United States Institute of Peace

The Iran Primer

Iran's Leaders on Iraq Crisis and ISIS

           Iran’s policy on Iraq has evolved as the Islamic State has taken more territory since June. Tehran has welcomed the nomination of Haidar al Abadi to replace Prime Minister Nouri al Maliki. The Islamic Republic has backed Maliki, a Shiite, since he took office in 2006. But the endorsement of Abadi, announced by Supreme National Security Council chief Ali Shamkhani and later by Supreme Leader Ayatollah Ali Khamenei, suggests Tehran has moved on. Maliki's government has alienated both Sunnis and Kurds. Abadi hails from al Maliki’s Islamic Da’wa Party and also is  a Shiite.The following tweet contains a remark by Khamenei to Iranian diplomats.
           Iran’s leaders are unified in their support for the central Iraqi government against The Islamic State. But officials have sent mixed messages on U.S. intervention or possible cooperating with Washington to help Baghdad quell the uprising. 
            In June, President Hassan Rouhani initially said his country could consider cooperating with the United States “if it starts confronting terrorist groups in Iraq or elsewhere.” Hesameddin Ashna, a Rouhani advisor and head of the state-run Center for Strategic Studies, even suggested that U.S. airstrikes could help the Iraqi air force.
            But Shamkhani dismissed speculative reports about U.S.-Iran coordination. And Supreme Leader Khamenei warned against U.S. intervention. He has blamed the United States, along with Sunni Gulf states, for allowing extremist groups to flourish in the region. “The real fight is between those who want to bring back a U.S. presence and those who want Iraqi independence,” Khamenei said on June 22.
            In August, Alaeddin Boroujerdi, chairman of parliament’s National Security and Foreign Policy Committee, dismissed U.S. airstrikes on Islamic State fighters. “The Americans, who strengthened terrorist groups in Syria, Iraq and Afghanistan, are putting on a show in dealing with ISIS instead of [taking] serious action,” he said.
            The following are excerpted remarks by Iranian leaders on Abadi’s nomination and U.S. airstrikes with generic comments on the Iraqi crisis since June.


Supreme National Security Council Chief Ali Shamkhani
      “The framework provided by the Iraqi Constitution stipulates that the prime minister has been chosen by the majority group in the parliament.
      “We congratulate Haidar al-Abadi on his nomination as prime minister, for him personally and for religious dignitaries, the Iraqi population and its political groups.
Iran calls on “all groups and coalitions in Iraq to protect the national interest”and “deal with external threats.”
            Aug. 12, 2014 according to the press
Parliamentary Speaker Ali Larijani
            “Obama has become concerned about the Kurds while many Christians, Sunni Muslims, Druze and Alawites were killed in Syria, but they [U.S. officials] remained silent.
            “Now, all of a sudden they have become conscious. This shows that they (US officials) have adopted a double standard and tactical approach toward this issue and this is wrong.”
           Aug. 12, 2014 to foreign ministry officials
Chairman of parliament's National Security and Foreign Policy Commission Alaeddin Boroujerdi
            “The Americans, who strengthened terrorist groups in Syria, Iraq and Afghanistan, are putting on a show in dealing with the ISIS instead of [taking] serious action.
Washington is just “posturing” to show “it has a role to play in the region.”
            Aug. 11, 2014 according to the press
Foreign Ministry
            “The Islamic Republic of Iran supports all steps taken toward the completion of the political process in Iraq. It is obvious that the Islamic Republic of Iran as in the past will continue its support for the Iraqi government and nation in fighting terrorism and promoting the country’s stability and security.”
             Aug.12, 2014 in a statement
            The following are generic comments on the Iraq crisis.
President Hassan Rouhani
      “The Islamic Republic will not tolerate violence and terror as foreign-backed takfiri militants wreak havoc in northern Iraq.
      “As the government of the Islamic Republic of Iran, we will not tolerate the [acts of] violence and terror and we fight violence and terrorism in the region and in the world.
      “We all should practically and verbally confront terrorist groups. We can think about it [cooperation with the United States] if we see America starts confronting the terrorist groups in Iraq or elsewhere.
      “Iran has never dispatched any forces to Iraq and it is very unlikely it will ever happen.”
            June 14, 2014 during a press conference
            “Regarding the holy Shia shines in Karbala, Najaf, Khadhimiya and Samarra, we announce to the killers and terrorists that the big Iranian nation will not hesitate to protect holy shrines.
            “These terrorist groups, and those that fund them, both in the region and in the international arena, are nothing, and hopefully they will be put in their own place.”
            June 18, 2014 in a speech to a crowd in Lorestan province
            “I advise Muslim countries that support the terrorists with their petrodollars to stop.
            “Tomorrow you will be targeted... by these savage terrorists. Wash your hands of killing and the killing of Muslims.
            “For centuries, Shiites and Sunnis have lived alongside each other in Iran, Iraq, the Levant, Lebanon, the Persian Gulf and North Africa...in peaceful coexistence.”
            June 22, 2014, according to press
            “If the Iraqi government wants help, we will study it; of course no demand has yet been raised until today but we are ready for help within the framework of the international laws and at the request of the Iraqi nation.
            “Of course, we should know that help and assistance is one issue, and interference and entrance [into the battlefield] is another. If the Iraqi government demands us we will help them, but the entrance of the Iranian troops [onto the scene of battles in Iraq] has never been considered.
            “Since the onset of its establishment, the Islamic Republic has never taken such measures and we have never sent our troops to another country for operations. Of course, we will provide countries with our consultative views.”
            June 24, 2014, according to press

            “Unfortunately, we face two festering tumors in this region and across the Muslim world. One tumor has always caused distress to the Palestinians and Muslims and these days it is secreting and wreaking havoc on the land of olive [trees]. The other festering tumor which is agonizing the Muslims these days is a campaign launched under the name of Islam, religion, caliphate and caliphacy and has undertaken the murder and killing of Muslims in the region. All studies indicate that both tumors have roots at the same point.

            July 28, 2014 in a meeting with Iranian officials and foreign diplomats
Supreme Leader Ayatollah Ali Khamenei
      “We are strongly against the interference of the US and others in Iraq’s internal affairs and do not approve of it, because we believe that the Iraqi government, nation and religious authority are capable of ending this sedition and will end it, God willing.
      “The United States is dissatisfied with the result of elections in Iraq and they want to deprive the Iraqi people of their achievement of a democratic system, which they achieved without U.S. interference.”
       “What is happening in Iraq is not a war between Shiites and Sunnis. Arrogant powers want to use the remnants of Saddam’s regime and takfiri [ISIS] extremists to deprive Iraq of stability and tranquility.”

      June 22, 2014 at a meeting with judiciary officials


Foreign Minister Mohammad Javad Zarif
Interview with CNN’s Christiane Amanpour
AMANPOUR: You have other problems [besides the nuclear dispute]. Right now on your border, and that is the rise of ISIS in Iraq. How big a threat to Iran is ISIS?

ZARIF: I think this problem of extremism and sectarianism is a danger not only to Iraq and Syria

but to the entire region. We've been saying that --

AMANPOUR: But to Iran?

ZARIF: -- to Iran, too. Iran is a part of this region. We don't like instability in our neighborhood. Inside Iran, we are probably best protected from such waves of extremism than any of our neighbors. All our neighbors are more vulnerable to this threat than Iran is internally. 

But for us, our domestic security is inseparable from security of the region. So for us a secure Iraq, a secure Persian Gulf, a secure Afghanistan is as important as our own security.

So from that perspective, it becomes important. But we said it from the very beginning that this problem of extremism, violence and use of sectarian divisions in order to advance a political agenda was dangerous for all countries in the region and that is why we insisted from the very beginning that we need to have a strong unified stance against it.

AMANPOUR: And I presume you want a unified Iraq as well, because right now, it looks like it's fragmenting and it could possibly fragment.

I want to ask you specifically, Nouri al-Maliki is a product of Iran, according to everybody. In other words, Iran backed him in 2010 when he was reelected. Iran backed a lot of the people who he brought into his cabinet. And they are calling him extremely divisive, extremely sectarian and practically the opposite --They're calling him extremely divisive and extremely sectarian. Is al-Maliki the man that Iran wants to see as prime minister, no matter what?

ZARIF: Well, I think you made some assumptions that are not correct. Iran, first of all, wants Iraq territorial integrity and I have spoken to almost every regional foreign minister and all of them want to ensure that Iraq remains a secure with its own boundaries, national unity of Iraq. Disintegration of Iraq is going to be a disaster for the entire region. So that's given.

Iraq has a very lively democratic process. It's very young but very lively. People go and vote and people elect certain people. Our advice to the Iraqis, all of them, who’ve never supported any individual or party, our advice has been that you need to work, based on the democratic model, but at the same time to ensure that the government is inclusive, that the government represents various views.

Now you have a system in Iraq with an overwhelming majority of one group, but you have a system where the president is from one ethnicity; the speaker of the parliament is from another religious sectarian group. The prime minister is from another.

If you find this combination within the constitutional framework that Iraq has established and then allow various political parties to form a workable government that also represents all segments of Iraqi society, this is our desire. We're not in the business of supporting any individual. 

We support the Iraqi people. We support the choices of the Iraqi people, whoever Iraq can choose as its prime minister will have the full backing of Iran, whoever Iraq choose as its prime minister. 

And as its president and as its speaker of parliament, will have the full backing of Iran, because for us the number one issue is that we need to respect the choices of the Iraqi people. And my advice to countries in the West as well as countries in the region is to have respect for people, allow them to make their own choices. And once you allow them to make their own choices, they'll make the best choice.

AMANPOUR: Obviously Iraq has had a very painful history under the dictatorship of Saddam Hussein. Obviously Iran suffered from that as well. But Prime Minister Maliki has at best treated the Sunnis as worse than junior partners, has basically frozen them out.

Do you think that the Shiite prime minister, because that’s what the constitution says it should be, should treat Sunnis as equals or as junior partners?

ZARIF: No, you see, it's a government based on democratic principles people have -- it doesn't matter whether you're Sunni --

AMANPOUR: It should be, but it hasn't happened.

ZARIF: -- no, no. You see, you have a government where political parties -- unfortunately some of them are along sectarian lines -- but political parties go to the polls, receive votes, some have more votes, some have less votes. They're different voting blocs in the Iraqi parliament.

Why do we need to send it into a sectarian issue? These are, in the United Kingdom, for instance, the prime minister is from one party; it has a coalition which works with another party. It's just a fact of life.

Why people need to make -- to insert divisive sectarian issues into this? We need to establish a government in Iraq that represents the views of the people but at the same time maybe if you have something exactly on that line, you will get only one group taking over all segments of Iraqi power structure and that is why you have these divisions and these attempts to bring everybody inside. 

It doesn’t mean that people who got the largest number of votes should be equally represented as people who got two votes in the parliament, that is not the meaning of democracy. Meaning of democracy is you get more votes; you get more seats in the parliament. You get more seats in the government. That's the reality.

But keeping that reality in mind, we insist that all segments of Iraqi society should be included in governing Iraq. That's the only way to ensure stability in Iraq and I'm sure all political parties, be Shia, Kurd, Sunni, all of them and non-sectarian, all of them have that objective in mind.

Now the way to achieve that objective may be different from -- based on one platform to another. But I think that's what we need to achieve. We should not start inserting sectarian divisions into Iraq.

Sectarian considerations are really dangerous for our region and really dangerous for the world. We live in a globalized world and it's very dangerous to fan these flames of sectarian hatred, one where it won't be contained in that area.

AMANPOUR: Is ISIS sufficient a threat for Iran and the United States to combat? Or does Iran not want to see any U.S. involvement in Iraq right now?

ZARIF: I think the international community needs to come together in order to deal with this threat of extremism and violence.

AMANPOUR: Specifically in Iraq.

ZARIF: In Iraq, in Syria, elsewhere. It requires a unified approach, not shortsighted policies, not infringing yourself in positions but really seeing the problem as it is. It is a problem of extremism. It is a problem of demagogues using inherent resentment that have arisen out of decades of injustice in our region.

But these are demagogues using these resentments in order to advance a very dangerous political agenda. And this dangerous political agenda may fit in the designs of some external powers. I don't know. I do not want to espouse conspiracy theories.

But what is important is everybody should come to realize that whatever their short-term interests are, in long term, this is a threat against everybody and everybody needs to have a unified international and regional stance against such acts of extremism and allowing it to take root in Iraq. 

Any political, any shortsighted political gain that some people believe they can derive from this unfortunate situation in Iraq is exactly shortsighted and will come to haunt them in the future.
Click here for more of the interview.
           “It is in the interest of everybody to stabilize the government of Iraq. If the U.S. has come to realize that these groups pose a threat to the security of the region, and if the U.S. truly wants to fight terrorism and extremism, then it’s a common global cause.”
            June 13, 2014 to Robin Wright for The New Yorker


Supreme National Security Council Chief Ali Shamkhani
      “The current crisis in Iraq is the result of the meddling and collaboration of the western and regional enemies of the Iraqi nation, who are seeking to prevent the Iraqi people’s will and determination from coming into action.”
      June 16, 2014 in a meeting with Iraq’s Kurdistan Regional Government Prime Minister Nechirvan Barzani
           “Reports in Western media about possible Iran-U.S. cooperation are part of the West’s “psychological warfare” and are “completely unreal.”
            “As we have announced, we will examine the issue of helping (Iraq) within the framework of international regulations in case of an official request by the Iraqi government and this will be completely a bilateral process and has nothing to do with a third country.”
            June 16, 2014 according to Fars News Agency

Revolutionary Guards Corps Commander Maj. Gen. Mohammad Ali Jafari
       “It is the opinion of the Commander-in-Chief that no one should aid countries like Syria and Iraq unless the work is limited counselling and advising. The people and governments of these countries can overcome their problems without the aid of any country.”
       June 24, 2014 at a ceremony for martyrs of the 1980-1988 war with Iraq


Foreign Ministry Spokesperson Marziyeh Afkham
      “Iraq enjoys the necessary potential and military preparedness to fight against the terrorist and extremist elements. Any move that complicates the situation in Iraq will not be in the interest of Iraq and the region.
       “We believe that the Baghdad government can fully overcome the ongoing crisis in Iraq and thwart conspiracies through consolidation of national unity and internal solidarity.”
            June 14, 2014 to the press
      “Causing insecurity, disrupting democratic trends, overcoming ballot boxes, imposing weapons and terror rather than [promoting] democratic trends, all of these suggest that terrorism is being used today as a tool to overcome people’s votes.
            “The Islamic Republic of Iran condemns the ominous phenomenon of terrorism and believes the first method to counter and eradicate it is for the regional nations to remain vigilant and for countries to boost national unity, and for the international community to pay serious and unbiased attention to this scourge facing humanity.”
            June 25, 2014 to the press
Interior Minister Abdolreza Rahmani Fazli
            “Supporting the Iraqi government and nation does not mean sending troops to Iraq. It means condemning terrorist acts and closing and safeguarding our joint borders.”
            June 14, 2014 according to Fars News Agency
Center for Strategic Studies head and Rouhani advisor Hesameddin Ashna
            “If the issue is about confronting extremism and violence, then yes, we’re [the United States and Iran] on the same side, but if it’s about destabilizing the region, then, no we are not.
            Iran would not support a U.S. ground intervention but airstrikes could help the “paralyzed” Iraqi air force.
            June 2014, according to The Washington Post
President Rouhani’s Deputy Chief of Staff for Political Affairs Hamid Aboutalebi
            “The events in Iraq has highlighted a number of hypothesis.
            “First, Iran and America are the only two countries, from a perspective of regional power, that can peacefully end Iraq’s crisis.
            “Second, Iran and America have both ruled out military involvement in Iraq
            “Third, both Iran and America have asked Iraq’s government and Nouri al Maliki to bring the scourge of terrorism and the problems of Iraq to an end.
           “Fourth, the legitimate government of Iraq, in addition to its military capabilities, has potential political solutions worth considering to resolve problems.
            “Fifth, Iran and America have both never disregarded the implicit possibility of cooperation to solve the crisis in Iraq.”
           June 15, 2014 on Twitter according to Al Monitor
Deputy Foreign Minister for Arab and African Affairs Hossein Amir Abdollahian
            “The brutal attacks of the Zionist regime against the Palestinian people in Gaza and the West Bank and the indifference of self-proclaimed advocacy groups and ISIL proved that they are enforcers of the policies dictated by Tel Aviv and apply their power and arms only against Muslims and the strength of the Islamic states.
           July 13, 2014 according to the press
            “Certain countries which are supporting Takfiri terrorists and remnants of [executed Iraqi dictator] Saddam [Hussein] should either correct their attitude or wait for negative consequences of their support.”
         June 30, 2014 in a meeting with Russian Deputy Foreign Minister Mikhail Bogdanov
           “If Iran asks [for help], we will send military equipment to Iraq within the framework of international laws and contracts.”
           June 26, 2014 according to the press
            “We supply Baghdad with necessary consultations but we have no intervention in the country.”
            June 16, 2014 according to Tasnim news agency
            “We will mightily support Iraq in is confrontation with terrorism. We are sure that the Iraqi armed forces will powerfully and effectively crash the terrorist and takfiri forces.”
            June 11, 2014 via state media
Parliamentary Speaker Ali Larijani
      “The Shiites, Sunnis and Kurds are our friends [in Iraq].
      “We have always insisted that all ethnic groups must have active and constructive participation in Iraq's power structure".
      “We regard it as unacceptable to deprive any Iraqi ethnic group of their constitutional rights by anyone.”

       June 21, 2014 according to Parliament’s website 

Deputy Commander of Army Ground Forces Brig. Gen. Kiumars Heidari
            “Iranian Army’s Ground Forces are not only closely monitoring the developments in Iraq and the region, but also constantly observe the different threats [coming from around the globe].”
            June 16, 2014 according to Tasnim news agency
Supreme Leader Khamenei’s representative to the Revolutionary Guards Hojjatoleslam Ali Saeedi
            “Saudi Arabia made a lot of efforts to upset the situation in Syria, and Qatar has also made a big investment in this regard, and some other countries made grave mistakes in Syria as well.”
           June 12, 2014 according to Iranian media
Expediency Council Chairman and former President Ayatollah Akbar Hashemi Rafsanjani
            “We do not want to interfere in the internal affairs of countries and we hope we will be a good mediator to extinguish the flames [of the crisis in Iraq].”
            June 22, 2014 in a meeting with New Zealand Foreign Minister Murray McCully
Interior Ministry Spokesperson Hossein Ali Amiri

            “There is no particular problem along our common border with Iraq; however, the necessary measures have been taken by the Interior Ministry and border police.”
           June 23, 2014, according to press

Basij Militia Commander Brig. Gen. Mohammad Reza Naqdi
            “The terrorist and anti-Islamic ISIL group is the US’s instrument for sowing discord among Muslims in the region.
            “The US and the Israeli regime seek to use fanatics and anti-Islamic groups to damage the Islamic community.”
            June 23, 2014, according to press

Lt. Commander of Khatam al Anbia Air Defense Base Gen. Shahrokh Shahram
            “Today the takfiri and ISIS forces are killing Muslims in the region on behalf of the US the same way over 30 countries helped Saddam [Hussein] during the imposed war to pave the way for the collapse of the Islamic Republic through waging war against Iran.”
            June 30, 2014 according to Fars News Agency

Tehran’s Provisional Friday Prayer Leader Seyed Ahmad Khatami
           “The US and Israel are supporting the ISIS with the purpose of disintegrating Iraq and create differences among Muslims.”
            June 27, 2014

Parliament's Director General for International Affairs Hossein Sheikholeslam
           “Supporters of these terrorist groups want to portray Iraq's parliamentary democracy as a failure because they consider this democracy as a factor for their destruction.”
            July 1, 2014 according to the press



Ambassador to Tehran Mohammad Majid al Sheikh
            “These are just the rumors of biased and despiteful media which are seeking to sow discord among the regional states, especially Iran and Iraq.
            “Iraq doesn’t need any country neither for weapons nor for the military forces at all; hence, I emphasize that neither General [Qassem] Soleimani nor any other (Iranian) figure is in Iraq.”
            June 24, 2014, according to press


Photo credits: President.ir, Khamenei.ir, Iran's Ministry of Defense, Iran's Ministry of Foreign Affairs, Ali Larijani by Harald Dettenborn [CC-BY-3.0-de (http://creativecommons.org/licenses/by/3.0/de/deed.en)], via Wikimedia Commons,


Rouhani: To Hell with Critics of Diplomacy

           In an annual address to Iranian ambassadors, President Hassan Rouhani called critics of his approach to nuclear talks cowards. “As soon as there is talk of negotiations they say 'we are trembling,'” said Rouhani in comments broadcast live on state television. “Well, to hell! Go and find a warm place for yourselves,” he added.

      Rouhani has faced resistance from hardliners on the nuclear issue, even though Supreme Leader Ayatollah Ali Khamenei has repeatedly expressed confidence in his administration and negotiating team. In May, more than 100 lawmakers, students, academics held a conference entitled “We’re Worried” – advertised as “the great gathering of critics of a weak [interim nuclear] deal.” Iran and the world’s six major powers failed to meet the July 20 deadline for a comprehensive agreement. But they have extended talks until November 24.

            The following are excerpted remarks from Rouhani’s address to Iranian diplomats translated by various news agencies.
            “The Iranian administration is resolved to have constructive interaction with the world.
            “Some people deliver slogans but they are political cowards and as soon as there is talk of negotiations they say 'we are trembling.’ Well, to hell! Go and find a warm place for yourselves. What should we do? God has made you fearful and trembling.
            “It is wrong to fear from interaction, negotiation and mutual understanding. Even it is wrong to fear from the heroic flexibility initiated by the Supreme Leader Ayatollah Ali Khamenei.
            “The administration has done something big. One of these examples is the Geneva [interim nuclear] agreement and if some are not thankful for these efforts, sooner or later they will be and history will have its own judgment.
            The nuclear dispute is an “artificial crisis,” and Iran is “not in a hurry in the nuclear discussions, but we do not see a delay as advisable.”
            “The foundations of sanctions have broken and I have no doubt in this and we should know that the previous situation will not return. In the negotiations with the P5+1, we are in the process of breaking the sanctions, and they know how we break the sanctions.
            “We know the sanctions to be oppressive and inhumane and we told them that your sanctions were wrong and inhumane. You sanctioned our medicine, and this will remain in history.
            “Whether the [U.N. atomic energy] agency is there or not, the Islamic Republic has not, is not and will not be after weapons of mass [destruction].
            “Ententephobia is a mistake. We want closer relations with the world but we will defend our rights and our national interests.
            “The world has to accept the present reality and know that we have a serious intention to resolve this issue and we will not retreat from our rights.
            “This administration is not an administration that will retreat from the rights of the people. It is an administration that has the highest and best support of the people and in the best situation, in unity with the leaders of other branches.
            “The other branches of government are also with us and all of us are next to the guidance of the supreme leader and we are a single unit in the country and we will not give permission for anyone to create differences between the branches of the government and, God forbid — God be praised this doesn’t exist — that there would be an insult to the supreme leader.”


US and Iran: New Nuclear Talks

      On August 7, a high-level U.S. delegation led by Deputy Secretary of State William J. Burns (left) met with Iranian officials in Geneva. It was the first meeting of officials from the two sides since the world’s six major powers and Iran failed to produce a final nuclear agreement in mid-July. “These bilateral consultations will take place in the context of the P5+1 nuclear negotiations led by E.U. High Representative Cathy Ashton,” according to a State Department media note released late on August 6. After the meeting, Iran's deputy foreign minister, Abbas Araghchi, said the talks were "good and useful." But another deputy foreign minister, Majid Takht-Ravanchi, warned that Iran won't cut its centrifuge capacity down to a "toy enrichment" program. The following is a list of U.S. officials who participated in the consultations and tweets on the talks by Iran's quasi-official nuclear program website. 

The Honorable William J. Burns
Deputy Secretary of State
The Honorable Wendy R. Sherman
Under Secretary of State for Political Affairs
Mr. Jacob J. Sullivan
Deputy Assistant to the President and National Security Advisor to the Vice President
Mr. Robert Malley
Senior Director for Iran, Iraq, and the Gulf States, National Security Council
Mr. James Timbie
Senior Advisor to the Under Secretary of State for Arms Control and International Security
Mr. Paul Irwin
Director for Nonproliferation, National Security Council


US Negotiator Warns Against New Sanctions

            On July 29, Under Secretary of State Wendy Sherman testified before the Senate Foreign Relations Committee on the status of nuclear talks between Iran and the world’s six major powers. “We believe strongly that it is worth taking additional time to pursue these very complicated and technical negotiations,” Sherman said regarding the four-month extension.
           Sherman and some of the committee members seemed to disagree about the executive branch’s authority to make a deal with Iran. Both Republicans and Democrats have insisted that a final agreement be put to a vote. “If you are asking if [we will] come to Congress for action to affirm the comprehensive deal, we believe the executive branch [has the authority],” said Sherman. But she assured the committee that President Obama would not neutralize sanctions by executive order without consulting with Congress.
During the session, Sherman also warned Congress against imposing new sanctions on Iran. “The administration believes quite strongly that at this moment in [the] negotiations, additional legislative action would potentially derail negotiations,” she said. The following are Sherman’s opening remarks to the committee.

            President Obama, Secretary Kerry, and the entire administration understand how vital a role Congress and this Committee play in shaping U.S. policy towards Iran. We remain committed to regular consultations, to hearing from you, and to sharing ideas. We all have the same goal, which is to make the world a safer place both in the near future and for generations to come.
            To that end, we seek to negotiate a comprehensive plan of action that, when implemented, will ensure that Iran cannot acquire a nuclear weapon and that Iran’s nuclear program is exclusively peaceful. A good deal will be one that cuts off the various pathways Iran could take to obtain a nuclear weapon: a uranium pathway, through its activities at Natanz and Fordow; a plutonium pathway, through the Arak heavy water reactor; and a covert pathway. It will therefore need to include tight constraints and strict curbs on Iran’s program, and enhanced monitoring and transparency measures to ensure that any attempt to break out will detected as quickly as possible.
            In Vienna, two weeks ago, we decided to continue our work towards our goal by extending the terms of the previously-negotiated Joint Plan of Action for four more months – until November 24. I will have more to say about that decision in a minute, but first let me review how we arrived at this juncture.
Rallying the International Community
            In 1968, Iran signed the Nuclear Non-Proliferation Treaty, which required it to allow International Atomic Energy Agency (IAEA) inspections and to develop nuclear power only for peaceful purposes. However, over the past 20 years, it became apparent that Iran’s government had engaged in a variety of undeclared nuclear activities. As detailed in numerous IAEA reports, these activities covered the full spectrum of the nuclear fuel cycle and suggested an intent that was far from peaceful. Iran also built a secret enrichment facility at Fordow and, in Arak, a heavy water reactor ideal for producing weapons-grade plutonium. Meanwhile, Iran was conducting research of a type that could facilitate the eventual construction of a bomb. These actions placed Iran in clear violation of its international nonproliferation obligations.
            In 2009, when President Obama took office, he indicated America’s willingness to engage directly with Iran to find a diplomatic solution, but Iran failed to respond positively, thus demonstrating clearly that the obstacle to a comprehensive resolution was in Tehran, not in Washington. Working together, the administration and Congress then constructed a much tougher bilateral and multilateral sanctions regime, even as we continued to offer Iran a diplomatic pathway to resolve our concerns about its nuclear program. The international community, having witnessed our decision to give diplomacy a chance, was increasingly supportive, and their efforts to comply with – and amplify – our sanctions have proved crucial in ramping up the pressure on Iran.
            In June 2010, the Security Council approved stricter curbs on Iran’s nuclear and shipping activities and barred Tehran from purchasing heavy weapons such as attack helicopters and missiles. In July of that year, the European Union (EU) prohibited joint ventures with Iran’s petroleum sector and banned the sale of equipment used in natural gas production. In subsequent months, the EU tightened sanctions on banking, energy, and trade; outlawed transactions involving Iran’s financial institutions; and embargoed the purchase of Iranian oil.
            These stiffer multilateral sanctions were complemented by additional bilateral measures – imposed by the United States and a number of other countries – that targeted Iran’s economy in general and its financial and energy industries in particular. The cumulative weight of these restrictions contributed in Iran to more than halving oil exports, rising inflation, a sharp decline in the value of the local currency, and higher unemployment.
            Sanctions, however, are a means, not an end. The key question was what impact they would have on Iran’s decision makers and whether they would choose to engage.
The Joint Plan of Action
            In June 2013, Hassan Rouhani was elected president of the Islamic Republic with a popular mandate to fix the economy, a goal that will only be fully achievable if nuclear-related sanctions are lifted. Last September, a telephone conversation between Presidents Obama and Rouhani – spurred in part by earlier and direct diplomatic contacts at a lower level – set the stage for a restart of formal negotiations between Iran and the P5+1.
            On November 24, 2013, after several rounds of intensive negotiations with Iran, we reached consensus on a Joint Plan of Action (JPOA), a mutual set of commitments that halted the advance and even rolled back parts of Iran’s nuclear program. The implementation of the JPOA started in January and was originally scheduled to last six months. In that time, Tehran pledged to cap its stockpile of low-enriched uranium. It agreed to stop enriching uranium to 20 percent and to convert or dilute its stockpile of uranium that had already been enriched to that level. It promised not to fuel or install remaining components at the research reactor in Arak. It consented to increase its transparency by providing additional information and managed access to key sites by the IAEA. And it allowed inspectors to have daily access at the Natanz enrichment facility and the underground plant at Fordow. In these past six months, the IAEA has verified that Iran has complied with its commitments; it has done what it promised to do. In addition, the JPOA has provided time and space to negotiate a more comprehensive, long-term solution by keeping Iran’s program from making more progress during that period.
            Meanwhile, from January to July, the negotiating teams were hard at work in search of a durable and comprehensive settlement. Based primarily in Vienna, our discussions on all issues were serious and exhaustive. Our experts spent hundreds of hours engaged in dialogue about the technical details. We made tangible progress in key areas, including Fordow, Arak, and IAEA access. However, critical gaps still exist on these and a number of other important elements – including the pivotal issue of uranium enrichment capacity – that must be part of a comprehensive plan.
            Under the current four month extension, the commitments under the JPOA will remain in effect. And, in fact, Iran has agreed in the time ahead to substantially increase the pace at which it is turning its stockpile of 20 percent enriched uranium oxide into fuel plates, including 25 kilograms over the next four months. That will make it much harder for that material ever to be used for a weapon. Iran will also mix depleted uranium with its inventory of up to two percent enriched uranium. The result is essentially a dilution of approximately three metric tons of material to its natural state and a step further away from the kind of highly enriched uranium that could be employed in a nuclear weapon.
            In return, the P5+1 and EU will continue to suspend the narrow group of sanctions that we committed to suspend when the JPOA was negotiated and will allow Iran access to $2.8 billion dollars of its restricted assets, the four-month prorated amount of the JPOA.
To sum up, under the JPOA, instead of becoming more dangerous over time, Iran’s nuclear activities have been more constrained, more closely inspected, and more transparent. This is the first true freeze in Iran’s nuclear program in nearly a decade.
            Meanwhile, sanctions relief for Iran will continue to be targeted and limited to amounts that will do little, if anything, to heal Iran’s deep-seated economic ills.
            From the perspective of international investors, Iran will remain closed for business. The overall sanctions regime will still be in place. Iran will continue to be cut off from the global financial system. Iran’s oil sector will still be negatively affected by sanctions, as will Iran’s currency. All told, we have sanctioned nearly 680 Iranian individuals and entities under our Iran sanctions authorities. And as we have demonstrated in the past few months, and throughout the past half dozen years, the Obama Administration will continue to enforce sanctions rigorously and thoroughly.
            We will also not hesitate to put pressure on Iran when that is warranted -- whether in relation to the government’s abysmal human rights record, its support for terrorism, its hostility towards Israel, or its detention of political prisoners.
            Engagement on one issue does not require – and will not lead to – silence on others. As I have noted repeatedly, we continue to press Iran to allow U.S. citizens
            Amir Hekmati and Saeed Abedini to return to their families as soon as possible, and to help us locate Robert Levinson, who went missing in Iran in 2007. We are also concerned about reports of Washington Post reporter Jason Rezaian’s detention in Iran, along with two other U.S. citizens and the non-U.S. citizen spouse of one of the three. We call on the Iranian government to immediately release Mr. Rezaian and the other three individuals as soon as possible.
            Let me emphasize that the decision to extend the nuclear negotiations was taken only after careful thought. Each of the countries represented in Vienna, when weighing both sides of the issue, believed that it continues to be in our interest to identify a mutually acceptable framework. We did not want to allow impatience to prevent us from doing all we could to contribute to the future security and safety of the Middle East.
America’s Commitment
            I stress that these negotiations are fully in keeping with the administration’s fundamental position. As President Obama has affirmed on numerous occasions, the United States will not allow Iran to obtain a nuclear weapon. That policy was in place prior to this negotiation; it is in place now; and it remains our solemn commitment. Because of the manner in which these negotiations have been structured and the pressure Iran continues to feel, Iran’s leaders have a strong and ongoing incentive to reach a comprehensive resolution. If they cannot do that, then we will respond with greater pressure and with greater backing from the international community to do so because of our consistent and good faith efforts to resolve this situation diplomatically.
Looking Ahead
            Mr. Chairman, our purpose in entering these negotiations was to test Iran’s unambiguously stated and often repeated commitment to an exclusively peaceful nuclear program. Accordingly, we have proposed a number of pathways whose elements would, in fact, give the world confidence that Iran’s program is and will continue to be exactly that. As we have said from the beginning, this is a negotiation where every element of a resolution must come together in order for any aspect to work. It would not make sense to foreclose one route to a nuclear weapon and leave a second avenue untouched; nor would it be sensible – given
            Iran’s history of illicit conduct – to equate Iran’s promises with actions. We need far-reaching and tangible commitments on all fronts. That is the only way.
Final Thoughts
            The next four months will allow us to determine whether a diplomatic solution is possible. As we have said many times, from the perspective of the United States, no deal is better than a bad deal. And yet, let us not forget that a comprehensive resolution, if we are able to arrive at one, will benefit people everywhere. It will ease anxiety and enhance security throughout the Middle East. It will reduce the likelihood of a nuclear arms race in the region. It will eliminate the potential threat of nuclear blackmail. It will contribute to the security of Israel, the Gulf states, and our partners throughout the region. Compared to any alternative, it will provide a more comprehensive, lasting, and peaceful solution to the concerns generated by Iran’s nuclear activities.
            Mr. Chairman and members of the committee, after our intense deliberations in
Vienna these past six months, we believe strongly that it is worth taking additional time to pursue these very complicated and technical negotiations. We wouldn’t have agreed to an extension if we did not have an honest expectation that we have a credible path forward; but we would have finished long ago if the task were simple. We still have work to do. We still have time to determine whether we can close the gap between what Iran has said it intends and what it is willing to do.
            From the outset, these negotiations have been about a choice for Iran’s leaders.
Officials in Tehran can agree to the steps necessary to assure the world that their country’s nuclear program will be exclusively peaceful, or they can squander a historic opportunity to end Iran’s economic and diplomatic isolation and improve the lives of their people.
Meanwhile, all of our options remain, as does our determination to resolve one of the most pressing national security issues for America, for the region, and for the world.
            In closing, I want to say to you on behalf of the entire administration that we welcome your thoughts, thank you for giving diplomacy a chance to succeed, respectfully solicit your support, and will be pleased to respond to any questions you might have.
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US Treasury: Iran Remains in Economic Hole

     On July 29, Treasury Under Secretary for Terrorism and Financial Intelligence David S. Cohen testified before the Senate Foreign Relations Committee on Iran’s economy. The following are excerpts with a link to the full text.

The State of the Iranian Economy
           When we announced the JPOA (Joint Plan of Action) last year, we said that we did not expect the relief package in the JPOA to materially improve the Iranian economy. And it has not. The depths of Iran’s economic distress – distress that resulted in large measure from the collaborative efforts of Congress, the Administration, and our international partners – dwarfed the limited relief in the JPOA. And so today, as we start to implement the short-term extension of the JPOA, Iran remains in a deep economic hole.
           It is useful to focus on three key indicators of Iran’s economy, the rial (Iran’s currency), its revenues, and its reserves. Judging by these three measures, the Iranian economy is doing worse today than it was at the outset of the JPOA.
Rial: Iran's currency, the rial, has depreciated by about 50 percent since January 2012 and has declined by about 7 percent since the JPOA was announced last November. Iran's central bank governor earlier this year bemoaned the fluctuations in the value of the rial in light of persistent costs and delays in obtaining hard currency and the limited tools available to intervene effectively in the currency market. In this regard, I would note that it remains sanctionable to provide U.S. dollar banknotes to the Iranian government.
Revenue: The cumulative impact of our sanctions since 2011 has caused Iran to lose about $120 billion in oil revenues – the key driver of Iran's economic growth. Iran will forego an additional $15 billion in oil revenues during the next four months alone as the sustained impact of our oil sanctions, which took effect in early 2012, continue to exact their toll on Iranian earnings. Moreover, Iran will only be able to use a small fraction of the revenue it earns from crude oil sales during the extended JPOA period, because its oil revenue continues to go into overseas accounts restricted by our sanctions.
Reserves: And the vast majority of Iran’s approximately $100 billion in foreign reserves remain inaccessible or restricted by sanctions. This money can only be used for permissible bilateral trade between oil-importing countries and Iran and for humanitarian trade.
           Iran’s economy is 25 percent smaller today than it would have been had it remained on its pre-2011 growth trajectory; it will not recover those losses for years to come. Meanwhile, Iran’s annual inflation rate, at about 26 percent, is likely to remain high, and is one of the highest in the world. Unemployment also remains high, and Iran is cut off from the foreign investment that it needs to promote job growth and infrastructure development.
           At the time we entered into the JPOA, some made dire predictions that our sanctions regime would crumble, and that Iran’s economy would rebound dramatically. It is now clear, that did not happen. To the contrary, Iran’s experience under the JPOA has reinforced its knowledge that real economic relief can come only if it obtains comprehensive sanctions relief, and that can only come about if it is prepared to enter into a comprehensive plan of action that ensures that Iran cannot acquire a nuclear weapon and that its nuclear program is exclusively peaceful.
Sanctions Relief in the Extended JPOA
           The P5+1 has committed in the JPOA extension period to continue the limited, temporary, and reversible sanctions relief of the JPOA, and to authorize the release to Iran of a small fraction of its restricted overseas assets in return for Iran’s commitment to continue to abide by the conditions on its nuclear program as set out in the JPOA, and to take a number of additional steps to constrain its nuclear program.
           Over the four-month period of the extended JPOA, and provided that it satisfies its commitments under the extension, Iran will be allowed to access, in tranches, $2.8 billion worth of restricted funds. This amount is the four-month prorated amount of funds made available under the original JPOA.
           Other aspects of the JPOA sanctions relief also will remain in effect for the next four months, including sanctions related to Iran’s petrochemical exports, its crude oil exports to current purchasers at current average levels, its automotive sector, the purchase or sale of gold or precious metals, the licensing of safety-related repairs and inspection for certain airlines in Iran’s civil aviation industry, and the facilitation of a financial channel for humanitarian trade, tuition payments, UN payments, and medical expenses incurred abroad.
           Altogether, we value the sanctions relief in the JPOA extension at about $3 to $4 billion. This is comprised of the $2.8 billion worth of restricted funds that Iran will be permitted to access plus the value that we assess the other elements of the sanctions relief are worth.
Extended Relief in Context
           We do not expect this minimal relief to alter the underlying negative fundamentals of Iran’s troubled economy. We are confident in this assessment for the same reasons that we were confident in December that the JPOA would not undermine our sanctions regime: Iran is in a deep economic hole and we will continue to enforce our sanctions to send a clear message that now is not the time for businesses to re-enter Iran.
           The value of this limited relief pales in comparison to the aggregate macroeconomic effects of our sanctions to date and Iran’s revenue losses, both of which will continue to accumulate during the next four months. Even with the diminished value of Iran's gross domestic product – valued at about $360 billion today using the open market exchange rate – the $3 to $4 billion or so in relief over the next four months pales in comparison.
           In short, Iran’s economy will remain under great stress. Remaining sanctions and their substantial structural problems will undercut key industries and contribute to persistent budget deficits and sustained high unemployment. Moreover, until a comprehensive solution is reached, we anticipate that most foreign firms will decline to re-enter Iran, as was the case during the first six months of the JPOA.
The International Sanctions Regime Remains Robust
           Firms have good reason to remain reluctant about doing business in Iran. The overwhelming majority of our sanctions remain in place, and we firmly intend to continue enforcing our sanctions vigorously.
           Iran continues to be cut off from the international financial system with its most significant banks subject to sanctions, including its central bank. All the Iranian banks designated by the EU remain cut off from specialized financial messaging services, denying them access to critical networks connecting the rest of the international financial sector. And the fact remains that any foreign bank that transacts with any designated Iranian bank can lose its access to the U.S. financial system.
           Investment and support to Iran’s oil and petrochemical sectors also is still subject to sanctions. And there are severe restrictions on providing technical goods and services to the Iranian energy sector.
           Broad limitations on U.S. trade with Iran remain in place, meaning that Iran continues to be shut out of the world's largest and most vibrant economy and precluded from transacting in the dollar.
           Our sweeping set of designated Iran-related actors – developed in concert with partners around the world, including in the EU, Canada, Australia, Japan, South Korea, and Singapore – remains in place. We have used our Iran-related authorities to sanction nearly 680 persons, a number that is complemented by the hundreds of Iranian individuals and entities against which our partners have also taken action. This multilateral effort to target those involved in Iran’s illicit conduct remains the cornerstone of the unprecedented sanctions regime that we have built in recent years.
           Finally, we remain vigilant in our efforts to counter Iran’s support for terrorism, its abuse of human rights, and its destabilizing activities in the region. We are committed to maintaining those sanctions and have an active diplomatic campaign aimed at persuading other jurisdictions and financial institutions to cut them off as well. Nothing in the JPOA, the extended JPOA, or in a comprehensive deal that may come, will affect our efforts to address Iran’s malign activities in these areas.
Vigorous Enforcement of Existing Sanctions
           Throughout the JPOA, we have demonstrated vigorous sanctions enforcement, recognizing the essential role that financial pressure played in the lead-up to, and now during, the JPOA, and how important maintaining that pressure will continue to be during this extended JPOA period.
           We are determined to continue to respond to Iran’s evasion efforts, wherever they may occur. Since the JPOA was negotiated, we have imposed sanctions on more than 60 entities and individuals around the world for evading U.S. sanctions against Iran, aiding Iranian nuclear and missile proliferation, supporting terrorism, and for carrying out human rights abuses. This amounts to nearly 10 percent of all of our Iran-related designations and listings since we first took action against Iran’s Atomic Energy Organization in 2005. We have also continued to enforce our sanctions against entities and individuals that violate Iran-related prohibitions, resulting in penalties and settlements for violations of the regulations enforced by the Office of Foreign Assets Control of more than $350 million during the past six months. We have been very clear to both our international partners and to Iran that these targeting and enforcement efforts will continue throughout the next four months of the JPOA extension.
           In addition to our designations and enforcement actions during the JPOA, my colleagues and I have made clear to banks, businesses, and governments around the world that the sanctions relief provided to Iran is limited, temporary, and reversible, and that the overwhelming majority of our sanctions remain in place. The simple fact remains that foreign banks and companies still have to decide whether to do business with Iran, or with the United States. They can’t do both.
           Nothing in this respect has changed.
           These actions have sent a resounding message to the international business and financial communities: Iran is not open for business today, nor will it be until it ensures the international community of the exclusively peaceful nature of its nuclear program.
           Throughout this short-term extension of the JPOA, I can assure you that we will continue to make certain that businesses and governments around the world understand this. I personally plan to travel to several countries in the coming weeks to meet with government and private sector counterparts to explain the continued limitations of the sanctions relief under the JPOA extension. And I know my colleagues within Treasury, at the State Department and elsewhere in the administration will do so as well. We will all echo President Obama’s clear and firm message – namely, that we will come down “like a ton of bricks” on those who evade or otherwise facilitate the circumvention of our sanctions.
           While this four-month extension will provide additional time and space for the negotiations to proceed, it will not change the basic facts and numbers on the ground. The Iranian economy is in deep distress and an additional four months of limited sanctions relief will not change that. In the meantime, we will not let up one iota in our sanctions enforcement efforts, and we are prepared to take action against anyone, anywhere who violates, or attempts to violate, our sanctions.
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