[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
     IRAN NUCLEAR NEGOTIATIONS: FROM EXTENSION TO FINAL AGREEMENT?

=======================================================================


                                HEARING

                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 29, 2014

                               __________

                           Serial No. 113-201

                               __________

        Printed for the use of the Committee on Foreign Affairs


Available via the World Wide Web: http://www.foreignaffairs.house.gov/ 
                                  or 
                       http://www.gpo.gov/fdsys/

                                 ______



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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
JOE WILSON, South Carolina           GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas             ALBIO SIRES, New Jersey
TED POE, Texas                       GERALD E. CONNOLLY, Virginia
MATT SALMON, Arizona                 THEODORE E. DEUTCH, Florida
TOM MARINO, Pennsylvania             BRIAN HIGGINS, New York
JEFF DUNCAN, South Carolina          KAREN BASS, California
ADAM KINZINGER, Illinois             WILLIAM KEATING, Massachusetts
MO BROOKS, Alabama                   DAVID CICILLINE, Rhode Island
TOM COTTON, Arkansas                 ALAN GRAYSON, Florida
PAUL COOK, California                JUAN VARGAS, California
GEORGE HOLDING, North Carolina       BRADLEY S. SCHNEIDER, Illinois
RANDY K. WEBER SR., Texas            JOSEPH P. KENNEDY III, 
SCOTT PERRY, Pennsylvania                Massachusetts
STEVE STOCKMAN, Texas                AMI BERA, California
RON DeSANTIS, Florida                ALAN S. LOWENTHAL, California
TREY RADEL, Florida--resigned 1/27/  GRACE MENG, New York
    14 deg.                          LOIS FRANKEL, Florida
DOUG COLLINS, Georgia                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida 
LUKE MESSER, Indiana--resigned 5/
    20/14 noon deg.
SEAN DUFFY, Wisconsin--
    added 5/29/14 noon 
CURT CLAWSON, Florida
    added 7/9/14 noon 

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director

                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

The Honorable Wendy R. Sherman, Under Secretary for Political 
  Affairs, U.S. Department of State..............................     5
The Honorable David S. Cohen, Under Secretary for Terrorism and 
  Financial Intelligence, U.S. Department of the Treasury........    14

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Wendy R. Sherman: Prepared statement...............     8
The Honorable David S. Cohen: Prepared statement.................    16

                                APPENDIX

Hearing notice...................................................    60
Hearing minutes..................................................    61


     IRAN NUCLEAR NEGOTIATIONS: FROM EXTENSION TO FINAL AGREEMENT?

                              ----------                              


                         TUESDAY, JULY 29, 2014

                       House of Representatives,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The committee met, pursuant to notice, at 2:08 p.m., in 
room 2172, Rayburn House Office Building, Hon. Ed Royce 
(chairman of the committee) presiding.
    Mr. Royce. This hearing will come to order.
    This afternoon we assess the past 6 months of nuclear 
diplomacy with Iran and ask if a viable agreement is achievable 
by November 24th.
    The administration, along with the United Kingdom, France, 
Russia, China, and Germany, has been seeking to negotiate a 
long-term comprehensive solution to Iran's nuclear program 
since last fall. With these negotiations, Iran has agreed to 
limit its nuclear program in return for some sanctions relief. 
Should a final agreement be reached, it would permit Iran to 
maintain a mutually defined enrichment program and be treated 
like any other nonnuclear weapons state party to the 
nonproliferation treaty.
    At the outset of these negotiations, the administration 
aggressively pushed back on Congressional attempts to give our 
negotiators more leverage with added sanctions to go into force 
should negotiations fail. The legislation that Ranking Member 
Engel and I authored and, frankly, was passed with 400 votes 
out of the House of Representatives would have given Iran's 
leadership a choice between compromise and economic collapse. 
We will never know if that prospect would have made a 
difference over the past 6 months. But we do know that talks 
haven't accomplished much to date without this pressure. 
Indeed, just days before the recent deadline, the Iranian 
foreign minister was offering an Iranian freeze of its current 
19,000 centrifuges for several years. Is the status quo the 
best Iran is offering after 6 months of negotiations, a status 
quo, by the way, that has Iran enriching more uranium?
    The committee has continued its intense focus on Iran, 
holding a series of hearings. And, among the challenges, 
nonproliferation specialists told us that, even if the number 
of Iran's centrifuges were drastically cut to 4,000, Iran would 
still have a breakout capacity of just 3 months. Of course, 
Iran's Supreme Leader is pushing for some 190,000 centrifuges.
    Experts stressed that an effective verification regime 
would require measures that go well beyond those in the 
standard safeguards agreement and the additional protocol.
    Former U.S. and IAEA officials noted that failing to 
understand the possible military dimensions of Iran's nuclear 
program would make it impossible to verify that Iran's nuclear 
program is completely peaceful in nature. It took 17 years for 
the IAEA to conclude that South Africa's nuclear program was 
entirely peaceful, and that was with the cooperation of its new 
government. Iran is mightily resisting this critical 
transparency.
    Former Secretary of State Clinton warned this weekend that 
any enrichment inside Iran will trigger an arms race in the 
Middle East. Also, many don't realize that any limits placed on 
Iran's nuclear program as part of the comprehensive solution 
will expire. In this respect, the final agreement is just 
another interim step with the real final step being the 
treatment of Iran as any other nonnuclear weapon NPT state. 
That means no sanctions, no restrictions on procurement of 
nuclear items, and certainly no restrictions on the number of 
centrifuges it can spin or the level to which it may enrich 
uranium. With such status, Iran could enrich on an industrial 
scale, claiming the desire to sell enriched uranium on the 
international market, as does France. Iran could also enrich 
uranium to levels near the weapons grade, claiming the desire 
to power a nuclear navy. That is what Brazil is doing.
    Of course, Iran isn't France or Brazil. That was evident 
when the committee examined Iran's behavior across the board.
    We heard from one former Iranian political protester and 
former prisoner that at least 750 people have been executed in 
Iran without due process in the past year.
    Today Iran's work--work of the regime is on full display, 
as hundreds of rockets and missiles have rained down on 
southern Israel, from 2,500 in total. It is Iran that provides 
the weapons, provides funding, provides training to Hamas and 
other Palestinian terror groups. As one former intelligence 
official testified, ``Iran's nuclear program is just the tip of 
a revolutionary spear that extends across the world and 
threatens key U.S. interests.''
    Ambassador Sherman, you have your work cut out for you. I 
am not sure how we reach an agreement that advances U.S. 
national security, given Iran's deep commitment to an extremely 
dangerous nuclear program. But one thing is clear. Come 
November there will be additional sanctions if there is no deal 
that is struck.
    But as the administration charts its course, I trust that 
you will be in close touch with this committee. That is 
especially important, given the significant changes to our Iran 
sanctions policy that are to be considered.
    And, as you know, Mr. Engel and I recently sent a letter to 
the President signed by 342 of our colleagues expecting such 
close coordination. America is stronger when we work together.
    And I now recognize the ranking member for any opening 
comments he may have.
    Mr. Engel. Thank you very much, Mr. Chairman, for holding 
this important hearing.
    Let me thank our witnesses for appearing today, Ambassador 
Sherman, Under Secretary Cohen. We have met with you many 
times, and America thanks you for the good work both of you 
have done and continue to do.
    After 6 months of talks between the P5+1 and Iran under the 
Joint Plan of Action, the parties have agreed to an extension 
for 4 months. I support this extension, but not indefinitely.
    Over the next 4 months, Iran will continue to abide by all 
the restrictions in the JPOA and undertake two new commitments. 
First, converting its 20 percent enriched uranium oxide into 
nuclear fuel rods--these rods are very difficult to convert 
back into a form that could be used for a nuclear weapon. 
Secondly, diluting its up to 2 percent stockpile. In exchange, 
Iran will have access to an additional 2.8 billion in frozen 
assets.
    The JPOA has led to some positive outcomes. Iran's economy 
continues to feel the pressure of international sanctions. 
Limitations on enrichment have lengthened the period of time to 
Iran's nuclear breakout point.
    If the United States and our allies think there may be a 
light at the end of the tunnel, then it is worth pursuing this 
track for a little bit longer. But, as we move forward, I am 
reminded of what Secretary Kerry said at the start of the 
process: ``No deal is better than a bad deal.''
    What was true 6 months ago is true now. So today I hope we 
can take a hard look at some of the remaining concerns. No deal 
is better than a bad deal. I hope, though, that we will all 
agree on what a bad deal is and what is good deal is.
    First, I want to reiterate my disappointment that Iran has 
been allowed to continue enriching under the JPOA. Especially 
after negotiating the nuclear gold standard deal with the 
United Arab Emirates, Iran doesn't seem like the best candidate 
for even a civil nuclear program. I am curious what we would 
need to see from the Iranians in order for them to prove that 
their nuclear program is exclusively peaceful.
    In addition, the JPOA deals with declared facilities. What 
concerns me more is the possibility that there are undeclared 
facilities. We all know that Iran excels in keeping its nuclear 
program under a cloak of secrecy.
    They built their Fordow Enrichment Facility into the side 
of a mountain. So while Iran has given the IAEA access to their 
declared facilities, I worry that there are other facilities 
that we don't know about. They have done it before, and they 
could do it again.
    Looking down the line, I am also concerned about what Iran 
could get in return for a comprehensive deal. Iran currently 
has over a $100 billion in frozen assets abroad and that 
doesn't even include the money that Iran could make if oil 
sanctions were lifted and business life were to return to 
normal. Money could still be used to finance Iran's 
destabilizing activities across the region, even if sanctions 
relief were to come in phases.
    You know, you look at the Israeli-Gaza war, the Israeli-
Hamas war right now and--Hamas being a terrorist organization, 
they have gotten nearly all of their weapons and missiles from 
Iran. So it is not only a matter of Iran's nuclear problems, it 
is a matter that Iran continues to be the largest supporter of 
terrorism around the world.
    Iran continues to be the leading state sponsor of 
terrorism, providing support to Hamas and Hezbollah. Iran 
continues to prop up the murderous Assad regime and continues 
to oppress its own people. We will need assurances that 
sanctions relief doesn't just mean funneling more money into 
the hands of terrorists.
    I would be delighted if the Iranians agreed to a deal that 
foreclosed any pathway to a nuclear bomb. But just as President 
Obama put the chance of success at 50/50, I too remain 
skeptical. We can't afford a bad deal that will threaten our 
allies and our interests, and we must be prepared to walk away, 
if necessary. And if negotiations go south, we must be prepared 
to level additional sanctions to squeeze Iran's economy. Iran 
must understand that all their actions have consequences.
    As the chairman just pointed out, the bill that both of us 
authored passed with over 400 votes--or 400 votes, the entire 
House, and passed unanimously out of this committee. All 
Democrats and all Republicans voted for the bill. The Congress 
feels very, very strongly that sanctions should be right there 
so that Iran will understand what it faces if it doesn't 
negotiate in good faith.
    And, of course, when we look at the bottom line for these 
negotiations, we want to see the timetable pushed back so it 
will take Iran a longer time to have breakout in producing a 
bomb. Obviously, that is something that we are all concerned 
with and must be ironclad into the negotiations--into the final 
agreement.
    So, Mr. Chairman, let me say this. There is no difference 
between Democrats and Republicans on this issue. We understand 
that Iran is a bad player. We understand that Iran doesn't 
negotiate in good faith. And we understand that Iran must 
understand that all options remain on the table and that those 
are not mere words, that those words have teeth.
    If the Iranians believe all options are on the table, 
perhaps they will begin to negotiate in good faith. If they 
really don't believe that, there is little incentiveness for 
them to negotiate in good faith.
    So, again, I thank our witnesses for being here today, and 
I look forward to their testimony.
    Mr. Royce. Thank you, Mr. Engel.
    This afternoon we are pleased to be joined by senior 
representatives from the Department of State and the Department 
of Treasury.
    It is good to have Under Secretary Wendy Sherman with us. 
And she has held numerous positions throughout the years in the 
Department of State, and Ambassador Sherman served as vice 
chair of the Albright Stonebridge Group prior to that.
    David Cohen is the Treasury Department's Under Secretary. 
He is focused on fighting money laundering and the financing of 
terrorism. And prior to his Senate confirmation in 2011, he 
served as the assistant secretary for terrorist financing. And 
he practiced law prior to that in Washington.
    So we welcome you back. And, without objection, your full 
prepared statements will be made part of the record.
    And members here will have 5 calendar days to submit 
statements or questions or extraneous material for the record.
    And, of course, we will begin with Ambassador Wendy 
Sherman.

 STATEMENT OF THE HONORABLE WENDY R. SHERMAN, UNDER SECRETARY 
        FOR POLITICAL AFFAIRS, U.S. DEPARTMENT OF STATE

    Ambassador Sherman. Thank you very much, Chairman Royce, 
Ranking Member Engel, and distinguished members of the 
committee.
    I am very pleased to be here this afternoon along with 
Under Secretary Cohen to discuss the status of negotiations 
related to Iran's nuclear program. You have my written 
statement; so, I will summarize some key points.
    Mr. Chairman and members, our goal all--of our goal is to 
prevent Iran from obtaining a nuclear weapon. The diplomatic 
process in which we are currently engaged was designed to 
achieve that goal peacefully and durably.
    We have a basic metric for a good agreement, one that cuts 
off all of Iran's potential paths to a nuclear weapon, the 
plutonium path with the current Arak reactor, the path through 
the underground facility at Fordow, the path through swift 
breakout at the Natanz enrichment plant, and the path that 
would occur in secret, which we will deal with through 
intrusive monitoring and transparency measures.
    And we will tie our sanctions relief to Iran's performance, 
only providing relief to Iran after it has taken verifiable 
steps as part of a comprehensive agreement and maintain the 
capacity to tighten the pressure if Iran fails to comply.
    I cannot tell you today that our diplomacy will succeed 
because I am not sure that it will. I can tell you that, in the 
past 6 months, we have made significant and steady progress. We 
have exchanged ideas, narrowed gaps on key issues, and 
identified areas where more hard work is required.
    For instance, we have had productive discussions about how 
to reduce the dangers posed by the facilities at Iraq and 
Fordow, about the protocols necessary for transparency, and 
about the disposition of Iran's stockpiles of enriched uranium.
    No issues have been neglected, but none have been finally 
decided, because nothing is agreed until everything is agreed. 
And, on some, we still have substantial differences, including 
the overall question of enrichment capacity.
    As you know, Mr. Chairman, there is some limit to how 
detailed I can be in this open session and still preserve the 
leverage we need in support of the goal we seek. However, the 
bottom line is that all serious obstacles remain. We have been 
moving in the right direction.
    For that reason, roughly 2 weeks ago, the parties to the 
negotiation agreed to extend our deliberations for 4 additional 
months. We agreed to this extension because we had seen 
significant progress in the negotiating room and because we can 
see a path forward, however difficult, to get to a 
comprehensive plan of action.
    We will use this time to continue working toward that 
comprehensive plan for ensuring that Iran does not obtain a 
nuclear weapon and that its nuclear program is exclusively 
peaceful.
    I note that a year ago Iran's nuclear program was growing 
and becoming more dangerous with each passing day. That is no 
longer the case. Last November, as the first step in this 
negotiation, we reached consensus on a Joint Plan of Action.
    In return for limited and targeted sanctions relief, Iran 
agree to freeze and even roll back key elements of its nuclear 
activities. In fact, the JPOA has temporarily blocked each of 
the paths Iran would need to go down to build a nuclear weapon.
    Many observers openly doubted whether Iran would keep its 
commitments under the Joint Plan of Action. But according to 
the IAEA, Iran has done what it promised to do during these 
past 6 months. The result is a nuclear program that is more 
constrained, more transparent, and better understood than it 
was a year ago, a program that has been frozen for the first 
time in almost a decade.
    Meanwhile, as Under Secretary Cohen will make clear, 
sanctions relief for Iran will remain limited to amounts that 
will do little, if anything, to heal Iran's deep-seated 
economic problems. Over the next 4 months, the valuable 
safeguards that freeze Iran's nuclear program will remain in 
place as we strive to negotiate a comprehensive and longer-term 
plan.
    I will be blunt and say that we will never rely on words 
alone when it comes to Iran. We have and we will insist that 
commitments be monitored and verified and that the terms of 
access and inspection be thoroughly spelled out. Our goal is to 
structure an agreement that would make any attempt to break out 
so visible and so time-consuming that Iran would either be 
deterred from trying or stopped before it could succeed.
    Speaking more generally, I want to emphasize that 
engagement on one issue does not require and will not lead to 
silence on others. The United States will not hesitate to 
express its views and 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 
toward Israel, its defense of political prisoners, journalists, 
and American citizens.
    Mr. Chairman and members of the committee, on this issue, 
we are united in our goals. We are determined that Iran not 
obtain a nuclear weapon. It is only because of the leverage, 
created by the executive and legislative branches of this 
government, by our allies and partners and by the United 
Nations Security Council, that Iran has come to the negotiating 
table in what we believe to be a serious way.
    But we all know that sanctions are a means, not an end. We 
are now in the process of determining whether the end we seek 
can be achieved through a diplomatic process. That effort is 
worthwhile because a positive outcome would be preferable to 
any alternative.
    A comprehensive agreement would ease anxiety and enhance 
stability throughout the Middle East. It would reduce the 
likelihood of a regional nuclear arms race. It would eliminate 
the potential threat of nuclear blackmail. It would contribute 
to the security of Israel and our partners throughout the 
region. And it would make our own citizens safer.
    Between now and November, we will continue our pursuit of 
these welcome ends, and it is with those high purposes in mind 
that I respectfully ask your continued support.
    Thank you, once again, for the opportunity to be here. And 
I will be pleased to respond to questions in as much detail as 
I possibly can in this open session.
    Thank you, Mr. Chairman.
    [The prepared statement of Ambassador Sherman follows:]
    
    
    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Mr. Royce. Thank you, Ambassador Sherman.
    We go now to Mr. Cohen.

STATEMENT OF THE HONORABLE DAVID S. COHEN, UNDER SECRETARY FOR 
 TERRORISM AND FINANCIAL INTELLIGENCE, U.S. DEPARTMENT OF THE 
                            TREASURY

    Mr. Cohen. Thank you, Chairman Royce, Ranking Member Engel, 
and distinguished members of the committee. Thank you for your 
invitation to appear before you today alongside my colleague, 
Ambassador Sherman, to discuss the extended Joint Plan of 
Action.
    I will focus my oral testimony this afternoon on our 
efforts to maintain intense pressure on Iran to help achieve a 
successful outcome in the negotiations over its nuclear program 
and the ever-mounting pressure that Iran will continue to face 
during the extended Joint Plan of Action period as the P5+1 
seeks the comprehensive and long-term resolution to the 
international community's concerns over Iran's nuclear program.
    When we announced the Joint Plan last November, we said 
that we did not expect the relief package in the Joint Plan of 
Action to materially improve the Iranian economy. And it 
hasn't. 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, 
dwarf the limited relief in the Joint Plan of Action.
    And so today, as we start to implement the extended Joint 
Plan of Action, Iran remains in a deep economic hole. The value 
of Iran's currency, the rial, has declined by about 7 percent 
since the Joint Plan of Action was announced last November.
    Since 2011, Iran has lost about $120 billion in oil 
revenues. It lost $20 billion in revenues in the first 6 months 
of the Joint Plan of Action and stands to lose an additional 
$15 billion in oil revenues during the next 4 months alone. And 
Iran's economy today is 25 percent smaller than it would have 
been had it remained on its pre-2011 growth trajectory.
    Now, when we entered into the Joint Plan of Action, some 
predicted that our sanctions regime would crumble, and some 
also argued that Iran's economy would rebound dramatically. 
Neither occurred. The fact is, as we enter the 4-month 
extension of the Joint Plan, our sanction regime remains robust 
and Iran's economy continues to struggle. And we remain 
confident that 4 months from now our sanctions will continue to 
bite and Iran's economy will remain under great stress.
    The $3 billion to $4 billion worth of relief that the 
extended Joint Plan of Action may provide Iran pales in 
comparison to what Iran needs to dig itself out of its deep 
economic hole. And we expect that firms will continue to shun 
Iran, as was the case during the first 6 months of the Joint 
Plan of Action. Firms have good reason to remain reluctant 
about doing business in Iran.
    The overwhelming majority of our sanctions remain in place. 
Iran continues to be cut off from the international financial 
system and is largely unable to attract foreign investments.
    Iran is still shut out of the United States, the world's 
largest and most vibrant economy, and precluded from 
transacting in the dollar.
    And our sweeping set of nearly 680 Iran-related sanctions 
designations, developed in concert with partners around the 
world, remains in place.
    Throughout the Joint Plan of Action period, we have also 
vigorously enforced our sanctions, recognizing the essential 
role that financial pressure played in the lead-up to and now 
during the Joint Plan of Action, and how important maintaining 
that pressure will continue to be during this extended JPOA 
period.
    Indeed, since the joint plan 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 abusing human rights.
    Throughout this short-term extension of the Joint Plan of 
Action, I can assure you that we will continue to make certain 
through word and deed that banks, businesses, brokers, and 
others around the world understand that Iran is not open for 
business and Iran will not be open for business unless and 
until it assures the international community of the exclusively 
peaceful nature of its nuclear program.
    While this 4-month extension will provide additional time 
and space for the negotiations to proceed, it will not change 
the basic fact that Iran's sanctions-induced economic distress 
has not receded.
    And over the next 4 months, my colleagues and I within 
Treasury and throughout the administration will continue to 
echo President Obama's clear message, namely, that we will come 
down like a ton of bricks on those who seek to evade our 
sanctions. That will help provide our negotiators leverage as 
we explore the possibility of a comprehensive and long-term 
resolution to the international community's concerns over 
Iran's nuclear program.
    I am happy to answer any questions the committee may have.
    [The prepared statement of Mr. Cohen follows:]
    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Mr. Royce. Thank you. Thank you.
    I had a couple of questions, and one I was going to start 
with is this sunset clause. I am very concerned about the way 
this clause would work.
    Once this agreement expires, Iran's nuclear program would 
be treated just like Japan's or just like Germany's. With such 
status, it would be very easy for Iran to produce material for 
many nuclear weapons.
    One witness we had before this committee characterized this 
provision as ``converting Iran from a nuclear pariah,'' in his 
words, ``to a nuclear partner, a giant get-out-of-jail-free 
card for Iran,'' in his words.
    Do you dispute this characterization?
    Ambassador Sherman. Thank you, Mr. Chairman.
    I believe that any comprehensive agreement with Iran must 
have an extremely long duration. It has been decades that the 
international community has had concerns about Iran's nuclear 
program.
    The United States had a public National Intelligence 
Estimate that said, until 2003, Iran was attempting to build a 
nuclear weapon and had such a program. We have maintained our 
concerns about Iran's program even since 2003, and that is the 
whole reason for this negotiation.
    So I believe that any comprehensive agreement must have a 
very long duration before Iran would, in fact, meet the 
standards required under the U.N. Security Council resolutions 
to be treated as a nonnuclear weapons NPT state.
    Along that road, they would be the subject of quite 
intrusive monitoring, transparency, and verification measures 
carried out by the IAEA. During that time, they would have, if 
they end up with an indigenous enrichment program, very small, 
very limited, to practical needs, very focused on intrusive 
monitoring, to ensure that there were no covert operations. 
Their issues concerning possible military dimensions would have 
to be addressed. Their research and development would have to 
be constrained in quite significant ways.
    So we would, in essence, be slowing down their ability to 
get to that kind of industrial-scale capacity that the Supreme 
Leader spoke of in his aspirational speech.
    Mr. Royce. And the Ayatollah--his views may evolve over 
time, but he just called again for the end of Israel. And I saw 
that, on Friday, they orchestrated and the government printed 
out these ``Death to Israel'' placards and ``Death to America'' 
placards.
    And from--converging in nine different parts of the city, 
you had this group meet at the city center. 700 towns and 
cities. The government orchestrated this rally--``Death to 
Israel'' rally.
    So, clearly, we are up against an attitude here that is 
pretty pronounced. And you have heard me comment before about 
some of the Ayatollah's statements about the ICBM ballistic 
missiles.
    A central component of a nuclear program is that delivery 
capability. He is talking about mass-producing these, the basic 
duty of every military man to be involved in this.
    Will a long-term agreement include limitations on their 
ballistic missile production? And will it include robust 
monitoring and verification on that front?
    And why did the interim agreement not explicitly require 
Iran to follow U.N. Security Council resolutions to stop its 
effort to develop a nuclear-capable ballistic missile, which, 
as we know, they are testing?
    Ambassador Sherman. What we have said in this negotiation 
and what is under discussion is that Iran must address all the 
provisions of U.N. Security Council resolutions.
    And, in 1929, there is a specific reference to any kind of 
delivery mechanism, long-range ballistic missile, for delivery 
of nuclear weapons. And so that has to be addressed in some way 
in this agreement. And it is under discussion, but not yet 
resolved.
    Chairman Royce. Thank you.
    I am going to forgo the rest of my time. We are going to 
hold everybody to 5 minutes and get down to some of our junior 
members for their questioning.
    Mr. Engel, you are next.
    Mr. Engel. Thank you. Thank you, Mr. Chairman.
    What do we estimate the time for Iran for achieve breakout 
now? And what would we consider a good deal? How far would we 
have to push them back to have this considered a good deal?
    Ambassador Sherman. I think, Mr. Engel, that it would be 
best to discuss breakout times with the intelligence community 
in a classified briefing.
    But I will tell you that most analysts out in the public 
say that right now Iran's breakout time is about 2 months. And, 
by that, I mean how much time, if they decided to go for it, 
they could produce enough highly enriched uranium for one 
nuclear weapon.
    There are two paths to a nuclear weapon in terms of fissile 
material, which I know you well know. But for all members, one 
is highly enriched uranium. That is Natanz and Fordow. And one 
is plutonium. That is the current configuration of the Arak 
reactor. And we want to stop and block both of those pathways 
as well as the covert pathway.
    I have said publicly that we believe that we need to go 
many months beyond that to achieve the kind of assurance that 
we are looking for that Iran cannot obtain a nuclear weapon.
    Mr. Engel. We voted on an agreement with the United Arab 
Emirates, which for a long time was considered the gold 
standard in civil nuclear cooperation, in which we agreed to 
allow them to have nuclear power for peaceful purposes in 
exchange for not enriching on their soil.
    If we are indeed going to have an agreement with Iran which 
allows them to enrich on their soil, how can we ever get 
countries that come after Iran to agree to an agreement--a one-
two-three agreement similar to the one that the UAE agreed to?
    Ambassador Sherman. This is obviously an area of concern, 
as you point out, Congressman. We have discussed this with UAE 
and many other countries, in fact.
    But what we are looking at here, if we are able to achieve 
a comprehensive agreement--and, as I said, I don't know whether 
we will or not because Iran has to make some very difficult 
decisions, and I am not sure whether they will or not--is that 
it will be a very small, highly constrained, intrusively 
monitored program.
    And they will have years of that kind of intrusive 
monitoring. I don't think that is a road that will be 
attractive to anyone else to go down, but it is something on 
which we are having continuing conversations.
    We believe, quite frankly, as you know, that Iran would be 
better off without any enrichment program. You can get fuel on 
the open market. They have argued, in fact, that they should be 
able to fuel Bushehr, which the Russians currently fuel and 
have made a guarantee for life. We believe that Russia should 
continue to fuel Bushehr and Iran has no need to do so.
    So anything that ends up in this agreement, if it does, on 
the enrichment side will be very small, very limited to a 
practical need, intrusively monitored, and not a path that we 
think will be attractive to anyone else.
    Mr. Engel. You mentioned that Iran has been keeping some of 
its promises and has shown some flexibility, but in terms of 
the question of their enrichment capacity, there has been less 
flexibility.
    Can you elaborate on that at all? Or, if you can't, what 
would make us think that they would suddenly see the light and 
have some flexibility?
    Ambassador Sherman. Well, what I would say is that we have 
said that their current capacity has to be severely limited and 
that where their program would begin in any agreement would 
have to be much smaller than what they currently have.
    We are approaching this in quite a holistic way. We are 
looking at all the ways in which Iranian enrichment capacity 
could be misused. Any arrangement in which we reach will be 
designed to address any problem that might come along the way.
    So we will look at capacity. We will look at advanced 
centrifuges, which could increase their capacity over time. We 
will deal with R&D. We will deal with their separate work 
units, which is the measure of the energy in their production. 
We will deal with stockpiles. We will deal with facilities. We 
will deal with the monitoring quite intrusively.
    And any arrangement that we might get to an agreement on 
will ensure that, if we close the front door, that Iran cannot 
enter through a back door. It is very complicated. It is highly 
technical.
    Some of my colleagues who are part of our expert team sit 
behind me. Quite frankly, it is a whole-of-government effort. 
The Department of Energy has been a tremendous partner, as have 
our labs, to make sure that, should we get to an agreement, we 
know exactly what we are getting down to the finest technical 
detail.
    Mr. Engel. Under Secretary Cohen, let me just ask you a 
very quick question.
    The sanctions relief would be based on a phased system, 
including waivers. Will the Iranians, do you believe, accept a 
deal that relies on waivers, not permanent relief? And how 
would you think that Congress--anticipate Congress' involvement 
in this?
    Mr. Cohen. Congressman, I am not going to venture a guess 
on whether the Iranians will accept a deal based on waivers. 
Perhaps Under Secretary Sherman wants to address that.
    In terms of Congress' role, as you say, the notion for a 
comprehensive deal is one where whatever relief is offered to 
Iran is phased in over time and is tied to Iran taking 
verifiable steps along the way.
    It is very important that we maintain pressure during the 
course of that period so that, initially, what we have is 
sanctions that are suspended, not lifted, and then eventually, 
perhaps, move to lifting the sanctions.
    But in the near term, the notion would be that we would 
suspend sanctions through the exercise of our authorities.
    Mr. Engel. Thank you, Mr. Chairman.
    And I would just reiterate what the chairman said before. 
Our letter to the President signed by three-quarters of 
Congress, we feel very strongly that Congress must be involved.
    Thank you, Mr. Chairman.
    Chairman Royce. Thank you, Mr. Engel.
    We go now to Ileana Ros-Lehtinen, chairman of the Middle 
East Subcommittee and a leader on Iran sanctions efforts.
    Ms. Ros-Lehtinen. Thank you, Mr. Chairman.
    Ambassador Sherman, last year, before this committee, you 
testified that, ``The ultimate goal of any negotiations is that 
Iran come into full compliance with U.N. Security Council 
resolutions.''
    Those Security Council resolutions demanded that Iran 
suspend all enrichment-related and reprocessing activities and 
that Iran ratify and implement the IAEA's additional protocols 
to strengthen safeguard measures.
    This morning, in front of the Senate Foreign Relations, you 
said that the administration's preference is that Iran not have 
enrichment capabilities but then conceded that President Obama 
and your team have admitted that there is likely going to be an 
enrichment program.
    Has Iran come into compliance with the U.N. Security 
Council resolutions, including the implementation of the 
additional protocols? Will it be in compliance when a 
comprehensive agreement is reached? If they don't, have U.S. 
negotiators failed to meet our goal, as you stated it was last 
year?
    You also said that this was also about verification, 
monitoring, and assurances to the international community. Of 
course, this is all based on the assumption that Iran has fully 
disclosed its program, a program that it kept covert for 2 
decades, and that it is what will likely be proven to be the 
fatal and faulty assumption in these talks.
    DOD has assessed earlier this year that the U.S. isn't able 
to detect or locate undeclared or covert nuclear activities.
    So how confident can we be that this regime, that has 
operated a covert nuclear program for decades, that has ignored 
U.N. Security Council resolutions, that has openly bragged 
about deceiving the West while in nuclear negotiations, has 
declared all of its facilities, activities, and programs to us, 
specifically its suspected military programs?
    And would any potential comprehensive agreement encompass 
anything that may be disclosed or detected after an agreement 
is signed or are we just dealing with these very specific 
facilities?
    As part of the extension agreement, we have agreed to 
another $2.8 billion in sanctions relief for Iran as well as 
allowing Iran to continue to export oil at a restricted level.
    And at our subcommittee hearing last month with Deputy 
Assistant Secretary for Energy Diplomacy, Amos Hochstein, I had 
asked him about reports that Iran was sending hundreds of 
thousands of barrels of oil to Assad to keep that thug and his 
war running; yet we are not counting this against Iran's 
restricted levels.
    We were all shocked to hear that we don't count that 
against Iran's limits because Syria isn't actually paying for 
the oil. And you repeated that this morning in the Senate.
    But what I had suggested to Mr. Hochstein was that this 
issue was bigger than just Iran sending soil to Assad and us 
not counting it for the JPOA. It goes to the heart of our 
policies as they relate to Iran and Syria, and it is about our 
U.S. national security interests.
    How much is Iran sending? How do we allow this to continue 
while we still negotiate a comprehensive agreement? How do we 
justify allowing Iran to send oil to Assad to keep his brutal 
regime afloat? And what else is Iran sending that we are 
ignoring? And if this were against the terms and Iran was 
caught in violation, who is in charge and what mechanism do we 
have to enforce the terms?
    Ambassador Sherman. Thank you, Congresswoman.
    Indeed, all of the U.N. Security Council resolutions will 
have to be addressed if we are to get to a comprehensive 
agreement.
    Indeed, Iran would have to agree to the additional 
protocol--and I believe that they will--as well as modified 
code 3.1 and, in addition, specific enhanced monitoring and 
verification mechanisms that will be attached to each of the 
elements as they get agreed to in a comprehensive agreement.
    Part of the reason for the additional protocol and for 
enhanced monitoring even beyond that is to deal with the covert 
path, to make sure that there aren't undeclared facilities.
    And, in fact, one of the things the IAEA does after a 
country signs onto the additional protocol--and it takes some 
time to do--is to create what is called the broader conclusions 
that, in fact, there are no undeclared sites.
    That will take the IAEA some time to do. And some of our 
sanctions relief will be tied to reaching that benchmark, among 
other benchmarks, as we put together a comprehensive agreement. 
So we are quite concerned to make sure that we cut off the 
covert pathway.
    There is no way, 100 percent, to ensure that any country in 
the world doesn't have a covert site. But what we can do is put 
the mechanisms in place to do two things: One, detect it if 
it's happening, and, two, stop it before it can become a 
problem to us and to our national security.
    In terms of the $2.8 billion, let me make one comment and 
then let Under Secretary Cohen mention this.
    The 4-month extension was really just a continuation of the 
JPOA. And, as such, the prorated amount for those 4 months is 
$2.8 billion in their restricted funds. It is not U.S. taxpayer 
money. It is restricted money that is frozen in accounts that 
Iran has that they will now have access to. So it was simply a 
straight piece of arithmetic.
    However, because we have such great concerns, we did get 
Iran to agree to take two additional steps that go beyond the 
JPOA. That is to take some of their 20 percent oxidized 
enriched uranium, which was part of the JPOA, and take 25 
kilograms of it, which is about the amount they can get done 
during this 4-month period, and turn them into metal plates for 
the Tehran research reactor, which make it virtually impossible 
for that to be converted back into enriched uranium.
    And we got them to agree to dilute all of their up to 2 
percent enriched uranium stockpile, which is over 3 metric tons 
of up to 2 percent enriched uranium. So these are two important 
steps that we got in addition to this as well.
    As for Syria, I will be glad to come back to that in 
someone else's question.
    Chairman Royce. Very good. Very good.
    We go now to Mr. Brad Sherman, ranking member of the 
Terrorism and Nonproliferation Subcommittee.
    Mr. Sherman of California. I will start with some comments, 
and I will ask our witnesses to respond for the record as they 
would like to these comments.
    Iran's economy may not have grown as fast as China's since 
2011. Mr. Cohen pointed out that it would be 25 percent smaller 
if it had kept growing at that rate.
    Keep in mind--it is 2011--that we in Congress passed the 
banking sanctions over the objection of the administration, and 
that point correlates with the decline in the growth of the 
Iranian economy.
    But the Iranian economy doesn't have to grow at China's 
rate in order to avoid regime endangerment. The fact is their 
economy is growing at 2 percent now. In America, we call that a 
recovery, not a regime endangerment.
    As the--I believe, the chairman brought up, we have this 
sunset clause so that, even if you are able to negotiate for 
really good controls, they all fade away in a decade and, at 
that point, Iran becomes unsanctioned and unlimited. Not sure 
that is a good deal.
    Mr. Cohen, you have talked about coming down like a ton of 
bricks. I think you need more bricks.
    In the first half of 2013, we had 83 companies sanctioned. 
Since Rouhani's election, when the Iranians went from 
Ahmadinejad, who was honest enough to tell us what he was 
thinking, to Rouhani, who is very sneaky, we have had only 61, 
which means we have been going at one-quarter the rate, half 
the companies sanctioned in double the amount of time.
    Now, I don't think we are going to negotiate a good enough 
deal, not because Ambassador Sherman is a bad negotiator, but 
because I don't think you have enough leverage. We should pass 
sanctions now that go into effect in January or February.
    And I know that Secretary Kerry is reported in the press to 
have thought that that was a good idea, but needed to check 
with the White House. He checked with the White House, and then 
the reports in the press was that he never said it to begin 
with. In any case, you need that additional leverage.
    The other additional leverage you need is for Israel not to 
just have 2,000- to 5,000-pound bunker-buster bombs, but the 
truly massive 30,000-pound bombs and the B-52s, which we have 
in our boneyard necessary to deliver them.
    I am not saying you make that transfer immediately, but you 
begin efforts toward that transfer and I think you will see a 
much better response between now and November.
    All options need to be on the table. And, frankly, the 
military option comes more out of Jerusalem than it comes out 
of Washington.
    I want to pick up on Mr. Engel's comments about how 
Congress needs to be involved.
    Mr. Cohen, is it your interpretation of existing law that 
the administration, without Congress, can use the power we have 
given you to waive individual transactions and, instead, waive 
whole classes of transactions? Do you need Congress or can you 
just stretch the existing law so as to give the Iranians the 
ability to operate sanction-free? Mr. Cohen?
    This is a legal interpretation question.
    Mr. Cohen. And let me answer that question in two parts. 
First of all, I am not a lawyer--at least not a practicing 
lawyer. So I will defer on the legal interpretation to those 
who are charged with----
    Mr. Sherman of California. What is the position of the 
administration on the amount of power it has?
    Mr. Cohen. The position of the administration is, as we 
look forward, in a comprehensive agreement, if one is to be 
had, to involve Congress in every step of the way, close 
consultation----
    Mr. Sherman of California. Look, you are going to talk to 
us all we want. Let's say we say ``no'' to this deal.
    Are you going to be able to implement it anyway by 
stretching the statutes and using your case-by-case waiver to 
make blanket waivers that deliver to the Iranians? And do you 
realize, and do the Iranians realize, that the next President 
my be elected on a platform of no more waivers?
    Mr. Cohen. Congressman, I am reluctant to predict what the 
position might be in a circumstance where Congress has 
expressed disapproval for an agreement.
    I can tell you that, under the existing legislation, the 
way we are approaching this is that we can proceed in close 
consultation with Congress to suspend and waive certain 
provisions of law----
    Mr. Sherman of California. ``Consultation'' means we will 
tell you ``no'' and you will do it anyway. Let's say we say 
``no'' in every meeting and every vote on the floor.
    Are you going to do it anyway or do you have the right to 
do it anyway.
    Mr. Cohen. Congressman, I am not in a position to answer 
that question.
    Mr. Sherman of California. In other words, the imperial 
presidency grows further.
    Finally--and I realize I am out of time--we were told with 
the original deal that, once you take uranium and make it 
uranium oxide, it was effectively neutralized. And we gave the 
Iranians $4.2 billion for that.
    Now we are being told that oxidizing the uranium does not 
neutralize it, but it will be really neutralized if we give 
them another $2.8 billion to turn it into fuel.
    The fact is I don't think it is neutralized either way, but 
we are paying for it twice and they still have it in their 
hand.
    Ambassador Sherman. Congressman, if I may, we did not give 
Iran $4.2 billion and now $2.8 billion to dilute or to oxidize 
their stockpile. That was part of an entire package.
    And that package is a list of about 15 or 20 commitments 
that Iran made, including stopping enriching up to 20 percent 
enriched uranium, diluting and oxidizing that stockpile.
    It did, indeed, because they don't have the conversion 
facilities to turn it back, put it in a state that made it 
quite difficult, if not impossible, for them to enrich it to 
highly enriched uranium.
    But, that said, we did not pay $4.2 billion for just one 
item. It was for an entire package of items that the IAEA has 
said they have, in fact, carried out.
    Mr. Sherman of California. Well, we are paying twice, 
whatever the amount is.
    I yield back.
    Mr. Royce. We need to go to Mr. Smith of New Jersey, 
chairman of the Subcommittee on Africa, Global Health, Global 
Human Rights, and International Organizations.
    Mr. Smith. Thank you, Mr. Chairman. Thank you for calling 
this very timely and important hearing.
    And welcome to our witnesses.
    Let me ask you a couple of questions beginning first with: 
What happens at midnight, November 25th, if there is no 
agreement? How firm is the 25th deadline? Are you contemplating 
scenarios if that deadline slips?
    Secondly, has the gap between the two sides on centrifuges 
actually widened with Iran's Supreme Leader Khamenei's recent 
statements that Tehran needs 190,000 centrifuges over the long 
term and that the P5+1 objectives, as he put it, are not 
realistic?
    Khamenei has also characterized the requirement that, as 
part of a final agreement, Iran end its ballistic missile 
program as ``stupid, idiotic expectation'' on our part.
    Thirdly, let me ask you--Khamenei, on Reuters--it is on the 
wire right now--has called Israel a rabid dog and has urged 
more arms to Hamas.
    Now, are the Iranians in a better position to provide arms 
to Hamas as a result of the easing of the sanctions, especially 
the $2.8 billion that they will get as a result of the July 
18th extension?
    And, finally, number 4, if I could, Andrew Natsios 
testified here at my subcommittee on North Korea, and we were 
talking about human rights and the ever-deteriorating situation 
in North Korea.
    He made a very important point. And, as you know, he is a 
very accomplished diplomat, having been U.S. Special Envoy to 
Sudan, head of USAID in the past, and now he is working on 
behalf of human rights in North Korea.
    He said de-linking human rights with the Six-Party Talks 
was a colossal mistake because, when the collapse of those 
talks happened, certainly the deterioration that we have seen 
on human rights just continued. There was no stoppage. There 
was nothing that was gained during those talks.
    I and many others have urged that human rights be 
integrated with the talks on the nuclear issue with Iran and 
especially now with Abedini. Yesterday was the 2-year 
anniversary, July 28th, of Pastor Abedini being brought to 
prison, and his enduring of torture began on that day.
    Hekmati, Levinson, and now a Washington Post reporter that 
we are all very concerned about. You mentioned it, Madam 
Ambassador. Jason Rezaian continues to be a concern. We don't 
know much about him.
    Since negotiations began and extensions in monies have been 
given to Iran by way of an easement on their sanctions, have 
human rights in Iran improved, stayed the same, or 
deteriorated?
    Ambassador Sherman. Thank you, Congressman.
    First of all, I want to bear witness, Congressman, to your 
leadership on human rights issues. You have been a long-
standing leader in that regard for many years, all the way back 
to when I worked up here on Capitol Hill, which, looking at my 
hair, was quite some time ago. So I know of your passion and I 
share it, as does this administration.
    As I said in my opening remarks--and let me elaborate--
where Iran's human rights record is concerned, where--its acts 
of terrorism and instability, it is putting Israel's security 
at risk on a daily basis. And certainly many of the original 
rockets that Hamas had came from Iran. They now make many of 
their rockets, if not most of them, themselves. But there is no 
doubt Iran played a part.
    We condemn Hamas' actions of raining rockets down on 
Israel. We condemn Iran's support for state-sponsored terrorism 
for acts of human rights. Indeed, our own human rights report, 
our own religious freedom report, shows that, indeed, there 
have been summary executions in Iran. And there is no doubt.
    I have met with all of the families--Pastor Abedini, Amir 
Hekmati, Christine Levinson--and I spend--every time that I 
meet with the Iranians, I have a session separately on 
Americans of concern to us and certainly have added the 
journalist to that list. There is absolutely no reason for such 
detentions whatsoever, and they do nothing, of course, to help 
create a climate that would make a nuclear negotiation 
successful.
    As to the Supreme Leader's comments about 190,000 SWU, or 
centrifuges, this doesn't help the negotiation climate either. 
I realize that he said this was aspirational and nothing that 
would happen today.
    But there is no question right now Iran has 9,000 
centrifuges that are enriching, another 10,000 that are 
installed. We believe that, if there is an enrichment program, 
it needs to be a fraction of that.
    Mr. Smith. What happens if that deadline slips?
    Ambassador Sherman. What I said this morning--and I know 
this will get asked by many--our intention is that November 
24th is the end of this negotiation. It could have gone for 6 
months. We decided only to do 4. We don't want to talk for 
talk's sake.
    That said, I try to be very straightforward with Members of 
Congress. I think that kind of clarity is important. I know 
from negotiations, you know from your own negotiations up here 
on the Hill, you never know where things are going to turn out. 
So I cannot tell you for an absolute certainty on the 24th we 
will end, but that is certainly our intention.
    Mr. Royce. So we go now to Mr. Gerry Connolly of Virginia.
    Mr. Connolly. Thank you, Mr. Chairman.
    And, Ms. Sherman, I believe your career began here on the 
Hill on the Senate side. I hope my friend Ileana----
    Ambassador Sherman. On the House side. On the House side, 
Mr. Connally.
    Mr. Connolly. Oh.
    Ambassador Sherman. I never worked in the United States 
Senate. I only worked in the House.
    Mr. Connolly. Oh. All right.
    Ambassador Sherman. I did help elect a congresswoman----
    Mr. Connolly. Mikulski.
    Ambassador Sherman [continuing]. To the United States 
Senate.
    Mr. Connolly. Yes. All right.
    Ambassador Sherman. I never worked in the Senate.
    Mr. Connolly. Well, she sends the best over there. All 
right.
    Thank you so much for being here and correcting the record.
    I was listening to my friend from California, Mr. Sherman, 
and I must say I am a little fearful that we may be making 
perfect be the enemy of the good and--especially when we talk 
about a military response from Israel as if that is the only 
solution.
    I am sure my friend didn't mean that. But when we talk 
about 30,000-pound bunker busters----
    Mr. Sherman of California. Will the gentleman yield?
    Mr. Connolly [continuing]. And taking airplanes out the 
boneyard to deliver them, that certainly sounds like we favor a 
military option before we have completed the diplomatic 
process.
    Mr. Sherman of California. Will the gentleman yield?
    Mr. Connolly. Of course.
    Mr. Sherman of California. Just for the record, I said no 
actual transfer, just begin the process until after November.
    Mr. Connolly. Yeah. I appreciate my friend. Thank you.
    But I would just caution that we are in the middle of a 
diplomatic process and, if Congress decides to intervene that 
way, it sends a clear signal that we have given up on the 
diplomatic process. And at least this Member of Congress--and I 
believe there are others--is not quite ready to make that 
judgment just yet.
    Ambassador Sherman, in your opinion, is Iran sincere in the 
negotiation process to stand down with respect to the 
development of its nuclear weapons?
    And you are going to have to be real succinct, but having 
come from the House, I know you know how to do that.
    Ambassador Sherman. Congressman, I believe Iran has come to 
these negotiations seriously. I believe they intend to get to a 
comprehensive agreement. But I do not yet know whether they can 
take the decisions they must to reach a comprehensive agreement 
to which we would agree.
    Mr. Connolly. Have you--you cited the IAEA.
    Is there any evidence of the Iranians having cheated on the 
Phase 1 interim agreement?
    Ambassador Sherman. The IAEA says they have completely 
complied with their obligations, as have the P5+1.
    Mr. Connolly. Do we sense tension or disagreement or even 
game-playing between the Supreme Leader and the new President 
Rouhani?
    Ambassador Sherman. You know, I think I would ask in a 
closed session for our intelligence community to give you their 
assessment of what the internal dynamics of----
    Mr. Connolly. I am only referring to public statements. I 
have seen public statements that seem to contradict each other.
    Ambassador Sherman. I have seen those public statements as 
well, but I think it is very hard for us to know what happens 
in such an opaque system.
    Mr. Connolly. So we don't know, really----
    Ambassador Sherman. I don't think we actually know.
    Mr. Connolly. All right. Have sanctions degraded because of 
the interim agreement--Phase 1 interim agreement?
    Ambassador Sherman. I don't believe they have at all. And I 
defer to Under Secretary Cohen on that.
    Mr. Cohen. I agree with Under Secretary Sherman. I don't 
think we have seen the sanctions architecture degrade at all in 
the course of the----
    Mr. Connolly. I think that is really important testimony 
because we have heard members assert otherwise.
    And it is really important for the administration, if that 
is true, Mr. Cohen, to be crystal clear and to have documentary 
evidence to counter it. Because, otherwise, it gets out there 
unchallenged, that somehow the sanctions have just all gone 
away and we are letting them off easy and Iran can now return 
to happy days again because they have just extended this 
agreement, and we have been played for fools.
    Mr. Cohen. The sanctions architecture, which includes our 
financial sanctions, our banking sanctions, our oil sanctions, 
as well as a host of other ancillary sanctions, that are not 
suspended in a Joint Plan of Action, haven't been carried 
forward into the extended Joint Plan of Action, remain in 
place.
    We have been enforcing them. And what we have seen in the 
marketplace is not that the sanctions architecture is 
crumbling, but it is holding firm. We have seen--and I am sure 
members of this committee are aware of trade delegations and 
others who have gone to Iran and sort of tested the waters.
    But what we have not seen are deals getting consummated, of 
people taking actions to defy the sanctions or to test our 
willingness to enforce. And, in fact, where we have seen 
actions that violate the sanctions we have responded.
    Mr. Connolly. Good.
    Final question, Ambassador Sherman. Why the extension? Why 
couldn't we consummate the final deal or the next phase in the 
deadline we set for ourselves and the Iranians? And would you 
address, in answering that, are they just playing for time? 
Because that is the other implied and sometimes explicit 
criticism, they are just playing for time here while they 
proceed with their development.
    Ambassador Sherman. I understand that concern, and we don't 
want talk for talk's sake. As I said, we could have gone for 
all 6 months. We thought that was not useful. They would wait 
until month 5.
    We think, quite frankly, with the U.N. General Assembly 
meeting in September and people convening in New York, it will 
create a fulcrum for some of the decisions that need to get 
taken here.
    As to why we didn't get there in 6 months, this is a highly 
technical agreement. I rely on all of these fine experts and 
many, many more because all of the devil is in the details. And 
each commitment that is made has to be detailed in quite 
extensive annexes, and it just takes an enormous amount of 
time.
    Mr. Royce. Thank you, Mr. Connolly.
    We now go to Steve Chabot of Ohio, chairman of the Asia 
Subcommittee.
    Mr. Chabot. Thank you.
    Madam Ambassador, first of all, let me just make this 
point. I think some would argue that it is logical to assume 
that, if we were unable to reach an agreement in the first 6 
months, that it is not very likely that we are going to be able 
to reach an agreement just giving us 4 more months.
    Would you comment on that.
    Ambassador Sherman. I can understand that because it is 
hard when you are not inside the room to know whether, in fact, 
there is any reality to the extension.
    Secretary Kerry came to Vienna, as did some of the other 
foreign ministers, had very extensive and quite direct 
conversations with Foreign Minister Zarif and all of the 
members of the Iranian team. So he could assess for himself 
whether there was any ``there'' there. He had gotten daily 
reports, as had the President, of what was occurring in the 
negotiation.
    And, in fact, we were making tangible progress on some of 
the key elements on how to deal with Iraq; how to deal with 
Fordow, that it not be an enrichment facility, which was agreed 
to; what kind of transparency measures; the additional 
protocol, as I mentioned, in 3.1; what should happen at Natanz; 
what should--some of the other transparency measures should be.
    We have other issues we still have to resolve, and we 
obviously have a gap that is significant on enrichment 
capacity. But the trajectory was in the right direction. The 
talks were quite detailed, quite specific, and, really, so he--
--
    Mr. Chabot. Okay. Let me cut you off there, if I can.
    Ambassador Sherman [continuing]. Go back and make some 
political decisions.
    Mr. Chabot. Thank you.
    Former Secretary of State and maybe future President, 
Hillary Clinton, was recently quoted as saying something along 
the lines that no deal is better than a bad deal. I think Prime 
Minister Netanyahu and others have made basically the same 
point.
    Would you agree with that comment?
    Ambassador Sherman. I would. The President of the United 
States has made that statement----
    Mr. Chabot. He said the same thing, too.
    Ambassador Sherman [continuing]. As has Secretary Kerry.
    Mr. Chabot. Okay. Let me ask you this: Would you describe 
the deal that we are ultimately likely to end up with here, if 
there is a deal reached--I think a lot of people are skeptical 
for good reason that any good deal would ever be reached--but 
that the deal will be closer to Iran continuing or having a 
nuclear capability with inspections or dismantle and remove? 
What do you think it is more likely that we will come up with?
    Ambassador Sherman. I don't know the answer to that 
question, Congressman, because this agreement is not about any 
one element. It is how all the elements come together in a 
package that cut off all of the pathways to a nuclear weapon.
    Mr. Chabot. Would we agree with something less than 
dismantle and remove?
    Ambassador Sherman. We will only agree to an agreement that 
cuts off all of the pathways to a nuclear weapon. We will only 
agree to an agreement that assures us that Iran will not obtain 
a nuclear weapon. There are many ways to get there.
    Mr. Chabot. Okay. Well, let me go back again one more time.
    As far as that specific terminology, dismantle and remove, 
are you suggesting that something less than that would be 
acceptable to this administration?
    Ambassador Sherman. Congressman, with all due respect, we 
would have to talk about each element of the program and what 
of that you would want to see dismantled, what of that you 
would want to see removed.
    Mr. Chabot. Okay. Thank you.
    The U.S. has committed to refrain from further reductions 
of Iran's crude oil exports. However, China has been 
consistently violating the limit.
    What efforts has the U.S. made to curb China's Iranian oil 
imports? And will there be any repercussions for China 
exceeding the acceptable limit over the last 6 months? And is 
the administration working to place sanctions on China if the 
limits are again exceeded over the next 4 months?
    Ambassador Sherman. Congressman, what we told the Congress 
and what we set out to do in the Joint Plan of Action was to 
set an aggregate range of 1 billion to 1.1 billion barrels per 
day of the five remaining countries plus a small amount to 
Taiwan that is still allowed to be imported from Iran. We 
believe in looking at the data that we will meet that 
aggregate.
    In terms of China, there have been some months where they 
have stayed pretty much at where we had hoped they would be and 
some months they have gone a little up and some months they 
have gone a little bit down.
    President Obama has had direct conversations with President 
Xi about keeping the sanctions in place and China, particularly 
since they are a member of the P5+1 negotiating group, keep to 
the commitments that we made in the Joint Plan of Action.
    Secretary Kerry raised this himself during the strategic 
and economic dialogue just a couple of weeks ago. I have raised 
it constantly with my interlocutors.
    China has made a commitment to keep to an average rein--
these tend to fluctuate up and down over the months--that will 
be in keeping with the commitments that were made in the Joint 
Plan of Action. Obviously, if that does not occur, we will have 
to decide how to address it.
    Mr. Chabot. Thank you.
    My time has expired.
    Mr. Royce. Mr. Deutch of Florida, ranking member of the 
Subcommittee on Middle East and North Africa.
    Mr. Deutch. Thank you, Mr. Chairman.
    And thanks to Under Secretary Sherman and Cohen for 
appearing today. We do appreciate your willingness to consult 
with Congress in the weeks leading up to the July 20th 
extension. We appreciate you being here as well.
    Mr. Smith referred to the case of Hekmati, Abedini, and 
Levinson. Today marks 2,699 days that Bob Levinson has not been 
with his family, and I want to raise it because, as the 
negotiations started and then an extension came, he remains 
still in captivity.
    I appreciate your efforts, Ambassador Sherman. I know you 
raise this issue every time, and I encourage you to continue 
doing so on behalf of my constituent, Bob Levinson, and his 
family.
    Now, at the outset of these negotiations, we heard a lot 
from our partners in the region about concerns about the P5+1 
sitting down with Iran. And when the JPOA was announced, we 
heard again that our allies were unhappy that the interim deal 
may have blindsided them.
    And, Secretary Sherman, I know that you spent a lot of time 
traveling throughout the region to try to allay those concerns.
    Now, this weekend we heard similar complaints after 
Secretary Kerry met with Turkey and Qatar on a potential cease 
fire in Gaza. And I understand the need to work with those who 
can exert leverage on Hamas, but to do it without including 
Israel, the PA, and other regional partners can give those 
partners a reason for concern. Now, taken together, these two 
instances raise some concerns.
    And I want to put aside this weekend's back-and-forth about 
cease-fire offers and the details. But I would like to focus on 
what my constituents reach out to me about, what they want, 
which is the same thing that our allies want, which is the same 
thing that Congress wants and it is the same thing the world 
expects, and that is clarity on these issues.
    In the case of Gaza, that means being unmistakably clear 
and without reservation why Israel has taken the action that it 
has taken. The footage of civilians that have been killed is 
horrific, and we mourn the loss of any innocent life.
    But we have to recognize the threat that Israeli faces, why 
they are responding, why, if you believe in human rights, you 
must condemn Hamas' use of civilians as human shields, and why 
any cease-fire agreement must include the issue of tunnels, 
destruction of the tunnels, and the demilitarization of Gaza. 
And anything that detracts from that clarity, in word or in 
deed, in statement or in video, can invite questions. Clarity 
avoids those questions.
    Likewise, in these negotiations with Iran, the clarity that 
we are looking for is to remind people that this is not just 
about getting to a deal with Iran. It is a reminder that seven 
times the United Nations said no enrichment for Iran. That went 
for years.
    The IAEA and others have pointed to military dimensions of 
Iran's program when Iran continues to be the largest sponsor of 
terrorism, including Iran's claims just this weekend that it is 
responsible for helping to build Hamas' rockets, that the 
United States remains committed to these core principles in 
negotiations--stopping Iran's nuclear program--because, 
ultimately, Iran with a nuclear weapon capability is the 
biggest threat to international security.
    It is not just about making a deal, as I said. And I 
commend you for all that you have said already to make that 
clear. It is about a historic opportunity and obligation that 
we have to stop Iran from acquiring nuclear weapons. Our 
national security interest is at stake. Everyone is just 
looking for clarity.
    The countries that raise concerns about the current crisis 
in Gaza are the same countries that are most concerned about 
Iran with a nuclear weapons capability: Israel, Egypt, Jordan, 
and the Gulf States.
    And let me be clear. I am not questioning the United 
States' commitment to stopping a nuclear-armed Iran. I am not 
questioning the United States' commitment to Israel. As 
Ambassador Rice reminded the world yesterday, there is one 
thing that you never have to worry about. That is America's 
support for the State of Israel.
    But I am simply raising perceptions that sometimes arise to 
ensure that perceptions never become reality. This hearing 
gives you--gives us the opportunity to provide the world with 
that clarity on the issue of Iran.
    Now, with all of that said, I would ask the question just 
about the military dimensions of the program. There are lots of 
issues that remain to be in--remain to be resolved, including 
what Iran did at Parchin.
    And the question is: Will Iran have to come clean on its 
past activities in order for the P5+1 to reach a final 
agreement with Iran? And, if not, how do we have a baseline to 
know how close Iran ever is to achieving that military 
capability?
    Ambassador Sherman. Thank you very much, Congressman.
    Let me say with absolute clarity what Ambassador Dermer, 
Israel's Ambassador to the United States, said. And that is 
that he knows that there is no better friend to Israel than the 
United States, that any of the attacks that have been made in 
any of the newspapers on Secretary Kerry are ``completely,'' to 
use his words, ``unwarranted.'' And Ambassador Dermer said he 
was speaking on behalf of the Prime Minister of Israel.
    I and all of my colleagues and the President of the United 
States and Ambassador Rice are immensely proud of Secretary 
Kerry. He went to the Middle East and he went to the region 
because he believes wholeheartedly in the need to do everything 
he possibly can as Secretary of State on behalf of the 
President and the interests of our country to protect the 
security of the Israel, to stop the rockets from raining down 
on Israel, to allow Israel to make sure that no tunnels can 
come into the State of Israel with terrorists and kidnappers 
and people who would do harm.
    And the Secretary obviously saw that there were civilian 
deaths that were happening all over the place, and there is not 
a person in this room who, as you said yourself, is not just 
heartbroken to watch children die, to watch people die, in any 
country anywhere in the world, in any territory anywhere in the 
world.
    But the Secretary of State's commitment to Israel's 
security, the President of the United States' commitment to 
Israel's security, my commitment to Israel's security, could 
not be stronger.
    While I was in Vienna, I consulted on a regular basis with 
both the National Security Advisor and the Minister for 
Intelligence in Israel and will continue to do so, as I also 
consult with Gulf partners, with partners in Europe, with 
Australians, with everyone throughout the world, but, most 
particularly, because we understand, from Israel's perspective, 
Iran's actions are existential for them. And we do understand 
and appreciate that.
    Where the Iran negotiation is concerned, we have only one 
objective, and that is that Iran not obtain a nuclear weapon. 
The President of the United States got a Nobel Peace Prize 
because he believed that this world should not have nuclear 
weapons.
    And he was going to make that a commitment of his 
administration, and he has done that at every turn, which is 
why we are engaged in this negotiation as well. As he said, we 
may not see that in certainly my lifetime--perhaps yours, 
Congressman, but not in mine--but it is an effort that we all 
must make to keep our country secure.
    So I thank you for offering this moment of clarity. I don't 
think there should be any doubt whatsoever about it.
    Mr. Royce. We go now to Mike McCaul of Texas, chairman of 
the Committee on Homeland Security.
    Mr. McCaul. Thank you, Mr. Chairman.
    And, Ambassador, thank you so much for being here today. I 
certainly don't envy your position, and it must be a very 
challenging job, to say the least, and we wish you the best.
    I have always had some fundamental concerns about the 
premise, in general, and that is that we could ever negotiate 
with the Supreme Leader, the Ayatollah, in good faith to give 
up his nuclear weapons program.
    Call me a skeptic, but I think we have to have a healthy 
amount of skepticism going into this process, as I am sure you 
do. They are a state-sponsor of terrorism.
    The right to enrich uranium violates six U.N. Security 
Council resolutions. The Ayatollah is now demanding, I think, 
190,000 centrifuges. That is 10 times the number that Tehran 
currently possesses. I don't understand that.
    We don't address the military dimensions with respect to 
ICBM capabilities, which we have been told they could have by 
the year 2015. And so I just have several concerns.
    I mean, I think--I asked Secretary Kerry this question. I 
mean, I think, fundamentally, what you want is for them to give 
up their enrichment program altogether and then we could 
provide that to them if it is truly a peaceful nuclear program.
    What are the chances of that?
    Ambassador Sherman. Well, thank you, Congressman.
    I agree that the best road for Iran, from our perspective, 
is that they have no enrichment program whatsoever. They will 
never get rid of their capability because they have already 
mastered the nuclear fuel cycle and, once someone has learned 
how to do something, you can't sort of take it out of their 
brain.
    So, quite frankly, even if we, you know, took military 
action, got rid of all of their facilities, dismantled 
everything, got rid of everything, they could rebuild it again 
because they know how to do so.
    So what we have to do is figure out a way to ensure that 
they have no pathway to a nuclear weapon, so no way to get 
highly enriched uranium to then turn it into a bomb and then 
put it on a delivery mechanism and deliver it, no way to have a 
plutonium pathway, no way to have a covert facility. And that 
is what we are attempting to do here.
    Part of that is, indeed, addressing the possible military 
dimensions of their program, to have access by the IAEA to 
those sites where we want to make sure there aren't undeclared 
facilities. All of that will have to be part of this agreement.
    And, finally, you are right to be skeptical. I am 
skeptical. The President is skeptical. He has said 50/50. The 
Secretary has said, others have said, as was mentioned earlier, 
no deal is better than a bad deal.
    Mr. McCaul. I certainly agree with that.
    Ambassador Sherman. That is what we are trying to do here.
    Mr. McCaul. And I think everyone agrees with that 
assumption.
    I don't see--there is not one single centrifuge dismantled, 
not 1 single kilogram of enriched uranium being stopped, and 
they--nothing to dismantle the heavy-water reactor, which a 
former administration official called it a plutonium bomb 
factory.
    This question has been asked twice, and I don't know--well, 
there are two questions I have in the limited time I have.
    One is: I know you want to be optimistic. But if November 
comes and goes and there is no agreement, what will this 
administration do?
    Ambassador Sherman. This administration will have had 
ongoing consultations with the United States Congress, with our 
partners around the world, and we will all make the best 
judgment we can about what we need to do next.
    Mr. McCaul. I would argue, Mr. Chairman, that sanctions 
would be certainly appropriate, the ones that we passed out of 
the House.
    And then the second one: What assurances--we have lifted, 
in terms of the sanctions, between $6 billion to $7 billion in 
frozen assets, and the extension of this negotiation frees up 
another $2.8 billion.
    What assurances do we have that this freed-up money is not 
going to fund the rockets that Hamas is firing into Israel?
    Mr. Cohen. Congressman, Iran, as others have noted, is the 
leading state sponsor of terrorism in the world today and has 
been for quite some time. It has supported Hezbollah. It has 
supported Hamas. It did so long before we entered into the 
negotiations that led to the Joint Plan of Action. It has 
continued to do so.
    The funds that are being made available to Iran in the 
course of the Joint Plan of Action, now in the extended Joint 
Plan of Action--their assets--there are no safe harbors 
regarding that money. The sanctions that we have, the efforts 
that we have, to disrupt Iran's provision of material support 
to Hezbollah, to Hamas, remain as intense as ever.
    And so we will not ease off one iota in trying to ensure 
that Iran does not----
    Mr. McCaul. So none of the money freed up by the lifting of 
sanctions are going to fund rockets to go into Israel?
    Mr. Cohen. Congressman, I cannot give you that guarantee. 
What I can guarantee you, however, is that we will do 
everything in our power to disrupt Iran's support for terrorism 
around the world and continue to do so.
    Mr. McCaul. I hope we all know what we are dealing with 
here.
    Thank you.
    Mr. Royce. Brian Higgins of New York.
    Mr. Higgins. Thank you, Mr. Chairman.
    Last year, when Hassan Rouhani was running for President, 
he was one of six candidates. He was viewed as the reform 
candidate. He ran against the policies that created for Iran 
international isolation. He ran against the policies that 
impose sanctions on Iran.
    And he won, and he won with over 50 percent of the vote, 
meaning that there would be no runoff. And the only way he 
could have done that is with the support of the Supreme Leader, 
Ayatollah Khamenei.
    Khamenei used to say that, you know, ``The sanctions don't 
hurt Iran. They make us stronger. They make us self-
sufficient.'' Well, last year Khamenei was saying that the 
sanctions are brutal. He characterized them as economic 
warfare.
    And when you look at sanctions, what you are trying to do 
is impose economic sanctions toward having a psychological 
impact. And last July the Iranian economy was a mess.
    You had 45 percent inflation, meaning that whatever you had 
prior to--or whatever you purchased prior to the inflation 
surge you were paying double within a couple of months.
    The Iranian currency had lost half of its value. Iranian 
officials were pointing fingers not at the United States, but 
at each other, as to who was to blame for all of this. You 
couldn't get chickens during Ramadan because there was no money 
to buy chicken feed.
    And then the International Monetary Fund said in February 
2014 in a report that the temporary agreement to ease sanctions 
have helped to stabilize the American economy. It seems as 
though we took away our own leverage. We took away our own 
leverage when we had the Iranians on the run.
    When you look at the context of this negotiation with the 
P5+1, we want to reduce Iran's centrifuges, which are the 
machines that mix at supersonic speeds to enrich uranium, to 
weapons grade while Iran currently has 19,000, up from 163 10 
years ago, to 50,000.
    You know, I don't know that we got a good deal here. By 
weakening the sanctions, albeit temporarily, albeit a small 
percentage overall, it seems like the Iranians are moving and 
are committed to moving an entirely different direction. You 
have next-generation centrifuges. You have knowledge that you 
can't destroy.
    I mean, they have tremendous leverage here, and the 
leverage that we have, seemingly, given the deplorable economic 
conditions in Iran last summer, we gave into in a process where 
it seems as though the two sides aren't maybe in agreement, but 
not even narrowing the differences. They are going two entirely 
different directions.
    I would ask you to comment.
    Mr. Cohen. Congressman, the Iranian economy is still a 
mess. The rial is still highly devalued. It has lost value 
during the course of the Joint Plan of Action.
    Iran's inflation is still among the highest, if not the 
highest, in the world. It still does not have access to almost 
all of its foreign reserves. Its economy, as I noted in my oral 
testimony, is 25 percent smaller today than it would have been 
had we not imposed the sanctions that you spoke of.
    The Joint Plan of Action did not fix the Iranian economy, 
won't fix the Iranian economy, and there is no sense in which--
looking out over the next 4 months, that Iran will be, you 
know, at the end of this period, I think thinking that their 
economy has rebounded.
    The pressure that comes from the sanctions, sanctions 
developed with Congress, with the administration, with our 
partners around the world, remains quite robust, and the impact 
on Iran's economy continues to bite. That provides leverage to 
our negotiating team to try and pursue the comprehensive 
agreement.
    And, with that, I will turn it over to Under Secretary 
Sherman to follow up.
    Ambassador Sherman. Congressman, the Joint Plan of Action 
for the first time in a decade froze Iran's nuclear program and 
rolled it back in specific ways.
    Iran halted all of its near 20 percent enriched uranium and 
halted, disabled, the configuration of centrifuge cascades that 
they have been using to produce it. They have diluted and 
oxidized that stockpile of 20 percent.
    They have not enriched uranium in roughly half of the 
installed centrifuges at Natanz and three-quarters of the 
installed centrifuges at Fordow, including all next-generation 
centrifuges.
    They have limited centrifuge production to those needed to 
replace damaged machines. So they cannot stockpile centrifuges 
during these months, including these 4 months of an extension.
    They have not constructed any additional facilities. They 
have not gone beyond its current enrichment R&D practices, as 
described in the IAEA report of November 14, 2013.
    They have not proceeded in any way, shape, or form on the 
Arak reactor. It is frozen in place. They have halted the 
production and additional testing of fuel for the Arak reactor.
    They have not installed any additional components at Arak. 
They have not transferred fuel or heavy water at the Arak 
reactor site. They have not constructed a facility capable of 
reprocessing and, without reprocessing, Iran cannot separate 
plutonium from spent fuel.
    And I could go on and on. Those are the highlights of what 
came out of the Joint Plan of Action. For the first time in a 
decade we are in a better place than we were.
    We have much further to go, and I don't know if we will get 
there, but it was a worthwhile thing to freeze their program.
    Mr. Royce. The gentleman is out of time.
    And so we have to go to Mr. Tom Cotton of Arkansas.
    Mr. Cotton. And I would simply say that perhaps we would be 
in an even better place if we had not relaxed the sanctions in 
November, but increased them, as this committee attempted to do 
last summer, followed by House action, or perhaps if we had 
taken a different course in 2009 during the green movement, but 
that is neither here nor there.
    Some of you may know the parable of the frog and the 
scorpion. The frog is at the river. The scorpion approaches him 
and asks for a ride across the river.
    And the frog says to the scorpion, ``But you will sting me 
and kill me.''
    The scorpion says, ``I would not do that because then we 
would both drown.''
    And the frog says, ``That is a good point.''
    So the frog gives the scorpion a ride across the river, and 
halfway across the scorpion stings the frog.
    And the frog looks to the scorpion and says, ``Why did you 
sting me? Now we will both drown.''
    And the scorpion said, ``Because it's my nature.''
    The problem here is not the nature of the weapon, but it is 
the nature of the Iranian regime. They continue to be the 
world's number one sponsor of state terrorism, whether it is 
Hezbollah or Hamas, that not just attacks our allies, like 
Israel, but tries to launch attacks on the United States, 
assassinating Ambassadors, if they could have executed their 
plan of friendly countries in restaurants just a few miles from 
here, or killing soldiers with whom I served in Iraq in 2006 by 
importing fighters and bombs and other material.
    I am deeply skeptical, as are my colleagues here on this 
committee, that any of this will ever change, no matter how 
skillful our negotiations, unless the regime in Iran changes. 
It has been like this for over 30 years. And, unfortunately, I 
think it will continue to be like this until the people of Iran 
have a legitimate, democratic representative government.
    Now, all that said, there are issues related to Iran 
besides this nuclear negotiation, such as their meddling in 
Iraq or their support for Bashar al-Assad in Syria, their 
ongoing support for Hezbollah and Hamas.
    One of our negotiating partners, Russia, has ongoing issues 
as well, such as their invasion of Ukraine and supplying thugs 
that shot down the civilian airliner and their support for the 
Bashar al-Assad regime in Syria.
    So I would like your brief assessment on whether they bring 
those issues to the negotiating table on this and, if so, how.
    Ambassador Sherman. Thank you, Congressman.
    So far, everyone has been focused on what goes on in the 
negotiating room around this comprehensive Plan of Action or 
the possibility of a comprehensive Joint Plan of Action.
    And although we were in Vienna at the time of the horrific 
events in Ukraine, my Russian colleague, Sergei Ryabkov, who is 
a long-time professional diplomat in Russia, stayed very 
focused on what could be done to try to move this comprehensive 
negotiation forward.
    I cannot tell you that all of these issues won't come into 
the room at some point, and it certainly does create strains 
around the margin. We are all human beings. And that was just 
beyond deplorable and shocking and, you know, we were all just 
completely stunned at what was occurring.
    Similarly, I think that what is happening in Iraq with 
ISIL, or ISIS, if one looks at it in Syria, is something of 
concern and, in that instance, ironically, Iran is probably as 
interested as we are in getting rid of ISIL.
    But it is not something on which we make common calls 
because there are so many other areas in which we have vast and 
unbridgeable disagreements in terms of their state sponsorship 
of terrorism, their human rights record, and what they do to 
foment instability around the world and, as you say, their 
relationship with Iraq is a long and complicated one.
    And I thank you for your service to our country not only 
here, but in Iraq, in what is now a very difficult circumstance 
for that country.
    So right now everyone stays focused. It is a constructive, 
serious negotiation. I hope it remains that way, but I can't 
tell you for sure that it will. The world is a pretty 
complicated place at the moment.
    Mr. Cotton. Well, thank you.
    Again, I remain deeply skeptical of the Joint Plan of 
Action, but I do wish you the best of success that we can reach 
an agreement that completely eliminates Iran's nuclear weapons 
program and ancillary programs not just for our sake, but for 
the sake of peace and safety around the world.
    Mr. Royce. We go to Mr. Juan Vargas of California.
    Mr. Vargas. Thank you very much, Mr. Chairman. Again, thank 
you very much for bringing this item before us once again and, 
also, the ranking member.
    As you know, I have been very skeptical of this process 
from the beginning. I think that we are negotiating with a 
regime that has no intention of giving up its nuclear weapons 
program. It only wants to go dormant for a few years, then 
restart. And, so far, everything that they have done confirms 
that, in my mind. They haven't destroyed their centrifuges. 
They haven't given up enrichment, even though they can buy the 
fuel, as you know, on the open market.
    And I don't think they want to in any way bar themselves 
from having a nuclear program. I think they are trying to 
figure out a way to get around the world. The world has spoken 
through the U.N. that they shouldn't have enrichment, they 
shouldn't have those capabilities. And, in this process, I 
think they are trying to earn that.
    I also have to say that I remember 1979, when the regime 
came into power. That is 35 years ago. I think that they are 
trying to wait us out. I think that they want a--we call it a 
final agreement, a long-term agreement. The reality is I think 
they only want the shortest time possible, not one that bars 
them forever.
    So I have been very, very skeptical. I thought that the 
better way was to continue to ratchet down the sanctions. And I 
have to say again kudos to the administration. This is the 
first administration that took the sanctions seriously, for 
God's sake. Before we hadn't and, thank God, this 
administration did. But then we let them off the hook when I 
think we should have ratcheted it down. And so here we are now.
    I also remember very clearly saying I thought that they 
were going to skip the 6 months, that it was going to slide, 
and it has slid. And, again, I hear today that it won't slide--
more likely, it won't slide. It could slide.
    But, so far, everything that they have done has confirmed, 
in my mind, they don't really want to stop their nuclear 
program. They just want to waste some time.
    Convince me that that is not the case.
    Ambassador Sherman. Congressman, the only thing that will 
convince you is what will convince me and what will convince 
the administration and our country, and that is if Iran takes 
the steps that it must to ensure that all of its pathways to a 
nuclear weapon are cut off and that their program is 
exclusively peaceful.
    And that means a comprehensive agreement that, as a 
package, accomplishes those metrics. And I don't know whether 
we will get there or not. But the only way I will be convinced 
is if Iran takes the difficult decisions that it must to do 
exactly that.
    Mr. Vargas. But two of the most important pathways is 
enrichment. I mean, enrichment is a way, obviously, to get a 
weapon. We are allowing them, it sounds like--and, again, I 
don't know this, but it seems to me that we haven't said they 
will have absolutely no enrichment. We haven't said that. That 
is a pathway.
    Ambassador Sherman. It is a pathway. But what we are 
talking about, if we get to this comprehensive agreement, would 
be an incredibly small and limited enrichment program under 
intrusive monitoring such that they would not have a pathway to 
highly enriched uranium for a nuclear weapon. If we cannot do 
that, then we will not have a comprehensive agreement.
    Mr. Vargas. The second pathway that I believe is very 
dangerous is the issue of time. If this final agreement is 5, 
7, 10, even 20, years--it was 35 years ago when they came into 
power. I mean, I still think they will have the same desire.
    I mean, I don't think that their nature is going to change. 
I kind of believe in that same issue of this frog and the 
scorpion. I think that they do want to sting. I don't think 
their nature is going to change.
    And what can you tell us--if you can't tell us in open 
session, I understand. But what can you tell us about the 
duration?
    Ambassador Sherman. Duration is a critical element and, in 
our view, it has to be quite a long time for the very reason 
you said. It has been decades that the international community 
has had no confidence in what Iran is doing.
    And so it is going to take a considerable period of time 
for us to gain that assurance and that confidence. And I am 
happy to discuss specific numbers with you in a closed session. 
Certainly double digits.
    Mr. Vargas. Okay. I look forward to that, because that is a 
great concern of mine.
    And, lastly, I guess I would say this, that I really 
appreciate the statement that you gave about Israel. And many 
of us who are devote Christians have a very strong feeling for 
the State of Israel and its people and an unequivocal statement 
of support for Israel. Especially during this time it was very 
important. I appreciate it.
    Thank you.
    Mr. Royce. We are going to go to Mr. George Holding of 
North Carolina.
    Thank you, Mr. Vargas.
    Mr. Holding. Thank you, Mr. Chairman.
    Mr. Cohen, you mentioned in your testimony that additional 
sanctions relief under the extension of the interim agreement 
includes keeping Iran's crude oil exports to current purchasers 
at current average levels.
    So if you could just answer succinctly, have Iran's crude 
oil buyers kept their purchases or acquisitions of Iranian 
crude oil to December 2013 levels at present?
    Mr. Cohen. Congressman, the best information that we have, 
which is current to within the beginning of July--so we don't 
have the last 20 days of the Joint Plan of Action period--
indicates that the aggregate amount of oil going to the five 
purchasers of Iranian oil is within the limits that we set out 
in the Joint Plan of Action of the 1 million to 1.1 million 
barrels per day.
    Mr. Holding. So is that at the levels of December 2013?
    Mr. Cohen. Yes, sir.
    Mr. Holding. And do you agree with that, Ambassador 
Sherman?
    Ambassador Sherman. Yes. Within that range, yes.
    Mr. Holding. All right. The administration has committed to 
comprehensively lifting nuclear-related sanctions as part of 
the final P5+1 agreement with Tehran.
    So my question, Ambassador Sherman, to you: What sanctions 
in the current law specifically, which provisions of the 
current law, does the administration consider nuclear related? 
And why?
    Ambassador Sherman. Congressman, as I think you know--
because you have asked this question--our laws are very 
complicated, and several of our laws cover a number of things 
all in the same law.
    We believe that there is a way to address the portions of 
the laws that relate to nuclear-related sanctions, and I am 
very glad to have our staff come up to sit with you or your 
staff and brief you in detail law by law what we are thinking 
about.
    I would prefer not to do that in an open session because 
how we are thinking about suspending and then, ultimately, if 
Iran complies with all of the things that they would need to 
comply with, coming to you to lift those sanctions, is part of 
our negotiations. And so I would rather discuss that in a 
closed setting than in an open setting.
    Mr. Holding. I appreciate that.
    You know, many of these sanctions that are imposed are for 
things including, you know, not only, you know, their nuclear 
program, but for all the other bad acts.
    I mean sanctions aimed at preventing Iranian banks involved 
in proliferation, terrorism, money laundering, any other 
activities, you know, the state-sponsored terrorism, you know, 
ballistic missile programs. It is a myriad of things, and the 
sanctions are all intertwined.
    And so, even if you come to an agreement, you know, on the 
nuclear program, you know, it doesn't ameliorate--or, you know, 
it doesn't alleviate nor does it come close to ameliorating the 
fact that Iran is quite a bad actor, and these sanctions have 
other purposes as well.
    Ambassador Sherman. Absolutely. And we believe there is a 
way to proceed forward so that our sanctions enforcement on 
terrorism, on human rights, on other issues not covered by a 
comprehensive agreement, should we get to one, remain in place. 
And we are happy to come up and delineate that in the best way 
we possibly can.
    Mr. Holding. All right.
    Mr. Chairman, I yield back.
    Mr. Royce. Thank you. Thank you very much, Mr. Holding.
    We are now going to go to Brad Schneider of Illinois.
    Mr. Schneider. Thank you, Mr. Chairman. And thank you again 
for calling this hearing, for you and the ranking member for 
staying vigilant in all you have done to make sure that we do 
all we can to make sure Iran cannot acquire--not just acquire a 
nuclear weapon, that they cannot acquire the capacity or 
capability.
    I want to thank the witnesses for coming here today and 
sharing their perspectives.
    As you have heard today, there is a--on both sides of the 
aisle a lot of skepticism. I think there is great concern about 
the negotiations from the start, great concerns about the 
sanctions relief provided to Iran, and the path that we are 
headed down.
    It is imperative--and I will repeat myself because I think 
it bears repeating--that Iran cannot be allowed to have the 
capability to get a nuclear weapon.
    Ambassador Sherman, you have used the language in your 
written testimony and in some of the answers that we want to 
cut the paths for Iran's nuclear programs. My concern is it is 
not just that we cut the path, but that we close that path and 
eliminate it permanently.
    Can you tell me the distinction here. Because they have cut 
the pathways, for example, to cascades on the centrifuges, but 
there are still 19,000 installed centrifuges. That path may be 
cut, but it is not closed.
    Ambassador Sherman. Yes. I think we are talking pretty much 
about the same thing, Congressman. I do want to make a 
distinction, though--and it is hard for all of us to have all 
of the detail on all of this, particularly in this open 
session.
    We can never get rid of Iran's capability. They have 
already mastered the nuclear fuel cycle. They can't unlearn it. 
As I said previously, we could destroy every facility they have 
and they could reconstitute them all.
    Mr. Schneider. But with all due respect, that is know-how, 
and know-how is one piece. Capability and having the assets in 
place is a different thing.
    Ambassador Sherman. Correct. So their centrifuge capacity 
can be attacked in a myriad of ways. Their centrifuges, their 
facilities, their stockpiles, how they are installed, how they 
are taken apart or not taken apart--all of those are elements 
of a package that would give us the confidence that, in fact, 
they did not have a pathway to highly enriched uranium where 
Natanz and Fordow are concerned, that they would not have a 
pathway to plutonium where Arak is concerned. There are a 
number of ways to get to that metric. That is the metric that 
matters. And I think we are in agreement.
    Mr. Schneider. And I know that some of these details like 
the specifics on Arak and specifics at Fordow would have to be 
in a closed session. I would like to have that closed session 
as soon as possible.
    Let me take it another direction. We are looking at 
November 24th, not that far away at this point----
    Ambassador Sherman. No.
    Mr. Schneide [continuing]. 3 months, 4 months.
    What are you telling Iran in the negotiations will happen 
if we don't have a satisfactory negotiated settlement by 
November 24th?
    Ambassador Sherman. Iran is quite well aware that all of 
our options and the world's options are on the table. Iran is 
quite well aware that, if we cannot get to a comprehensive 
agreement, that they will likely face even more sanctions than 
they are currently facing and that----
    Mr. Schneider. But are we making clear the magnitude of 
those sanctions? We can't go back to the sanctions regime of 
November 24, 2013. It has to be orders of magnitude greater 
than what we had, even greater than what we passed last summer.
    Ambassador Sherman. They are very well aware.
    Mr. Schneider. What do you think they believe?
    Ambassador Sherman. I think they believe that, if we do 
that, they have a lot of things they can do in return.
    Mr. Schneider. Do you think that they believe we actually 
will raise the sanctions, that we have the capacity?
    Ambassador Sherman. Oh, I think----
    Mr. Schneider. What do they think our partners believe? And 
what do our partners believe will happen?
    Ambassador Sherman. There is no doubt in my mind that Iran 
understands the power and prerogatives of the United States 
Congress, the actions that you have taken, and the actions that 
you would take.
    And if, in fact, we could not reach a comprehensive 
agreement and we are sure that we cannot reach a comprehensive 
agreement, we have stated publicly as an administration that we 
would expect there to be more sanctions.
    Mr. Schneider. Would the administration support Congress 
taking action and stating very clearly in a resolution or in a 
law that, if there is not an agreement by November 24th, these 
are the sanctions they will face, so there is no doubt. That 
clarity that my colleague talked about earlier is so important.
    Ambassador Sherman. We actually do not support such action, 
Congressman, and the reason is very simple. We believe that, if 
this comprehensive agreement does not work, it should be 
because Iran cannot make the commitments that it needs to.
    We don't want there to be any other basis, any other 
excuse. We don't want them to say, ``We couldn't get there 
because Congress, you know, pushed our hardliners to the 
wall,'' whatever kind of narrative they put on the table.
    We want it to be crystal clear to the world that we tried 
diplomacy as far as we could take it and Iran could not do what 
it needed to do. Because, if we do that, then the entire world 
will stay together in the enforcement not only of the existing 
sanctions, but sanctions to come.
    Mr. Schneider. Well, I am out of time. But let me just 
close by saying I disagree, respectfully, but I think we need 
to be clear. And I think, if we do tell Iran what their options 
are so there is no doubt, we have a better chance of getting to 
a successful resolution on negotiations.
    And let me also say that that successful resolution can't 
be for a few years. It shouldn't even be measured in years. It 
should be measured in generations. Because, as you said, it is 
an existential threat not just for Israeli, but for many 
countries around the region, and a threat to the world. Thank 
you.
    And I yield back.
    Mr. Holding [presiding]. Thank you.
    Go next to the gentleman from Texas, Mr. Weber. Recognized 
for 5 minutes.
    Mr. Weber. Ambassador Sherman, do you consider all of those 
involved in these negotiations reasonable people?
    Ambassador Sherman. That is a hard question to answer.
    I believe that everybody who sits around this negotiating 
table is serious. I think they want to try to achieve a 
comprehensive agreement. But it is hard to use the word 
``reasonable'' for all of the actions that are occurring in 
this world.
    Mr. Weber. Do you consider me reasonable?
    Ambassador Sherman. I don't know you, but I am sure you 
are.
    Mr. Weber. How about do you consider yourself reasonable?
    Ambassador Sherman. I hope so. My husband and my daughter 
may not from time to time.
    Mr. Weber. Is it reasonable for terrorists to strap on 
themselves dynamite and go blow up innocent women and children?
    Ambassador Sherman. Of course not.
    Mr. Weber. Is it reasonable for terrorists to have 12-year-
old kids strapped-on dynamite and go blown up----
    Ambassador Sherman. Of course not.
    Mr. Weber. Is that a blatant disregard for human life?
    Ambassador Sherman. Of course.
    Mr. Weber. Is it reasonable for Iran--the leadership of 
Iran to espouse the need for the complete destruction of 
Israel?
    Ambassador Sherman. Of course not. And, as I said in my 
opening statement, where it comes to the destruction of Israel, 
which they have espoused, the human rights abuses, the summary 
executions that take place, the detention of journalists and 
American citizens, their disregard for human rights, the 
fomenting of instability around the world, none of this is 
reasonable, of course, Congressman.
    Mr. Weber. See if you agree with this following statement: 
You cannot reason someone out of a position that they didn't 
use reason to get into.
    Ambassador Sherman. You know----
    Mr. Weber. That is ``yes'' or ``no.''
    Ambassador Sherman. It is actually not, with all due 
respect, Congressman. I don't think their positions are 
reasonable, and I don't think they have come----
    Mr. Weber. You have----
    Ambassador Sherman. Let me finish.
    I don't think their positions are reasonable in any regard 
on all of those scores----
    Mr. Weber. I am talking about killing women and children 
and the complete destruction of Israel.
    You don't think that is an unreasonable position?
    Ambassador Sherman. Of course not.
    Mr. Weber. And so we can't--you think we can reason them 
out of that position, do you?
    Ambassador Sherman. Of course not.
    Mr. Weber. Okay. Let me ask you: Is it reasonable, as 
reasonable people--let's just assume for argument's sake that 
we on our side are reasonable. That may be a stretch for some 
of us, but let's just assume that it is. I am talking about me.
    Is it reasonable to assume that Iran, with a blatant 
disregard for life, will continue to mislead us and the 
international community at every step of the way, at every 
chance they get, in order to concentrate on destroying Israel 
and, I might add, the United States? Is that reasonable to 
assume?
    Ambassador Sherman. Congressman, our negotiation with Iran 
is not based on trust.
    Mr. Weber. It is not based on reason.
    Ambassador Sherman. It is not based on trust. It is not 
based on the reason in way that you are describing it. It is 
based on understanding that, if they want the economy they want 
in the future, if they want to end their isolation in the 
world, if they want to rejoin the community of nations, then 
they have to take specific steps that will be monitored and 
verified to give the international community----
    Mr. Weber. Then, under that scenario, is it reasonable to 
assume that, if they get the economy that they want, that they 
will cease to seek the destruction of Israel? Is that 
reasonable?
    Ambassador Sherman. What I can say to you, Congressman, is 
that the United States of America under this President, I 
believe under any President of the United States, will do 
whatever we need to do to ensure the security of Israel in the 
Middle East. It is a solemn responsibility that I think we all 
feel.
    Mr. Weber. I am going to ask you one more time.
    Do you believe that you can reason people out of a position 
that they did not use reason to get into?
    Ambassador Sherman. Congressman, I think what you are 
trying to lead me to is how can we sit down with Iran and have 
this negotiation and expect that we will get to any good end.
    Mr. Weber. Mr. Chairman, I yield back.
    Mr. Holding. The gentleman yields back.
    We now go to the gentleman from New York.
    Mr. Meeks is recognized for 5 minutes.
    Mr. Meeks. Thank you, Mr. Chairman.
    Let me thank Chairman Royce and Ranking Member Engel for 
facilitating this important hearing.
    Let me just state at the outset that I supported the 
interim agreement that allowed the Joint Plan of Action to move 
forward, but I also support the extension that would allow the 
negotiations to continue.
    Many critics have said that these negotiations are risky, 
we can't trust Iran, and we didn't get enough in the interim 
agreement. Well, you know what. Many of those things in some 
way are true. Many of those things in some ways are true.
    And I believe strongly that it is even--but more risky--it 
would be more risky for us if we did not negotiate. We would be 
worse off without concessions gained in the interim agreement. 
Much work remains. No question about it. And there are 
certainly many political pitfalls.
    But taking on one of our Nation's largest foreign policy 
and security issues could never be easy. No one said this would 
be easy. No one said there would be no risks. There has to be. 
In any foreign policy, there are risks. There are dangers. But 
to not sit down, the risk is even greater to all of us.
    Six months have gone by, and I consider the framework where 
we are--I consider it a success--a multilateral success 
achieved in close collaboration with our allies, which I 
believe is extremely important.
    Because if you look at sanctions, we have had sanctions on 
Iran for a long time on a unilateral basis. That did not 
cripple their economy. That did not hurt their economy.
    Their economy began to hurt and we crippled them when we 
were able do it collectively with our allies. And that is why 
the P5+1 is together, because that is the only way that we 
could inflict the kind of sanctions that would hurt their 
economy.
    If that goes away and the United States is doing it only by 
themselves, that is not going to bring down the Iranian 
economy. That is not going to be successful. That is not going 
to cause the kind of hurt that people are talking about.
    It is only going to happen if we do it collectively. And I 
think where the administration should take strong credit is 
that they were able to get this coalition together to implement 
these sanctions and keep them together.
    And the biggest threat to Iran is knowing that we are 
together because, if they could divide us, they would. They 
would. That would be to their benefit. They could then resume 
their economy and say, ``Forget the United States by 
themselves.''
    What makes the sanctions work is that they are multilateral 
sanctions with our allies. Tremendously important. Nobody just 
says you automatically trust when you get into these 
negotiations.
    So I think that we have to utilize and take advantage of 
everything. And I would say, in short, that better access that 
we now have to Iran's nuclear facilities is a huge plus for us. 
I wouldn't want them running around without us having any 
access to their facilities.
    Its dilution of medium-enriched uranium is a huge plus for 
us. We want them out there in the blind or we don't want to be 
working with our allies, you know, let them run around. That 
puts us all in danger.
    Now, I don't trust--you know, they say--I think--but I 
think that we have got to do the hard work. It is easy to go 
the other way. You know, we say--talk about kids all the time 
that, you know, it is easier to fight than try to at least 
negotiate something.
    If you have to fight, then you will. I know that is how I 
was raised. If I had to fight, I will. But, first, let's try 
and--and we have got something, a leverage. Talk about losing 
leverage? We would lose the leverage that we currently have in 
Iran if we lose our partners. That is part of what our leverage 
is.
    So I didn't mean to go off on that tangent, but I just felt 
that that was just important to say.
    In regards to--and I am out of time. So I don't even have 
time for a question because you wouldn't have any time to 
answer it. But I would love to have a closed-door session so 
that we can have more talk.
    But I just want to say I thank the administration for 
keeping us together, keeping the world together. It is not--so 
it can be all of us together--not just the United States 
against Iran, but all of us together--to try to make sure that 
we force them to conform. We will see what the results will be. 
We don't know. But we have got to try.
    I yield back.
    Mr. Holding. Gentleman's time has expired.
    The chair recognizes the gentleman from Illinois, Mr. 
Kinzinger, for 5 minutes.
    Mr. Kinzinger. Thank you, Mr. Chairman.
    Thank you both for being here, and thank you for your 
service to your country. And sometimes I am sure it is not 
always fun to be sitting where you are sitting.
    I am also sure that some of the things I am going to ask 
you and say probably have already been done. And so I apologize 
for beating a dead horse if, in fact, that is what I do.
    Just to respond to my colleague on the other side of the 
aisle, the point is made that if--you know, we can't do this by 
ourselves, we have to bring our allies with us. And I agree 
with that, that it exists in what we see in Ukraine and other 
places.
    But I would just remind folks that we have the lead on 
this. And when the United States entered some pretty strict and 
pretty tough sanctions against Iran, the rest of the world 
followed. When we decided that we were going to do an interim 
agreement, the rest of the world follows. We are uniquely 
capable in terms of who we are to be able to lead the world to 
this.
    So, you know, this idea that, if we don't extend another 6 
months, the coalition is going to fall apart, maybe that is 
true. I don't think it is. But if it is true, it is probably 
because we entered this interim agreement in the first place.
    And I will mention that I remember, as I am sure others 
have said, that 6 months ago, you know, we were told, ``Just 
trust us on this. We are going to have this interim agreement, 
and we are going to get where we need to be. You are going to 
be really proud of the result. And if you aren't, we are going 
to be the first ones back here asking for tougher sanctions and 
to re-implement the sanctions.''
    I promise you I could have told you 6 months ago we would 
be right here where we are, looking for another extension. It 
is like we are repeating itself.
    I worry about the message to our allies in Korea, to the 
United Arab Emirates, who are asking for the right to enrich 
and we say, ``Well, look, we are committed to a nuclear-free 
Korean Peninsula. We are committed to a nuclear-free Middle 
East,'' but, yet, we will give this. I mean, the final 
agreement is going to have some enrichment. We know that. We 
are going to give this to our worst enemy.
    So the message we send is, ``If you are the worst enemy of 
the United States, you can pretty much do what you want with 
agreement. If you are our best friend, we are going to keep our 
thumb on you and control what we want.''
    Let me just ask, Ambassador, what are we going to be able 
to solve in 6 months that we haven't been able to in the first 
6? So there are these gaps that still exist between the two 
countries in terms of what we want in the final agreement.
    If we couldn't get them there in 6 months, what's the next 
6 months going to do, especially after getting $2.8 billion 
released into their economy to buy their continued cooperation, 
which I think is bad negotiating, but whatever.
    What is another 6 months going to do that we couldn't do in 
the first 6? I don't think it is a lack of time. It is 
something else.
    Ambassador Sherman. Thank you, Congressman.
    Let me make a couple points.
    First of all, I agree that the United States of America is 
uniquely positioned on most things in the world and, because we 
have the finest military in the world, we bear and, in 
particular, both--burden and opportunity in the world to lead.
    That is not always an easy thing to do, and it is best done 
when we can do it collectively so that the world shares some of 
the burden, both in cost and treasure and in our people.
    In the case of sanctions, Under Secretary Cohen may want to 
comment as well.
    But, quite frankly, the European Union sanctions were also 
quite critical to the collective effort here, as were the U.N. 
Security Council sanctions. It was all of them coming together 
that really created the collective that was necessary to really 
bring Iran to the table.
    Mr. Kinzinger. If I might interrupt, I agree. But I believe 
the interim agreement broke that bond we had and it kind of was 
the hole in the dam now to where, if we want to go back to 
where we were, it is going to be very difficult. Maybe I am 
wrong, but it seems to me that way.
    Ambassador Sherman. Well, I'll let--why don't you----
    Mr. Kinzinger. And if you could be really quick because I 
have another----
    Ambassador Sherman. Then I will come back to the other 
points you made.
    Mr. Kinzinger. Okay. Very quickly, sir.
    Mr. Cohen. Congressman, it is just the contrary. The fact 
that we have proceeded with our close partners in both imposing 
sanctions on Iran and in agreeing in the Joint Plan of Action 
to the very limited, very targeted, sanctions relief that we 
agreed to I think makes it all the more likely that, if Iran is 
not prepared to take the steps it needs to take to get a 
comprehensive agreement, we will have our partners with us not 
just to reinstate, but to ramp up.
    Mr. Kinzinger. But why couldn't we have tested that now? I 
mean, it has been 6 months. Now is the time when we say the 
sanctions are back on. And now all of a sudden Iran gets 
religion and says, ``Okay. You know what. Whoa, whoa, who. The 
places we are apart we want to be with you because you did 
that.''
    One last thing. And I apologize. Deterrence is will plus 
capability. I think we have the capability to deter. Right now 
I think what is in question is the will, and that is important 
for the negotiations.
    Last question: How important is it to the administration 
that a final nuclear agreement with Iran restricts Iran's 
ballistic missile program?
    Ambassador Sherman. So couple of points to what you have 
said.
    We are going to negotiate for 4 additional months, not 6.
    Mr. Kinzinger. Okay.
    Ambassador Sherman. We decided not to do all 6. We don't 
want to talk just for talk's sake.
    November 24th was 1 year from when the Joint Plan of Action 
was negotiated. So we decided to make that the time and to 
actually use the fact that many players will be in New York for 
the U.N. General Assembly as to fulcrum to try to move this 
along at a rapid rate.
    We would not have agreed to an extension if we didn't 
believe we had made tangible progress and we did not see a path 
to a----
    Mr. Kinzinger. And I don't mean to interrupt, but I am over 
my time.
    Just how important is the restriction of ballistic 
missiles?
    Ambassador Sherman. We have said that the U.N. Security 
Council resolutions must be addressed. And in that it says that 
somehow we must address long-range ballistic missiles capable 
of carrying nuclear warheads.
    So it is not ballistic missiles, per se. It is about when a 
missile is combined with a nuclear warhead. That is the issue 
here.
    Mr. Kinzinger. Thank you.
    Yield back.
    Mr. Holding. Gentleman's time has expired.
    We go now to the gentleman from Pennsylvania, Mr. Perry. 
Recognized for 5 minutes.
    Mr. Perry. Thank you, Mr. Chairman.
    Ambassador Sherman, are you familiar with the CRS report 
that cites substantial information regarding the collaborative 
programs with Iran and Syria and North Korea aimed at producing 
nuclear weapons?
    Ambassador Sherman. I am not familiar with that specific 
report. But I have certainly seen reports about potential 
collaboration.
    Mr. Perry. So, then, you would agree that there has been 
collaboration with North Korea and----
    Ambassador Sherman. I would agree I have seen those 
reports. And I think any future discussion of that probably 
should take place in a closed session.
    Mr. Perry. Fine.
    Based on that, how--if that were true, and getting away 
from the closed-session stuff, how does this current 
arrangement ensure compliance such that Iran doesn't just 
comply with an agreement on their own soil while outsourcing to 
North Korea various components and then assembling back in Iran 
or what have you? How does this address that?
    Ambassador Sherman. We agree that that issue of what they 
are doing, what they are trying do, whether they do it by 
themselves or with others, is all part of ensuring that they do 
not have a pathway to a nuclear weapon.
    So I would agree with you that, in some way or other, in a 
comprehensive agreement that issue has to be under discussion 
as well.
    Mr. Perry. It has to be or it is--it is part of it now?
    Ambassador Sherman. It is and it has to be.
    Mr. Perry. Okay. Would you--how would you characterize the 
outcome of your negotiations with North Korea? Would you 
characterize them as a success?
    Ambassador Sherman. We could spend an entire day discussing 
those negotiations.
    Mr. Perry. Sure.
    Ambassador Sherman. I think we will never know.
    What I will say is, during the Clinton administration, 
Congressman, not 1 additional ounce of plutonium was produced 
and the only plutonium that existed for nuclear weapons took 
place before President Clinton ever became President. And 
during his entire administration, not 1 additional ounce of 
plutonium was created.
    Mr. Perry. That is fine. But we are where we are now.
    And I am reading some of your comments where you 
recommended that the only way the U.S. could deal with North 
Korea's disputed programs and prevent--and it is important to 
use the word ``prevent''--you did--prevent them from achieving 
a nuclear capability was through diplomacy.
    So that having been said--you were the lead negotiator, 
right, 2001?
    Ambassador Sherman. I was the Special Envoy. Yes.
    Mr. Perry. Yes.
    So based on that, I mean, the goals as I understand them, 
were to bring North Korea back into NPT compliance and freeze 
their nuclear weapons program, which is--permanently, which is 
essentially prevention. But, yet, in 2003, as we all know, they 
declared that they had nuclear weapons.
    So based on the close relationship currently with Iran and 
North Korea and the negotiations you personally led, knowing 
that you are leading negotiations now with Iran and that Korea, 
you know, announced in 2003 that they had nuclear weapons, when 
our job, your job, was to prevent them from getting them, most 
Americans throughout the course of that saw it as appeasement. 
I think most Americans see what is currently happening as 
appeasement. I think most Americans would agree, if they are 
educated about what the history is and what happened, that we 
failed. North Korea has nuclear weapons, as far as we know.
    I mean, why should Americans consider these negotiations to 
be anything but appeasement and have any confidence that this 
is going to end up any different than North Korea?
    Mr. Sherman. Congressman, as I said, we could spend an 
entire day discussing what happened in North Korea and at what 
point and for what reasons North Korea, in fact, did obtain a 
nuclear weapon. That did not occur on President Clinton's watch 
when I was responsible for that negotiation.
    That said, this is an entirely different situation. The 
only metric should be whether, in fact, the pathways to a 
nuclear weapon are closed off to Iran, including the potential 
for a covert program such that we would know either in time to 
stop it or to deter it, as well as their current uranium 
enrichment and plutonium pathways to a nuclear weapon.
    And you will be able to judge that on its own merits should 
we get to a comprehensive agreement. And, as I have said, I 
don't know that we will.
    Mr. Perry. Listen, I appreciate your passion for it, and I 
appreciate the verbiage, this pathway and cutting off their 
pathways and so on and so forth.
    But it seems to me we were doing the same thing with North 
Korea. And pathway or not, at the end of the day--you know, we 
hear this, ``Well, let's not make the perfect the enemy of the 
good.'' But at the end of the day, North Korea has got nuclear 
weapons and we can't do a darn thing about it. And when Iran 
gets them, we don't have many options then either.
    There can be--there is no way--there is no place for 
failure here. And I am afraid that, once we look back in 
hindsight and say, ``Well, we tried this'' and, ``We thought 
that,'' it is going to be too darn late when they have got them 
and we have got a nuclear arms race going in the Middle East.
    With that, I yield back.
    Ambassador Sherman. Congressman, I appreciate the concern.
    I will say this: Sanctions did not stop Iran's nuclear 
program. Sanctions brought Iran to the negotiating table. But 
they continue to build their nuclear program even with all the 
sanctions in place.
    Mr. Holding. The gentleman's time has expired.
    We have a few more members here to ask questions. We have 
votes approaching quickly on the floor. I understand our 
witnesses need to leave no later than 4:30.
    So, with that, I will recognize the gentleman from Florida, 
Mr. Clawson, for 5 minutes.
    Mr. Clawson. I will be brief.
    Thank you for coming and thank you for your service. You 
clearly understand the details of what is going on here, and I 
appreciate what you all are--what you all are doing. And I know 
it is not easy.
    Barring military force, it seems to me the success in these 
negotiations depends on leverage, not reasonableness. And 
leverage in my world is always dependent on money. Money 
creates leverage.
    Tell me a little bit whether you think the extension of 
these talks gives the Iranians a chance to break the 
international coalition with respect to economic sanctions that 
really creates our leverage.
    Mr. Cohen. Congressman, I don't believe so. Quite the 
contrary. I think the fact that we are giving negotiations an 
honest effort and exploring the possibility of a comprehensive 
agreement with our partners helps to hold together the 
international coalition that put very significant economic 
pressure on Iran and continues to put very significant economic 
pressure on Iran, and that creates the leverage that you speak 
of.
    And that is critically important to the potential success 
of these negotiations that we hold that international sanctions 
coalition together. And we are doing so. And it is held 
together throughout the course of this Joint Plan of Action. 
And, as I said in response to a question earlier, we do not see 
any indication of our sanctions architecture weakening.
    Mr. Clawson. And folks like Russia or China that don't--
aren't normally part of our coalitions, do they create holes in 
the fence that let the cattle out?
    Mr. Cohen. The short answer to that question is ``no.''
    Mr. Clawson. Really?
    Mr. Cohen. In the work that we have done on imposing 
sanctions on Iran: I am not going to sugarcoat and say 
everything has been absolutely perfect.
    But with respect to Russia and China and our other partners 
around the world, the sanctions have held together very well. 
There--you know, there are reports of, you know, this potential 
Russia deal with Iran and all the rest.
    Mr. Clawson. Right. Right.
    Mr. Cohen. That has not been consummated. We have been very 
clear with the Russians that we would regard any follow-through 
on that deal as being inimical to the negotiations, and it has 
not--it has not come to fruition.
    So I think what we have seen with all of our P5+1 partners, 
as well as many others around the world--the Japanese, the 
Australians, the South Koreans, the others--is a cohesive 
effort to put real pressure on Iran.
    Mr. Clawson. Good.
    Well, I have read that even some of our European friends 
continue to trade with Iran. And I see you smiling. And so it 
has always kind of struck me as making your life a lot more 
difficult if you want to create leverage when our own--when our 
very friends continue to trade with the people that we are 
trying to--to--to put a little leverage on.
    Mr. Cohen. Well, Congressman, our sanctions on Iran are not 
a complete trade embargo.
    Mr. Clawson. Correct.
    Mr. Cohen. There is some trade that is permissible with 
Iran----
    Mr. Clawson. Right.
    Mr. Cohen [continuing]. And not for the United States----
    Mr. Clawson. Right.
    Mr. Cohen [continuing]. But for others around the world. 
And we have obviously seen that continued trade over the course 
of the years.
    That does not mean, however, that the sanctions that we 
have put in place that are extraordinarily powerful, that go 
after Iran's oil sales, go after its access to the 
institutional financial system, have, as you say, holes in the 
fence. Those sanctions are staying.
    Mr. Clawson. Okay. Good. I always wondered how it worked 
when so much of the world was not part of the official 
coalition.
    The last point that I make today is I am guessing as part 
of a final deal, if you look down the road, Ambassador, 5 years 
from now and we have an optimistic outcome, that part of that 
optimistic outcome would be safety for Israel and that Iran 
would sign up.
    So, in other words, the final deal wouldn't be no nukes, 
but everything else is okay, but, rather, we would have fences 
of defense for our most important ally in the region, of 
course, Israel.
    Ambassador Sherman. As I have said, all of the sanctions 
that go to their acts of terrorism, their human rights abuses, 
their fomenting instability around the world, will remain in 
place and our commitment to Israel's security will continue.
    What I think it is important for all of us to remember--and 
I remind myself of this every day--is the reason that we are 
doing this is because, as unstable as the Middle East is today, 
an Iran with a nuclear weapon would be truly horrific and would 
really change the entire strategic framework of the Middle East 
in ways that none of us can even imagine or want to imagine.
    Mr. Clawson. Walking away is not an option. I understand.
    And I thank both of you for your service.
    Ambassador Sherman. Thank you.
    Mr. Holding. Gentleman's time has expired.
    Now turn to the gentleman from Florida, Mr. DeSantis. 
Recognized for 5 minutes.
    Mr. DeSantis. Thank you, Mr. Chairman.
    Thank you to the witnesses.
    In terms of--Ambassador Sherman, you talked about how it 
would be very bad if Iran had a nuclear weapon.
    How does the administration view Iran's posture?
    We have had a hearing recently where one witness was trying 
to apprise how--the Israelis' view, and he said there is a 
significant number, maybe not a majority, who believe, ``Well, 
you know, maybe they actually could be contained with a nuclear 
weapon.''
    And then I--I look at people like Bernard Lewis, the 
historian, who said, ``Look, given the viewpoint and ideology 
of the mullahs who run the country, mutually assured 
destruction is not something that is--that scares them. It 
actually would induce them to want to develop weapons and even 
use them,'' thinking, ``Hey, if we can inflict more damage to 
Israel or to United States, we will deal with millions of our 
own people being killed.''
    So does the administration believe that Iran with a nuclear 
weapon and an apocalyptic ideology--that a mutually assured 
destruction scenario would not apply?
    Ambassador Sherman. The administration believes that Iran 
cannot be permitted to obtain a nuclear weapon, period.
    Mr. DeSantis. And is one of the reasons for that because of 
the world view that they bring to the table with a nuclear 
weapon?
    Ambassador Sherman. It is the world view that they bring to 
the nuclear--we don't believe anybody else needs to have a 
nuclear weapon, period, in the world.
    And certainly, given some of the other things that Iran 
does in the world that many members have discussed today, Iran 
with a nuclear weapon would allow them to project further power 
into the region, would be a deterrent to others in the region, 
and would confer on them a place in the world that they should 
not have.
    Mr. DeSantis. So since the administration has been dealing 
with Iran about this issue--I am going to guess it has been 
months and months now--has there been any change in Iran's 
sponsorship of terrorism worldwide?
    Ambassador Sherman. I would want to have our intelligence 
community give you their assessment. But from an outsider's 
point of view who isn't an intelligence analyst, I would say 
that they have not stopped.
    Mr. DeSantis. And I guess--I understand--I have talked with 
folks who have been involved in arms deals who say, ``Look, we 
don't deal with these side issues. We just try to focus on 
that. It is tough enough.''
    And I understand that generally, and I understand that--why 
you would deal with that with the Soviet Union or some of the 
other countries that we have done.
    But given that Iran--they are fomenting jihad with 
Hezbollah and Syria and Iraq now, and, of course, they are one 
of the main suppliers of the missiles in the Gaza Strip to 
Hamas. Don't we need to put terrorism and their terrorist 
activities on the table?
    I mean, I think it is really difficult to see how we would 
have a successful agreement where we didn't believe they would 
be able to have a nuclear weapon, but somehow they would 
continue on fomenting jihad the way that they are doing.
    Ambassador Sherman. Well, I understand the impulse to want 
to do that. Quite frankly, it would be an overwhelming 
negotiation that would make this all even more difficult than 
it already is.
    The reason that we are focused first and foremost on them 
not obtaining a nuclear weapon is for the reasons I said. Their 
ability to, in fact, do more with their state sponsorship of 
terrorism would be much greater if they indeed had a nuclear 
weapon.
    So we believe that first and foremost what must come off 
the field is their ability to gain a nuclear weapon. And we 
have--will not for one moment stop all of our other efforts in 
all of the other areas in which we have profound disagreement.
    Mr. DeSantis. Thank you.
    I think that, for me--as I look at it, I think, initially, 
it was a mistake to let off on the sanctions. I think that 
Iran--a regime like that, they are going to respond to 
strength.
    And my fear is that, by giving them more time, you know, 
they see that as, ``Well, gee, you know, we got this time,'' 
you know, ``They don't want to put the screws to us yet.''
    And so I think stronger sanctions combined with--I mean, I 
think that they have to fear that there could potentially be a 
use of force, whether it is by us, whether it is by the 
Israelis or whatnot.
    And, if not, I just don't think that they are going to have 
an incentive to really want to disarm and not create--and not 
acquire nuclear weapons.
    But I appreciate you guys for being here.
    And I will yield back the balance of my time.
    Mr. Holding. Gentleman yields back.
    Recognize the gentleman from Georgia, Mr. Collins, for 5 
minutes.
    Mr. Collins. Thank you, Mr. Chairman. I know we are getting 
to the end; so, I will get to my questions.
    Under the terms of the July 18th extension, the United 
States and its negotiating partners will further release 
sanctions and give Iran access to the $2.8 billion in blocked 
assets.
    In return, Iran's main obligation will be to keep observing 
the interim agreement and to convert 25 kilograms of 20 percent 
highly enriched uranium from an oxidized form into fuel and 
directly usable research nuclear reactor by November 24, if 
that is correct.
    I would like to know from you--is--did U.S. get--officials 
get any assurances from the Iranian Government that they will 
not use any of the 2.8 in new sanctions relief either, A, to 
support international terrorism from other state sponsors, like 
the Assad regime, to advance the nuclear ballistic missile or 
advance conventional weapons program of Iran or any other state 
or to violate the Iranian people's human rights?
    Mr. Cohen. Congressman, as has been discussed in this 
hearing, Iran is involved in a whole variety of destabilizing 
activity, including some of the activities you just described. 
They have been engaged in that activity for years now and have 
used their increasingly constrained funds to continue to pursue 
those objectives.
    There is no reason to believe that the funds that they will 
be provided access to under this Joint Plan of Action will go 
to the activity and no reason to believe that it necessarily 
won't. I can't guarantee you that either way.
    What I can tell you, though, is that our sanctions and our 
efforts to disrupt Iran's support to Hezbollah, support to 
Hamas, violation of human rights, will continue unabated during 
this period.
    Mr. Collins. Well, the only thing that concerns me there--
and I was going to a different question at this point.
    But the defeatist--and I understand you are looking and you 
are being a realist. You know, I may call it defeatist-
sounding. But if we basically say that, ``Well, Iran may. They 
may not. They have been doing this for years,'' then shouldn't 
there have been at least some discussion about, ``Okay. If you 
do this. You thought sanctions were bad last time. Get ready''?
    I mean, I--there is a lot of us--I am not going to go into 
this--there is many on this committee and many on this Hill 
that believe that this was just a total disaster to start with. 
Okay?
    And now we are just basically saying, ``Well, they have 
been doing it for a long time. They have not been doing it for 
a long time. We got the same kind of commitments last time.''
    Frankly, especially from the folks in my district, they 
just don't buy the line anymore. The corporate line is just not 
real good. And the tone of your voice not being--and I agree 
with you, I mean, in a realist kind of sense.
    But what bothers me is we don't seem to have a hammer on 
the other side to say, ``Look, you know, this has got to 
happen'' because most of us believe it is just going to be--it 
is funneled to different directions to start with.
    Mr. Cohen. Well, with all due respect, Congressman, there 
is nothing defeatist about it. We have been very actively 
engaged in disrupting and attempting to disrupt Iran's support 
for terrorism around the world for years now, and we are 
continuing to do so.
    We do it through our sanctions designations. We do it 
through our work with our partners. We, as I am sure you know, 
worked to intercept the Klos C, which was a vessel going from 
Iran to support the--support Hamas with weapons.
    There is nothing at all defeatist in our approach to 
countering Iran's support for terrorism around the world. The 
funds that Iran is getting access to I cannot guarantee you 
will not go to this activity. And I would not presume to tell 
you something that I could not in good conscience tell you is 
the truth.
    But I will tell you that we will continue to work as hard 
as we possibly can and we will, in fact, redouble our efforts 
to ensure that Iran's support for terrorism around the world is 
something that we take--we take action against.
    Mr. Collins. Part of the issue of the repeal--or at least 
giving some of the blocked assets was to spurt growth in the 
Iranian economy and just for, basically, their basic needs, not 
their terroristic nature.
    Has there been any reports or things that you have seen 
that the Iranian economy is growing? And, if so, what could be 
attributable to the unblocked assets?
    Mr. Cohen. There are--we watch very closely how the Iranian 
economy is performing. As I am sure you know, it has contracted 
quite substantially in the last several years.
    There has been, since the Rouhani administration has come 
into power in Iran, better management of their economy. And 
some of the decline that we have seen in the past has begun to 
moderate. But Iran's economy is still in very significant 
distress.
    And the funds that are made available to the Iranians under 
the Joint Plan of Action, the $2.8 billion in this extension 
period and the $4.2 billion from the original period, do not in 
any respect suffice to jump-start the Iranian economy. The 
Iranian economy--the whole of the Iranian economy is so great 
that those funds do not move the needle on their economy.
    Mr. Collins. Thank you.
    Mr. Chairman, I yield back.
    Mr. Holding. Gentleman's time has expired.
    We appreciate very much the time and work of our witnesses 
today. I know the committee--I speak for all of the committee--
looks forward to consulting closely with you in the 4 months 
ahead on these critical and difficult issues.
    Ambassador Sherman. Thank you very much.
    Mr. Holding. The committee stands adjourned.
    [Whereupon, 4:32 at p.m., the committee was adjourned.]
                                     

                                     

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