Excerpts: Iran’s nuclear program is a fundamental threat to the United States, our friends and allies, and to the global consensus on halting and reversing the spread of nuclear weapons.
As we meet this morning, Iran’s centrifuges continue to spin, making more and more enriched uranium that could ultimately be turned into fuel for nuclear weapons. This threat continues to grow with each passing day.
This summer, in response to that threat, Congress passed the most rigorous sanctions ever imposed on Iran, the Comprehensive Iran Sanctions, Accountability, and Divestment Act, or CISADA, as it is widely known.
The overwhelming vote for CISADA – 408-8 in the House, 98 to nothing in the Senate – was a powerful demonstration of the bipartisan commitment to a tough approach to halting Iran’s nuclear program.
This Act broadly expanded the applicability of the original Iran Sanctions Act, including sanctioning third-country companies and banks involved in activities such as sales of refined petroleum to Iran, assistance to Iran’s domestic refining capacity, and financial dealings with the Iranian Islamic Revolutionary Guard Corps, or IRGC.
The fundamental premise of our approach is that companies should choose the US market over the Iranian market. It’s a sound approach but by no means a silver bullet for addressing Iran’s desire to acquire a nuclear weapons capability.
Our legislation, even before the President signed it into law on July 1, helped to galvanize international opinion regarding the Iranian nuclear issue. The European Union, previously a key source of Iranian commerce and investment, passed its own set of tough sanctions in late July. Other states – Canada, Australia, South Korea, Japan, and Norway – followed with their own national sanctions.
As a result of our sanctions and additional financial measures pursued by the Administration, most major Western, Japanese, and South Korean energy companies have ceased selling Iran refined petroleum and investing in Iran’s energy sector, and the doors of much of the financial, insurance, and shipping worlds have been closed to Iran.
Major oil companies, such as Royal Dutch Shell, Total of France, Italy’s ENI, Vitol, Norway’s Statoil, Spain’s Repsol, and Japan’s INPEX, have all ended or are in the process of ending their energy projects in Iran. And there are numerous reports that these sanctions have seriously hurt the Iranian economy and deepened political fissures in the Iranian leadership. But is that, in fact, the case? And, if so, how much closer does it bring us to our real objective, which is to persuade Iran to suspend its nuclear enrichment program and end its nuclear weapons program?
The purpose of this hearing is to attempt to answer those very questions. I would like to hear the witnesses’ candid assessment of the current sanctions regime. Is it helping us to achieve our goal of an Iran without nuclear arms? Are sanctions having the desired impact on Iran’s economy, and are we getting closer to persuading Iran to suspend its uranium enrichment program, as repeatedly demanded by the international community? In particular, is international support for sanctions holding firm? How much back-filling is there by companies whose governments have not imposed national sanctions?
On that last point, there seems to be no doubt that Chinese companies are pursuing energy investments and selling Iran refined petroleum. The Chinese acknowledge it. I’d like to know why we haven’t sanctioned any of the Chinese companies engaged in clearly sanctionable actions. I’m concerned that we will not be able to sustain a robust sanctions regime if we don’t impose sanctions in an even-handed manner.
Many leading Western, Japanese, and South Korean companies have pulled out of Iran because they feared we would otherwise impose sanctions. Will they stay out if they see that others are getting off scot-free? Is the problem that we lack leverage over the Chinese companies? What kind of message do we send if we fail to sanction companies that are transparently engaged in sanctionable activities?