United States Institute of Peace

The Iran Primer

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Report: Impact of Sanctions on Iran

Sanctions have constricted Iran’s economy and played a role in bringing Iran to the negotiating table over its nuclear program, according to Kenneth Katzman in an updated Congressional Research Service report. International sanctions have caused a decline in Iran’s GDP, oil production and exports, currency value, and industrial production. But sanctions have not caused Iran to improve its human rights record or reduce its support for armed groups in Syria, Iraq, or Yemen. The following is an excerpt from the report.

International sanctions on Iran’s key energy and financial sectors harmed Iran’s economy and arguably contributed to Iran’s acceptance of restrictions on expanding its nuclear program in exchange for modest sanctions relief. The interim nuclear agreement (Joint Plan of Action, JPA) has been in effect since January 20, 2014, and extended twice (until June 30, 2015) to allow time to translate it into a comprehensive nuclear agreement. The economic pressure caused:
 
  • Iran’s crude oil exports to fall to about 1.1 million barrels per day (mbd) at the end of 2013, from about 2.5 million barrels per day Iran in 2011. The crude oil exports are capped at the 1.1 mbd level by the JPA.
  • Iran’s economy to shrink by about 5% in 2013 as Iran’s private sector reduced operations. The economy has rebounded only modestly since the JPA sanctions relief went into effect.
Sanctions have constricted Iran’s ability to procure equipment for its nuclear and missile programs and to import advanced conventional weaponry, but have not halted Iran’s provision of arms to the Assad government in Syria, the Iraqi government, and to pro-Iranian factions such as Lebanese Hezbollah or Houthi rebels in Yemen. Sanctions have not altered Iran’s repression of domestic dissent.
 
Under the JPA, Iran has obtained sanctions relief through presidential waivers of several U.S. sanctions laws and authority under several executive orders. The core of the sanctions relief is $700 million per month in access to hard currency from oil sales, plus about $65 million per month in additional hard currency provided to educational institutions for Iranians studying abroad. The JPA caps Iran’s crude oil exports at the pre-JPA level of about 1.1 mbd. The JPA also suspends sanctions on Iran’s auto manufacturing sector and on its sales of petrochemicals. The fall in oil prices since June 2014 has additionally harmed Iran’s economy, perhaps introducing an additional incentive for Iranian leaders to negotiate a comprehensive nuclear deal.
 
According to an April 2, 2015, framework for a comprehensive nuclear accord, a finalized nuclear deal will entail—upon certification that Iran has implemented its nuclear program commitments— easing of U.S., U.N., and multilateral sanctions on Iran’s energy exports and foreign investment in Iran’s energy sector. Sanctions will also be eased on Iran’s financial, shipping, automotive, and other industrial sectors. U.S. sanctions that apply only to U.S. companies and those imposed because of Iran’s support for terrorism or for human rights abuses will not be altered as a consequence of a finalized deal. The Administration has asserted that, in the event of an agreement, it will act on its own authority to suspend most sanctions on Iran and, after testing Iran’s compliance over an unspecified period of time, would request that Congress provide long-term sanctions relief. Legislation in the 114th Congress would impose additional sanctions that would go into effect immediately if diplomacy fails. One bill, S. 615, would prevent the President from suspending U.S. sanctions on Iran pending congressional review of a finalized nuclear deal.
 
Click here for the full report

 

US Tries to Sell Israel on Iran Deal

On April 30, Secretary of State John Kerry told Israel’s Channel 10 News that the United States will not “disappoint Israel” and will only sign a nuclear deal if it closes off all of Iran’s potential pathways to a bomb.  “I say to every Israeli today we have the ability to stop them if they decided to move quickly to a bomb, and I absolutely guarantee that in the future we will have the ability to know what they’re doing,” he said in an interview with Tamar Ish-Shalom in Washington. The following are excerpts.

 
QUESTION:  Mr. Secretary, the U.S., Israel’s obviously strongest ally, is advancing towards an agreement with Iran, a country that has publicly sworn to wipe my country off the map and a country that while negotiating with the West is still funding Hizballah and directing its actions.  Can you understand why some Israelis feel deep disappointment towards the Administration?
 
SECRETARY KERRY:  Well, I can understand why they feel a set of questions and skepticism.  That I understand.  But I don’t think it’s appropriate to feel disappointment because we’re not going to disappoint Israel.  We will never disappoint Israel.  We are not going to sign a deal – I’ll say this again – we will not sign a deal that does not close off Iran’s pathways to a bomb and that doesn’t give us the confidence to all of our experts – in fact, to global experts – that we will be able to know what Iran is doing and prevent them from getting a nuclear weapon.
 
President Obama has absolutely pledged they will not get a nuclear weapon, and I believe that where we are heading will, in fact, protect Israel.  Let me give you an example.  When we started this negotiation, the breakout time – what we call it to get enough fissile material for one bomb – was about two months to three months.  We have pushed that out now, and with this deal, for the first 10 years, we will know that it is one year for that period.  Now I ask you a simple question:  Is Israel safer with two months or one year?  I think the – they started out with a 12,000 kilograms of a stockpile of enriched material.  Under our agreement, that will be reduced by 98 percent to 300 kilograms for that 10-year period.  Now, there are a lot of the assurances and visibility on their program that aren’t for 10 years.  They’re for 15, they’re for 20, they’re for 25, and they’re forever, forever.  And the forever alone gives us, we believe, the capacity to know what Iran is doing.  We will not disappoint Israel.
 
QUESTION:  What many Israelis are asking themselves is what would happen in 10 to 15 years when the agreement expires and Iran will be a step from obtaining military nuclear capability. I mean, can one really guarantee that that won’t happen?
 
SECRETARY KERRY:  Well, let me tell you exactly what happens here.  Countries in the world that are signatories to the Nonproliferation Treaty have the right to peaceful nuclear power.  That’s why they signed the Nonproliferation Treaty.  Now we are going to put Iran to an extraordinarily rigorous test as to whether or not they are changing their visibility, their accountability, so that we know what they are doing, so that when they become an NPT country full-fledged, we will still know that their program is peaceful. 
 
I say to every Israeli today we have the ability to stop them if they decided to move quickly to a bomb, and I absolutely guarantee that in the future we will have the ability to know what they’re doing so that we could still stop them if they decided to move to a bomb.  We don’t give one option up that we have today.  We have various options – sanctions, we have a military option. We don’t lose any of those.  And in fact, we gain on the visibility into Iran’s program.  We will have inspectors in there every single day.  That is not a 10-year deal; that’s forever there have to be inspections. 
 
And so people need – there’s a lot of hysteria about this deal.  People really need to look at the facts and they need to look at the science of what is behind those facts.  We negotiated with the former Soviet Union.  We had 50,000 nuclear warheads facing at each other.  They were called the Evil Empire.  Even Ronald Reagan was able to negotiate with Gorbachev.  We set up systems where we could verify.  And we proceed – even today with our bad relations that we have right now with Ukraine, we’re still doing the things necessary to adhere to that agreement.
 
So this will be no different.  If we do not believe that – and if Russia doesn’t believe that and China doesn’t believe that and Germany doesn’t believe that and France doesn’t believe it and England doesn’t believe it – if all of these permanent five plus one members of the United Nations don’t believe they can live up to it, we’re not going to sign the deal.  But if we’re satisfied that we have the ability to do this, we ask people to measure carefully what the agreement is, and wait until we have an agreement to make all these judgments.
 
QUESTION:  You mentioned a military option.  Prime Minister Netanyahu repeats again and again, even after the Lausanne agreement, that Israel has the right to defend itself by itself and that all options are on the table.  Can you imagine a scenario in which you wake up one morning and discover that Israel has launched an offensive in Iran?
 
SECRETARY KERRY:  Well, that’s obviously – for the most part, that’s hypothetical until we know what the circumstances are where that choice might or might not be made.  I do not believe, frankly, that Israel – we’ll wake up one morning and find that.  I believe our relationship with Israel is such that the prime minister would talk to us at considerable length, because we would be deeply involved in what would happen as an aftermath and there are huge implications to that.
 
But more importantly, we don’t lose that option here.  If – let me give you an example of what we have here.  We have 25 years of the ability to inspect and track and trace every ounce of uranium that is mined in Iran, every movement of that uranium from the mine to the mill, from the mill to the yellowcake, from the yellowcake to the gas, from the gas to the centrifuge, from the centrifuge out into waste or enriched material.  We will follow every trace of that.  And we have set up very special processes here where we guarantee that if Iran refuses to allow us to watch one of those things, that will be a material breach of this agreement and all the options that we have today are still at our disposal.
 
So we believe that what we’ve put in place here so far – and we have to finalize this.  We don’t have the final agreement yet.  And if there’s a balking at signing that final agreement or they try to move back from the kinds of assurances that we think are necessary to satisfy our friends in Israel, to make sure we can look every Israeli in the eye and say we will know what they are doing and we will stand by you if they break out or try to, and we will not allow them to get a weapon.  And I promise you that will remain the policy of the President of the United States with this deal, without this deal, and way into the future with any other president.  We will not disappoint Israel.
 
QUESTION:  President Obama said to Israelis, “We have your back.”  What does that practically mean?  What kind of assurances will Israel receive?”
 
SECRETARY KERRY:  Well, let me give you an example of what that means.  A lot of Israelis don’t see this, but every week we step up to defend Israel in one fora or another in the world, whether it’s the Human Rights Council in Geneva, whether it’s the UN in New York, whether it’s some other entity in The Hague, at the ICC, whatever it is.  We constantly are voting, working, pushing in order to push back against unfair bias, bigoted, degrading, inappropriate assaults on Israel’s sovereignty and integrity, and we stand up for it.
 
QUESTION:  And that, of course –
 
SECRETARY KERRY:  In fact, we’re even being kicked out of entities at the UN now because we stand up and we have a law that says if the Palestinians do something, then we would not pay our dues.  Well, guess what?  Because of that we’re losing our vote in UNESCO.  We will – and we will no longer, by the way, be able to defend Israel as a result of losing that vote.  So we believe and we’ve asked the prime minister and the Government of Israel, give us a waiver so we can at least continue to be able to defend Israel, because actually this winds up being self-defeating. 
 
QUESTION:  Did you receive an answer on this –
 
SECRETARY KERRY:  We haven’t yet gotten the support we’re looking for to try to be able to get that waiver.  So really, I think it hurts Israel because we’re no longer able to be there.  I mean, we’ve done so many things, including trying to prevent the Palestinians from going to the ICC, trying to argue at the ICC that they’re not a state, and that costs us, believe me, in certain ways.  But we do it because it’s the right thing to do and we stand with Israel.  So I think people need to have some confidence that the administration that designed and deployed Iron Dome that has saved countless thousands of lives in Israel, the administration that has signed an MOU and put $3.1 billion on the table to continue to provide defense, that supported Israel through Gaza and so forth, the administration that designed and deployed a weapon that has the ability to deal with Iran’s nuclear program is absolutely an administration, a government, and a country that will stand by Israel way into the future.
 
QUESTION:  Both Israel and the Gulf states share their concerns regarding this agreement.  But while the GCC leaders were already invited to Camp David in Washington to meet with President Obama and discuss the agreement, Prime Minister Netanyahu hasn’t received an invitation yet.  Why?
 
SECRETARY KERRY:  But no, these are just the Gulf states because we already have a defense arrangement and security guarantees with Israel.  What we are doing now is addressing the concerns of many of the neighbors in the region – which we understand, by the way, and they’re legitimate.  They sit there as Israel does and say, “Well, now, wait a minute.  If the United States is making a deal with Iran on this nuclear deal, are they still going to push back against Iran’s behavior in other ways?”  And the answer is profoundly, to a certainty, yes.  We are going to push back.  We’re not going to take away the embargo on weapons transfer on day one, et cetera.  We’re not going to take away – by the way, that was put in by the UN.  We’re not going to take away the United States Iran Sanctions Act that actually imposes sanctions on them for what they did in our embassy in 19 – when they took over the embassy.  We’re not going to stand by while they play footsie with Hamas or put weapons into one place or another, as we just did where we sent the USS Roosevelt into the Gulf to push back against this flotilla that was traveling from Iran, we knew, with weapons on it.  We’re not going to do – we’re not going to let them do those things.
 
And we want to reassure not just Israel but all of the countries in the region that the United States will defend them, stand with them, work with them in order to push back against inappropriate, unacceptable, law-breaking behavior anywhere where we see it in that region.  And that’s exactly why we’re having the meeting.  I will meet with the ministers of the GCC in Paris in a week or so, and then they will come to Camp David and we will make very clear the United States’ determination to continue – in fact to raise the level, increase the level of pushback against behavior that we deem to be inappropriate.
 
Now let me just ask you something.  That will be necessary – I think you would agree – even if you don’t have a deal, because Iran has been doing everything it’s been doing on very little money even with sanctions.  And the policy of the prior administration to us and leading into the Obama Administration was there should be no enrichment at all.  But they enriched.  They went from 164 centrifuges in 2003 to 20,000 centrifuges, and that’s what I found when I came in as Secretary of State.  They had enough fissile material to be able to make eight bombs.  That’s where we were.  We’ve rolled that back.  We are the first administration to stop their program, roll it back, and begin to put in place restraints going forward.  And we think that’s very significant.
 
QUESTION:  Mr. Secretary, when Prime Minister Netanyahu was asked if he trusts President Obama in an interview to CNN recently, he chose to evade an answer again and again.  Isn’t this maybe more than anything evidence to the low point the relationship has come to that leaders on both sides can’t even publicly declare that they trust one another?
 
SECRETARY KERRY:  Well, I don’t – I didn’t see the interview.  I don’t know what he said or didn’t say, so I’m not going to comment on that except to say to you that I don’t think – I was in the United States Senate for 29 years, left in my 29th.  I had a 100 percent voting record for Israel.  I have great ties to Israel.  And I can tell you, no administration in American history has literally done as much, put as much on the line, worked as hard to try to help Israel in so many ways, from trying to work with the Palestinians on peace efforts a year and a half ago to building Iron Dome, deploying it; to providing the MOU; to providing daily work with our intelligence community, with our military that is still going on notwithstanding any tensions or misunderstandings.  President Obama wants a strong and normal relationship with the government, with the prime minister, with whatever emerges as a government.  We look forward to working with it.  I look forward to traveling there and visiting.  It was going to happen sooner; it may happen now in the next weeks when they get a government.  And I’m confident we’re going to proceed forward with a strong and healthy relationship between the United States and Israel because that’s in our DNA.  It’s not going away.
 
QUESTION:  How would you define the crisis between Netanyahu and the Administration following on the speech in Congress?
 
SECRETARY KERRY:  I don’t think there is a crisis.
 
QUESTION:  There isn’t?
 
SECRETARY KERRY:  No.  I’ve said many times – go back to every statement I made.  I welcomed the prime minister of Israel to come and speak here at any time.  I know there was a flare-up over the notification issue because it came from the speaker’s office, not through the normal process, and that raised a moment of a flurry of speculation.  But I guarantee you there’s nothing that stands between the United States and Israel, and I am confident that the relationship between the President and the prime minister will be viewed as we get a government and move forward now as one that is cooperating on all the critical issues with respect to security, the normal relationship challenges that we face, and our cooperation in order to help stand with Israel in fora where people attack it unfairly and do things that run counter to our values and to our policies.
 
QUESTION:  So there isn’t a lack of trust, a lack of chemistry?  Some commentators even –
 
SECRETARY KERRY:  I don’t get into chemistry.  Look, I’m not here to be a psychologist or psycho-babblist.  My job as Secretary of State is to work with our allies and our friends.  And Israel is a great ally and a great friend, and we will continue to work in the same way I have every day that I’ve been in public life.
 
QUESTION:  A word about the southern – about – excuse me.  A word about the northern border of Israel, which is very tense in the past couple of weeks.
 
SECRETARY KERRY:  Yeah, yeah.
 
QUESTION:  How concerned are you by the possibility of a war erupting in the northern border of Israel with Hizballah?
 
SECRETARY KERRY:  Well, I’m always concerned about what Hizballah is doing.  I mean, I personally traveled to Syria prior to the war, prior to the uprising, in order to challenge Bashar al-Assad with respect to their transfer of SCUD missiles to Hizballah and Lebanon.  And that’s something I did as a United States senator on behalf of the Administration as chairman of the Foreign Relations Committee.  So we have no illusions about why Hizballah is there, who supports Hizballah – Iran, about its activities that are dangerous and provocative.  And Hizballah has tens of thousands – 70, 80,000 rockets.  We’re well aware of that.  It’s one of the reasons why the United States built Iron Dome and it’s one of the reasons why we will stand by Israel.  We need to rid that country of those rockets.  We need to stop that kind of behavior; that is, we need to get the IRGC out of Syria.  We need to end Iran’s support for these kinds of terrorist activities.  And we will, through the GCC enhanced security arrangement that we’re working on and our continued cooperation with Israel, absolutely stand against that kind of behavior.
 
But let me ask you:  Would you rather stand against an Iran that has a nuclear weapon while you’re trying to do that, or that can’t?  We have decided the first priority is take away the ability to have a nuclear weapon.  And that will not change any of our commitment and dedication to preventing all these other terrible scenarios from unfolding.  But I’d rather do it without their having a nuclear weapon than with their having one, and that’s why we are intent on guaranteeing they don’t get a nuclear weapon.  It’s a good starting point, folks.

Click here for a full transcript.

 

Khamenei on Labor Day

On April 29, Supreme Leader Ayatollah Ali Khamenei highlighted the important role laborers play in Iran’s economy. In his address for International Labor Day, Khamenei called for resolving “problems such as delays in paying their salary, dismissals, problems related to providing and the like.” He also argued that sanctions, though effective in some respects, cannot stop a well-organized, national effort to boost domestic production. The key to solving economic problems does not exist in Lausanne, Geneva and New York. It exists inside the country,” Khamenei said. The following are excerpts from his speech. 

Today's meeting with you dear laborers from throughout the country is, in fact, a symbol of our respect for laborers. We have said and continue to say many things in this regard. Today too, we will discuss a number of issues, but the main point is that by holding this meeting, we want to show our respect for laborers and labor. We want to highlight - more than before - the significance of labor in our minds and in the minds of the people of Iran. We should pay attention that all great achievements are made in the shade of labor in its broad sense. Labor is valuable. Thanks to the value of labor, laborers are very valuable in society.
 
There is a well-known narration that the Holy Prophet of Islam (s.w.a.) kissed the hands of a laborer. This is not a mere formality. Rather, it is a lesson. Therefore, we want the value of labor to be appreciated. We want laborers to be respected. We want to draw officials' attention to matters related to laborers such as resolving the problems of laborers and their working environment. There are certain problems such as delays in paying their salary, dismissals, problems related to providing and the like. These are problems that exist at a public level and for the society of laborers. Officials should pay more attention to these matters. This is the purpose of our meeting.
 
What I feel is that from the beginning of the Revolution until today, laborers have really carried out valuable tasks for the country. These tasks are primarily related to the value of labor and laborers, secondly to their presence in difficult arenas of the country in the course of many years and thirdly to their refusal to be deceived by those who wanted to pit laborers against the Islamic Republic from the very first day. Laborers made this great self-sacrifice while they had many problems in different eras. So, laborers have emerged victorious out of this test.
 
As I said, the problems that exist are not solved by talking. It is necessary to take action and to show innovation. Second, the solution to the economic problems of the country should be found inside the country. Production is the spinal cord [of economy]. The spinal cord of the economy of resistance - which we have spoken about before - is strengthening domestic production. If this is done and if our effort is focused on this matter, then labor problems will gradually be solved, labor and laborers will become valuable, everyone will be employed and unemployment - which is a problem in our society - will gradually be reduced and removed. The main basis is production.
 
Some people might say that there are certain prerequisites for the issue of production which you always repeat and stress in your public speeches and in your meetings with officials. They might say that in the current conditions - sanctions and international pressures - it is not possible to boost and strengthen production. I do not deny that the unjust sanctions that the enemies of the people of Iran and the Revolution have imposed on our nation are not ineffectual. Without a doubt, they exert some influence, but I deny that these sanctions can prevent a public, well-organized and well-planned effort for boosting production. I do not agree with this. When I take a look at the country, I see that production has particularly increased in those areas where the enemies have exerted more pressures and imposed more sanctions. This has been achieved because of the efforts that officials and our enthusiastic laborers and youth made. I can witness this. It is in front of everyone's eyes.
 
Compare the present time with 15, 20 or even 10 years ago in terms of the country's achievement in the area of military products. We have made astonishing and mesmerizing achievements in the area of military products. This is while the enemies have exerted more sanctions on the military and these sanctions are not related to this year or last year. They have existed since long ago and they have exerted many pressures, but we made progress. We have also made many achievements in the area of biological sciences and biotechnology while the same restrictions and sanctions existed. Even some well-known universities in the world did not allow Iranian students to take these courses and to make progress in them. Despite what they did, the country has made outstanding and visible achievements in these sciences and everyone can witness them.
 
If those who are curious and want to have information in this regard- these are not confidential matters- they can obtain such information. Another achievement is in new sciences such as nanotechnology. These are among new technologies in the world and no one has helped us in them. From now on too, they are not going to help us. We are advanced in such sciences. Our experts, our youth, our researchers and our scientists are working on them and making great efforts. They have made eye-catching achievements in such areas.
 
They are also working on knowledge-based industries. Recently, an exhibition was held in this Hussainiyah and I met with the youth who are active in these industries. I also visited the different divisions of knowledge-based companies. Of course, I was already aware of their activities and I had received certain reports, but I got a chance to see these people up close. They are making great efforts and moving forward. Today, we have made much progress in the area of knowledge-based companies compared to 10, 15 years ago. All these achievements have been made while we were under sanctions. But if the cruel sanctions of the enemies had not existed, it would have been possible for us to even make more progress. We do not deny this. Of course, there is another probability. We might have shown negligence by ignoring the needs of the country. We might have attended to affairs - by relying on the money that we received from oil, imports and other such things - that do not bring about any progress for the country. This was also possible.
 
We should really pay attention to the fact that part of our achievements was made due to the obstacles that foreigners created for us. We should appreciate the value of this. They did not give us anything and we had to act on our own. When the path of importation becomes wide open and when we import whatever we like, then our desire for self-indulgence draws us towards laziness and idleness. This is another side of the matter. Therefore, when I place emphasis on the issue of production, some people should not say that production is not possible under severe and strict sanctions. This is not the case. It is possible to do so. Whatever you decide to do will be possible if you show determination, bring all your power to the arena and ask Allah the Exalted for His help and guidance. We have tested this.
 
In the present time, we play a leading role in the world in some industries. One example is in the area of building dams. Who in the world helped us reach this point in the area of building dams? Today, Iran is among leading countries in this area. Some companies in western countries build dams at an enormous cost. If Iranian youth were in charge, they would build much better dams at much lower costs. This is an area in which we have made progress. Who helped us in the course of these long years? The same is true of the nuclear issue and many other issues.
 
I believe that the economic problems of the country - the most important of which are matters related to laborers and their unemployment and living problems - will be solved if the issue of production receives attention. We receive and read certain reports about these problems, but attention to production will create job opportunities and it will engender a feeling of dignity and self-reliance. When a country relies on its domestic capabilities, it will feel self-reliant. In the process of becoming self-reliant, we may want to resolve tens of matters with the world, but our power or weakness will make a huge difference when we are at the negotiating table. When you feel powerful, you negotiate in a certain way. When you feel weak, you will negotiate in a completely different way. If the domestic structure of power is solid and firm in all areas - including the economy - then we can negotiate with different sides over all matters. In order to do so, we should negotiate with the other side in a powerful way, not in a way that it displays our needs. This will embolden the enemy and it will encourage him to set terms and say a load of nonsense all the time. I find the cure in this. I say - I said it in the beginning of the year as well - that everyone should focus all their efforts on the issue of production.
 
Of course, this has certain prerequisites. Investors, laborers, consumers and governmental organizations have certain responsibilities. This task is not an individual one. Everyone should cooperate. When we speak about the people's harmony and unanimity with the administration, this is what it means. It means that everyone should cooperate so that they can clear the path of the country from this big boulder [blocking the path].
 
Investors and those who are well-to-do should invest. I knew some individuals who could have invested their money in lucrative businesses which were not related to production, but they did not do so. They said, "We will not do this because we want to render services to the country". They invested in production with less profit because they understood that the country needs it. Well, this is an act of worship. An investor who thinks about the needs of the country, who does not invest his money in speculation or lucrative but harmful businesses and who invests it in production instead is doing a very good deed. Therefore, investors play a major role.
 
Hardworking laborers play a role as well. A laborer who endures the difficulty of work and who dedicates his life, his time and his energy to working properly is, in fact, worshipping God. Work is difficulty anyway. Physical work is a difficult task in life. In my meetings with you dear ones, I have repeatedly cited this narration from the Holy Prophet (s.w.a.): "God bless those who take on a responsibility and do it appropriately". May God show mercy on those who work properly, whether industrial, agricultural or different other types of labor. When work is done properly, one's product will turn out to be perfect. This is the role of laborers which is an act of worship.
 
Fair-minded and conscientious consumers can also help the production of the country. They should not look for famous products and brands only. Some people constantly speak about brands. They should not look for brands and popular models in the world. They should pay attention to the interests of the country. The interests of the country lie in consuming domestic products and helping Iranian laborers. There are some people who chant slogans in favor of laborers and they make extravagant claims, but in practice, they are kicking Iranian laborers. Kicking Iranian laborers means refusing to use the products that our laborers manufacture. It means using foreign products which are sometimes much more expensive.
 
In some industries, we are among leading countries in the world, but some people import the same products from outside the country. This is the responsibility of everyone including the administration. The honorable Minister of Labor is present here. I request that you bring this up and insist on it in the administration. Those products and goods that governmental organizations need and use should not at all be brought from outside the country. This is a major and great matter. Considering the vast scope of its activities, the administration is a number one consumer. Executive officials should not say, "We need such and such a thing urgently, but it does not exist in the country. Therefore, we should bring it from outside the country".
 
Well, do you not plan? If you need it urgently, why do you say it now? You should have said it two years ago so that domestic manufactures would have enough time to plan and to build and test it. This way, you could have it today. These are important, not minor, issues. The administration should prevent itself from using those foreign products which can be manufactured inside the country, ranging from pens and paper on your desks to building materials and other products. It should consider this haraam for itself. Government officials should prevent self-indulgence, the desire for ease and comfort- these are the least of problems that exist- and, God forbid, abuse.
 
We have experienced, tested and witnessed this. Once - many years ago - a task was being carried out in the country. They were building something. I summoned the officials in charge and I asked them not to use any foreign product in what they were doing. They promised to do so and they kept their promise honorably. When we received a report and carried out an investigation in the end, we found out that 98 percent of the materials were produced inside the country. Only two percent did not exist in the country and they imported it. Well, this is possible. So, consumers are one of the major bases of strengthening and promoting domestic products.
 
Another major base is the system of combating smuggling. We have placed great emphasis on combating smuggling. Different administrations have come and gone in the course of these years [but they did not attend to this matter]. Well, this is something that should be done and it is possible. They should not say that it is not. It is completely possible. They should prevent smuggling in a very decisive way. Once I said that the administration should not only pursue the issue of smuggling in our borders. Today, billions of dollars are being allocated to smuggling. Because they release many different figures, I cannot exactly say how much. You should pursue smuggling before and when they enter our borders and when they find their way into shops. This is a very important matter and task. Those who are working on it are doing jihadi work and worshipping God as well. This is also among good religious deeds.
Another important pillar are import-control organizations. These organizations should adopt a careful outlook as well. There are some affairs which are not in the hands of the administration. These tasks are carried out by the private sector and there is no other option. However, governmental organizations can manage them with supervision. They should act in a way that the issue of importation does not harm domestic production.
 
Another issue is the responsibility of promotional organizations and the media. The media can play a role as well. The IRIB and other media should work, in the real sense of the word, on promoting domestic products. All these tasks are effective.
Another issue is the stability of laws. This is the responsibility of the Majlis. They should take care not to change laws related to economic matters - such as matters related to labor - on a daily basis so that it is possible to plan.
 
The cultural officials of the country too should plan cultural work. They should criticize idleness, laziness and avoidance of hard work. Hard work should be endured. If we do not endure hard work, we do not get anywhere. We should not like easy work only. We should endure hard work, wherever it exists. Those who managed to reach a peak in industry, technology and scientific matters imposed hard work on themselves. This requires creating a culture. If we only want to do easy work, things will not move forward.
 
Officials in charge of combating corruption have a role as well. Corruption is frequently spoken about, but this is of no use. If we only shout "thief, thief", thieves do not stop their work. We should enter the arena. The officials of the country are not journalists. It is journalists in newspapers who speak about corruption. You and I who are officials should take action. Why so much talk? You should enter the arena. If we know how to act, we should combat corruption in the real sense of the word.
 
These are our responsibilities. These are the responsibilities of our different sectors. This is the cure for solving the economic problems of the country. If we want to solve the economic problems of the country, we should focus on production. Everyone is responsible in the way that we explained. Of course, some responsibilities are heavier and some are lighter, but everyone is responsible in some way. The key to solving economic problems does not exist in Lausanne, Geneva and New York. It exists inside the country. If everyone works hard and shows diligence, problems will -by Allah's favor - be solved. The people of Iran and the officials of the country have accomplished even greater feats in the course of these years. So, they can also resolve the issue of production. The current administration is thankfully working hard in an enthusiastic way. There are a number of well-informed individuals in the administration. They should make efforts, work hard and pursue the matter. By Allah's favor, they should solve problems.
 
To be fair, the society of laborers in our country is a noble society. The society of our laborers is a noble society. I was completely aware of the efforts that were made - from the very first day of the Revolution and even before the decisive victory of the Revolution - to pit laborers against the Revolution. I was aware of and I witnessed these efforts during the time of those astonishing rallies and demonstrations in the year 1357. I witnessed these efforts up close. The same effort has been made in the course of many years. Even during my presidency and after that, there were some people who wanted to pit laborers against the Islamic Republic, but our laborers have endured problems and shown resistance with complete power, stability and modesty. This is very valuable.
 
The officials of the country should appreciate the value of these great laborers who endure problems and who work hard. The reward for this nobility of character is that everyone should work hard so that by Allah's favor, they can solve their problems. Allah the Exalted too will definitely help those who have good intentions, who do good work and who move towards good goals.
 
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Biden Defends Blueprint for Iran Deal

On April 30, Vice President Joe Biden pushed back against critics of the blueprint for a nuclear deal with Iran. He argued that an agreement would have the “toughest transparency and verification requirements, which represent the best possible check against a secret path to the bomb.” The following are excerpts from his remarks at The Washington Institute for Near East Policy’s Soref Symposium Gala Dinner.

We all know the risk that a nuclear-armed Iran would pose -- a regional arms race; a major blow to the prohibition against nuclear proliferation; the risk that a future crisis could escalate into a nuclear war; and a shield behind which Iran would surely hide and its proxies further destabilize the region and threaten Israel.
 
Let me make something absolutely clear.  I know I’m always characterized as a friend of Israel and sometimes it’s not suggested in as positive a way as I feel it.  But Israel is absolutely right to be worried about the world’s most dangerous weapons falling in the hands of a nation whose leaders dream openly of a world without Israel.  So the criticism that Israel is too concerned I find preposterous.  They have reason to be concerned.  And the fact of the matter is that I think we should get beyond the notion that there’s anything remotely acceptable about Israel not being concerned.
 
And quite frankly, that’s why the President, President Obama, decided for the first time -- people forget this -- to make it an explicit, declared policy of the United States of America, no such policy existed before President Obama uttered it -- that all instruments of American power to prevent -— not contain, not contain -— to prevent a nuclear-armed Iran would be used to prevent that from happening.
 
And he made sure that something existed that didn't exist before, that our military had the capacity and the capability to execute the mission, if it was required.  When we took office, we understood the threat, like all of you.  But we also understood that no approach to date had done anything other than move Iran closer to a nuclear weapon.  Nothing had addressed Iran’s march.
 
As a matter of fact, when we took office, the United States did not have the international support we needed to deal with Iran.  If time permitted, I could quote for you quote after quote from around the world that we -- the United States, many in the international [sic] felt that we, the United States —- rightly or wrongly -— the United States was the problem, not Iran was the problem.  That limited our options considerably, our ability to generate international pressure.  We were viewed in the Middle East before we took office as the isolated party.
In the interim, nearly every aspect of Iran’s program raced ahead.
 
So we embarked on a new strategy which had two purposes.  One was to unite the world behind our approach making it clear that a genuine diplomatic path existed for Iran; and secondly, putting in force what few believed could happen -- sanctions -- sanctions that would bring them to the negotiating table.
 
And we created space to do two things.  First, it allowed us to change how the world viewed the problem even if there were no sanctions and we had to act.  By letting the world know that we were extending the hand -- if they wanted to negotiate -- created a different environment in which we could operate, demonstrating a willingness to explore diplomacy in good faith meant that, whatever action we might ultimately be required to take to prevent a nuclear-armed Iran, we’d be able to take it with significantly greater support -- international support, support from the rest of the world.  We accomplished that.
 
Second, we thought there was a chance that, just a chance with incredibly tough sanctions that Iran might actually take meaningful action to address the world’s concerns about their nuclear program.
 
So after Iran initially rejected the President’s outstretched hands, working with Congress and our international partners, we put together not only the toughest sanctions regime in history, but one of the most broad-based.  If we were honest with ourselves, a number of you would say -- acknowledge you were surprised that not only our allies joined us, but Russia and China joined us, which united the United Nations Security Council behind even tougher sanctions that the Council passed.  It wasn’t just the major powers of the P5+1, but energy-hungry nations like India, Japan, and South Korea.  They did their part, as well.  That’s what made sanctions so profound.
 
And we kept faith with this approach for six and a half years.  Soon, it was Iran -— not America -— that was isolated.  And over time, our choices created the conditions that made diplomacy possible.
 
Meanwhile, inside Iran, sanctions helped shape the political climate that led Iranians to elect a leader who campaigned on the need to break Iran’s international isolation.
Finally, Iran began to talk.  And talks grew into an interim deal.  When it did, people predicted the sky would fall; some of my best friends in the region; Iran would cheat and sanctions would crumble.  But the deal held, and so did the sanctions.  In fact, many at home and in the region who initially saw the interim deal as a historic mistake, I think was the quote, saw it as important part of stopping a nuclear-armed Iran.
 
And now we have a historic opportunity to forge an enduring peaceful solution.  I know Jack Lew went through the parameters of the potential deal in detail.  And I know I’m keeping you from your main course. So I won’t go into all the detail.  But let me say, as you heard last night, we’re pursuing a deal that would verifiably block each of Iran’s paths to a bomb, through a break-out attempt from the known nuclear facilities at Natanz, Fordow, Arak; or a sneak out from unknown sites. 
 
A lot of ink has been spilled on this deal.  Some in favor, some against, some thoughtful, some misleading.  So tonight, I want to directly address some of the concerns that I’ve heard.
 
First, some have worried that the President and administration are willing -- even eager -— to settle for a deal so badly that we’ll sign a bad deal.  The right deal is far better than no deal.  But if what’s on the table doesn’t meet the President’s requirements, there will be no deal. 
And a final deal must effectively cut off Iran’s uranium, plutonium, and covert pathways to the bomb.  If it doesn’t, there will be no deal.  
 
The final deal must ensure a breakout timeline of at least one year for at least decade or more.  If it doesn’t, no deal. 
 
And a final deal must include phased sanction relief, calibrated against Iran taking meaningful steps to constrain their program.  If they do not, no deal. 
 
And a final deal must provide verifiable assurances the international community is demanding to ensure Iran’s program is exclusively peaceful going forward.  If it doesn’t, no deal. 
The second argument I hear is that no deal is worth the paper it’s written on, because Iran will simply cheat.  And it’s true that Iran could try to cheat, whether there’s a deal or not.  Now they didn’t cheat under the interim deal -— the Joint Plan of Action -— as many were certain they would.  But they certainly have in the past and it would not surprise anyone if they tried again.  However, if they did try to cheat, under a deal that we're talking about, they would be far more likely to be caught.  Because as this deal goes forward, we’ll also put in place the toughest transparency and verification requirements, which represent the best possible check against a secret path to the bomb.
 
Iran will be required to implement the Additional Protocols, allowing IAEA inspectors to visit not only declared nuclear facilities, but undeclared sites where suspicious, clandestine work is suspected.
 
Folks, let me tell you what this deal would do in relation to intrusive inspections:  Not only would Iran be required to allow 24/7 eyes on the nuclear sites you’ve heard of -— Fordow and Natantz and Arak -- and the ability to challenge suspect locations, every link in their nuclear supply chain will be under surveillance.
 
For the next 20 to 25 years, inspectors will have access to Iran’s uranium mines and uranium mills, centrifuge production sites, assembly and storage facilities; all purchases of sensitive equipment will be monitored.
 
And, as part of the transparency requirements under the final deal, Iran will have to address the IAEA concerns about the possible military dimensions of Iran’s past nuclear research.
No other option addresses concerns about potential for a covert Iranian program -— or Iranian cheating -— as well.  More sanctions, as some are calling for, in the absence of international support, if the P5+1 doesn't support them, will result in the loss of sanctions, backsliding on the access we already have to Iran’s program.  Even military action is no panacea for a secret program -- if there is one -— since you can’t target what you don’t know exists.  So this deal is not about trust.  It’s about verification. 
 
And if at any point Iran breaks any of the commitments made in the agreement, which we have not arrived at yet.  We have a framework.  All these things in the framework we expect to be -- to have every t crossed and i dotted.  If not, there will be no deal.  They are much more likely to be detected if they were to cheat, and we’ll have more time to respond, by snapping back sanctions or taking other steps to enforce compliance.
 
And there will be a clear procedure in the final deal that allows both the U.N. and unilateral sanctions to snap back without needing to cajole lots of other countries -– including Russia or China –- to support it.  That will be written in the final deal.
 
And if Iran resumes its pursuit of nuclear weapons, no option available today will be off the table.  As a matter of fact, the options will be greatly increased because we will know so much more.
 
Third, some have said that because some of the constraints in this deal expire over time, this deal “paves” Iran’s path to a bomb.  Let’s get something straight so we don't kid each other.  They already have paved a path to a bomb’s worth of material.  Iran could get there now if they walked away in two to three months without a deal. 
 
Under the deal we’re negotiating now, we radically alter that timetable.  For the next 10 years, Iran’s centrifuges would be cut by two-thirds, from 19,000 currently installed to 6,000.  Only 5,000 of these would be enriching at Natanz; all the most -- all being only the most basic IR-1 models.  There would be no enrichment permitted at Fordow. 
 
Iran will also immediately be required to reduce by 98 percent the remaining stockpile of low-enriched uranium.  And under the final deal contemplated, Iran also will be required to have no more than 300 kilograms of uranium enriched to below 5 percent for the next 15 years.  You can't make a bomb out of that.  That’s a small fraction of what would be required if Iran enriched it further, up to 90 percent for a single nuclear weapon. 
 
In contrast, without this deal, they already have enough material -— if further enriched -— for as many as eight nuclear bombs.  Already, right now, as I speak to you.  The result if the final deal is concluded, for a decade, breakout time for one weapon’s worth of highly enriched uranium would be extended from the current two to three months to no less than a year.  And for years after that, stockpile limitations and other constraints on Iran’s enrichment program would produce a longer breakout timetable than exists today.
 
Under the proposed deal, the Arak reactor currently under construction will be redesigned to produce zero weapons-grade plutonium.  And that's easy to see.  The spent fuel will be required to be shipped out of Iran for the life of the reactor.  And Iran will be barred from building the reprocessing capabilities needed to extract bomb-grade material from plutonium.
Taken together, these measures close off Iran’s plutonium path forever.  No other option -– not more sanctions and not military action –- would provide this kind of time.
 
And by the way, if we’re viewed as walking away from what is considered a reasonable deal by our partners in favor of a unilateral, maximalist positions, we will lose international support that our sanctions regime depends on.  Because unilateral U.S. sanctions long ago ceased to be enough to ratchet up the pressure.  That's not what is hurting Iran so badly.
 
And as I said:  If down the road, Iran resumes its pursuit of nuclear weapons, no option available today will be off the table to handle the threat.  None.  Our technological capability increases every day and the additional knowledge we’d acquire would be significantly more than we have now.
 
 Take all this together, it’s clear:  Those who say the deal paves Iran’s path to the bomb -— respectfully -— they don't get it.  They’re wrong.  Remember what I said the path has already been paved.  If they walk away today, in two to three months, they have enough highly enriched uranium, if they chose to, to make up to [sic] eight nuclear weapons.  As a former respected Israel head of military intelligence, [sic] Mossad, wrote about the political framework we arrived at, he said:
 
“It contains important achievements for the major powers in terms of setting back the Iranian nuclear program and imposing key restrictions on future development of the Iranian nuclear program as well as unprecedented supervision.”
 
He’s a former head of Mossad[sic].
 
Finally, there is the myth that a nuclear deal between the United States and Iran enables Iran to gain dominance inside the Middle East.  Folks, this isn’t a grand bargain between America and Iran that addresses all the differences between us.  This is a nuclear bargain between Britain, France, Russia, China, Germany, the EU, America, and Iran -— one that reduces the risk of nuclear war and makes the region and the world safer as a result. 
 
It’s not a bet on Iran changing its stripes.  All of you know that Iran is not a monolith.  There is significant debate within Iran about its future.  Some want to dominate the region via militant proxies.  Others want more normal relations with the outside world.  Many of those helped elect Rouhani.
 
But you see, that debate being fought out inside Iran is being fought out inside Iran.  It’s not the premise upon which this deal is made.  This deal is solid, worthwhile, and enforceable regardless of the outcome of that internal debate in Iran.  And it’s true we did not precondition the deal on Iran renouncing its proxies or recognizing Israel.  And we don't ask Saudi Arabia to recognize Israel.  But we passionately believe that Iran must eventually do those things.  That's not the deal.
 
I’ve been involved in arms control negotiations since I was a 30-year-old kid when I came to the United States Congress in 1972 on the Foreign Relations Committee.  Two of the last deals as a senator, I was delegated to go and negotiate with the Russians. 
 
Just like arms control talks with the Soviet Union -— another regime we fundamentally disagreed with, whose rhetoric and actions were repugnant and unacceptable, whose proxies we forcibly countered around the world –- we negotiated to reduce the nuclear threat to prevent nuclear war. 
 
Kennedy did not condition the Partial Test Ban Treaty on the Soviets surrendering Cuba.  Nixon negotiated the SALT Treaty without conditioning it on the end of the Vietnam War and Russian support for the North Vietnamese.  Reagan demanded that Gorbachev tear down the Berlin Wall, but it didn’t condition talks in Reykjavik on the Soviets doing it first.  And they all kept us safer.  That’s what we’re doing today. 
 
It’s true, as Jack discussed yesterday with you, that should Iran act rapidly to restrict its program, Iran will have additional cash available to it.  And despite good reasons to think most of it will go to urgent domestic needs, some or all of it may fund further mischief in the region.  But if that occurs, it will not occur in a vacuum.
 
We are working continually to develop the means and capacity to counter Iran’s destabilizing activities as we’ve demonstrated in places like the Straits of Hormuz every single day.  And we’re prepared to use (inaudible) the force.  Just listen to the news tonight about what we're now doing in the Straits.
 
We’re sanctioning Iran’s terrorist networks.  We're strengthening our partners to push back against Iran’s bullying.  We’re strengthening national institutions and militaries so they can't have -- they are not manipulated, or corrupted, or hollowed out by militias, clients, states within states in places like Iraq and Lebanon. 
 
The one reason I am sanguine that -— deal or no deal -— Iran will not dominate the Middle East is what I’ve learned from years of working in Iraq.  The people of the Middle East don’t want to be dominated by anyone –- not us, not Iran, not anyone.
 
And a nuclear deal reinforces our efforts to push back against Iran interference and aggression.  Because as dangerous and difficult as Iran is today, just imagine what and how emboldened, a nuclear-armed Iran would be and what escalation it would sponsor in support of terrorism and militancy. 
 
As we produce this deal, we’re also deepening our cooperation with Israel and our other regional partners, including in the Gulf, who are concerned about Iran’s ambitions in the region, as we are.
… 
When it comes to Iran, the President said he would draw on all instruments of our national power to prevent Iran from acquiring a nuclear weapon.  I have heard some speak cavalierly about how simple military strikes would be.  “Why don't we just take them now and get it over with?”  This is not only incredibly uninformed, but it’s dangerous.  There’s nothing simple, minimal, or predictable about a war with Iran.  If required, it will happen.
 
It’s a risk we may yet have to take should Iran race for a bomb.  But you should be ready, we should be ready -- even when strikes would achieve less at a greater cost than a deal we are debating today. 
 
After a decade of learning the limits of what war can achieve in the Middle East, we owe it to ourselves -– and to our troops -– to fully explore what is possible through diplomacy. If the last 12 years haven’t done anything else, I hope they instilled a bit of humility in all of us about nation-building.  And so we do so knowing that the finest military in human history remains at the ready. 
 
In closing, I want to offer a piece of advice:  Don’t underestimate my friend Barack Obama.  Do not underestimate him.  He has a spine of steel, and he is willing to do what it takes to keep America and our allies safe.  And that's what we're doing in Iran.
 
Folks, there is no deal yet.  The Iranians may yet refuse to agree to the detail the framework lays out in detail.  If they do not, there will be no deal.  And it will be Iran who rejected the agreement, and the sanctions -- international sanctions -- will stay in place and more will follow.
 
So, folks, make your judgment when the final deal is put before us.  But be critical.  Not only of the deal -- be critical of the criticism to see if it holds water.
 

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Treasury on Iran Deal and Sanctions

On April 29, Treasury Secretary Jacob Lew outlined how the United States could ensure Iran’s compliance with the terms of a nuclear deal. He said the United States could keep the “sanctions architecture in place while providing relief through waivers” to preserve the ability to “reimpose sanctions if Iran reneges on its commitments.” The following are excerpts from Lew’s remarks at The Washington Institute for Near East Policy 30th Anniversary Gala.

 
Tonight I want to speak about an issue that I know is on everyone’s mind, and that is our ongoing efforts to make sure that Iran never obtains a nuclear weapon.  Specifically, I would like to discuss why the framework agreement we recently reached with our P5+1 partners and Iran offers the best chance of achieving that objective.  You will hear more broadly from the Vice President tomorrow, but I will describe how my team at the Treasury Department is prepared, if we are able to conclude a comprehensive agreement in the next several months, to help ensure that Iran complies with the terms of the agreement. 
 
But first, how did we get to this point?  At the outset of this Administration, President Obama made clear that preventing Iran from acquiring a nuclear weapon was a national security priority of the highest order.  We knew then, as now, that an Iran in possession of a nuclear weapon would directly threaten our security and that of our closest allies, increase the chance of nuclear terrorism, and risk setting off an arms race in the Middle East.  So we resolved to do whatever it would take to make sure that Iran will never get a nuclear weapon. 
 
For us at Treasury, that meant working together with Congress, Departments across the executive branch, and our international partners to establish the most effective, comprehensive, and innovative program of economic sanctions in history.  
 
At first, there were many out there who said a sanctions regime would not work.  That the United States — which had a near-total embargo on Iran for over a decade — had exhausted its sanctions tools.  That countries like China and India would never agree to dramatically scale back their oil purchases. 
 
Those assessments were wrong.  Sanctions isolated Iran from the international financial system, slashed its oil exports by more than half, deprived it of access to much of its oil revenues and foreign reserves, and severely constrained its overall economy.
 
But the goal of sanctions was never to create pressure for its own sake.  Sanctions were always intended principally as a means, through economic pressure, to persuade Iran to come to the negotiating table to engage in serious diplomacy over its nuclear program.  And that is exactly what happened.  
 
In November 2013, we reached an interim agreement to freeze and even roll back Iran’s nuclear program while negotiations on a longer term agreement were underway.  Many critics suggested that this interim agreement, the Joint Plan of Action, would free Iran from the pressure of sanctions and ultimately pave the way for an Iranian nuclear weapon.  But throughout the JPOA, we have ensured that Iran abided by its commitments.  Its nuclear program has remained frozen, certain aspects of the program were curtailed, and we have gained unprecedented insight into Iran’s nuclear activities.  That gave us the space we needed to engage in talks knowing that Iran was not simply biding time and creeping toward a nuclear weapon under diplomatic cover. 
 
Which brings us to today.  The framework understanding reached several weeks ago in Switzerland is the basis of a good deal.  If we are able to conclude a final agreement consistent with the framework, it will make our country safer, it will make our allies safer, and it will make the world safer.
 
That’s because it meets our core objectives: cutting off every pathway that Iran could take to develop a nuclear weapon and providing for the most robust and intrusive inspections regime ever placed on a country’s nuclear program.  In return, after Iran takes the required steps to cut off these pathways, the international community is prepared to provide Iran with relief from a defined set of nuclear-related sanctions. 
 
Let me be absolutely clear: A comprehensive deal with Iran would not be based on trust.  It would be based on intense verification and scrutiny – as well as the knowledge that if Iran does not keep its word, we have preserved all our options, including economic and military tools, to make sure that Iran can never acquire a nuclear weapon.  We now have several months of tough diplomacy ahead of us, during which we hope to iron out all the technical details required to implement an agreement.
 
If Iran takes the steps to shut down the paths to a nuclear weapon, the framework provides sanctions relief.  I would like to spend a few minutes discussing in detail how we think about sanctions relief and how it will work if we reach a comprehensive deal.
 
When we began thinking about the idea of a nuclear agreement with Iran, we knew full well that we needed an approach to winding down sanctions that accounted for the possibility that Iran might cheat.  Historically, Iran had told the international community one thing, while doing something very different.  We had two overarching conditions for any future sanctions relief.
 
First, that the relief would have to be carried out in phases, to match verified, agreed-upon steps on Iran’s part.  It would be unacceptable for us to lift the sanctions on Iran on the day it agrees to a comprehensive deal, since continued pressure from sanctions is the best way to ensure that Iran actually lives up to its commitments.  And second, we need to make sure that if Iran violates any of those commitments, there will be a mechanism to snap sanctions back into place and reverse the relief. 
 
The framework agreement meets our requirements in both respects, and if we can get a comprehensive deal, here’s how it will work.
 
Iran will receive relief from UN, EU, and U.S. sanctions only after it verifiably completes major nuclear-related steps, ensuring that it is at least one year away from having enough fissile material to produce a nuclear weapon.  
 
That means reducing installed centrifuges at Natanz and Fordow by two thirds and ceasing all enrichment at Fordow.  That means rebuilding and redesigning the heavy water research reactor at Arak such that it cannot produce weapons-grade plutonium. That means reducing its stockpile of low-enriched uranium from around 10,000 kilograms to 300 kilograms. Every step of Iran’s nuclear supply chain, from mining to enrichment, would be subject to intrusive inspection, so we will know if the Iranians are keeping their word.
 
If Iran takes those steps — and we can confirm that the work is complete — it will represent far-reaching movement, and it will extend Iran’s breakout time from about three months to a least a year.  In exchange for taking these steps, we would be prepared to provide sanctions relief, including suspending oil, trade, and banking sanctions.  And while we would provide this relief by using the President’s authority to waive sanctions, the authority to reimpose sanctions would remain in place.  Only after many years of compliance would we ask Congress to vote to terminate sanctions, and only Congress can terminate legislative sanctions.
 
Keeping the sanctions architecture in place while providing relief through waivers also furthers our second condition, which is to preserve our ability to reimpose sanctions if Iran reneges on its commitments.  By ensuring that sanctions can be quickly snapped back if Iran cheats, we will retain important leverage over Iran for years after an agreement is reached.
 
Crucially, this approach to sanctions relief and snapback is not just a U.S. position.  Our international partners are united in the view that we must be able to reimpose multilateral sanctions on Iran if it breaches the restrictions on its nuclear program.  We are still developing the exact mechanisms by which sanctions stemming from UN Security Council Resolutions would be re-imposed.  But we have made it abundantly clear that if Iran breaks its commitment, it will face once again the full force of the multilateral sanctions regime.  The snapback would not be vulnerable to a veto by an individual P5 member, including China and Russia.
 
I’ve spoken in some detail about what relief from the sanctions will mean for Iran.  But before closing I would like to spend a few minutes on what the relief will not mean.
 
Many Americans, and many of our closest allies, are understandably concerned that Iran will use the money it receives as a result of sanctions relief to fund terrorism and support destabilizing proxies throughout the Middle East.  We share those concerns, and we are committed to maintaining sanctions that address these activities, even after Iran takes the steps required to get relief from nuclear sanctions.  But it’s important to note that the connection between nuclear sanctions relief and Iran’s other malign activities is complicated, and most of the money Iran receives from sanctions relief will not be used to support those activities. 
 
Even before oil prices fell, punishing sanctions put Iran’s economy in a very deep hole.  President Rouhani was elected on a platform of economic revitalization, and Iranians are demanding proof that engagement with the international community will produce tangible economic benefits.  The scale of Iran’s domestic investment needs is estimated to be at least half a trillion dollars, which far outstrips the benefit of sanctions relief.  As a result, Iran is expected to use new revenues chiefly to address those needs, including by shoring up its budget, building infrastructure, maintaining the stability of the rial, and attracting imports. 
 
The bottom line is that as a result of our sanctions, Iran will be playing catch up for a long time to come.  Think about the following indicators:
 
  • Our sanctions have cost Iran over $160 billion in oil revenues since 2012 – revenues Iran can never recoup. And even if Iran were able to quickly double its current oil exports — a big if given how low oil prices are today and how much improvement Iran’s infrastructure needs to produce at this level — it would take more than three years for Iran to earn that much money, and that would not come close to regaining lost economic activity.
  • Iran’s GDP shrank by 9 percent in the two years ending in March 2014, and it is today 15­ to 20 percent smaller than it would have been had it remained on its pre-2012 growth trajectory.  It will take years for Iran to build back up the level of economic activity it would be at now had sanctions never been put in place.
 
So Iran will be under enormous pressure to use previously blocked resources to improve its domestic economy. 
 
Unfortunately, the cost of Iran’s support for terrorism and regional interventions is relatively small.  Those activities have continued over the last several years, even while Iran’s domestic economy has suffered badly.  We are under no illusions that Iran will all of a sudden stop providing significant support to dangerous actors like Hizballah and the Assad regime — and so we will remain vigilant in our efforts to combat those activities.
 
Make no mistake: deal or no deal, we will continue to use all our available tools, including sanctions, to counter Iran’s menacing behavior.  Iran knows that our host of sanctions focused on its support for terrorism and its violations of human rights are not, and have never been, up for discussion.  The Treasury Department’s designations of Iranian-backed terrorist groups and the Iranian entities that support them, most notably the IRGC-Qods Force, will persist, giving us a powerful tool to go after Iran’s attempts to fund terror.
 
As the President made clear when he announced the framework, “our work is not yet done.”  Over the course of the next two months, our negotiators will continue to refine the details of how we implement a comprehensive agreement.  We are determined to guard against backsliding by the Iranians.  And we will only reach a final agreement if our technical experts are confident in the mechanisms both for inspections and for the possible reimposition of sanctions. 
 
The President remains committed to only reaching an agreement if it is a good one.  But a diplomatic resolution would be by far the most effective and most enduring way to address this grave threat.  Apart from the broad costs and risks associated with taking military action against Iran, we should not take too much comfort in how long a military strike would slow down Iran’s nuclear ambitions.  The estimates range, but almost all experts agree that a military strike would result in Iran doubling down and speeding up its nuclear program.  And we would go from full visibility to no visibility, severely limiting our ability to see or stop nuclear progress.  
 
Click here for a full transcript.

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