[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


                      IRAN NUCLEAR DEAL OVERSIGHT:
                  IMPLEMENTATION AND ITS CONSEQUENCES
                               (PART II)

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

                                 HEARING

                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 25, 2016

                               __________

                           Serial No. 114-190

                               __________

        Printed for the use of the Committee on Foreign Affairs
        
        
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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         BRAD SHERMAN, California
DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       BRIAN HIGGINS, New York
MATT SALMON, Arizona                 KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina          ALAN GRAYSON, Florida
MO BROOKS, Alabama                   AMI BERA, California
PAUL COOK, California                ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas            GRACE MENG, New York
SCOTT PERRY, Pennsylvania            LOIS FRANKEL, Florida
RON DeSANTIS, Florida                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida                 ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
DANIEL DONOVAN, New York

     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 Stephen D. Mull, Lead Coordinator for Iran Nuclear 
  Implementation, U.S. Department of State.......................     4
The Honorable Thomas M. Countryman, Assistant Secretary, Bureau 
  of International Security and Nonproliferation, U.S. Department 
  of State.......................................................    10
Mr. Adam J. Szubin, Acting Under Secretary, Office of Terrorism 
  and Financial Intelligence, U.S. Department of the Treasury....    20

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Stephen D. Mull: Prepared statement................     6
The Honorable Thomas M. Countryman: Prepared statement...........    12
Mr. Adam J. Szubin: Prepared statement...........................    22

                                APPENDIX

Hearing notice...................................................    56
Hearing minutes..................................................    57
The Honorable Mark Meadows, a Representative in Congress from the 
  State of North Carolina: Letter submitted for the record.......    59
The Honorable Gerald E. Connolly, a Representative in Congress 
  from the Commonwealth of Virginia: Prepared statement..........    62
Questions submitted for the record by the Honorable Ileana Ros-
  Lehtinen, a Representative in Congress from the State of 
  Florida, and written responses from:
  The Honorable Stephen D. Mull..................................    64
  The Honorable Thomas M. Countryman.............................    65

 
                      IRAN NUCLEAR DEAL OVERSIGHT:
                  IMPLEMENTATION AND ITS CONSEQUENCES
                               (PART II)

                              ----------                              


                        WEDNESDAY, MAY 25, 2016

                       House of Representatives,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The committee met, pursuant to notice, at 10:08 a.m., in 
room 2172, Rayburn House Office Building, Hon. Ed Royce 
(chairman of the committee) presiding.
    Chairman Royce. This hearing will come to order.
    Last week, a commander in Iran's Islamic Revolutionary 
Guard Corps made headlines around the world for boasting that 
Iran could wipe out Israel ``in less than 8 minutes.'' And, 
remember, this is the same Iran that Secretary Kerry is 
promoting as open for business.
    Sadly, in the 4 months since the nuclear agreement with 
Iran was implemented, few things have surprised me. I expected 
Iran to continue full speed ahead with its intercontinental 
ballistic missile program, and it has, testing two ICBMs. And, 
remember, as the Secretary of Defense says, 
``intercontinental'' means able to reach from there to here. We 
have also seen the testing of ballistic missiles, and in case 
we misconstrue their intent, on the side of these ballistic 
missiles were the words ``Israel must be destroyed,'' in Farsi 
but also in Hebrew.
    It is no surprise that Iran's abysmal human rights record 
continues, the executions continue, the torturing at Evin 
Prison continues. Two more Americans have now been taken 
hostage. And it is no surprise that the agreement with $100 
billion-plus is strengthening the Revolutionary Guards and 
others responsible for these abuses.
    I am not all that surprised that Iran may hold its nuclear 
program to the letter of the agreement. After all, it was this 
committee that exposed the agreement's central flaw, and that 
central flaw is the sunset clause. With its nuclear 
infrastructure kept intact and key restrictions that expire, 
Iran does not have to cheat to get the bomb. Instead, it just 
simply must wait out the clock to get the bomb.
    But what is astonishing, and that is the reason for this 
hearing, what is astonishing is the length the Obama 
administration has gone to accommodate Iran. It is bad enough 
that the administration essentially rewrote counterterrorism 
laws through executive action or that it has hardly responded 
to Iran's missile test. The administration told us that 
sanctions on Iran's terrorism, on their human rights, on their 
ballistic missiles would be fully enforced after the agreement, 
yet it now says that non-nuclear sanctions would undermine the 
Iran agreement.
    So what has happened is that the White House's Iran's 
policy now amounts to walking on eggshells. And in another odd 
twist, the Obama administration is going beyond the agreement 
to purchase material used in the production of nuclear weapons 
from Iran. As one prominent expert summed up, ``We shouldn't be 
paying them for something they shouldn't be producing in the 
first place.''
    But the State Department has taken its advocacy for Tehran 
to a new and disturbing level by trying to persuade major non-
U.S. banks that doing Iran-related business is not only 
permitted but is actually encouraged. As one witness told the 
committee earlier this month, we are acting as the ``business 
development and trade promotion authority of the Islamic 
Republic of Iran.''
    International businesses must deal with the reality of an 
Iran whose Islamic Revolutionary Guard Corps controls the 
broadest of sectors across the Iranian economy, not the 
administration's fantasy in which Iran's behavior can be 
ignored and investment can be pushed into the country. They 
hear the warnings of the Financial Action Task Force, which 
sets the global anti-money-laundering standards. As Stuart 
Levey, the former Treasury official who was responsible--as we, 
in a bipartisan way, passed legislation over the years in this 
committee for sanctions on Iran, that former Treasury official 
in both administrations was responsible for much the sanctions 
architecture that squeezed Iran. As he wrote in the Wall Street 
Journal, ``Why is Washington pushing non-U.S. banks to do what 
is still illegal for American bankers to do'' and, I will just 
add to that, what the international Financial Action Task Force 
says no banks, no banks should be doing?
    Last week, Secretary Kerry went so far as to say that 
European leaders are looking at ways to subsidize investments 
into Iran. Where does it stop? And Iran is still pushing for 
access to the U.S. dollar, the world's top currency. Given the 
administration's lack of any resolve to stand up to the Supreme 
Leader, we are right to pursue legislation to prevent that from 
happening.
    And I now turn to the ranking member for any opening 
comments he may have.
    Mr. Engel. Thank you, Mr. Chairman.
    Thank you for calling this hearing.
    To our witnesses, welcome to the Foreign Affairs Committee. 
I am grateful that the administration has kept Congress up to 
speed on the Iran nuclear deal throughout the process. I know 
there are many areas where we can continue to work together on 
this issue.
    Ambassador Mull, it is good to see you again.
    Assistant Secretary Countryman, we are glad to have your 
voice in the mix as well, although we miss you in the Balkans.
    And Acting Under Secretary Szubin, you are doing great 
work, despite the fact that you have to do your job with one 
hand tied behind your back. We hear a lot of talk on Capitol 
Hill about how we need to do all we can to curb rogue regimes 
and terrorist groups. Well, one easy thing for our Senate 
colleagues to do would be to bring your nomination up for a 
vote. It has been too long, and it should happen.
    Commentary and analysis about the Iran deal has become the 
latest for the cottage industry in foreign policy circles. I am 
sure that at this point most of you know my refrain: I opposed 
the deal. I voted against it. I thought we could have done 
better. But now that it is in place, we need to ensure it is 
implemented to the letter and continue to hold Iran's feet to 
the fire with respect to the regime's other dangerous and 
destabilizing activities.
    Today, I hope our witnesses, who are on the front lines of 
implementation, can help us cut through speculation and 
political noisemaking around the deal and give us a clear 
picture of how things are moving forward. For example, we keep 
hearing that because Iran hasn't yet realized the anticipated 
windfall from sanctions relief, the administration is going 
around the world trying to drum up business for Iran. Now, in 
my experience, when something sounds like a political attack, 
it is usually because it is.
    I don't think we should be making any concessions to Iran 
beyond the scope of what is in the deal, but it is perfectly 
reasonable for the United States to clarify for businesses what 
kind of transactions are now in bounds and what remains against 
the law. In my view, at the end of the day, if businesses 
continue to shy away from investing in Iran, Iran's leaders 
have no one to blame but themselves. After all, with its 
history of corruption, money laundering, support for terrorism, 
human rights abuses, and an illegal ballistic missiles program, 
Iran doesn't exactly seem like a smart bet for investing. That 
is why the Financial Action Task Force, FATF, continues to 
designate Iran as a high-risk jurisdiction.
    So, hopefully, our witnesses can shed more light on why 
sanctions relief has only led to a trickle rather than a surge 
for Iran and how the United States has responded as this aspect 
of the deal has unfolded.
    I would also like to hear about what we are doing and what 
we plan to do to pressure Iran on other areas of concern. As 
President Obama wrote during the consideration of the Iran 
deal, he ``made sure that the United States reserved the right 
to maintain and enforce existing sanctions and even to deploy 
new sanctions to address those continuing concerns, which we 
fully intend to do when circumstances warrant.'' I don't think 
we should be shy about slapping new sanctions on Iran, again, 
if the situation and circumstances warrant.
    After Iran's ballistic missile test late last year, the 
administration did impose new sanctions. That was the right 
thing to do. The test was a clear violation of the U.N. 
Security Council resolution governing the nuclear deal. But 
Iranian money continues to flow to Hamas to rebuild its network 
of terror tunnels. Hezbollah has stockpiled thousands of 
rockets, courtesy of Iran's generosity. It is fair to say that 
Hezbollah would not exist if it wasn't for Iran. The Assad 
regime, Iran supports them. Hezbollah has propped up that Assad 
regime. It couldn't do it without Iranian help. Shia militants 
in Iraq and Houthi fighters in Yemen can still count on Iran's 
support. And we have intercepted ship after ship carrying 
Iranian weapons.
    So what is the plan to deal with all these problems? How 
will the administration use the authorities it already has? 
What can Congress do to make sure this administration and 
future administrations have all the tools they need? How can we 
and our allies compel Iran to change its behavior?
    I look forward to hearing our witnesses' thoughts on these 
areas.
    I thank you all again for your service and your testimony.
    Thank you, Mr. Chairman. I yield back.
    Chairman Royce. Thank you Mr. Engel.
    We are pleased to be joined by a very distinguished panel 
this morning.
    Mr. Connolly. Mr. Chairman, I have a unanimous consent 
request. I just ask unanimous consent that the IAEA report of 
January on implementation be entered into the record.
    Chairman Royce. Without objection.
    Mr. Connolly. I thank the chairman. Forgive me for the 
interruption.
    Chairman Royce. Thank you, Mr. Connolly.
    We are joined by Ambassador Stephen Mull. He serves as the 
Lead Coordinator for Iran Nuclear Implementation at the 
Department of State. And prior to his appointment, Ambassador 
Mull served as the Ambassador to Poland and as Executive 
Secretary of the State Department.
    And we have Mr. Thomas Countryman. He is Assistant 
Secretary of the Bureau of International Security and 
Nonproliferation. He is a career member of the Senior Foreign 
Service. And Mr. Countryman most recently served as the Deputy 
Assistant Secretary for European Affairs.
    Mr. Adam J. Szubin is Acting Under Secretary for the Office 
of Terrorism and Financial Intelligence at the Department of 
Treasury. He previously served as Director of Treasury's Office 
of Foreign Assets Control.
    We welcome all three of our witnesses back to the 
committee.
    And, without objection, all the full prepared statements of 
these witnesses will be made part of the record.
    Members here will have 5 calendar days to submit any 
statements or questions or any other extraneous material for 
the record.
    And so I will ask the Ambassadors if they would please 
summarize their remarks.
    And we will start with Ambassador Mull.

 STATEMENT OF THE HONORABLE STEPHEN D. MULL, LEAD COORDINATOR 
   FOR IRAN NUCLEAR IMPLEMENTATION, U.S. DEPARTMENT OF STATE

    Ambassador Mull. Thank you very much, Mr. Chairman, Ranking 
Member Engel, and all the members of this committee. It is 
great to be back here with you again today to talk about where 
we are in implementing what remains one of the highest 
priorities of the Obama administration, the Joint Comprehensive 
Plan of Action.
    I am happy to report today that, so far, the JCPOA has been 
fully implemented by all of its participants according to its 
terms. I think it is important to recognize what an 
accomplishment that is toward advancing not only our national 
security, but that of our closest friends and allies, 
particularly those in the Middle East. Because of our efforts 
to date and our success in this agreement, the security of the 
United States and our partners has been enhanced, and in 
conversation with allies and partners around the world, we 
regularly hear support from our closest friends for this deal.
    As of implementation day in January under the JCPOA, Iran 
had completed dozens of the specific actions to limit, freeze, 
or roll back its nuclear program and subject it to greater 
transparency by the IAEA; that included shipping out 25,000 
pounds, 98 percent of Iran's supply of enriched nuclear 
material; cutting its centrifuge enrichment program by more 
than two-thirds and subjecting itself to very tight controls 
going forward; and destroying the core of the Arak heavy-water 
reactor, which would have permitted the production of weapons-
grade plutonium. And Iran's implementation together of all of 
these commitments increased the time it would take to produce 
enough fissile material for a nuclear weapon, the so-called 
breakout time, from roughly 2 months to more than a year. These 
actions were complemented by the historically comprehensive 
verification and monitoring measures specified in the JCPOA.
    Iran is now subject to the greatest monitoring and 
verification regime in the history of nuclear power. Providing 
us with confidence that if Iran should seek to break out of its 
commitments, such an attempt would be detected, and we would 
have ample time to respond. At the same time, in this deal we 
have preserved our ability to snap back penalties that made 
this deal possible in the first place. As of now, we have not 
had to implement or take those measures of snapping back the 
penalties because Iran is fully compliant with the terms of the 
deal, as the IAEA verified in February and as I expect it will 
again in its next report in the coming weeks.
    In exchange for Iran's meeting its nuclear commitments 
under the JCPOA, we met ours by lifting the so-called secondary 
sanctions on Iran. In an effort to provide greater clarity to 
the public and private sectors of what sanctions were lifted 
and what non-nuclear sanctions remain in place, we have been 
participating in outreach with the public and private sectors 
at the request of our foreign partners and foreign governments 
in order to explain U.S. commitments under the JCPOA. As long 
as Iran continues to meet its nuclear commitments, we will 
continue to meet our commitments on sanctions.
    While we are encouraged by Iran's implementation of its 
nuclear commitments thus far, we have always recognized that 
the JCPOA would not resolve all of our concerns with Iran, and 
in fact, those concerns are still very much active.
    Instead, the JCPOA was specifically aimed at addressing the 
most urgent issue of verifiably ensuring that Iran does not 
have a nuclear weapon. Thanks to our efforts to date, we have 
made significant progress toward that goal, and the United 
States and our partners remain safer because of those efforts.
    I look forward to your questions later on in the hearing. 
Thank you.
    [The prepared statement of Ambassador Mull follows:]
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    Chairman Royce. Thank you, Ambassador.
    Mr. Countryman.

  STATEMENT OF THE HONORABLE THOMAS M. COUNTRYMAN, ASSISTANT 
        SECRETARY, BUREAU OF INTERNATIONAL SECURITY AND 
           NONPROLIFERATION, U.S. DEPARTMENT OF STATE

    Mr. Countryman. Chairman Royce, Ranking Member Engel, 
members of the committee, I want to thank you for your service 
and in particular for this invitation. It is always an honor 
for me.
    Ambassador Mull has laid out our progress in the successful 
implementation of the Joint Comprehensive Plan of Action. My 
bureau is focused upon giving full support to those 
implementation activities. And among a number of functions, I 
would emphasize helping to assure that the International Atomic 
Energy Agency has the independence, the expertise, and, above 
all, the resources needed for full implementation of the JCPOA. 
And thanks to the support of Congress, I am happy to say that 
the IAEA in fact has sufficient resources and expertise to do 
this mission.
    In the future, besides the Iran mission, the IAEA does a 
number of other functions that are central to U.S. national 
security. And I look not only to this administration and 
Congress but to future administrations and Congresses to ensure 
that the IAEA continues to have those important resources, both 
for implementation of this agreement and for the full range of 
its functions.
    And in the interest of diligent, scrupulous implementation 
of the JCPOA, it would be extremely valuable for the Senate to 
confirm a highly qualified individual, Laura Holgate, to be our 
full-time confirmed Ambassador to the U.N. missions in Vienna.
    While the threat of a nuclear-armed Iran has been addressed 
through implementation of this agreement, we recognize that, 
like every previous arms control agreement negotiated by any 
administration, an arms control agreement does not change the 
full range of behavior of the partner or adversary with whom we 
are negotiating. And so there remains a need, as both the 
chairman and ranking member have noted, to address the full 
range of serious misbehavior by the Iranian regime.
    The particular responsibility of my bureau is to address 
the ballistic missile program of Iran as well as a number of 
other proliferation-related efforts in the conventional field 
as well. We do this through the rigorous implementation of 
sanctions; that is, by designating, in partnership with the 
Department of the Treasury, those entities in Iran responsible 
for the weapons program. And we have designated every major 
entity in Iran associated with the ballistic missiles program. 
We will continue to do so as new information becomes available.
    At the same time, I will give you my personal opinion that 
it is not U.N. resolutions, or designations, or sanctions that 
cause Iran to change its calculus and its interest in the 
ballistic missile program. But what we can do to slow and deter 
and make their missile choices painfully expensive to the 
Iranian regime is rigorous enforcement of strategic trade 
control. And we do that not only in partnership with a wide 
range of U.S. agencies but in partnership with more than 40 
countries under the Missile Technology Control Regime, with 
more than 100 partner countries under the Proliferation 
Security Initiative, and as a result, all the legally binding 
restrictions on missile technology for Iran that are contained 
in U.N. resolutions are successfully implemented, not to the 
point--and I admit this first--of preventing Iran from a 
continued interest in these programs. But I can assure you of 
our continued diligence in using not just declaratory 
statements but actual tools of interdiction and export control 
to slow Iran's progress.
    And, of course, beyond my bureau's purview, we work closely 
with our regional partners, including the Gulf Cooperation 
Council and Israel, to bolster their defenses against a 
continuing military threat from Iran. We have no intention of 
reducing our focus on Iran's other programs, even as we 
continue with the successful implementation of the JCPOA.
    Thank you. And I look forward to your questions.
    [The prepared statement of Mr. Countryman follows:]
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    Chairman Royce. Thank you, Mr. Secretary.

STATEMENT OF MR. ADAM J. SZUBIN, ACTING UNDER SECRETARY, OFFICE 
OF TERRORISM AND FINANCIAL INTELLIGENCE, U.S. DEPARTMENT OF THE 
                            TREASURY

    Mr. Szubin. Chairman Royce, Ranking Member Engel, and 
members of the committee, thank you for inviting me to appear 
today to discuss our implementation of the Joint Comprehensive 
Plan of Action, the JCPOA.
    Very soon after I joined the Treasury Department in 2004, 
we saw with alarm the progress that Iran was making in its 
covert nuclear program and understood that this was a national 
security threat of the highest order. From that time, the 
talented women and men in my office have devoted literally tens 
of thousands of hours to address this threat. It has been an 
effort like nothing I have ever seen: Working with the 
intelligence community to identify and track Iranian front 
companies and their movements of funds through hidden accounts; 
working with the private sector here and abroad to strengthen 
the vigilance with respect to Iran; working with law 
enforcement and regulators to hold sanctions violators 
accountable; working with our diplomats and with foreign 
counterparts to make clear to Iran that the price of their 
nuclear program was complete isolation from the international 
community; and working with you in Congress, particularly here 
in this committee, in a bipartisan effort to sharpen our 
sanctions tools, deepen their impact, and bring Iran to the 
table.
    After nearly a decade, the accumulated pressure had its 
intended effect. The Iranian people rejected the course that 
their government had charted and elected President Rouhani to 
ease the pressure and obtain a better economy and a brighter 
future for the Iranian people.
    The JCPOA was a tremendous breakthrough. It represents a 
peaceful solution to what had been one of the world's most 
serious national security threats. Iran was a few months from 
having enough fissile material for a potential nuclear weapon, 
and it was advancing. Now, Iran's breakout time has been 
extended to beyond a year, and we are safer because of it.
    Since Iran has kept its end of the deal, we must uphold 
ours. It is in our national security interest to ensure that 
the JCPOA works as intended and stands the test of time. It is, 
therefore, important that we fulfill all of the commitments we 
made in the deal.
    Iran is already seeing benefits under this deal. It has 
been able to open new banks accounts. It has been able to gain 
access to billions of dollars in reserves. And its oil exports 
to Europe have recovered to about one half of their pre-
sanctions levels.
    That said, some companies and banks around the world 
continue to have concerns about doing business in Iran. Some 
are concerned about their financial transparency, the 
designation of Iran is a high-risk jurisdiction by FATF, the 
Financial Action Task Force, the world's standard setting body 
for anti-money-laundering and counterterrorist financing. 
Others are noting concern about corruption as well as 
regulatory and other obstacles to conducting business in Iran, 
and still others cite Iran's provocative behavior outside the 
nuclear file, including its active support for terrorism and 
its ballistic missile testing.
    As President Obama said recently, Iran has to understand 
what every country in the world understands, which is 
businesses want to go where they feel safe, where they don't 
see massive controversy, where they can be confident that 
transactions are going to operate normally.
    As Iran pursues more business, it is incumbent on Iran to 
address such problems to undertake meaningful reforms and 
create an environment in which businesses feel secure.
    I have talked a bit about the sanctions relief that we have 
delivered, but I also want to be clear about what this deal 
does not mean. First, with certain limited exceptions, the 
primary U.S. embargo on Iran remains in place, including the 
prohibitions on U.S. persons investing in Iran and the 
prohibitions on Iran accessing U.S. markets and banks. Along 
these lines, let me say clearly that we have not promised nor 
do we have any intent to give Iran access to the U.S. financial 
system or reinstate what is known as the U-turn authorization.
    Additionally, we have maintained all of our sanctions 
designed to counter Iran's malign activities outside of the 
nuclear file. Iran continues to be the world's leading sponsor 
of terrorism and to play a significant and negative role in 
destabilizing the region. Under our current sanctions regime, 
we have designated more than 200 Iranian-linked firms and 
individuals on non-nuclear grounds; that includes the IRGC, the 
Quds Force, their subsidiaries, their senior officials, their 
front companies and agents, all of whom we are continuing to 
target and expose. That also includes major Iranian defense and 
missile entities, as noted by Assistant Secretary Countryman, 
which are behind Iran's current ballistic missile work.
    Indeed, since the implementation of JCPOA, we have 
continued to target new Iranian actors, including key 
supporters of their ballistic missile program, agents of Mahan 
Air, the Quds Force support airline, and central Hezbollah 
money-laundering individuals. Indeed, I can tell you that, 
after many years of targeting Hezbollah, today the group is in 
its worst financial shape in decades.
    Ultimately, we have been and will remain clear eyed about 
the nature of the threat posed by Iran. And we will continue to 
combat these threats using the range of tools at our disposal, 
including our sanctions and by designating new targets, as 
appropriate.
    I want to thank this committee again for inviting me to 
appear today. And I look forward to our continued work with 
your committee and to your questions.
    [The prepared statement of Mr. Szubin follows:]
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    Chairman Royce. Thank you, Mr. Szubin. And I do appreciate 
your work in terms of targeting Hezbollah. The legislation that 
I and Eliot Engel passed and the committee passed in December 
to the President's desk, and your implementation of that is 
appreciated.
    But you noted in your testimony that the United States has, 
in your words, ``no plans to give Iran access to the U.S. 
financial system.'' I appreciate that clarification. However, 
that hasn't been the source of our concern.
    Let me be specific here. Does the United States have any 
plans to offer Iran the ability to access offshore dollar-
clearing facilities to allow for dollar-denominated 
transactions and ease Iran's ability to trade internationally, 
or are there plans for the administration to allow the Iranians 
to conduct large-scale dollar-denominated transactions and 
dollar clearing in any form?
    And your testimony, as I heard it, studiously avoided that 
question, so let me put that to you.
    Mr. Szubin. Thank you, Mr. Chairman, for the question. And 
I welcome the chance to clarify an area that I think has been 
the subject of a lot of confusion and concern.
    Our sanctions, our primary sanctions in the U.S., control 
what U.S. actors can do and what they cannot do. It governs the 
conduct of U.S. actors anywhere they reside in the world. So, 
for example, a branch of a U.S. bank in Europe, in East Asia 
has to behave like a U.S. person here in Washington or here in 
New York.
    Our sanctions, on the other hand, do not control the 
actions of non-U.S. persons, whether or not the currency they 
are using is the dollar, euro, pound, or the yen. To be very 
specific, every foreign bank in the world has U.S. dollars in 
their possession. It is, thankfully, the international currency 
of choice for international trade. That means banks in Europe, 
Japan, and China all hold dollars in their vaults. Our 
sanctions don't extend to those dollar bills. And foreign 
actors aren't under our jurisdiction if they chose to give 
those to any actor, including an Iranian actor.
    So I just want to be clear as to the contours of our 
jurisdiction in response to offshore dollar clearing. That is 
something that is beyond our jurisdiction.
    Chairman Royce. But that seems to have a different intent 
than the response the Treasury Secretary gave me when I asked 
him in the Financial Services Committee. I asked the Treasury 
Secretary--I think it was 2 months ago--if he stood by his 
testimony during the agreement's consideration in which we were 
assured they would not have access. Instead of shutting the 
door right there, Secretary Lew said his focus was on making 
sure Iran gets relief. And 2 months since, the President still 
has not responded to my letter on this question.
    So there has been ample time for the administration to 
bring absolute clarity to this question. And the concern is 
that while Iran wouldn't be allowed direct access to the 
dollar, you could structure a scheme offshore that would have 
similar impact. So I just remind you it is the Treasury 
yourself--it is your department--that has declared the entire 
territory of Iran as a primary money-laundering concern, and 
that means that any financial transaction with Iran or any 
offshore scheme that is set up risks supporting the regime's 
ongoing illicit activities, including ballistic missile 
activities or anything else.
    Let me go to a question for Assistant Secretary Countryman.
    Mr. Szubin. May I be able to clarify something?
    Chairman Royce. Yes. You can clarify it, but Iran is 
pushing this, right? I read the translations of the Iranian 
papers. I see what they are pushing for, but go ahead.
    Mr. Szubin. Yes. Thank you for the opportunity.
    I just wanted to clarify that Secretary Lew has made 
himself clear on the record in public, and of course, we look 
forward to responding to your letter to be clear in writing as 
well. But he has said exactly what I have said here today, and 
I know he was looking forward to me being here to be able to 
relay his views on this. Iran will not have access to our 
financial system.
    Chairman Royce. Perfectly fair, but when I asked him the 
question, the focus was on making sure Iran gets relief.
    So let me go to the next question, and this is to Assistant 
Secretary Countryman, the last question I will ask here. In 
your testimony, you put stock in the new U.N. Security Council 
Resolution 2231 and its provisions related to Iran's ballistic 
missile program.
    Now it is well documented that, before the deal, Iran was 
legally bound by U.N. Security Council Resolutions not to test 
ballistic missiles. Now here is the problem in a negotiation--
the first problem, one that the members of the committee are 
already aware of, and that is that the administration agreed to 
a change. Instead of saying ``shall not,'' the change was 
``Iran shall be called upon not to.'' So that was watered down.
    But there is other language in there, new language that 
focuses on Iranian missiles designed--and this is something 
that, frankly, I missed--designed to be capable of delivering 
nuclear weapons, while it previously focused on missiles 
capable of delivering nuclear weapons. Okay? So what was the 
rationale for using the words ``missile designed to be capable 
of'' instead of simply ``missiles capable of''? If I could ask 
that.
    Mr. Countryman. I don't know the answer. I was not involved 
in the negotiations. I will get you an answer if I can. I would 
note that the new Resolution 2231 does not change the 
substantive prohibition on provision of any kind of ballistic 
missile technology to Iran.
    Chairman Royce. Well, wait, but you have the Iranian 
Foreign Minister saying that that word in these negotiations, 
``designed''--he said: ``It took me 7 months to negotiate.'' So 
everybody knew what it meant.
    And so what they are saying now is with the changed ``Iran 
shall be called upon not to'' rather than ``not to,'' that they 
can go forward full speed with their ICBM program, and that is 
what they are doing. As we sit here, that is what they are 
doing. And it is not as though they are hiding the intent. They 
combined that with the rhetoric ``death to America, death to 
Israel.''
    I just think we have a situation--well, let me let you 
respond.
    Mr. Countryman. I don't believe Iran has ever hidden its 
intent to continue developing ballistic missiles nor has it 
slowed down doing so, no matter what administration took what 
steps.
    Chairman Royce. But here is what we have: We have a 
situation now where the Security Council--I mean, what can we 
point to where we can say the Security Council now is taking 
action against Iran's missile program? None that I can see.
    Mr. Countryman. I understand we have fewer rhetorical 
points to make. I don't focus on the rhetoric. I focus on the 
active effort to deny the export of technology from advanced 
countries to Iran. I understand that Iran's interpretation is 
different from ours.
    Chairman Royce. But our difficulty here is that we have now 
given Russia or we have given Beijing the ability to interpret 
this differently. We have forever now a less effective 
constraint on Iran's missile program than we had before. And on 
top of that, we now see Iran asserting this in the 
international community, and we don't see the pushback from the 
United States. This is the point I wanted to make to you.
    My time has expired. I will go to our ranking member, Mr. 
Engel of New York, for his questions,
    Mr. Engel. Thank you, Mr. Chairman.
    Mr. Szubin, let me ask you this: When Congress was 
considering whether to oppose a nuclear deal with Iran, we 
heard various statements from administration officials that 
Iran's non-nuclear behavior, which is, of course, supporting 
the terrorists, human rights violations, advancing their 
ballistic missile program; that those things would be outside 
of the scope of the deal. Yet, since implementation to today, 
we have heard a different message: No new sanctions. We have 
heard that from the administration: No new sanctions, even if 
they are outside the scope of the deal.
    So can you clarify the administration's position, because I 
thought that we were told that, in their support, Iran's 
support, for terrorism, that we could slap additional sanctions 
on it, and it would not violate the JCPOA, if Iran had launched 
missiles, ballistic missiles, and we wanted to penalize them, 
that that would not butt heads with the JCPOA? But, now, we 
hear differently, so would the administration veto new non-
nuclear sanctions against Iran if the new sanctions are not 
intended to relist delisted entities?
    Mr. Szubin. Thank you Ranking Member Engel.
    Mr. Engel. Let me also say--I am sorry--let me also say, 
when you are giving the answer, would the imposition of non-
nuclear sanctions violate our obligations under the JCPOA?
    Mr. Szubin. I appreciate the opportunity to clarify the 
administration's views on this. And I would also offer 
Ambassador Mull, if he wants to come in when I conclude----
    Mr. Engel. Certainly.
    Mr. Szubin [continuing]. To provide his view from the State 
Department. Our view has not been no new sanctions since 
implementation day. In fact, to the contrary, you have seen the 
administration announce multiple rounds of new sanctions 
designations in exactly the areas you are talking about: Iran's 
support for terrorism, their ballistic missile program, 
Hezbollah, Mahan Air.
    We have been continuing on our path to knock out the key 
proxies that these companies are using to procure materials and 
to move money. So we have been very consistent on that from 
exactly, as you said, our statements announcing the deal and on 
throughout, including, less than 2 months ago, new designations 
of the Quds Force affiliated airline, Mahan Air, and new 
designations against the liquid propellant missile companies 
within Iran that work under SHIG, the Shahid Hemmat Industrial 
Group.
    With respect to new legislation, I think the 
administration's view consistently has been there is no 
inconsistency with the JCPOA if it is outside the nuclear space 
so long as it doesn't undermine and interfere with our 
commitment to fulfill what we committed to fulfill in the deal.
    Then the question becomes very much what specific 
legislation looks at and what are the details.
    Mr. Engel. Well, because I think that while the President 
has the authority under existing law to sanction Iran, and the 
President has, which I support, I think it is not so terrible 
to have Congress come up with new sanctions if we feel Iran is 
violating its agreements.
    Certainly, in the launching of the ballistic missiles, the 
chairman spoke about that, with ``Death to Israel'' on it. To 
me that is provocation. And when they continue to support 
terrorists, that is a provocation. And I think that sometimes 
it is important for the Congress to speak out on these things. 
We have been having a lot of hearings on Iran and the 
implementation of JCPOA, and in some of our previous hearings, 
some of our witnesses have said: Well, if the Congress were to 
come out with new sanctions, it would give it that little extra 
edge. It would really send a message to Iran that we are aware 
of what they are doing and we are not tolerating it.
    It is true that the President could implement and has the 
authority to implement new sanctions without the Congress 
acting, but I really think it is important that the Congress 
act. So I would hope that the administration would seem to 
lessen its objection to Congress coming forward with new 
sanctions because, after all, when the JCPOA was put in front 
of the Congress, we were told specifically that it would not 
affect further sanctions against Iran for things other than 
their nuclear program, which would be terrorism and ballistic 
missiles and some other stuff.
    Mr. Szubin. Yeah, and that continues to be our view. I do 
want to point out, though, that Congress' sanctions 
contribution continues to be very potent right now. I neglected 
to mention this, so I am glad I have the opportunity.
    When we announced new designations in the terrorism, human 
rights, ballistic missile, Syria, Yemen space that have to do 
with Iranian actors, thanks to Congress and thanks to your 
efforts, those sanctions do not just touch U.S. actors. Those 
sanctions have secondary or extraterritorial effects around the 
world, which means that if a financial institution in East 
Asia, Africa, Europe, or the Gulf engages in transactions with 
any of the IRGC, the missile actors, the human rights 
designated actors, thanks to Congress, they face these 
secondary sanctions, namely a cutoff, a potential cutoff, from 
the U.S. financial system. Those are, sort of, if you will, 
supercharged sanctions, and that is only thanks to Congress' 
efforts. And so those stand behind every designation that we 
issue, even since implementation.
    Mr. Engel. Well, that is a good point, and that is why the 
chairman and I both feel so strongly that Congress needs to 
continue to be involved and that, if we need to, issue further 
sanctions. It does not violate our obligations under the JCPOA 
to do so. I just want to see quickly if Ambassador Mull has 
anything to add to it.
    Ambassador Mull. No, thank you so much Ranking Member 
Engel. Acting Under Secretary Szubin stated very clearly and 
succinctly that new sanctions on Iran's behavior outside the 
scope of the nuclear agreement would not be a violation of 
JCPOA. We have been very clear about that publicly as well as 
directly with our Iranian counterparts when they tried to make 
that argument.
    We have been very clear throughout the negotiations and as 
recently as my last meetings with the Iranians last week that 
sanctions on things such as missile launches, which are 
inconsistent with U.N. Security Council Resolution 2231, 
weapons proliferation, destabilization, support for terrorism 
will continue to have consequences from the United States 
Government. There is no doubt about that in the administration.
    Mr. Engel. Thank you.
    Thank you, Mr. Chairman.
    Chairman Royce. Thank you, Mr. Engel.
    We go to Mr. Chris Smith of New Jersey.
    Mr. Smith. Thank you very much, Mr. Chairman. Thank you 
again very much for your vigorous oversight of the Iranian 
deal, you and the ranking member.
    Let me just say a couple of points, and then I will ask a 
question or two.
    This week, as we all know, our Nobel Peace Prize winning 
President lifted the lethal arms embargo on a cruel 
dictatorship in Vietnam, a nation that has crushed dissent from 
journalists, bloggers, and religious believers. The New York 
Times had asked him not to do it, as did other editorials. He 
did it anyway and made a statement. Words are cheap in 
Washington. They are cheap in Hanoi as well. We asked for 
deeds.
    Two weeks ago, I had a hearing right here with Mrs. Vu Minh 
Khanh, the wife of Nguyen Van Dai, a human rights defender I 
had met in 2005, a tremendous man, he, like so many others, is 
fighting for fundamental human rights. He is in prison. Many of 
us said: Mr. President, if you are going to give something, 
please ask very specifically for the release of these prisoners 
and not just give all and get nothing in return.
    Administration officials have repeatedly testified that the 
deal in no way would impact our pressing Iran on human rights, 
yet the administration has only sanctioned one Iranian official 
for human rights abuses since they started negotiations. Iran, 
like Vietnam, is a cruel dictatorship that uses torture to hurt 
and even kill dissidents. Why is that the case? Why is there 
not a more robust effort on human rights?
    Secondly, credibility and messaging, even if it is clever 
and aggressive, needs to be honest. A May 5th New York Times 
article by David Samuels paints a highly disturbing insight 
into the administration's selling of the Iranian deal to the 
press, to the Congress, to the American people. The New York 
Times Magazine piece notes that the narrative that Ben Rhodes 
shaped, the story of an Iran deal that began in 2013 with a 
moderate faction inside led by Iranian regime that beat 
hardliners, the Times points out that that was actively 
misleading. It was to convey an impression that then people 
would follow up and say: Oh, things have changed.
    Mr. Rhodes brags in the article that we ``created an echo 
chamber,'' an onslaught of freshly minted experts cheerleading 
for the deal. Rhodes said: ``They were saying things that 
validated what we had given them to say.''
    He also points out that he was able to spoon-feed 27-year-
old reporters who knew nothing about this foreign policy and 
then they, with these so-called experts, constantly doing the 
echo chamber.
    Gentlemen, that is not the way to do a deal. It ought to be 
honest. It should be transparent. When you do things like this, 
you are duping the chairman or duping our ranking member 
because I, too, felt the sense of, are we missing something 
here? And the more we look at the deal, the more realize it. 
So, on the human rights piece, if you could speak to that, what 
is your view of the New York Times Magazine piece?
    And, finally, Ambassador Mull, the last time you were here, 
I asked you a very specific question about the Iranian 
material. You said it had been taken out, put on a Russian 
boat, vessel, and that we didn't know where it went. Do we know 
where it is now? Has there been a U.S. validation as to its 
whereabouts and whether or not it is under lock and key? All 
three of those questions.
    Ambassador Mull. Thank you very much, Congressman Smith, 
for those very good questions.
    On human rights, there has been no doubt about the strength 
of U.S. feeling about this very disturbing human rights 
situation in Iran. We have made that very clear publicly in 
repeated reports, whether on our religious freedom report or 
human rights report. I can affirm to you that in every meeting 
in which I have participated with Secretary Kerry with Iranian 
counterparts, we have made very clear our concerns. In fact, it 
was those concerns that really motivated our effort to get--
every human rights violation is a serious one. We are most 
concerned when the human rights of Americans are violated. So 
our concern about that motivated our very hard work to win the 
release of American detainees in Iran earlier this year.
    And I pledge to you, although human rights is outside the 
scope of the nuclear amendment, I know Secretary Kerry feels 
passionately about these issues and will continue to remain 
engaged.
    As opposed to the transparency of the negotiation of the 
agreement, I can tell you I worked in the Foreign Service for 
more than 34 years now. I have never seen an international 
agreement that has had greater transparency than the Iran 
nuclear deal. It was released in full to the public on the very 
day----
    Mr. Smith. I am almost out of time. We couldn't read the 
IAEA inspection protocol? I don't know what they are doing. We 
take them at their word. They are a good group. But 
transparency, that needs to have a little asterisk on it I 
would suggest.
    Ambassador Mull. The IAEA has continued to report and will 
continue to do so. We have briefed the Congress dozens of times 
throughout the negotiations and since then, and we are 
available in open and closed session to do so.
    Finally, your question about the enriched material that was 
removed from Iran to Russia, I was in Russia last month and in 
fact can confirm that that material is secure in Russia. There 
is no risk of its further proliferation. I would be very 
pleased to brief you in a closed session in more details if you 
would like, sir.
    Chairman Royce. Okay. We are going to go to Mr. Brad 
Sherman of California.
    Mr. Sherman. People in this country want us to get along 
with everyone around the world. We long for peace, and there 
are those who say sanctions contradict that. But when you look 
at what Iran has done in Syria, hundreds of thousands, perhaps 
1 million people killed by Assad with funds provided, weapons 
provided, thugs provided by the Iranian Government. When you 
see people killed by barrel bombs and sarin gas, we realize 
that the right response to the Iranian regime cannot be 
Kumbaya.
    This House was divided on the Iran deal, but we were united 
in one thing: Sanctions work. And, Mr. Szubin, thanks to you 
and your predecessors, you proved they work by working hard to 
make sure that they work. Some believe that the sanctions got 
us a good deal. Some believe the sanctions would have gotten us 
a better deal. The only agreement was that sanctions work.
    I join with the ranking member in saying that we ought to 
have new sanctions. And, Ambassador Mull, I thank you for 
clarifying that that will happen. I know that the Department of 
Treasury does additional designations, so you are doing your 
job. We need to do our job by passing statutes.
    Ambassador Mull, is it correct to stay that the 
administration's view is that simply reauthorizing and 
extending the Iran Sanctions Act would in no way violate the 
JCPOA?
    Ambassador Mull. To be honest, Congressman, we are aware of 
interest in this House, and throughout the Congress in general, 
to reauthorize the ISA. We don't believe that we need to act on 
it now because it is valid through the end of this year. But we 
are certainly open to working with----
    Mr. Sherman. Well, sometimes Congress likes to get our work 
done. I didn't ask you, you know, the House schedule. We might 
want to get our work done sooner rather than later. Is it a 
violation of the JCPOA to simply keep our statute going the way 
it was the day the JCPOA was signed?
    Ambassador Mull. Sir, I would be hesitant to speculate 
because I know, under previous efforts to re-extend it, there 
have been other things added onto that.
    Mr. Sherman. Again, if it were published in the exact 
language that existed on the day the JCPOA was signed, would 
that be a violation of the JCPOA?
    Ambassador Mull. Well, again, sir, we would have to look at 
what was actually published.
    Mr. Sherman. You know what was published. You don't want to 
answer the question.
    Mr. Szubin, a technical legal question. You talked about 
branches of U.S. banks. Does that apply equally to 
subsidiaries, or does it depend on how it is legally 
authorized?
    Mr. Szubin. It does depend.
    Mr. Sherman. So do you need legislation saying that the 
U.S. bank that owns a subsidiary would be subject to penalties 
if it allowed its subsidiary to do what its branch could not 
do?
    Mr. Szubin. So the distinction does exist, and that is not 
unique to Iran. That cuts across all of our sanctions programs. 
But I can tell you, in practice, I don't know of a single 
subsidiary of a U.S. financial institution that is considering 
doing this business. Given their global platforms, I think it 
would be all but impossible.
    Mr. Sherman. I am not aware of a problem either, but new 
legislation, I think, would be helpful.
    You have referred to Mahan Air as the Quds Force airline. 
Congressman McHenry and I sent a letter to EU Ambassador, 
joined by the chairman and the ranking member and many members 
of this committee, saying that you should designate Mahan Air 
under U.N. antiterrorism sanctions. Mahan Air cannot fly to 
Europe or Asia without ground service. It is not getting ground 
service from, for example, two companies, Airport Handling, 
which is based in Italy, and AHS Group, which is based in 
Germany. Now these same service companies also serve as U.S. 
airlines. Put aside the terrorist risk of having the same 
handlers do both, and would the Treasury Department consider 
listing these two airport handling companies for doing business 
with Iran?
    Mr. Szubin. Thank you very much for your focus on this 
issue. We don't comment on who we might designate in the 
future, but I want to say the continued ability of Mahan Air to 
fly around the world as if it was a legitimate airline is 
something I have raised in every capital that I visited. And I 
don't think it should be treated as a regular airline.
    Mr. Sherman. Well, the way to do it would be to designate 
these handlers. And you maybe won't mention their names, but I 
just did. And I would point out that our friends in the Ukraine 
ask us for so much, you would think that they would have 
listened to you when you made that point and as we make that 
point here.
    We have three major auto manufacturers, including Fiat 
Chrysler and Mercedes, investing in auto manufacturing in Iran. 
It is only a matter of time before the products of these 
investments, which are also being made by Volvo, will be used 
by the IRGC. Would investing in auto factories that are 
producing transportation for the IRGC be sanctionable?
    Mr. Szubin. Any type of material support to the IRGC would 
be sanctionable. The IRGC----
    Mr. Sherman. What if you build an auto factory that sells 
its trucks to the IRGC?
    Mr. Szubin. Typically, what we are looking for if we are 
going to be designating a company is to see that it is witting 
or colluding--a witting partner or colluding with the 
designated terrorist group. Investment in a firm that creates 
cars that then are subsequently appropriated by the IRGC would 
typically be a little bit too attenuated----
    Mr. Sherman. Well, no, not appropriated, just sold. I mean, 
you can't say you are not cooperating with the--my auto dealer 
cooperates with me. I take my car in service. He is a very 
cooperative guy. Are you saying that auto manufacturing 
facilities that sell trucks to the IRGC are going to be 
uncooperative?
    Mr. Szubin. No. Although, I might need to get the name of 
your auto dealer because I don't have that experience. What I 
am saying is that what we are looking for in going after new 
designation targets is those who are working with the 
designated entity. If we see companies that are propping up the 
IRGC, whether with autos, whether with funds, whether with 
weapons, whether with experience and support, that is what we 
would target.
    Mr. Sherman. I would ask you to look at these investments. 
I would ask you also--in addition to sanctioning those who do 
the wrong thing, warning those who are thinking of doing the 
wrong thing, whether you choose to do it publicly or privately. 
And I look forward to giving you the address of Fiat Chrysler, 
Volvo, and Mercedes.
    I yield back.
    Chairman Royce. Mr. Sherman, thank you.
    I think Mr. Sherman's point is that more banks, more 
ticketing agents, and more ground service providers and other 
companies that are providing support for Mahan Air should be 
sanctioned.
    We go now to Mr. Dana Rohrabacher of California.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman.
    And, again, I would like to thank you and the ranking 
member for taking very seriously the responsibility that we 
have to oversee what we disagreed on with you in terms of the 
Congress disagreed with you--many of us did--on this agreement 
with the mullah regime in Iran. The JCPOA was--the purpose, I 
take it was and that is what we were told, was to basically 
prevent Iran from at some point obtaining the capability of 
mass destruction on the governments that it considered to be 
under the command of the Great Satan, meaning Israel, the 
United States, and anybody else who disagrees with them. So we 
did not want them to have this right to obliterate their 
enemies, or at least, not the right but the capability. And 
this agreement was supposed to prevent that, and today, we have 
three witnesses who are basically saying that it was a good 
agreement and it has brought us to a safer world.
    And what is concerning to me is when we go back and, as the 
chairman has pointed out, that the agreement itself has flaws 
and perhaps some intentional flaws. And one flaw would be that 
it expires after a certain length of time, and so we can see 
Iran moving toward that goal unimpeded now to get themselves to 
a point, after expiration, they will be able to then have the 
power and force what they want.
    But even more disconcerting to me is that the flaw is that 
the treaty may well have contained what I call weasel words. I 
was a journalist for a number of years, and it is very easy to 
find out when someone really is trying to lie to you without 
lying to you. What they do is they put something in--they word 
something in a way that it appears to be accomplishing 
something that it is not accomplishing.
    And as the chairman just pointed out in his questioning, 
the actual words were changed to make them less enforceable. 
Now shouldn't that be a warning sign to anybody who takes this 
treaty seriously? And how do you explain that? The chairman had 
two or three examples where, for example--all right. Let's just 
go directly to the one I will ask you about. Basically, we have 
a situation where a rocket is designed, and as long as it is 
not designed to carry a nuclear weapon, the Iranians now, 
because we have changed--there is a weasel word put into the 
treaty--that they now can work and obtain that nuclear weapons 
delivery system as long as it wasn't designed to be a nuclear 
weapons delivery system. And that was changed to the point 
where, before, they would not have been permitted that. Why was 
that changed?
    Mr. Countryman. As I noted, I was not involved in the 
negotiation of that word in that resolution. I do not agree 
that this is a dramatic difference in the effect of the 
resolution with Iran----
    Mr. Rohrabacher. Okay. Let's--okay. Like I was saying 
before, it is not a dramatic difference. In one wording, it 
absolutely prohibited them from getting a rocket that could 
deliver a nuclear weapon system. After the wording, it now 
permits them to have it, because the strict definition of what 
the wording was, they now have an opening to possess a nuclear 
weapons delivery system. That is not dramatic? That is huge. 
Except it is being hidden with weasel words. Okay----
    Mr. Countryman [continuing]. Permission of Iran obtaining 
intercontinental or nuclear capable ballistic missiles. There 
remains an absolute prohibition in that resolution of anyone 
providing that technology.
    Mr. Rohrabacher. The missiles that were designed to deliver 
nuclear weapons, not technology that could achieve that goal. I 
mean, the fact is, if it can carry a nuclear weapon, even if it 
is not designed to do so--maybe it is designed to put up 
satellites. No, we don't want them to have that if that, 
indeed, will permit them to drop a nuclear weapon in 
Washington, DC, with a missile using it as a delivery system.
    You don't call that dramatic? That is very dramatic, and I 
think that people of the United States have been disserved--
there has been a disservice to us and our security by this type 
of--and I say weasel words again, deception. A weasel word is a 
deception to make people think that you are actually 
accomplishing something that you are not accomplishing.
    Let me tell you, this is not a problem of interpretation. 
This is a problem with actually a negotiation failure that we 
have obviously reached an agreement with them, meaning the 
mullah regime which murders their own people, that we have 
actually reached an agreement with them which they know will 
permit them to achieve their objective. This was not a good 
treaty to begin with. I appreciate your testimony, but 
obviously, I disagree with it.
    Chairman Royce. We go to Mr. Gerry Connolly of Virginia.
    Mr. Connolly. Thank you, Mr. Chairman.
    And welcome to our panel.
    Ambassador Mull, the Iran agreement addressed their support 
to Hezbollah, right?
    Ambassador Mull. No.
    Mr. Connolly. They addressed--well, certainly, it addressed 
the issue of money laundering?
    Ambassador Mull. No.
    Mr. Connolly. Syrian Assad support?
    Ambassador Mull. No.
    Mr. Connolly. Terrorism in Mahan Air?
    Ambassador Mull. No, sir.
    Mr. Connolly. Yemen?
    Ambassador Mull. No, sir.
    Mr. Connolly. Banning any further expression of death to 
America, or death to Israel? Surely, we addressed that in the 
agreement?
    Ambassador Mull. No, sir.
    Mr. Connolly. What did the agreement address?
    Ambassador Mull. Sir, the agreement addressed limiting 
Iran's capability to develop fissile material to build a 
nuclear weapon.
    Mr. Connolly. Well, that is a unique approach. Surely, in 
the Cold War with the Soviet Union, we had a different model. 
We addressed every negative behavior the Soviets were engaged 
in in every agreement we approached, including in my colleague, 
Dana Rohrabacher's administration, the Reagan administration. 
Is that not correct? We addressed every aspect of Soviet 
behavior, unlike this agreement?
    Ambassador Mull. No, sir, that is not correct.
    Mr. Connolly. Oh. Well, let's get to this agreement. Did 
this agreement require Iran to modify the Iraq heavy water 
research reactor and to fill the reactor calandria with 
concrete?
    Ambassador Mull. Yes, sir.
    Mr. Connolly. Did they do that?
    Ambassador Mull. Yes, sir, they did.
    Mr. Connolly. Oh, my lord.
    Did it require the reduction of installed centrifuges from 
19,000 to 6,104?
    Ambassador Mull. Yes, sir. That is true.
    Mr. Connolly. And did they achieve that?
    Ambassador Mull. Yes, sir, they did.
    Mr. Connolly. Did it require that uranium enrichment be 
reduced to a level of 3.67 percent?
    Ambassador Mull. Yes, sir.
    Mr. Connolly. And did they achieve that?
    Ambassador Mull. Yes, sir.
    Mr. Connolly. Did it also require that their stockpile be 
reduced to 300 kilograms and the rest of it shipped out of the 
country?
    Ambassador Mull. Yes, sir.
    Mr. Connolly. And did they do that?
    Ambassador Mull. Yes, sir, they did.
    Mr. Connolly. And you witnessed in Russia where it is being 
stored?
    Ambassador Mull. I confirmed in Russia where it is being 
stored.
    Mr. Connolly. Did they agree to allow the inspection and 
limitation on centrifuge production and uranium mines and mills 
under surveillance by international auspices?
    Ambassador Mull. Yes, sir.
    Mr. Connolly. And have they complied with that?
    Ambassador Mull. They are in full compliance.
    Mr. Connolly. And has the International Atomic Energy 
Agency verified this?
    Ambassador Mull. Yes, sir they have.
    Mr. Connolly. And have we verified this, our Government?
    Ambassador Mull. Yes, sir, we have.
    Mr. Connolly. Really? Well, I have to admit, I find--here 
is the second hearing. We had over 30 hearings in this, and, 
oh, my gosh, I tell you, I was worried. I had trouble sleeping. 
When I listened to my colleagues predict cheating, stealing, 
subterfuge, evasion, and I hear you, Ambassador Mull, tell me, 
well, maybe they wanted to do that, but they didn't.
    And so now that we are having hearings on compliance, we 
are talking about everything but compliance. We are talking 
about other behavior, which is to be condemned. I condemn it. I 
voted for sanctions on the other behavior.
    And, by the way, did the agreement prohibit any further 
U.S. sanctions for any purpose?
    Ambassador Mull. In----
    Mr. Connolly. Are we prohibited under this agreement for 
looking at new sanctions on unrelated behavior, that is to say, 
unrelated to the nuclear agreement?
    Ambassador Mull. Yes, that is correct, sir.
    Mr. Connolly. So we are not prohibited?
    Ambassador Mull. We are not.
    Mr. Connolly. We are not prohibited. We could entertain 
other sanctions for their support for Hezbollah, for example?
    Ambassador Mull. Yes, absolutely, sir.
    Mr. Connolly. Or putting sanctions on Mahan Air?
    Ambassador Mull. Yes, sir.
    Mr. Connolly. Okay.
    Mr. Rohrabacher. The gentleman asked a question early on in 
your questions. Would you like an answer to that, or----
    Mr. Connolly. Well, if my friend would----
    Chairman Royce. The gentleman will withhold, the time 
belongs to----
    Mr. Connolly. Because I only have 58 seconds, otherwise I 
would. If the chairman will give me time, that is great.
    These arguments are, you know, to me, a smokescreen for not 
addressing the main issue. And the other argument used, which 
is clever but still flawed, which is perfect is the enemy of 
good. The fact that it is not in perpetuity. That we couldn't 
achieve Iran forever forswearing any nuclear ambition means 
this is flawed. Was that ever in the cards, Ambassador Mull? I 
mean, I thought we hadn't even talked to them for almost 30 
years. So to get them to agree to this and comply seems to be, 
I don't know, to me, some kind of achievement. And why don't 
you comment, because my time is up.
    Ambassador Mull. Yes, sir. We believe it is an achievement. 
We believe that we and our allies in the region are 
considerably safer because of the achievements and full 
implementation of this agreement.
    In terms of whether it ever sunsets, while it is true 
certain restrictions on Iran's capability--its stockpile and so 
forth expire after certain periods--Iran's commitment and full 
access to the International Atomic Energy Agency is in 
perpetuity. And so whenever the IAEA believes that Iran is 
moving to develop a military application for its nuclear 
program, it will report as such, regardless of when that 
happens. And we have every capability, through law and through 
previous executive orders, to respond immediately to put back 
in place the very pressures that brought about this deal in the 
first place.
    So we are very confident that we have the tools to make 
sure that the security from this deal is long lasting, and if 
it is not, we can turn the tables and go back to the status quo 
ante.
    Chairman Royce. Mr. Joe Wilson of South Carolina.
    Mr. Wilson. Thank you, Mr. Chairman. And I yield 10 seconds 
to my colleague from California, Mr. Rohrabacher.
    Mr. Rohrabacher. Just to answer Mr. Connolly's point, which 
was, yes, in the Reagan administration, it was different. The 
fact is that in the Reagan administration, our goal was to 
bring down the Soviet Union. And even as we negotiated with 
them on various treaties, we had efforts all across the globe 
to bring down that government, which is exactly what we should 
be doing with the mullah regime, and we are not doing.
    Mr. Wilson. And, again, thank you very much, Chairman 
Royce. And I want to thank also, Congressman, the ranking 
member, Eliot Engel. I was grateful to actually vote with both 
of them opposing this dangerous deal. And, sadly, as we hear 
more and more about it, it becomes more dangerous. And it is so 
sad that we have a mullah regime, which is suppressing the 
dynamic people of Iran. They continue, as was cited, to 
proclaim death to America, death to Israel. That has not 
changed. I just find it incredible.
    And then my concerns, Ambassador Mull, have been verified 
due to the IAEA report, and that is in early March, the head of 
the International Atomic Energy Agency disclosed that certain 
agreements reached under the dangerous deal limit inspectors 
from publicly reporting on potential violations by the mullah 
regime. The Director General Amano, of the IAEA, which is 
responsible for ensuring Iran complies with the agreement, told 
reporters that his agency is no longer permitted to release 
details about Iran's nuclear program in compliance with the 
deal.
    The recent reports are devoid of details about critical 
implementation issues, including the amounts of low-enriched 
uranium in Iran, the nature of centrifuge rotor and bellows 
manufacturing, and advanced centrifuge research and development 
activities. Why would the administration agree to limit IAEA 
reporting? Why has the IAEA reporting on Iran been constrained? 
What specific component of the deal or U.N. Security Council 
resolution that implemented it, limits the IAEA reporting, and 
are there any Americans or Canadians who are serving as 
inspectors?
    Ambassador Mull. All right. Congressman, thanks for those 
questions.
    Last week, you know, I was in Vienna, and I met with the 
director general of the IAEA, Mr. Amano. I believe those press 
comments attributed to him are inaccurate and misinterpreted. 
It is quite clear that the IAEA will be reporting every 3 
months on the status of implementation.
    Now, in terms of the level of detail, I agree with you that 
in the last report there was less detail than in previous 
reports. That is because the Iranian nuclear program is 
significantly smaller than what it was as a result of this 
deal.
    The IAEA confirmed that Iran was within all of the 
numerical limits to which it committed. Director General Amano 
assured me last week that the IAEA would continue to address in 
its forthcoming report whether or not Iran is complying with 
every element of the deal. So I think you can count on a full 
reporting to continue from the IAEA.
    Mr. Wilson. But, clearly, it was stated that it is devoid 
of details by critical implementation issues. And whether it is 
low or not, it can say low or nonexistent, including the 
amounts of low-enriched uranium in Iran, the nature of 
centrifuge rotor and bellows manufacturing and advanced 
centrifuge research and development activities. That should be, 
really, easy to say yes or no.
    And then, Mr. Countryman, the development of missile 
technology and testing, to me, it is incredible. It is very 
revealing. There was only one reason that you would be 
developing an intercontinental ballistic missile capability, 
and that is to deliver a nuclear weapon, and it would be 
against American families.
    In the past month, we have had the spectacle of Iran 
testing a missile, which in Hebrew, so people who would be 
affected understand, as cited by Mr. Sherman, and that is that 
in Hebrew, it stated that Israel be wiped off the map. This was 
on a test. How can we possibly trust such a regime that makes 
such defiance in the aftermath of this dangerous deal?
    Mr. Countryman. I don't trust them further than I can spit.
    Mr. Wilson. Well, great. And then what measures are there? 
And I am grateful that I work with Congressman Seth Moulton. In 
the NDAA, we have a requirement that there be a response to 
missile testing and identification missile testing. Is there 
anything in place to let the American people know what is going 
on?
    Mr. Countryman. I am sorry. What is going on on----
    Mr. Wilson. To identify a missile test and what is the 
implication of the missile test by Iran?
    Mr. Countryman. Yeah. There is a lot of information, some 
of which is not appropriate for this forum, but we are always 
prepared to brief members on the full range of information that 
we have about Iranian missile tests.
    Mr. Wilson. Well, American families are at risk. They need 
to know.
    I yield the balance of my time.
    Chairman Royce. Go to Mr. David Cicilline of Rhode Island.
    Mr. Cicilline. Thank you, Mr. Chairman.
    Thank you to our witnesses.
    I appreciate the testimony with respect to the compliance. 
And I think many of us who, in fact, supported this deal, we 
are pleased that in fact compliance with the requirements have 
been met--or that Iran has taken the steps that are required.
    I think part of the challenge for us, though, is that we 
were told during this process that getting the nuclear issue 
off the table was so critical, and that we actually could 
expect Iran would engage in additional destabilizing activity. 
And, in fact, people suggested some of the resources that they 
would have access to, and some of the political needs that the 
regime would have would have caused them to be worse in that 
area, in terrorism, in human rights, and other areas.
    And so we were assured that this would give us an 
opportunity to push back hard in these other areas, because the 
danger of a nuclear Iran would be off the table. And I was 
persuaded by that. So I am very interested to hear the 
administration's efforts with respect to pushing back hard. And 
I want to begin in the area of human rights.
    What has the administration done since the signing of the 
JCPOA with regard to imposing sanctions on human rights 
violators in Iran? By all accounts there has been an increase 
in human rights violations, I think, in part, as the regime 
intends to show that they are still in charge. Despite this 
agreement, we have seen an increase in human rights violations. 
What has the administration done since the signing of the JCPOA 
with respect to human rights violations in Iran, if anything?
    Ambassador Mull. Congressman Cicilline, thanks for the 
question. As I mentioned earlier to Congressman Smith, the 
Obama administration is deeply concerned about the human rights 
situation in Iran. And in confronting that situation, we have a 
variety of tools available at our disposal. Sanctions are 
certainly one important part of it.
    Mr. Cicilline. Sorry to interrupt you. I probably should 
have been more precise with the question. I know you said you 
raised it in meetings. Has the administration done anything 
with respect to the imposition of sanctions on any individual 
or entity since the signing of the JCPOA with respect to human 
rights violations?
    Ambassador Mull. There has not been a specific sanction on 
a human rights case----
    Mr. Cicilline. Not one?
    Ambassador Mull [continuing]. Since the signing of it.
    Mr. Cicilline. Not one?
    Ambassador Mull. But we have managed to address human 
rights concerns, for example, by getting Americans out of the--
--
    Mr. Cicilline. I appreciate that. I congratulate on that. 
But just my point is, the existing sanctions regime has not 
caused the administration to impose a single imposition of 
sanction for human rights.
    Second question is, there has been a lot of discussion 
about additional sanctions. I think everyone acknowledges the 
JCPOA deals with nuclear sanctions and that non-nuclear 
sanctions, obviously, remain a tool. And so I would ask 
Ambassador--actually, Mr. Szubin, you recently expressed some 
concerns about the overuse of sanctions, and, you know, that 
the imposition of sanctions can impose costs. Are there 
circumstances in which you think we should be imposing 
additional sanctions on Iran, particularly in the context of 
the ballistic missile testing?
    It appears as if it is not a violation of JCPOA according 
to the administration, but clearly a violation of Security 
Council Resolution 2231. And if additional sanctions are not a 
useful tool, what do you suggest we do to dissuade or put 
pressure on Iran not to engage in this very nefarious activity 
with respect to ballistic missiles?
    Mr. Szubin. Thank you, Congressman. And I do want to 
clarify the quote you are referencing about the potential 
overuse of sanctions was made in a broader discussion about 
this tool as we move, potentially, into--well, for certain into 
a new administration and how to use this tool, the tool of 
sanctions both on the congressional side and on the executive 
branch side in a judicious way that would preserve its 
influence. It was not made with respect to----
    Mr. Cicilline. No. No, I understand.
    Mr. Szubin. With respect to their ballistic missile 
program, I think sanctions are a key piece. I think we do need 
to keep the pressure on. And I find particularly important 
those brokers and procurement agents who are helping to mask 
the ultimate end user, and that is who the SHIG group that I 
mentioned earlier, the SPIG group, that is who Iran's missile 
agencies are using to get the parts that they need in violation 
of U.N. Security Council resolution.
    The more we can expose those actors, both the individuals 
involved and the companies, the better, and the more we see it 
frustrate them. But I do want to say that that public effort is 
not the only thing we have going. Obviously, there are 
strategic interdictions that are going on at sea, some of which 
you would see in the papers, some of which you would not. And 
we have our own version of that in a financial sense, which is 
payments that are being made to broker procurement of dual-use 
items. We are sometimes able to block those payments mid-
transfer, which not only causes real damage to the procurement 
efforts, but also can sometimes spark a lot of useful 
intelligence from the effective individual.
    Mr. Cicilline. But am I correct in assuming that it would 
be useful in terms of sending a message to the Iranians that 
Congress and the United States is serious about stopping their 
ballistic missile system, and stopping their gross violations 
of human rights, by enacting additional sanctions in the non-
nuclear sphere as an expression of Congress and ultimately the 
American people's strong condemnation of ballistic missiles or 
human rights violations?
    That it would actually strengthen your hand as the 
administration for the Iranians to know there are Members of 
Congress that feel very strongly about this reflecting the 
sentiments of the American people, and we are committed to 
using all the tools at our disposal outside the JCPOA, not 
involving any of the nuclear sanctions to really effectively 
dissuade them, and persuade them, and impose costs on them for 
engaging in ballistic missiles testing or human rights 
violation?
    Mr. Szubin. No. I think the focus of this body of Congress 
on these non-nuclear threats has been and remains essential. 
And, frankly, the fact that it has been a bipartisan focus has 
been extremely powerful, and it does give us leverage in 
talking to the Iranians and talking to our international 
allies.
    With respect to the enactment of new sanctions legislation, 
I will repeat what I said to the chairman, which is, as a 
technical matter, the deal is talking about nuclear sanctions. 
As a practical matter, if legislation were to undermine the 
deal by taking off the table commitments that we had put on the 
table, that would be a problem. And, obviously, we don't want 
to see new legislation interfere with our fulfillment of the 
JCPOA.
    Mr. Cicilline. Understood. Thank you very much.
    I yield back, Mr. Chairman.
    Chairman Royce. Mr. Randy Weber of Texas.
    Mr. Weber. Thank you, Chairman.
    Ambassador Mull, you said in your opening comments, the 
JCPOA has been successfully implemented, cutting its missile 
program by more than two-thirds, increasing the breakout time 
of 2 months to more than a year. So it is your estimation, 
then, that it went from 2 months to 12 months, in your opinion 
we gained 10 months?
    Ambassador Mull. Yes, sir----
    Mr. Weber. Okay. That is math. You also said we have 
preserved our abilities to snap back penalties. And you further 
said that at the request of our foreign friends--and I am 
paraphrasing on this--we have been explaining the lifting of 
our sanctions. So the explaining of the lifting of those 
sanctions, that discussion time--is that going to take a month 
or two?
    Ambassador Mull. We tried to be responsive, Congressman, to 
whenever our international partners express questions about 
U.S. law and U.S. procedures, not just on Iran but on anything.
    Since the implementation day was reached in the agreement 
back in January, there has been a flood of requests, mostly 
from the world financial centers in Asia and Europe.
    Mr. Weber. So that really is my answer. A flood of requests 
from around the world. In the event that Iran would get very 
aggressive and start doing things again that we felt like a 
snapback sanction was in order here, it would take time, would 
it not, to explain to our friends around the world as to why we 
think they violated it and why we think an action is necessary?
    Ambassador Mull. I don't think it would take that much time 
if Iran----
    Mr. Weber. How much time do you think it would take?
    Ambassador Mull. To notify the world of Iran violation?
    Mr. Weber. No. To explain why snapback sanction--well, 
that, and then to explain and to get their buy-in on why 
snapback sanctions were necessary.
    Ambassador Mull. Well, I think--I mean, certainly, if we 
decided to snap back, we would make it an instant announcement 
of that. I couldn't speculate if there are questions from our 
allies----
    Mr. Weber. It would take a month or two. I am going to 
leave it at that, because I am going to run short on time. It 
is not going to be instantaneous. I think snap back is the 
wrong word there. Okay?
    Mr. Countryman, you said it is not sanctions or U.N. 
resolutions that cause Iran to change its pursuit of weapons--
it is not sanctions or U.N. resolutions but trade control. And 
I notice you didn't read from your remarks. You pretty much 
spoke from the heart, I guess, as it were.
    So if trade control was really the force du jour there that 
we needed, didn't we have them going in the right direction? 
Did sanctions have them going in the right direction? They were 
hurting.
    Mr. Countryman. Well, if you will give me just a moment. I 
make a distinction between sanctions that are intended to 
impose an economic cost and change behavior, and that is 
something that my colleague, Mr. Szubin, especially specializes 
in, and strategic trade control, which is how the United States 
cooperates with countries around the world to ensure that 
states of concern and non-state actors don't get their hands on 
dual-use technology, whether it is nuclear, missile related, or 
anything else.
    Mr. Weber. Okay. So you are say the force behind the 
sanctions was the trade control of all of our friends 
Ambassador Mull and I were talking about?
    Mr. Countryman. Well, there have been a number of 
institutions in place for years. The missile technology control 
regime, 40 most advanced countries in the world on ballistic 
missile technology, that cooperate against providing that kind 
of technology to countries like Iran. The proliferation 
security initiatives started under the Bush administration, and 
they are back----
    Mr. Weber. I get what you meant. The denial of access to 
our monetary system being somewhere up there in the upper 
echelon of one of those sanctions, agreed?
    Mr. Countryman. Yeah. I would put that, again--I am not 
trying to make fine distinctions, but I would say that is more 
in the category of economic sanctions and trade control.
    Mr. Weber. Okay. Well, I want to go with Mr. Szubin on 
this, because he did say super-charged sanctions could be used.
    Describe for us, if you would, the difference between, you 
know, normal sanctions, lesser sanctions, and super-charged 
sanctions.
    Mr. Szubin. I would be happy to. And I did not mean to coin 
a new term and certainly not that term.
    Mr. Weber. When I was in high school, super charging meant 
something different but go ahead.
    Mr. Szubin. What I meant was to refer to the reach of a 
targeted sanction. So just to give you a very specific example. 
If we target a human rights actor in the Democratic Republic of 
the Congo, we add them to the OFAC sanctions list, that binds 
the actions of U.S. banks, U.S. companies. Foreign actors are 
still permitted without any fear of U.S. consequences, to do 
business, as long as they keep their transactions out of the 
U.S. So they can't be routing those transfers through the U.S., 
but if they want to do it in local currency, fine.
    When it comes to Iran, what Congress did was say no, anyone 
who does business anywhere around the world in whatever 
currency with an Iranian actor that is on the OFAC blacklist, 
faces a potential cut off from the U.S. financial system. That 
is what I was referring to as these greatly augmented sanctions 
designations.
    Mr. Weber. Okay. Thank you for that distinction.
    Mr. Chairman, I yield back.
    Chairman Royce. Mr. Meadows of North Carolina, who was 
instrumental in the Hezbollah sanctions legislation we 
referenced earlier. As a matter of fact, he was the driving 
force, the driver behind the bill that this committee put out 
on Hezbollah sanctions.
    Mr. Meadows.
    Mr. Meadows. I thank you, Mr. Chairman. I thank you for 
your leadership on that particular effort.
    So, Mr. Szubin, let me come to you. Is it all these 
sanctions, and as we talk about this, it gets very confusing. 
And so we have removed some sanctions; we have left some in 
place.
    To the average elected official, do we have, really, the 
intellectual discernment to decide which sanction is which and 
when it should be applied and when it should not be applied? Is 
that easily done?
    Mr. Szubin. I sure hope we have that capability. I mean, 
that is what my office is there to do.
    Mr. Meadows. That is what your office is--but it is not 
necessarily what my office or other elected officials' offices, 
in terms of figuring out sanctions and how they should apply 
and if they apply in every case; is that correct? So if we have 
questions, you are the go-to person to figure out whether we 
are complying; is that correct?
    Mr. Szubin. We would be happy to provide any consultation 
on that that is sought.
    Mr. Meadows. All right. Since we are talking today about 
compliance, and we are talking about centrifuges and all kinds 
of other things, Ambassador Mull, can you tell me why, when we 
look at the JCPOA--we are talking about centrifuges, and they 
were ``to be made inoperable,'' and you have changed the 
language to be disabled, and most of those centrifuges from 
what I understand, have been turned off and put in a storage 
place in Iran. Is that correct?
    Ambassador Mull. Sir, the centrifuges that have been 
dismantled had all of the equipment----
    Mr. Meadows. All of them?
    Ambassador Mull. And they are allowed----
    Mr. Meadows [continuing]. Are disassembled is what you are 
saying?
    Ambassador Mull. They are allowed, certainly, 5,060 to be 
operating at this time.
    Mr. Meadows. No. But I am talking about of the 19,000. You 
disassembled all of them, and they can't be put back into place 
very quickly----
    Ambassador Mull. That is correct.
    Mr. Meadows [continuing]. This is your sworn testimony?
    Ambassador Mull. That is correct.
    Mr. Meadows. Are they being stored in Iran?
    Ambassador Mull. Yes, sir.
    Mr. Meadows. So how long would it take them to get them out 
of storage and put them back in operation if they decided to do 
that today?
    Ambassador Mull. If they decided to do so, it would depend. 
Some of them are stored in----
    Mr. Meadows. Well, I know they got rid of some of them that 
weren't actually in use. So--but what I am talking about is the 
ones that they were supposed to dismantle, how long would it 
take them to take them from storage and get them back in----
    Ambassador Mull. Well, this all factors into our 
calculation of breakout time. It would certainly be a matter of 
several months----
    Mr. Meadows. That is not my question. That is a great 
answer to a question I didn't ask. How long would it take to 
take the centrifuge from the storage and actually get it back 
in place again and flick on the switch?
    Ambassador Mull. Well, it--again, it depends on the 
centrifuge; it depends on the location. All of this--the 
storage is completely, sir, under monitoring full time by the 
IAEA.
    Mr. Meadows. I didn't ask that. That is two answers to 
questions I didn't ask. I asked you, how quickly from the 
storage could they be back in place? A month?
    Ambassador Mull. Which centrifuge and from which location 
do you mean? It depends.
    Mr. Meadows. All right. Let's take some of the centrifuges 
of the 19,000 that we put in storage. What would be the fastest 
time that they could get one of them that is most operable and 
put it back in place, the fastest time?
    Ambassador Mull. Sir, I don't have an immediate answer for 
you. I would have to consult with our technical----
    Mr. Meadows. Can you give me a range? Seven days?
    Ambassador Mull. I would have to check with our technical 
engineers to get the----
    Mr. Meadows. All right. Well, let me tell you the reason I 
asked. I have a letter here that went to Governor Pat McCrory 
from you, which by many descriptions is a pro-Iranian marketing 
material suggesting that we ought to do more business with 
Iran. And it says when we need to check on sanctions, and asks 
the Governor to do that, of which they don't have the 
expertise. They have asked me about the expertise in terms of 
compliance.
    Why would you send a pro-Iranian marketing letter to my 
Governor?
    Ambassador Mull. Sir, I----
    Mr. Meadows. Who instructed you to do that?
    Ambassador Mull. Well, with respect, I disagree that is a 
pro-Iranian----
    Mr. Meadows. Well, some have described it that way. And you 
can disagree, so we will disagree on that.
    Who instructed you to do that?
    Ambassador Mull. In the agreement, the United States 
Government committed to inform State and local authorities 
about changes in the nuclear situation in Iran----
    Mr. Meadows. So you sent a letter like this to all 50 
States?
    Ambassador Mull. That is right, because the United States 
Government committed to do that.
    Mr. Meadows. So in doing that, you went to great lengths, a 
number of paragraphs, to talk about how great this is and all 
that and selling--instead of just saying that you need to look 
at changing your laws as it relates to that.
    Why was it in such a pro-Iranian manner?
    Ambassador Mull. Sir, I disagree that it was in a pro-
Iranian manner. It described----
    Mr. Meadows. We will give it to the press and let them 
opine on it.
    Obviously, is this something that you released to the press 
so they know all about it?
    Ambassador Mull. I did not release it to the press.
    Mr. Meadows. Okay. Well, we will let them do that.
    I guess the other question is, since we have our ally, 
Israel, and many of them are under attack by a BDS movement, is 
the State Department going to send out a similar letter saying 
that States should not actually embark on a BDS movement for 
all 50 States for our ally, Israel?
    Ambassador Mull. I am sorry, sir. BDS movement, I am not 
sure----
    Mr. Meadows. Boycott investment----
    Ambassador Mull [continuing]. Investment sanction.
    Sir, our relation----
    Mr. Meadows. It is troubling that you wouldn't know what 
that is.
    I will yield back.
    Chairman Royce. Mr. Scott DesJarlais of Tennessee.
    Mr. DesJarlais. Thank you, Mr. Chairman.
    Mr. Countryman, did I hear you say it was your belief that 
Iran never intended to slow its testing of ballistic missiles?
    Mr. Countryman. I don't know about never, and it is 
difficult to talk about intent, but the record shows that they 
have had a consistent, steady program of ballistic missile 
development for missiles of various range, similar to that of 
other countries in the region and beyond the Middle East.
    Mr. DesJarlais. And it is your job to apply sanctions for 
violations?
    Mr. Countryman. It is my job with the support of a number 
of agencies, both to apply strategic trade controls to inhibit 
Iran acquiring the technology and in cooperation with the 
Treasury and others to apply sanctions to entities in Iran and 
outside Iran that violate those restrictions.
    Mr. DesJarlais. Okay. And you stated in your written 
testimony that all the sanction authorities we need are already 
in place, and we have repeatedly used our own domestic 
authorities to sanction those involved in Iran's ballistic 
missile program and will continue to do so as warranted.
    I mean, you can say that you have the authorities to deal 
with it, but that rings hollow. The Iran, North Korean, and 
Syria Nonproliferation Act of 2006, which levies U.S. sanctions 
on entities connected with Iran ballistic activity, is 
implemented by your office. But the GAO study commissioned by 
this committee, from last year, shows the State Department to 
be completely delinquent in applying these sanctions.
    The report that triggers designation for sanctions for 2011 
showed up in December 2014, 36 months late. The last report sat 
on the Deputy Secretary's desk for more than a year, according 
to GAO. And the State Department needs to comply within its 6-
month reporting cycle and minimize the delays and its ability 
to impose sanctions. Would you agree?
    Mr. Countryman. I read the GAO report. It is a good one. I 
agree that we have been slow. I would not say delinquent. I 
think the report did a good job of stating the important 
verification process that we have to go through in a complex 
interagency process. I am determined to do better.
    Mr. DesJarlais. Well, they also stated that political 
concerns such as international negotiations with countries 
involving transfers can delay State implementing the process. 
Would you agree with that?
    Mr. Countryman. No.
    Mr. DesJarlais. So the Ben Rhodes' comment and all that has 
nothing to do with protecting the President's legacy in your 
opinion?
    Mr. Countryman. I don't know which comment you are 
referring to.
    Mr. DesJarlais. Well, the echo chamber, the fact that they 
were trying to hide the fact that this was not really a good 
deal. But you said that you don't think you are completely 
delinquent. Do you not think that 36 months behind on a 6-month 
window is completely delinquent?
    Mr. Countryman. I think if you wanted a report every 6 
months, you would get an inadequate report. I think that we 
have to do better and faster, but I----
    Mr. DesJarlais. Okay. We agree there are missiles that 
have--Israel needs to be abolished, and you are saying that we 
have all the people in place to apply these sanctions. That is 
not very comforting when we are looking at two 3-year delays in 
a program where we have a deal that is designed to curtail the 
development of nuclear weapons, but a ballistic missile is the 
essential component to delivering these not only to Israel but 
to our allies in the United States.
    And you say you have to do better. It doesn't give me much 
comfort.
    Where are the delinquent reports right now? Where are they 
in the process?
    Mr. Countryman. Well, first, I would note that INKSNA is 
not our only tool. It is a congressionally mandated tool, and 
we take that very seriously, and we want it to be a good 
decision process and one that can be justified and explained 
fully to you when it is delivered.
    But we have other tools available if we need them in order 
to move against individual entities.
    In terms of where we are in the report, I am hopeful that 
you will get the 2013 report in the very near future. The 2014 
report is well in preparation. And as I said, we are trying 
to----
    Mr. DesJarlais. Do we know whose desks they are on now? Do 
you know where they are at? I mean, we are talking about 
reports from 3 years ago on a 6-month window, again. And you 
are saying we need to do better. Do you know where they are at?
    Mr. Countryman. Yes.
    Mr. DesJarlais. Who has them?
    Mr. Countryman. They are in the process, and I think they 
will be completed shortly.
    Mr. DesJarlais. You are not going to tell me who has them. 
You are just going to tell us, we are going to do better; we 
are 3 years behind; they are shooting missiles; we are in the 
middle of a deal that Secretary Kerry all but admitted it is 
not a matter of if it fails, it is more when it fails, which 
could be a year, 2 years, 3 years.
    So you are applying sanctions from reports from 2 to 3 
years ago for things that are happening now. Is that what you 
are telling us?
    Mr. Countryman. I am saying that we have sanctioned the 
primary entities involved in Iran's missile program. And if we 
rush this to you any sooner, it will not make a dramatic change 
in the entities that are already sanctioned.
    Mr. DesJarlais. Or the President may look bad?
    Mr. Countryman. Pardon me?
    Mr. DesJarlais. I said or the President may look bad, as 
the GAO reported that is the reason for these delays.
    Chairman Royce. The gentleman's time has expired.
    Mr. Countryman. The GAO is not correct on that point.
    Chairman Royce. We are now going to Mr. Lee Zeldin of New 
York.
    Mr. Zeldin. Thank you, Mr. Chairman.
    Ambassador Mull, you referenced earlier historic 
verification and monitoring regime. Have you yet read the 
verification regime outlined in the side deals between the IAEA 
and Iran?
    Ambassador Mull. I am not aware of any side deals between--
which side deal do you mean?
    Mr. Zeldin. I am referencing the deals between the IAEA and 
Iran to decide how the JCPOA is going to be implemented, what 
governs the verification of the Iran nuclear deal?
    Ambassador Mull. Iran and the IAEA have a confidential 
safeguards agreement just like every member of the IAEA has 
done.
    Mr. Zeldin. We are talking about the same exact thing. Have 
you read that?
    Ambassador Mull. No, sir, I have not.
    Mr. Zeldin. Okay. I would just offer up for you and for 
Secretary Kerry, who was here a few months ago, it is difficult 
to vouch for a historic verification and monitoring regime when 
you don't know what the historic verification and monitoring 
regime is. All you know is what is contained in the JCPOA, but 
you don't know what is included in the agreement between the 
IAEA and Iran, especially as we read Associated Press reports 
about how Iran might be collecting some of their own soil 
samples, responsible for inspecting some of their own nuclear 
sites.
    As we read what the Associated Press reports, as far as the 
verification of the JCPOA, if you haven't yet read it, it is 
impossible to say that is a historic verification and 
monitoring regime, because you don't know what it is. The 
administration has said the deal is not built on trust; it is 
built on verification.
    Why didn't the Obama administration ask the Iranians to 
sign the JCPOA?
    Ambassador Mull. Why did we ask them to sign it?
    Mr. Zeldin. Why didn't we ask them to sign it?
    Ambassador Mull. Well, the JCPOA is a political agreement, 
and that evolved that way in the course of negotiations that, 
in order to preserve our ability to exact the kind of penalties 
and the kind of nimble ability and agility that we would have 
to exact penalties if the agreement were not implemented 
correctly. We believe it served our interests best to have this 
as a political agreement.
    Mr. Zeldin. Well, I would assume that if you have bought 
cars in your life, you have bought houses in your life, you 
have signed many agreements. You have signed your name on all 
sorts of things. I would imagine if there was an example we 
need to come up with of something where you should get a 
signature, that the JCPOA is a great example of something where 
you ask the Iranians, would you mind signing it. The 
administration decided not to.
    Ambassador Mull. Yeah, the----
    Mr. Zeldin. Now, what is a political commitment? Secretary 
Kerry has referred to the JCPOA not as a treaty. And the reason 
is he said because he wouldn't be able to get it passed. That 
is what he said right here. The reason why this isn't a treaty 
is because he wouldn't have been able to get it passed. 
Ridiculous answer, but moving on. He says it is not an 
executive agreement; it is a political commitment.
    What is a political commitment as defined by the Obama 
administration?
    Ambassador Mull. A political commitment is one that is the 
official policy of the United States Government that we are 
fully committed as a government to implementing the deal on its 
terms. As a political commitment, we or any future government, 
is free to withdraw from that agreement with a minimum of legal 
difficulty. We have decided that----
    Mr. Zeldin. I am sorry. You said you are allowed to 
withdraw from the political commitment without legal 
difficulty?
    Ambassador Mull. That is right, yes.
    Mr. Zeldin. Okay. That is what we are defining the JCPOA as 
something that you can withdraw from without legal difficulty?
    Ambassador Mull. Well, if other parties, namely Iran, 
decide to withdraw from it, there are going to be very serious 
consequences for that. We have preserved by establishing this 
as a political agreement, our freedom of action, in ensuring 
there are dramatic consequences to withdraw from that 
agreement.
    Mr. Zeldin. Okay. So should the Iran Sanctions Act be 
extended as is?
    Ambassador Mull. I know it is in place until December of 
this year. We are ready to work with the Congress in addressing 
that question right up to December.
    Mr. Zeldin. What is the administration's position on Iran 
Sanctions Act? Should it be extended as is?
    Ambassador Mull. Our position is is that we are willing to 
talk with the Congress, congressional leadership, about that.
    Mr. Zeldin. Okay. When do you plan on coming up with a 
position on the Iran Sanctions Act?
    Ambassador Mull. Again, we are open to work with Congress 
on this. We are at your disposal.
    Mr. Zeldin. Well, I have a position, the Iran Sanctions Act 
should be extended as is. What say you?
    Ambassador Mull. Well, let's sit down and talk about what 
that means. And during further----
    Mr. Zeldin. What does that mean? It means the Iran 
Sanctions Act, as is, should be extended as is.
    Ambassador Mull. But in previous efforts to extend the act, 
there have been efforts, suggestions to change the----
    Mr. Zeldin. I am not suggesting changing it. Extending as 
is.
    Ambassador Mull. But there are voices in Congress who would 
like to amend it. So we need to have a conversation about it.
    Mr. Zeldin. Okay. Well, the Obama administration needs to--
I know there is a whole thing about legacy and turning over to 
the next administration that Iran never acquired a nuclear 
weapon, but many of you all need to pray to God that the next 
administration cleans up your mess.
    I yield back.
    Chairman Royce. The gentleman's time has expired.
    We go to Mr. Scott Perry of Pennsylvania.
    Mr. Perry. Thank you, Mr. Chairman.
    Mr. Countryman, good morning.
    You started with the administration in September 2011? Is 
that correct?
    Mr. Countryman. I have been a foreign service officer since 
1982. I have been in my current post since 2011.
    Mr. Perry. You started this position 2011, right?
    Mr. Countryman. Yes.
    Mr. Perry. Did you have any participation in the 
negotiations/agreement that we are speaking of, the JCPOA?
    Mr. Countryman. I was not a member of the negotiating team.
    Mr. Perry. Okay. What was your involvement? You are the 
Assistant Secretary for the Bureau of International Security 
and Nonproliferation and I would think that this would fall 
under the nonproliferation moniker, if you would. So what were 
your duties regarding this program, the negotiations, the deal, 
et cetera?
    Mr. Countryman. As you know, the negotiating team was small 
and worked very well. I provided a couple of my experts for 
technical support.
    Mr. Perry. Okay. So you are fully aware of what was 
happening and who was doing it, even though you weren't there, 
you provided the experts that you knew when things were 
happening, who was talking to whom those types of things? Yes?
    Mr. Countryman. Yes, sir. I knew when people were talking 
to each other. I did not know a lot about the substance of what 
was being discussed in the negotiations.
    Mr. Perry. Okay. So you knew when people were talking to 
each other. And so then you knew when Ben Rhodes made the claim 
that we were dealing with moderates in Iran, that that was 
completely false? That was a fraudulent statement? You knew 
that, because you knew the timeline, right? You started in 
2011, and you provided expertise and then you would have known 
that negotiations actually started in mid-2012?
    Mr. Countryman. I know when negotiations began under the 
previous Iranian presidency. I know when negotiations began 
under President Rouhani's presidency. I did not know the 
substance of it.
    Mr. Perry. I didn't ask you. But you knew when that 
happened, right? So when Ben Rhodes said that we were dealing 
with--and sold this to the American people and the rubes up 
here in Congress, right, us primitive people up here in 
Congress that questioned the timeline, but you knew at that 
time that that was a falsehood, right? I mean, you knew, 
because you knew that it started in 2012 and Rouhani wasn't 
elected until June 2013. So you knew that, right?
    Mr. Countryman. I do not believe it was a falsehood. And 
no, I did not know.
    Mr. Perry. You did not know that?
    Mr. Countryman. And there is no secret, there was nothing 
concealed here. At the time of the preliminary agreement signed 
in 2013----
    Mr. Perry. You knew that negotiations started in 2012, 
right? Did you know that?
    Mr. Countryman. Did I know the instant they began? No.
    Mr. Perry. Did you--okay. So around sometime mid 2012, 
maybe December 2012--but some time in 2012, right, you knew 
that, because you were providing material as well, right?
    Mr. Countryman. I was providing an expert who gave advice 
to the negotiation team.
    Mr. Perry. But did you know or didn't know?
    Mr. Countryman. Did I know what, sir?
    Mr. Perry. When negotiations started generally speaking 
based on that? When did you provide the individuals that 
helped?
    Mr. Countryman. Generally speaking, I knew.
    Mr. Perry. Generally speaking, you knew. So, and you also 
knew, I am thinking, that Rouhani wasn't elected until June 
2013? Right? Right?
    Mr. Countryman. Yes, sir.
    Mr. Perry. Okay. So then when Ben Rhodes made the statement 
that we were dealing with the moderate in Rouhani----
    Mr. Countryman. At what time did he make this statement?
    Mr. Perry. He made the statement throughout the 
negotiation, because that was what we were supposed to accept 
here, even though many of us did not and questioned that.
    Did you know then?
    Mr. Countryman. In 2013, when the JCPOA, the interim 
agreement with Iran was concluded, there was extensive briefing 
to Congress and to the press about the history of contacts 
between Iran and the United States.
    Mr. Perry. Leading up to that, we had questions about that, 
and the word was that we were all supposed to accept it that 
these were moderates and this is where the negotiation began. 
And I am not saying you came to Congress and said that, but you 
knew that that was not necessarily the case?
    Mr. Countryman. I strongly disagree, sir.
    Mr. Perry. You did not know that?
    Mr. Countryman. I have not heard false statements from the 
White House. I have heard a lot of statements during the 
discussion of this agreement, but not false ones from the White 
House.
    Mr. Perry. Did you make any statements in support of the 
claim that this administration was negotiating with moderates 
from Iran on this deal? Did you make any of those statements? 
Did you support----
    Mr. Countryman. Not that I recall.
    Mr. Perry. Did you support any of those statements in any 
of the statements that you made? Did you support that?
    Mr. Countryman. Not that I recall.
    Mr. Perry. Not that you recall.
    Mr. Countryman. My focus has been on the substance of the 
agreement and having done nonproliferation for 5 years, I see 
an agreement that is the most detailed of any kind of arms 
control agreement verification----
    Mr. Perry. Well, Mr. Countryman, understand that while the 
last questioner just outlined the fact that we are 36 months 
late on triggers designation for sanctions, we have a trust 
issue here. We have a trust issue between Congress and the 
administration who objectively falsified the timeline when many 
of us here knew it. And I think you could have said something 
but you chose not to. For whatever reason, that is your 
business.
    Mr. Countryman. I have not seen a false timeline. I have 
not seen----
    Mr. Perry. Mr. Chairman, I yield back.
    Chairman Royce. We thank the witnesses. We thank General 
Scott Perry and the other members of the committee here for 
their participation as well, and we will continue the dialogue 
on this issue.
    Thank you very much. I appreciate your attendance.
    Mr. Szubin. Thank you.
    Chairman Royce. We stand adjourned.
    [Whereupon, at 11:58 a.m., the committee was adjourned.]

                                     
                                    

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