POMED Notes: Sen.CFR – Iran Policy in the Aftermath of UN Sanctions

The U.S. Senate Committee on Foreign Relations held a hearing to discuss implementation of international and domestic sanctions against Iran. The hearing came in light of the UN Security Council’s adoption two weeks ago of Resolution 1929, imposing a fourth and more stringent round of sanctions on Tehran. The June 22 hearing sought primarily to address enforcement of the resolution in order to curtail Iran’s nuclear program, but human rights and democracy issues were also prominent throughout the discussion. The Committee—chaired by Sen. John F. Kerry (D-MA), with ranking Committee member Sen. Richard G. Lugar (R-IN) in attendance—requested the testimony of two individuals: William Burns, Under Secretary for Political Affairs at the Department of State; and Stuart Levy, Under Secretary for Enforcement at the Department of the Treasury.

(POMED’s full notes continue below, or read the rest of the entry as a pdf document.)

Sen. John Kerry (D-MA) opened the conversation with an aside on the war in Afghanistan, in light of the recent blow-up between the White House and General Stanley McChrystal. Kerry stated that America’s “top priority” is the success of its mission in Afghanistan and implored the concerned parties to remain focused on U.S. policy goals in the region.

Turning to Iran, Kerry argued that the possibility of the Iranian regime securing nuclear weapons represents “as critical an issue as we could face.” Kerry congratulated the Obama administration on the “impressive” achievement of pushing new and stronger sanctions through the UN, and drew attention to Congress’s Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA), which passed out of House and Senate conferences on Monday, and which Congress hopes to vote on this week. Kerry advocated a two-pronged approach of combining pressure and diplomacy to ensure that the new sanctions succeed where previous rounds have failed.

Kerry also highlighted human rights and democracy issues regarding U.S. policy on Iran, commenting that policymakers need to understand how efforts to curb the nuclear program may “play into Iran’s volatile domestic politics,” and arguing that progress on sanctions must not come at the expense of the Iranian people, whom he characterized as a potential force for moderation within Iran. Citing the abuse perpetrated by the regime against the Iranian people, Kerry stated, “We will continue to speak up for the rights and the well-being of the Iranian people.”

Kerry also called for the release of the three American hikers detained in Iran since 2009 and suggested Iranian involvement in the 2007 disappearance of American citizen and retired FBI agent Robert Levinson.

Sen. Richard Lugar added to Sen. Kerry’s opening comments, also emphasizing democracy and human rights in Iran. Lugar noted that the one-year anniversary of Iran’s “brutal repression of protests” has brought to the forefront “the values we as Americans hold dear”—including freedom of expression, assembly, transparency, and free elections—and argued that policymakers must keep in mind those who “continue to pay a personal cost” for their opposition to the Iranian government. Regarding sanctions, Lugar asked the Obama administration to weigh in on CISADA and sought clarification regarding the President’s overall strategy on Iran.

William Burns provided the first witness testimony, arguing that Iran’s refusal even to engage in confidence-building actions proposed by the P5+1 group—China, France, Germany, Russia, the United Kingdom, and the United States—had forced the hand of the international community. Burns stated that Iran now faces the most comprehensive international sanctions to date, and indicated his expectation that these measures would be “vigorously” implemented. He pointed not only to Iran’s nuclear program, but also to its record of human rights abuses, as cause for serious concern. He argued that American policy is “straightforward: we must advance our broader interests in democracy, human rights, and development across the Middle East,” and said that President Obama has been clear that “We will stand up for those rights that should be universal to all human beings, and with those brave Iranians” resisting the regime.

Burns noted that Sec. of State Hillary Clinton has appointed Robert J. Einhorn, the State Department’s Special Advisor for Nonproliferation and Arms Control, to lead implementation of the UN resolution. Burns expressed cautious optimism that the new sanctions might have an effect on Iranian policy, observing that the regime had been worried about the sanctions. Burns concluded that the regime will see itself plunged into increasing isolation if it does not live up to its international and human rights obligations, arguing that a government that does not respect basic rights for its own people “will find it increasingly difficult to win the respect that it professes to seek in the international community.”

Stuart Levy spoke next, outlining a U.S. strategy to combine governmental sanctions with commitments by private corporations to stop dealing with Iran. Levy claimed that in light of evidence of Tehran’s financially deceptive practices, virtually all major financial institutions have sharply reduced or completely cut off their ties with Iran. Levy stated that Washington has encouraged American companies and financers not to do business with 26 specific companies associated with the Islamic Revolutionary Guard Corps (IRGC) or with Iranian oil and petroleum interests.

Sen. Kerry started off the question and answer session after the testimony, inquiring whether Levy felt that he had sufficient legal tools and international cooperation to take firm action against Iran. Levy replied in the affirmative on both counts, welcoming the sanctions legislation proposed by Congress, and pointing to strong statements made last week by the EU regarding enforcement of the UN sanctions resolution.

In response to another question from Kerry, Burns indicated that the Obama administration is very concerned about the potential for a regional arms race if Iran continues to pursue a nuclear agenda, mentioning Iran’s decision to enrich uranium at levels near 20% as “reckless” and worrisome.

Sen. Lugar asked the witnesses to weigh in on Secretary of Defense Robert Gates’ assessment that the Iranian regime has shifted from a religiously dominated institution, to a more narrowly based “military dictatorship,” making the timing ripe for sanctions to have a greater effect. Burns agreed with Gates’ evaluation, noting that the U.S. is trying to “carefully target” the IRGC and the increasingly closed circle of leadership in the regime. Meanwhile, Burns indicated that the State Department intends to work intensively with Congress on sanctions legislation.

Sen. Russell D. Feingold (D-WI) asked how effective policymakers should expect the new sanctions to actually be and whether the tools provided in Resolution 1929 were adequate. In his response, Levy underscored the Resolution’s establishment of a panel of eight experts, including one American, as a key measure that would significantly increase the sanctions’ impact on Iran. Burns also reiterated Sen. Kerry’s support for a dual policy of “pressure and engagement.”

Sen. Barbara Boxer (D-CA) expressed her pleasure with the passage of Resolution 1929, though commenting that she would have preferred to see tougher measures in the final version. Boxer focused on the need to go after U.S. firms for using foreign subsidiaries or setting up shell companies abroad in order to continue to deal with Iran. She also asked why China has not shown the same urgency in dealing with Iran as the United States.  Burns responded that China is increasingly aware of the danger posed by Iranian nuclear ambitions and indicated that the administration will continue to press Beijing on this matter.

Sen. Robert Menendez (D-NJ) called for adopting the strongest sanctions possible against Iran in Congressional legislation, criticizing what he characterized as a U.S. tendency to “roar like a lion and bite like a puppy” on the nuclear issue. Menendez focused on enforcement and accused the State Department of dragging its feet, mentioning that the administration had so far failed to sanction any companies doing business in violation of the Iran Sanctions Act renewed in 2006. In response, Burns reported that the State Department has taken a significant step forward with the completion of its internal review, and expects to engage with other agencies to enforce legal sanctions.

Sen. Jim Webb (D-VA) asked if the Obama administration retained interest in additional policy approaches to the Iran issue, such as confidence-building measures put forward in the past by the P5+1 group. Burns affirmed that such options are not off the table. Burns also agreed with a statement from Webb that since the 2009 elections, the Iranian regime has grown increasingly militarized and dictatorial. Webb and Burns also discussed the use of waivers on the sanctions, which Burns called a “good tool” allowing “flexibility” for the President to apply maximum pressure on Tehran.

Sen. James E. Risch (R-ID) asserted his perception that U.S. efforts on this issue the past year had yielded no results, cautioning that policymakers would have a “real wreck” on their hands unless immediate action is taken. Burns and Levy disagreed with the Senator’s assessment, arguing that the new sanctions have provided better implementation tools, while the past year’s efforts had also resulted in stronger partnerships between the U.S. and other nations.

Sen. Benjamin L. Cardin (D-MD) commended the progress made by the administration in gaining Russia and China’s support for sanctions, and asked what kind of cooperation the U.S. is receiving from the Arab Gulf nations on this issue. Levy indicated that the passage of Resolution 1929 has brought the Gulf countries solidly on board.

Sen. Cardin called attention to statements recently issued by the UN Human Rights Council, with the support of the U.S. and 55 other nations, condemning the Iranian regime’s abuse and violation of democratic activists’ human rights. Cardin asked whether this measure indicated a change in the UN stance toward Iran. Burns affirmed that concern is rising regarding the denial of universal human rights in Iran and the oppression of Iranian citizens, arguing that President Obama has spoken out clearly against such violations, and stating that “We will continue to work with others to amplify” international awareness of the issue.

Sen. Roger F. Wicker (R-MS) asked whether the witnesses felt that the new UN sanctions were watered down in order to sway Russia and China. Burns dismissed the charge, saying that the resolution provides a “stronger platform” than ever before to pressure the Iranian regime. Wicker also asked about the long-term ramifications of Turkey and Brazil’s decision to veto the resolution. Burns indicated that though the administration has made clear its “disappointment” with their decision, the U.S. will continue to work on the “common concerns” shared with these key nations.

Sen. Robert J. Casey (D-PA) honed in on human rights issues relating to freedom of information and internet usage, asking what Congress could do to help the administration in enhancing Iranian rights in this area. Burns mentioned that at least 25% of the Iranian population is online regularly and highlighted efforts by the State Department to enhance internet access in Iran, including work on a tool to avoid jamming by the Iranian government. He indicated that waivers to allow certain kinds of technology-related equipment into Iran would help with these efforts.

Sen. Jeanne Shaheen (D-NH) asked how the administration is dealing with American corporations to encourage further divestment in Iran. Levy responded that the U.S. government is “very vigilant” in enforcing the laws on sanctions and cited two prominent cases where the U.S. penalized companies in violation with fines rising into the hundreds of millions. Shaheen also asked how responsive the international community has been to the Financial Action Task Force’s (FATF) countermeasures on Iran. Levy indicated that Iran is the only country on which FATF has imposed such countermeasures, and said that the U.S. intends to use them to seek further “robust” action on Iran.

Shaheen also asked whether Turkey and Brazil shared U.S. concerns on Iran, and whether the sanctions had so far worked to decrease the commitment of other countries, such as Syria, to Iran. Burns said that Turkey and Brazil share the U.S.’s strategic interest in preventing Iran’s nuclear ambitions, and suggested that while the resolution is not a “magic cure” for policy challenges in the region such as Syria, it does heighten Iran’s isolation.

Sen. Kerry closed out the discussion with a final question regarding indirect U.S. payments to Iran for oil, which Levy deferred to a later, potentially closed session that would also deal with classified matters. Levy told the committee that continuing to make addressing Iran a high priority for U.S. policy, will be key to success in containing the regime.