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Treasury’s Cohen: Sanctions Update

            On April 2, Treasury Under Secretary David Cohen briefed the Senate Subcommittee on Financial Services and General Government on Iran sanctions. "Today, Iran stands isolated from the global financial system with slashed oil revenues, an eroded currency, and a severely weakened economy," reported Cohen. The following are excerpts from his testimony.

 
Iran Sanctions Program
 
Our unprecedented sanctions on Iran have led the way in demonstrating the power and efficacy of our financial measures.  
 
From the outset of the Obama Administration, we have pursued a dual-track strategy that paired an offer to Iran to rejoin the community of nations if it addresses the international community’s concerns over its nuclear program with increasingly powerful and sophisticated sanctions if it continued to ignore those concerns.
 
When Iran initially chose another path, we responded by crafting and implementing the most comprehensive, powerful, and effective set of sanctions in history.
 
Today, Iran stands isolated from the global financial system with slashed oil revenues, an eroded currency, and a severely weakened economy. 
 
Our oil, financial, and trade-based sanctions helped drive Iran into deep recession. Since 2011, oil sanctions imposed by the EU and the U.S. have cost Iran over $100 billion in lost sales.  Last year, Iran’s economy contracted by six percent and is expected to perform badly this year as well.  Its currency, the rial, has lost about 60 percent of its value against the dollar since 2011.  And its inflation rate is about 30 percent, one of the highest in the world.
 
This enormous pressure on the Iranian economy did not come about overnight.  We have worked side-by-side with Congress to craft sanctions that target Iran’s key sources of economic strength.  We maximized the impact of these sanctions through TFFC’s robust and persistent engagement with foreign governments and the private sector.  Working alongside our interagency partners, we leveraged our in-house intelligence component, OIA, to identify Iranian pressure points.  And then OFAC took action against illicit actors and their financial networks by targeting them with powerful sanctions. 
 
This has not been a simple task.  In all, TFI enforces a sophisticated and complex regime of sanctions on Iran that encompasses 10 statutes, 26 E.O.s, and 4 United Nations Security Council Resolutions.  We supplement these tools by issuing public guidance, licenses that advance U.S. objectives, and advisories warning of concerning trends and practices.
 
Although our sanctions have proved to be incredibly potent, we have not imposed sanctions for sanctions’ sake.  All along, the goal of our sanctions has been to induce a shift in the decision making calculus of the Iranian government and to build the necessary leverage for serious negotiations about its nuclear program. 
 
We are now in the midst of those negotiations.  In the Joint Plan of Action (JPOA) that went into effect in late January, Iran agreed to take important steps to halt the advance of its nuclear program in exchange for limited, targeted, and temporary relief for six months.  And as Iran has implemented its commitments to date, we have worked to fulfill our own.     
 
Even as we now seek to negotiate a comprehensive solution over Iran’s nuclear program, the core architecture of U.S. sanctions—especially our potent oil, financial and banking sanctions—remains firmly in place.  And over the remaining four months of the JPOA period, we will continue to vigorously enforce these sanctions as well as the broad array of sanctions targeting Iran’s human rights abuses and its support for terrorism. 
 
Global Counter-Terrorism Program
 
Over the past 12 years, OFAC has designated more than 800 individuals and entities under our counterterrorism sanctions program.  In 2013, we designated 87 individuals and entities with the aim of disrupting and degrading some of the most dangerous terrorist threats to our country, including al-Qa`ida in the Arabian Peninsula (AQAP), Lashkar-e Tayyiba, the Haqqani Network, and the Iranian Revolutionary Guards Corps Qods Force.
 
Beyond the blocking of assets, a Treasury designation exposes terrorists’ activities publicly, drawing them out of the shadows and alerting financial institutions and foreign governments to their nefarious activity.  It also encourages corresponding actions from counterterrorism partners and the United Nations.  But most importantly, the designations disrupt and degrade the finances of terrorist groups as those designated will never again be able to openly access the international financial system.
 
Click here for his full testimony.
 

Iran on Ukraine, Crimean Secession

            On March 27, the U.N. General Assembly declared Crimea’s secession from Ukraine illegal. About half of the 193-nation group— 100 nations— voted in favor of non-binding resolution 68/39, which was proposed by Ukraine and supported by the United States and the European Union. Some two dozen countries were absent from the vote – including Iran and Israel, which rarely take the same action at the United Nations. The two likely did not vote for very different reasons.

            Iran likely wanted to maintain its strong relationship with Russia. Parliamentary Speaker Ali Larijani said Iran would “remain neutral on the issue” but criticized the West for not accepting the results of the Crimean referendum. Foreign Minister Javad Zarif said the Ukrainian people should be allowed to determine their own fate in a press conference on March 1, 2014.
 
            For Israel, the issue of annexation is sensitive due to the disputed status of the Palestinian Territories it gained after the 1967 Arab-Israeli War. 
 
            Only 11 countries voted against the resolution, which argues that the secession referendum has “no validity” and urges the international community to reject changes to Ukraine’s borders.
 
            On March 19, Russia warned that tensions over Ukraine could spill over into negotiations on Iran’s nuclear program. Deputy Foreign Minister Sergei Ryabkov warned that Moscow could take “retaliatory measures” on its Iran policy if pressured by the West.
 
            But U.S. officials were confident that the Iran talks would not be affected. “The overriding commitment is one of working together to resolve the Iran nuclear program and there are many other issues in the world that will continue to cause us to have disagreements and debates and sometimes to find ourselves in opposition to one another," said U.S. ambassador the U.N. nuclear watchdog Joseph Macmanus on March 5.
 
            The following are remarks by Iranian leaders and excerpts from the U.N. resolution followed by a breakdown of the vote.
 
Foreign Minister Mohammad Javad Zarif
            “We are concerned about the situation in Ukraine” and hope for “a solution based upon calm and progress would be agreed” between the two sides.
            March 2, 2014 in a press conference
 
Senior Foreign Policy Advisor to the Supreme Leader
Ali Akbar Velayati
            “Today …separatism is a [serious] threat against Ukraine and the security of the Caucasus region is very important and must receive special attention.”
            Feb. 24, 2014 in a meeting with the Japan Institute of International Affairs in Tehran
 
            NATO has “set its greedy eyes on Ukraine.”
            March 2, 2014 in an interview
 
Foreign Ministry Spokesperson Marzieh Afkham
            “We believe that Ukraine’s fate should be determined by the people’s resolve, harmony between the country’s political forces, and no foreign interference.”
            Feb. 24, 2014 to the press
 
Member of Parliament Mohammad Esmail Kowsari
            “Americans and Westerners will definitely achieve nothing in Ukraine because whenever people enter the scene to decide their own fate, they (Westerners) fail to achieve their objectives.
            “The bullying and meddling efforts by Western states know no boundaries and they say all places must be under their dominance.”
            March 24, 2014 according to Iranian media
 
Expediency Council Member Saeed Jalili
            “The support extended by those powers which claim to be advocates of democracy to the anti-democracy behaviors shown in Ukraine, Egypt and Bahrain is worrying.”
            March 9, 2014 in a meeting with E.U foreign policy chief Catharine Ashton
 
U.N. Resolution 68/39
 
Welcoming the continued efforts by the Secretary-General and the Organization for Security and Cooperation in Europe and other international and regional organizations to support deescalation of the situation with respect to Ukraine,
 
Noting that the referendum held in the Autonomous Republic of Crimea and the city of Sevastopol on 16 March 2014 was not authorized by Ukraine,
 
1. Affirms its commitment to the sovereignty, political independence, unity and territorial integrity of Ukraine within its internationally recognized borders;
 
2. Calls upon all States to desist and refrain from actions aimed at the partial or total disruption of the national unity and territorial integrity of Ukraine, including any attempts to modify Ukraine’s borders through the threat or use of force or other unlawful means;
 
3. Urges all parties to pursue immediately the peaceful resolution of the situation with respect to Ukraine through direct political dialogue, to exercise restraint, to refrain from unilateral actions and inflammatory rhetoric that may increase tensions, and to engage fully with international mediation efforts;
 
4. Welcomes the efforts of the United Nations, the Organization for Security and Cooperation in Europe and other international and regional organizations to assist Ukraine in protecting the rights of all persons in Ukraine, including the rights of persons belonging to minorities;
 
5. Underscores that the referendum held in the Autonomous Republic of Crimea and the city of Sevastopol on 16 March 2014, having no validity, cannot form the basis for any alteration of the status of the Autonomous Republic of Crimea or of the city of Sevastopol;
 
6. Calls upon all States, international organizations and specialized agencies not to recognize any alteration of the status of the Autonomous Republic of
Crimea and the city of Sevastopol on the basis of the above-mentioned referendum and to refrain from any action or dealing that might be interpreted as recognizing any such altered status.
 
 
Approve: 100
 
Albania, Andorra, Australia, Austria, Azerbaijan, Bahamas, Bahrain, Barbados, Belgium, Benin, Bhutan, Bulgaria, Cameroon, Canada, Cape Verde, Central African Republic, Chad, Chile, Colombia, Costa Rica, Croatia, Cyprus, Czech Republic, Democratic Republic of the Congo, Denmark, Dominican Republic, Estonia, Finland, France, Georgia, Germany, Greece, Guatemala, Guinea, Haiti, Honduras, Hungary, Iceland, Indonesia, Ireland, Italy, Japan, Jordan, Kiribati, Kuwait, Latvia, Liberia, Libya, Liechtenstein, Lithuania, Luxembourg, Macedonia, Madagascar, Malawi, Malaysia, Maldives, Malta, Marshall Islands, Mauritius, Mexico, Micronesia, Moldova, Monaco, Montenegro, Netherlands, New Zealand, Niger, Nigeria, Norway, Palau, Panama, Papua New Guinea, Peru, Philippines, Poland, Portugal, Qatar, Romania, Samoa, San Marino, Saudi Arabia, Seychelles, Sierra Leone, Singapore, Slovakia, Slovenia, Solomon Islands, Somalia, Spain, South Korea, Sweden, Switzerland, Thailand, Togo, Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Kingdom, United States of America
 
Reject: 11
 
Armenia, Belarus, Bolivia, Cuba, Nicaragua, North Korea, Russia, Sudan, Syria, Venezuela, Zimbabwe
 
Abstain: 58
 
            Afghanistan, Algeria, Angola, Antigua and Barbuda, Argentina, Bangladesh, Botswana, Brazil, Brunei, Burkina Faso, Burundi, Cambodia, China, Comoros, Djibouti, Dominica, Ecuador, Egypt, El Salvador, Eritrea, Ethiopia, Fiji, Gabon, Gambia, Guyana, India, Iraq, Jamaica, Kazakhstan, Kenya, Lesotho, Mali, Mauritania, Mongolia, Mozambique, Myanmar, Namibia, Nepal, Nauru, Pakistan, Paraguay, Rwanda, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, São Tomé and Príncipe, Senegal, South Africa, South Sudan, Sri Lanka, Suriname, Swaziland, Tanzania, Uganda, Uruguay, Uzbekistan, Vietnam, Zambia
 
Absent: 24
 
Belize, Bosnia and Herzegovina, Republic of the Congo, Côte d'Ivoire, Equatorial Guinea, Ghana, Grenada, Guinea-Bissau, Iran, Israel, Kyrgyzstan, Laos, Lebanon, Morocco, Oman, Serbia, Tajikistan, Timor-Leste, Tonga, Turkmenistan, Tuvalu, United Arab Emirates, Vanuatu, Yemen
 
Click here for the full resolution.

 

Iran Top Issue in Obama Visit to Saudi Arabia

     On March 28, President Barack Obama met with Saudi Arabian King Abdullah al Saud near Riyadh to discuss the Iranian nuclear talks and Syrian crisis. Obama assured the king that Washington is committed to preventing Iran from attaining a nuclear weapons capability. The following are excerpts from a press briefing by senior White House officials on the bilateral meeting.

 
SENIOR ADMINISTRATION OFFICIAL: It was a good opportunity for the President, on Iran, to underscore what we are doing in the nuclear negotiations, what our objectives are, and to make clear to the King -- and via the King, Saudi Arabia -- that we're determined to prevent Iran from acquiring a nuclear weapon; that we've gone into the talks eyes wide open, but we believe that this is a common interest in stopping proliferation to Iran; that the arrangements in place now have halted Iran’s nuclear program and set it back in important respects, which gives us time to negotiate in the P5-plus-1 to reach a comprehensive solution that meets the criteria that I mentioned, of stopping Iran from having a weapon, and ensuring that its program is exclusively peaceful; and again, to sit down with the King and assure him that that's the objective, that we won't accept a bad deal; and that the focus on the nuclear issue doesn’t mean we are not concerned about or very much focused on Iran’s other destabilizing activities in the region, which the Saudis and the King are also concerned about.  Iran’s meddling in other countries in the region, its support for terrorism -- these are things that we’ve made clear across the board that will not go away, but we believe, and the President was able to explain that dealing with the nuclear issue doesn’t mean not focus on those things, and stopping Iran from a nuclear weapon itself will curb Iran’s ability to continue its destabilizing activities throughout the region.
 
Now, one of the destabilizing activities Iran is undertaking in the region, we believe, is its support for the Assad regime in Syria, which is another big topic between the two leaders.  As I think you all know, King Abdullah feels very passionately about Syria and the tragic humanitarian situation there, as obviously does President Obama -- and once again, an opportunity to sit down face-to-face.  We’ve actually cooperated well and extensively with the Saudis on the question of Syria…
 
Question:  On Iran, what did the King -- did the King seem convinced of what the President said about Iran -- the nuclear deal?
 
SENIOR ADMINISTRATION OFFICIAL:  Look, I don’t want to speak for the King or his reaction.  He listened very carefully.  And like I said, what was important about this meeting is obviously we’ve explained to the Saudis, they know what our position is, but there’s nothing like the person who’s responsible for driving and making this policy to come down and sit face-to-face with the King and patiently and carefully walk him through what we’re doing and what the objective is.
 
     And I think -- again, I can’t speak for the King’s -- what he took away or his response.  But I think it was important to have the chance to look him in the eyes and explain how determined the President is to stop Iran from getting a nuclear weapon, and how determined the President is to continue to counter Iran’s other destabilizing activities, and that the President and the United States are going into this eyes wide open, there’s no naïveté…
 
SENIOR ADMINISTRATION OFFICIAL:  On Iran, as we’ve said with Israel, for instance, we understand that given the history of the Saudis’ relation with Iran and their proximity to Iran, that they’re going to be skeptical; that we basically price into the Iranian nuclear negotiations that our Gulf partners are going to be watching with a skeptical eye to make sure that we are getting a good deal.  And that’s appropriate given the fact that a lot of the destabilizing activity that Iran undertakes is right in their neighborhood -- their support for the Houthis in Yemen; some of their destabilizing activities in the Gulf, as well as, of course, their support for Hezbollah.
 
So the point the President has made repeatedly is that we are interested in getting a deal that meets our concerns, that assures that the program -- the Iranian nuclear program is peaceful.  That, ultimately, would be in the interest of Saudi Arabia and the region, because Iran would be a far more destabilizing force if they had a nuclear weapon.  So ultimately, those talks we believe could yield an outcome that is in service of regional security.  But if we can’t get the outcome we want, the President has made very clear that we’re not going to take a bad deal either…
 
I think part of the concern has been that the nuclear negotiations represent a broader rapprochement between the United States and the West and Iran.  But the fact of the matter is that’s not going to be the case if we don’t see changes from Iran and these other areas. 
 
     For instance, all of our sanctions on terrorism-related issues are fully in place with respect to Iran.  In terms of what we do, we’re working against the Assad regime in Syria.  Together with our Gulf partners we are working to support the Yemeni government.  And we’ve worked to at times expose Iranian support as a means of disrupting the types of support that they could provide, whether it’s to the Houthis or other groups around the region. 
 
We work with a lot of countries in trying to counter Hezbollah’s activities, targeting their financing, intelligence cooperation, strengthening the Lebanese Armed Forces.  So I think on the Hezbollah side of the equation, we have a lot of actions all over the world that are frankly geared at cracking down on Hezbollah’s activities. 
 
So, again, I think across the board we have a very aggressive set of measures that we’re using to counter Iran’s support for terrorism, to expose and counter its efforts to destabilize countries in the region.  And those are going to be ongoing, and those also depend on the cooperation we have with our partners here.
 
But at the end of the day, if we can get a diplomatic resolution to the nuclear issue that assures that Iran’s program is peaceful, that’s going to be a good thing.  A nuclear-armed Iran would be far more dangerous in terms of its ability to destabilize the region, to leverage its support for terrorism.  So that’s why we’re so invested in that project.  And I think our view is at the end of the day, if we can achieve that diplomatic resolution that will be good for the security of the Gulf and of the region.  If the Iranians make further changes in their policies as it relates to these other issues, then there may be the prospect of looking at a broader conversation.  But they’re not doing that.
 

     As near as we can tell, their actions in terms of their regional behavior is the same today as it was before these nuclear talks began.  And our efforts to counter those Iranian actions are the same today as they were before the nuclear talks began.  And so that’s a steady state in an issue where I think we have more convergence with the Saudis as a matter of policy than divergence. 


Click here for the full briefing.

 

 

Rouhani in Afghanistan to Boost Regional Ties

           On March 27, President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif visited Kabul, Afghanistan to attend an international Nowruz festival and discuss cooperation with neighboring countries. “Today we celebrate Nowruz in a country that has been the victim of ignorance, aggression and extremism over many eras, but has always acted like the Phoenix fighting against extremism, communism and fundamentalism protecting its independence and freedom,” said Rouhani in an address. He described Afghanistan as an occupied nation without directly referencing U.S. or NATO forces. Delegations from at least nine countries from Azerbaijan to Pakistan attended the festival. Rouhani and Zarif met separately with Afghan President Hamid Karzai and Tajik President Emomali Rahmon. The following are excerpted remarks and tweets from the visit to Kabul.

 
President Rouhani’s Address
           “Today we celebrate Nowruz in a country that has been the victim of ignorance, aggression and extremism over many eras, but has always acted like the Phoenix fighting against extremism, communism and fundamentalism protecting its independence and freedom.
            “Two occupations… brought the unfortunate seed of violence in this country, which has damaged the lives of people and this country. My country the Islamic Republic of Iran has condemned both occupations and has helped the people of Afghanistan in both periods of time.”
 
           Foreign Minister Zarif's Tweets
 
 
Click here for more information on Iran-Afghan relations.
 
 

Zarif Condemns Attacks in Letter to U.N.

           On March 26, Foreign Minister Mohammad Javad Zarif sent a letter to U.N. Secretary General Ban Ki-Moon condemning attacks on Iranians in 2013 and 2014. Zarif sent the letter one day after Ban Ki-Moon decried the killing of one of the five Iranian border guards abducted in February.  A Sunni militant group, Jaish al Adl, reportedly claimed responsibility. The following is the full text of Zarif’s letter and Ban’s statement.

 

March 26, 2014
 
Excellency,
 
I have the unpleasant duty to draw your attention to the shocking news about the possible murder of one of the five Iranian border guards abducted on February 7, 2014 by an extremist terrorist group, in the border area between Iran and Pakistan. This is the latest in a series of similar terrorist atrocities against Iranian citizens, including diplomats and other officials and innocent civilians of Iranian and other nationalities, which include:
 
- Repeated explosions and terrorist attacks in our Eastern border in recent months, which have resulted in the murder of at least 12 soldiers;
 
- Two car-bomb attacks on the Iranian diplomatic and cultural premises in Beirut on 19
November 2013 and 19 February 2014, killing one diplomat and a dozen security guards and many Lebanese civilian bystanders;
 
- Abduction and murder of Iranian diplomatic personnel in Sana’a, including kidnapping of an Iranian diplomat, Mr. Nour Ahmad Nikbakht, on July 21, 2013, and brutal assassination of another, Mr. Abolghassem Assadi, on January 18, 2014; and
 
- Suicide attack on the Iranian Consulate-General in Peshawar, on February 25, 2014, killing two security guards and injuring many innocent Pakistani bystanders.
 
It is extremely regrettable that all available evidence indicate that these cowardly acts of terror targeting the Islamic Republic of Iran and its citizens have been perpetrated by State-sponsored extremist groups, with similar patterns of funding, coordination, support and direction. The entire international community should be alarmed by the regional and extra-regional ramifications of sectarian tension and extremist violence, which are being systematically organized, sponsored and orchestrated in various parts of our region. In fact, learning from recent history, a sober assessment of the medium and long-term implications of this dangerous trend will show that the very sponsors of such hatred, who for ill-conceived interests have hastily resorted to such shortsighted tactics to remedy their strategic miscalculations and failures, stand to lose the most from the sectarian and extremist violence that they are spreading.
 
Moreover, there is very little doubt concerning the inherent and reinforcing interrelationship in our region between perpetual war economy, extremist violence and terrorism on the one side, and drug trafficking and transnational organized crime on the other. The Islamic Republic of Iran has been in the forefront of the global campaign against drug trafficking, with narcotic seizures by Iran amounting to over three quarters of the entire confiscations throughout the world. Being in the first line of defense against this global menace has cost Iran dearly in blood and treasure, without any meaningful international cooperation to share the cost, provide technological assistance, or at least take a resolute stance against those who have exacted a heavy toll on Iran, its innocent civilians and brave soldiers. While our sacrifices help protect the entire humanity from the scourge of narcotics, the international community is simply not doing enough to help Iran in this never-ending struggle. Mere condemnation of acts of terrorism does not suffice.
 
In the last few days, all Iranians celebrated Nowruz -- recognized by the General Assembly as an international day of peace, neighborliness and solidarity -- sharing the sense of grief and desperate anticipation of the families and loved ones of these national heroes. While noting the efforts of the Governments of Pakistan, Lebanon, and Yemen, our hostages remain in captivity and the perpetrators of previous crimes have yet to face justice. The Iranian people have every right to demand more resolute global action, yielding practical results in bringing their hostages back home and in bringing to justice those responsible for the murder of their compatriots. A manifestation of this legitimate demand can be seen in the grass root one-million signature campaign organized by the Iranian youth, from all walks of life, calling upon you and other national and international authorities to take stronger measures to secure the early and safe return of their hostages. Through this letter, I join them in their dignified appeal to the global community.
 
I will be grateful, if you have this letter circulated as a document of the General Assembly,Security Council and the Human Rights Council.
 
Please accept, Excellency, the assurances of my highest consideration.
 
M. Javad Zarif
Minister for Foreign Affairs
 
 
New York, 25 March 2014 - Statement Attributable to the Spokesperson for the Secretary-General on the killing of an Iranian border guard
 
The Secretary-General condemns the killing of one of the five Iranian border guards who were abducted on 6 February in the country's southeast border region by a militant group. He expresses his solidarity with the Government and people of Iran, who are confronted with this appalling act amid the annual Nowruz celebrations held to commemorate in peace the start of a new year. The Secretary-General sends his condolences to the family of the slain guard. He calls for the perpetrators to be brought to justice. He hopes for the success of the ongoing efforts by the Government of Iran to achieve the release of those who remain captive.

 

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