----
    Mr. Nunn. So, when we talk about the humanitarian aid 
piece--let's talk about Turk Bank. It has gone before U.S. 
review. We have seen that Iran has a long history of taking 
money intended to help the Iranian people and using it to fund 
terrorism. Would you agree with that?
    Mr. Paley. We have long expressed our concerns about this 
and that is why we have----
    Mr. Nunn. Tell me a tangible action that you have taken to 
clamp down on this?
    Mr. Paley. We have, first of all, worked very closely with 
our Treasury colleagues to ensure that strict due diligence----
    Mr. Nunn. Agreed. Has it stopped any of the flow of oil? 
Because I have only seen increases.
    Mr. Paley. In terms of the flow of oil, we also have a 
series of actions that we continue to roll out to address these 
issues. In addition to sanctions, we also have diplomatic 
outreach to a variety of different countries when we are aware 
that they are involved somehow on Iran's supports.
    Mr. Nunn. Mr. Paley, I would like a listing of all the 
actions that have actually resulted in a reduction of oil flow 
out of Iran and to terrorist groups.
    Thank you, Mr. Chairman. I yield back.
    Chairman Huizenga. The gentleman's time has expired, and I 
will remind everyone on the committee that they are able to 
submit, through the Chair, questions in writing to our 
witnesses who are expected to respond promptly.
    Now, finally, the long-awaited gentleman from Texas, Mr. 
Green, the ranking member of the subcommittee, is recognized 
for 5 minutes, before we will then move to a separate 2-minute 
closing. So, the gentleman is recognized for 5 minutes, and 
then an additional 2 minutes.
    Mr. Green. Thank you very much, Mr. Chairman.
    I am going to read from an article that was printed on 
Tuesday, December 12, 2023, and ask that it be included in the 
record at a later time.
    My colleagues--this is not contained in the article--are 
concerned about fungibility but it is selective fungibility. 
There's not a lot of concern about what happened with money and 
cash in a previous Administration.
    The article is styled, ``Qatar sent millions to Gaza for 
years-with Israel's backing. Here is what we know about the 
controversial deal.'' I shall not read it in its entirety. I 
will read excerpts.
    When did the Qatar payments start? In 2018, Qatar began 
making monthly payments to the Gaza Strip. Some $15 million was 
sent to Gaza in cash-filled suitcases.
    There was some talk earlier about cash and how it is 
fungible. Well, the money was supposed to go into Gaza to help 
with payments to people who were working to help the persons 
who live in Gaza.
    But cash is supposed to be fungible--$15 million sent in 
cash-filled suitcases delivered by the Qataris through Israeli 
territory after months of negotiation, and then it goes on to 
read that Israel approved the deal in a security cabinet 
meeting in August 2018 when Netanyahu was serving his previous 
tenure as prime minister.
    The U.S.--that would be under the Trump Administration, I 
am adding--was aware of the Qatari payments to Hamas, a former 
senior State Department official involved in the region told 
CNN on condition of anonymity due to the sensitivity of the 
matter.
    It goes on to read that Shlomo Brom, a former deputy to 
Israel's national security adviser, told The New York Times 
that an empowered Hamas helped Netanyahu avoid negotiating over 
a Palestinian state, saying the division of the Palestinians 
helped him make the case that he had no partner for peace in 
Palestine, thus avoiding pressure for peace talks that could 
lead to the establishment of an independent Palestinian state.
    You see, this money was sent to Hamas or to the persons in 
Gaza because the Palestinian Authority (PA) was withholding 
making payments, and as a result, this money was to fill in 
this gap.
    Naftali Bennett, a former Israeli prime minister, told CNN 
Sunday that after years of flagging his concerns to Netanyahu 
when he was prime minister of education--this is Bennett--he 
stopped the suitcase transfers when he became prime minister in 
2021, and here is an exact quote from him: ``I stopped the cash 
suitcases because I believe that horrendous mistake to allow 
Hamas to have all these suitcases full of cash that goes 
directly to reordering themselves against Israelis.'' This is 
the exact quote: ``Why would we feed them cash to kill us?'' 
Bennett asked.
    Continuing: Qatar denies those funds were intended for 
Hamas, saying they were meant as aid to salaries of workers in 
the besieged enclave.
    So, friends, under the theory of fungibility given to us 
today by my colleagues, when you give money to workers that 
Hamas might normally have to use from its coffer, now you have 
aided Hamas, and the United States was aware of all of this 
under the Trump Administration.
    I am bringing this to our attention for many reasons, but 
my principal reason is this: I believe in a two-state solution. 
I believe in it so strongly that I have a resolution that I 
have filed indicating that we should have a state for the 
Palestinians. We have filed such a resolution to benefit the 
Israelis. I support Israel. I voted for more than $50 billion 
to support Israel. But I think it is time for us to have a 
Palestinian state, and I regret that Mr. Netanyahu has thwarted 
these efforts.
    I yield back.
    Chairman Huizenga. The gentleman's time has expired, and 
now we will put 2 minutes on the clock for you to have a 
closing statement.
    Mr. Green. I think we agreed on one minute each.
    Chairman Huizenga. At the discretion of the Chair, I am 
giving you up to 2 minutes. How about that?
    Mr. Green. But is that because you will have 2 minutes as 
well?
    Chairman Huizenga. It will be even.
    Mr. Green. Okay. I do not mind it being even. It is just 
that----
    Chairman Huizenga. It will be even. The gentleman is 
recognized for one minute for a closing statement.
    Mr. Green. Okay. Then, I will take part of my one minute to 
say this: We agreed on one minute, and if you want to change 
what we agreed to, I think you should at least respect me 
enough to say, let us change the agreement and make it 2 
minutes.
    Chairman Huizenga. Sure.
    Mr. Green. That was our agreement, one minute.
    Chairman Huizenga. Which is why I am saying, one minute. I 
was attempting to be charitable to give the gentleman up to 2 
minutes. But in respect for our handshake agreement, the 
gentleman will be recognized for one minute.
    Mr. Green. I greatly appreciate the Chair honoring our 
handshake agreement.
    Friends, as you can see, these issues can become quite 
contentious but here is where we are. Fungibility is something 
that was contemplated, I am sure, when these protocols, these 
rules, these laws were drafted. I do not know how you can 
contend that people cannot process funds in this way.
    But here is the point: We still want to provide 
humanitarian assistance to people who need it. I support this 
humanitarian assistance. But what I do not support is 
empowering Hamas, as Mr. Netanyahu did, so that Hamas could be 
the perfect enemy. He could utilize Hamas, because Hamas wants 
to destroy Israel, and say, I cannot negotiate for peace. We 
cannot have a two-state solution because Hamas is not amenable 
to that kind of peace talk.
    That is what I am opposed to, and I yield back the balance 
of my time.
    Chairman Huizenga. The gentleman's time has expired. Now, I 
will recognize myself for a one-minute close.
    You have both said today that keeping money in Iraq was a 
benefit to Iran. Are we to assume that Iran did not support the 
transfer to Oman and other jurisdictions? I did not think so. 
It is clear that the transfer was at the request of Iran to the 
Biden Administration.
    Ms. Rosenberg said that she could not tell us or would not 
tell us today in an open setting if there had been problems 
with the transactions out of Oman, the two transactions out of 
Oman that have been acknowledged, and the way I understand it 
is that saying, ``yes or no,'' is not classified.
    But I guess if the answer is, ``yes,'' you apparently did 
not want to confirm that on the record. I expect a follow-up in 
a classified setting for all of us to understand why this is 
classified.
    Additionally, Ms. Rosenberg spoke at length about the 
controls of the Europeans but the Europeans do not have control 
over money in Oman or Qatar.
    Mr. Paley repeatedly said to Ms. Garcia that there have not 
been any transactions. To be clear, Ms. Rosenberg said there 
have been two transactions with money in Oman, and that there 
were problems, and she would not answer that. What I think he 
meant to say is that there have not been any transactions, 
``yet,'' using the money out of Qatar.
    And finally, we sent a very narrow document request on the 
waiver issue to Treasury that remains outstanding. Ms. 
Rosenberg, I expect that Treasury will produce an outstanding 
document quickly.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    I ask our witnesses to please respond as promptly as you 
are able.
    This hearing is adjourned.
    [Whereupon, at 10:28 a.m., the hearing was adjourned.]

                            A P P E N D I X

                           December 13, 2023
                           
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