[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
THE IRAN, NORTH KOREA, AND SYRIA
NONPROLIFERATION ACT: STATE
DEPARTMENT'S NON COMPLIANCE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
THE MIDDLE EAST AND NORTH AFRICA
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
JUNE 17, 2015
__________
Serial No. 114-42
__________
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
------
Subcommittee on the Middle East and North Africa
ILEANA ROS-LEHTINEN, Florida, Chairman
STEVE CHABOT, Ohio THEODORE E. DEUTCH, Florida
JOE WILSON, South Carolina GERALD E. CONNOLLY, Virginia
DARRELL E. ISSA, California BRIAN HIGGINS, New York
RANDY K. WEBER SR., Texas DAVID CICILLINE, Rhode Island
RON DeSANTIS, Florida ALAN GRAYSON, Florida
MARK MEADOWS, North Carolina GRACE MENG, New York
TED S. YOHO, Florida LOIS FRANKEL, Florida
CURT CLAWSON, Florida BRENDAN F. BOYLE, Pennsylvania
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
C O N T E N T S
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Page
WITNESS
Mr. Thomas Melito, Director, International Affairs and Trade,
Government Accountability Office............................... 5
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Mr. Thomas Melito: Prepared statement............................ 8
APPENDIX
Hearing notice................................................... 32
Hearing minutes.................................................. 33
The Honorable Gerald E. Connolly, a Representative in Congress
from the Commonwealth of Virginia: Prepared statement.......... 34
THE IRAN, NORTH KOREA, AND SYRIA
NONPROLIFERATION ACT: STATE
DEPARTMENT'S NON-COMPLIANCE
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WEDNESDAY, JUNE 17, 2015
House of Representatives,
Subcommittee on the Middle East and North Africa,
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 2 o'clock
p.m., in room 2172 Rayburn House Office Building, Hon. Ileana
Ros-Lehtinen (chairman of the subcommittee) presiding.
Ms. Ros-Lehtinen. The subcommittee will come to order.
After recognizing myself and my good friend, the ranking
member of our subcommittee, Ted Deutch of Florida, for 5
minutes each for our opening statements, we will then recognize
any other members seeking recognition for 1 minute. We will
then hear from our witness. And without objection, the witness'
prepared statements will be made a part of the record, and
members may have 5 days to insert statements and questions for
the record, subject to the length limitation in the rules.
And I would like to say, first of all, I apologize for not
having a lot of members here. There is a lot of activity going
on right now, and our GOP Caucus is having a big briefing on
the pending Supreme Court decision on the subsidies for
Obamacare. So I apologize, but you have the best right here.
The Chair now recognizes herself for 5 minutes. As part of
this subcommittee's continued efforts to perform our oversight
functions of the State Department and of the Iranian nuclear
negotiations, we are convening this hearing to take a look at
State's compliance with the Iran, North Korea, and Syria
Nonproliferation Act, known by its acronym INKSNA.
INKSNA, by State's own admission, is an extremely important
and effective tool to address the threat of the proliferation
of weapons of mass destruction, WMDs, and ballistic missiles.
It could be even more effective if we pass an updated version,
like the INKSNA Modernization Act that I authored in 2011,
which passed the House overwhelmingly with a vote of 418 to 2.
This law requires the President, who has delegated the
authority of INKSNA to the State Department, to provide a
report to our committee every 6 months identifying individuals
who are believed to have sent or received certain items or
technology from Iran, North Korea, or Syria. These individuals
would then be subject to specific sanctions as detailed in the
law.
Well, the GAO (Government Accountability Office) was asked
by Chairman Royce to examine the implementation of INKSNA by
the State Department and to review its reporting process and
identify the impact of that process on the imposition of
sanctions against the Iranian regime.
What the GAO found was that the State Department has been
extremely delayed in providing the requisite reports to
Congress. Of the 18 legislatively mandated reports that the
Department was to issue to date, only six have been issued. The
latest report we received was not only late, it took State
almost 3 years to prepare the 2011 report that we received in
December 2014--but this report sat awaiting approval on the
Deputy Secretary of State's desk for over a year. Can you
follow that?
So it took State almost 3 years to prepare the 2011 report.
We received it in December 2014. But the report sat awaiting
approval for over a year. State reportedly told the GAO that
one of the major causes for delay is the vetting process of the
individual cases. Each cycle, State has unilaterally made the
decision to package cases together--that is the problem--and
move them through the process at the same time.
So what ends up happening is if we have one problematic
case, well, that case can hold up the process for all of the
other cases. Instead of pulling that case aside for processing
in the next cycle, State holds up the entire package until all
cases have been cleared, thus holding up indefinitely the
sanctions on all of these individuals, because, remember, it is
not just about the report, we want to know who is being
sanctioned.
So while we are waiting and waiting and waiting, no one is
getting sanctioned. While we are waiting for an entire group to
be processed because of one problematic case, we are allowing
these other individuals to continue to help Iran, to continue
to help North Korea, to continue to help Syria, and they will
skirt sanctions and proliferate weapons of mass destruction.
This is a huge blow to the intent of the sanctions and
their effectiveness, as well as a huge blow to our national
security. But let us look at the timeline of the last report
for a moment. We received the report, as I said, in December
2014. It sat on the desk for over a year. In November 2013,
President Obama announced that the P5+1 had reached an
agreement with Iran, and we were ready to implement the joint
plan of action while they continued to pursue a final
agreement.
If we connect the dots, the administration had actionable
intelligence and a legal obligation--let us not forget that--to
sign off on the report and sanction these individuals. But the
administration sat on this. They did not file the report, and
the administration did not sanction these individuals.
This flies in the face of all of the times that the
President and the folks that we know have said that the U.S.
will continue to fully enforce all of the sanctions on Iran
while the negotiations were ongoing. That is what the
administration says. What they are doing is quite different.
Each and every one of these times they knew that this was less
than truthful.
The reporting requirements of the law is clear. State is
required to submit INKSNA reports to Congress every 6 months,
yet the State Department took it upon itself to ignore this
requirement. The requirement is not a suggestion; it is the
law.
And as the Iran nuclear negotiations continue we are also
left to wonder, what other sanctions is the administration not
enforcing that it should or that it must? We already had the
recent report from the U.N. panel of experts that said that the
U.S. and other nations were not reporting Iran's sanctions
violations to the Sanctions Committee.
Ambassador Power was here in this very room yesterday and I
asked her about that, and she, too, stated the administration
has been above water and has been fully enforcing all of the
sanctions. But when it comes to the nuclear negotiations and
Iran, I am more inclined to believe that the administration is
purposely misleading Congress and is in fact not following the
intent and letter of the law.
This GAO report should be just the tip of the iceberg, and
I commend Director Melito and his team for their hard work in
putting together this report.
Thank you.
And now I yield to the ranking member of the subcommittee,
my good friend Mr. Deutch.
Mr. Deutch. Thank you, Madam Chairman, for holding today's
hearings. I want to thank the chairman for her continued
legislative efforts to strengthen the Iran, North Korea, and
Syria Nonproliferation Act. You have been tireless in your
efforts to keep focus on the nexus between these three regimes
and their quest for weapons of mass destruction.
As we heard in our hearing on Iran's ballistic missile
capabilities last week, the relationship between Iran and North
Korea with respect to illicit procurement is vital to the
Iranian regime's efforts to circumvent international sanctions.
We know that the Iranian regime has been unabated in its
support for Assad over the past 4 years, and the potential
transfer of sensitive technologies or weapons to this murderous
regime that has shown it is more willing to use and continue to
use, despite its obligations under the Organization for
Prohibition of Chemical Weapons Agreement, chemical weapons
that it is willing to use against its own people.
INKSNA was enacted and subsequently amended to shut down
illicit procurement and transfers. And, first, let me say that
I appreciate the GAO's work on this work, and I appreciate the
State Department's willingness to make comments on GAO's
findings and accept the GAO recommendation. We know that
building and enforcing a sanctions regime is complex, and I
commend the work that State has done to enact punishing
sanctions on bad actors over the years.
The ongoing nuclear negotiations with Iran is a prime
example of the effect sanctions can have, although I would
respectfully note that the purpose of sanctions is to change
behavior, not simply to come to a negotiation.
However, it is clear from GAO's investigation that there
has been a failure to comply with the particular 6-month
reporting requirement in INKSNA. And while I respect and
appreciate the time that it takes to adequately verify
sensitive intelligence and to work through the interagency
process, I am concerned that State Department's decision to
issue annual reports instead of every 6 months is causing a lag
time in the imposition of sanctions.
Again, I know that it often takes quite a bit of time to
meet the requirements for a sanctions determination, but I
agree with the GAO that finding that one outstanding
determination should not delay an entire report. Isn't there a
process in which State can issue its 6-month reports to
Congress while denoting an unfinished investigation?
Further, I would like to understanding more as to why GAO
found that the longest delay in the issuance of a report seems
to be at the Deputy Secretary level. How does this reporting
requirement differ from those in other sanctions legislation,
and are those requirements being met?
Finally, and perhaps most concerning, is that the INKSNA
process seems to differ from other sanctions determinations in
which sanctions are not levied until a report is issued to
Congress. I would be interested to hear if, in your interviews
with the State Department, any discussions took place with
respect to potential legislative changes to the underlying law.
In cases where sanctions have been imposed, the majority of
the sanctioned persons have been located in China, Sudan, Iran,
and Syria. Strikingly, 17 of the 82 sanction entities have had
sanctions imposed on them more than once. Understanding that
INKSNA sanctions need to be renewed every 2 years, I would be
interested to hear more from State as to why there are repeat
offenders. Is the lag time between the issuance of reports,
which then can trigger a sanctions designation, allowing these
actors to continue to engage in sanctionable activity?
Now, Mr. Melito, I appreciate you being here today to
explain GAO's findings, and it is my hope that we can work to
implement whatever changes in process are necessary to ensure
that we are acting as quickly as possible to impose sanctions
on those who aid and abet the world's most dangerous actors.
And with that, Madam Chairman, I will yield back the
balance of my time.
Ms. Ros-Lehtinen. Thank you very much, Mr. Deutch, for that
excellent statement.
Mr. Trott, you are recognized.
Mr. Trott. Thank you. I want to thank the chairwoman and
ranking member for calling this hearing to focus on the
administration's failure to comply with the reporting
requirements of the Iran, North Korea, and Syria
Nonproliferation Act.
INKSNA is supposed to provide the United States Government
with an important and flexible tool to achieve its
nonproliferation objectives and a method by which to impose
sanctions to accomplish this important goal. Unfortunately, due
largely to political concerns with Iran, the administration has
failed to comply with INKSNA, which has only heightened
concerns in Congress with the ongoing nuclear negotiations.
Continued reluctance to enforce these sanctions
significantly compromises our credibility and nullifies
INKSNA's effectiveness as a tool in helping to curtail the
proliferation of weapons of mass destruction.
I urge the administration to comply with INKSNA, as failure
in this regard will mostly certainly result in the
proliferation of weapons of mass destruction. Not only does
non-compliance with this act put the United States at risk, but
it also threatens our friend, Israel.
I look forward to examining the reporting history with
respect to INKSNA and trying to better understand why the
delays--why there have been delays in the reporting and what
impact the delays have had on the proliferation of weapons of
mass destruction.
I yield back.
Ms. Ros-Lehtinen. Thank you very much, sir.
Mr. Clawson of Florida is recognized.
Mr. Clawson. Yield back.
Ms. Ros-Lehtinen. Thank you.
And now we are pleased to recognize our witness. We are so
pleased to welcome Dr. Thomas Melito, Director of the
International Affairs and Trade team at the Government
Accountability Office. He is responsible for the GAO's work on
international sanctions and nonproliferation, and has recently
completed a review of the implementation of the U.S. and U.N.
sanctions on North Korea.
Thank you, Dr. Melito, for being with us here this
afternoon, and for the work of all of the folks on your team
that helped put this very important document together. And,
with that, your written statement will be made a part of the
record. Please feel free to summarize and present your
findings.
STATEMENT OF MR. THOMAS MELITO, DIRECTOR, INTERNATIONAL AFFAIRS
AND TRADE, GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Melito. Thank you. Madam Chairman, Ranking Member
Deutch, and members of the subcommittee, I am pleased to be
here to discuss GAO's work regarding State's implementation of
the Iran, North Korea, and Syria Nonproliferation Act of 2006,
which is referred to as INKSNA.
INKSNA targets the transfer of prohibited items related to
weapons of mass destruction. INKSNA requires that State provide
Congress with a report every 6 months, and State cannot impose
sanctions until it has done so. My testimony is based on a
report which is publicly released today.
I will focus on four topics. First, State's timeliness in
providing Congress with INKSNA reports; second, State's process
for preparing these reports; third, the potential impact of
State's reporting timeliness on the imposition of sanctions;
and, fourth, GAO's recommendation and State's response.
Regarding the first topic, State has not provided reports
to congressional committees in accordance with INKSNA's 6-month
reporting requirements. Since 2006, it has provided only six
reports covering 2006 through 2011, instead of the 18 reports
that INKSNA required. State provided these reports at irregular
intervals averaging 16 months. It provided its most recent
report in December 2014, 22 months after its prior report.
Regarding the second topic, State's process does not allow
it to comply with INKSNA's 6-month reporting cycle. The process
is complex and lengthy, involving multiple interagency and
internal reviews regarding each group of reportable transfers
that first came to its attention in a single calendar year. It
then determines whether to impose sanctions on foreign persons
associated with those transfers.
Under this process, State does not provide a report to the
committee until it has resolved concerns it may have regarding
any of the transfers in a particular annual group. As a result,
a single problematic case can delay State's provision of a
report which may include other transfers that State may be
otherwise ready to report.
Moreover, State's process requires officials to begin
preparing a new report every December, regardless of whether
they have completed and provided all previous reports. As a
result, they must manage the preparation of a backlog of
multiple draft reports, each addressing a different year.
For example, State data indicate that in the last 6 months
of 2014 State officials were simultaneously managing the
preparation of three draft reports covering calendar years
2011, 2012, and 2013. State's delays in reporting on transfers
have also recently increased, growing from 26 months for the
2010 report to 36 months for the 2011 report.
Regarding the third topic, State's process limits its
ability to minimize the time required to impose INKSNA
sanctions. INKSNA requires State to identify foreign persons in
a report before it can impose sanctions on them. Under INKSNA,
State is expected to decide on sanctions between 6 and 12
months after it first obtains credible information of a foreign
person's involvement in a reportable transfer.
However, under State's process, the actual interval between
the transfer and the opportunity to impose a sanction has been
considerably longer. For example, State did not impose
sanctions on 23 foreign persons for transfers it first learned
of in calendar year 2011 until December 2014, between 36 and 48
months after the fact.
Regarding our fourth topic, GAO recommended that State
should reconsider its INKSNA reporting process to ensure that
it, one, complies with INKSNA's 6-month reporting cycle; and,
two minimizes delays in its ability to impose sanctions.
State officials concurred with our recommendation. However,
in commenting on our findings, they raised some concerns. State
officials commented that our report does not take into account
the inherent difficulties of meeting what they characterize as
the law's tight deadlines and a substantial increase in scope
of reportable activity.
In response, we note that INKSNA's scope has not changed
since 2006, and that the time required by State to provide the
reports to the committee has increased since 2006.
State officials also commented that our report does not
place sufficient priority on the need for careful preparation
and thorough vetting. We recognize that State must thoroughly
vet each INKSNA transfer, and that some transfers may require
several years to investigate. However, our report demonstrates
that State should consider a more efficient process for meeting
INKSNA's deadlines.
Under its current process, State's practice of reporting
transfers in annual groups could allow a single, problematic
transfer to delay the reporting of other transfers that State
may have already investigated.
Madam Chairman, Ranking Member Deutch, and members of the
subcommittee, this completes my prepared statement. I would be
pleased to answer any questions you may have.
[The prepared statement of Mr. Melito follows:]
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----------
Ms. Ros-Lehtinen. Thank you very much, and thank you, again
to your whole team for the great and difficult work that you do
all the time.
Mr. Melito. Thank you.
Ms. Ros-Lehtinen. The findings in this report are very
troubling, not only from an oversight perspective for us as
Members of Congress but for anyone who believes that the laws
of the land are indeed meant to be followed, and that no one is
above these laws.
And they are also disturbing because of what they tell us
about the length that the administration will go to to appease
the Iranian regime in its misguided and dangerous quest to
reach a nuclear deal with Iran and forge some sort of legacy
for President Obama. Those are my words, not yours. I realize
that.
But in your report you mention that State officials said
political concerns, including international negotiations and
foreign relations, can delay the reporting process. Did the
negotiations between Iran and the P5+1 factor in the decision
to delay the latest report? What were you told?
Mr. Melito. We can't actually comment in a public setting
on that. We are able to talk about the process in a public
setting. But when you get into discussions of countries in
individual cases, it actually goes to a very high level of
classification very quickly.
Ms. Ros-Lehtinen. Thank you. No worries. The GAO found that
State actually ignores the 6-month requirement and focuses on
yearly reports, as I said and you verified. Does State decide
on its own to submit yearly sanctions reports rather than
adhering to the legally required 6-month schedule? Do they do
that on their own?
Mr. Melito. State has created a process that envisions
annual reports. And when we asked them why, they thought that
was the most efficient way to do it. So it does not envision
two reports a year; it only envisions one report a year.
Ms. Ros-Lehtinen. Did anyone at State acknowledge that they
are violating the law with this practice, that until it is
changed that is the requirement?
Mr. Melito. We asked that question several times, and I
don't think we ever got a clearly definitive answer on that.
Ms. Ros-Lehtinen. In response to your report, State assumed
that the committees were okay with the reporting process.
However, it is extremely odd since in the year 2011 I authored,
and the House passed, the INKSNA Reform and Modernization Act
and State's failure to meet the requirements of this law,
particularly with respect to the reporting cycle, was a part of
that effort and has been raised with the Department in multiple
instances.
Which specific offices within the State Department did you
have access to? Did you ever engage or have sufficient access
to the Deputy Secretary's office or those in the State
Department who dealt with Iran sanctions generally, such as the
Deputy Coordinator for Sanctions?
And, related to that, which offices did you request
meetings with? And which offices failed to either get back to
you or turn down your request for a meeting?
Mr. Melito. So we had what I would characterize as highly
functional access to the working level, which was the ISN, the
International Security and Nonproliferation Bureau, which is
the bureau responsible for preparing the annual reports.
We did realize, given the nature of what we were finding,
that there was a need to engage higher level officials. And we
did request a meeting with the Deputy's office, as well as the
coordinator's office, and we were not granted that meeting.
Ms. Ros-Lehtinen. And, finally, the GAO provided State with
the opportunity to comment on the report and submit those
comments for the record. Department officials, according to
your report and the comments, repeatedly cite the difficulties
of meeting the tight deadline, and even went through the
trouble of boldfacing and underlining the fact that they need
time to identify every foreign person in each group.
The GAO also noted that this practice of reporting
individuals in entire groups could allow a single problematic
case, as we talked about, to delay the reporting of an entire
group. Why wouldn't State simply remove the problematic cases
allowing the other ones to be processed through, and did you
suggest this as a workaround for the State Department? And, if
so, what was their response?
Mr. Melito. We went through our understanding of how it was
working with them on multiple occasions. And at what is called
the exit conference where we go through our findings, we went
through exactly that scenario, where we were seeing single
cases holding up the process. And we explored with them their
opportunity to maybe revisit the process and change it, and
they were quite resistant.
They have had this process for probably 10 years, and they
seem to think it works and it is very efficient. But I think
the ``why'' is probably better asked of State Department.
Ms. Ros-Lehtinen. Thank you very much, Director Melito.
I now recognize Mr. Deutch, the ranking member.
Mr. Deutch. Thank you, Madam Chairman. And, Madam Chairman,
I apologize, but after my line of questioning I have another
committee meeting that I have to run off to.
Mr. Melito, in the course of your discussions with State
Department, did they indicate that meeting the 6-month
reporting requirement is too difficult and that they needed
changes made to the law?
Mr. Melito. They recognize they have a backlog. They
recognize they need to clear that backlog. They also say that
once they clear the backlog that they are going to go back to a
6-month reporting cycle. I don't know exactly what changes they
have in mind.
So we did ask them whether they thought that 6 months was
not reasonable, would you want to explore changing the law, and
they said, actually, they wanted to leave the law as it was,
because they thought it was working as intended.
Mr. Deutch. Well, what did they think the impact on the law
was of the 36- to 48-month delay that you referenced?
Mr. Melito. Well, we bring up that the threat of a sanction
may loosen credibility when there is such a long time between
the actual observation of a problematic transfer and the actual
sanction decision.
They disagreed, and they thought that the--what is going on
during this period of time, there is a lot of behind-the-scenes
discussions with other governments and trying to forestall
other transfers. And I am confident that that is actually
happening, but the actual ultimate result, if you can't
succeed, is a sanction. The credibility of the sanction does
require some timeliness.
Mr. Deutch. And did State give your team any justification
as to why they choose to look at potential violations only on
an annual basis?
Mr. Melito. So one tangible thing they have is they have to
look at lists of technologies that are possibly not--are
controlled. They have international lists, and they have their
own internal list.
If they decide in 2010 to add a new item, it can't be
retroactive to 2010. It can only move forward. So they are
saying that by keeping cohorts together they won't create any
confusion on that. But that does seem like something that could
be managed.
Mr. Deutch. Because you suggested in your testimony that
there is a more efficient way to do it.
Mr. Melito. The most efficient way is to release the cases
as they are finished. We agree that some cases are very
difficult and should take as long as they are taking. But they
acknowledge that when the report comes out some cases have been
finished for a long time.
Mr. Deutch. All right. So what is the response as to why
they shouldn't be reported as they are finished?
Mr. Melito. If they gave you the answer they gave us, if it
is not satisfying it is because it wasn't satisfied.
Mr. Deutch. Okay. Did State indicate that the process that
it uses to investigate and make determinations for these
sanctions differs in any way from the process they use for
other sanctions regimes?
Mr. Melito. So the biggest difference is that the
requirement to sanction has to first follow a report to
Congress. We have looked at quite a number of Iran and North
Korea and other sanction regimes, and there is a very similar
deliberative process, both within State and across multiple
agencies. Some of the same working groups are involved in other
sanction regimes.
All of those, though, culminate with an internal decision
by either State or Treasury to sanction. INKSNA seems unique,
from my perspective, in that it first requires a report to
Congress.
Mr. Deutch. So, in all, just to refer back to my friend's
comment earlier, in all of the other Iranian sanctions
programs, they reach a determination saying if they make a
designation sanctions are applied. It doesn't appear that the
goal, then, is to appease the Iranian regime.
Mr. Melito. I really couldn't comment on that one way or
the other.
Mr. Deutch. Okay. Did the Department acknowledge that it
could issue reports that acknowledge in some way that at least
that there were investigations that were still pending?
Mr. Melito. We know that they currently, at the end of
2014, were simultaneously preparing the results of 2012, 2013,
and we now--I am sure they are beginning to think about a 2014
report. So there are--we know they are doing what they need to
do. They are monitoring activity, and they are preparing case
files, and they are discussing this internally in the State
Department and across. It is reaching the final decision. That
seems to be what is taking so long.
Mr. Deutch. And just getting back to the first question I
asked, so they believe that once the backlog is cleared up--the
law doesn't need to change, because once the backlog is cleared
up, then they can get back to the requirements, meeting the
requirements that are set forth. Did they tell you when they
anticipate that happening?
Mr. Melito. They did not.
Mr. Deutch. Okay. Thanks, Madam Chairman.
Ms. Ros-Lehtinen. Thank you. Excellent questions. Thank
you, Mr. Deutch.
Mr. Trott is recognized.
Mr. Trott. Thank you, Madam Chairwoman.
You said a minute ago, sir, that reaching a final decision
seems to be the problem. Can you explain why reaching a final
decision is so difficult?
Mr. Melito. I can only tell you in a general sense and what
is publicly available. They have to--first, the intelligence
community has to determine whether it is publicly possible to
report the information, the names of individuals, and they also
want to go through the deliberative process of working with
other governments, and making sure that they have got a
sufficient case file.
So when you are dealing with, you know, overseas entities
and trying to make sure you have the right person and you have
enough evidence, this can take some time.
Mr. Trott. So is there any evidence, or do you have any
sense that the administration's general indifference and
insouciance toward taking action on the world stage is a
contributing factor?
Mr. Melito. I cannot comment on that.
Mr. Trott. Okay. Is there anything in INKSNA that requires
that the State Department review and vet individuals as a
group? Could they do it individually?
Mr. Melito. The law does not state how that should be done.
It just says it has to be done every 6 months.
Mr. Trott. Has anyone suggested maybe that, since they are
so backlogged that they develop a different process, or are
weapons of mass destruction not a big deal?
Mr. Melito. I think if they were to implement GAO's
recommendation, they would create a new process.
Mr. Trott. Okay. So the State Department officials told you
that they believe that the threat of imposing sanctions can be
as effective as the imposition of sanctions in achieving the
behavioral changes that sanctions are intended to motivate. Do
they provide any information or analysis to support the idea
that the threat of sanctions against these three countries
could be as effective as actual sanctions?
Mr. Melito. To get into specifics on that assertion on
their part would actually not be possible at a public hearing.
Mr. Trott. I apologize. Not be possible because of?
Mr. Melito. In a public hearing.
Mr. Trott. I see. Okay. So basically they are treating
these three countries like we treat England, France, and
Australia. Would that be a fair summary?
Mr. Melito. I----
Mr. Trott. Okay. I apologize. I will move on.
Actually, that is the extent of my questions. I yield back.
Thank you, Madam Chairwoman.
Ms. Ros-Lehtinen. Thank you very much.
Mr. Higgins of New York is recognized.
Mr. Higgins. Yes. Thank you, Madam Chair. I just wanted to
focus on the North Korean agreement that was signed back in
1994. And, you know, it seems as though that agreement was
fundamentally flawed in the first instance, because of its
brevity, because of the lack of inspections, and just a lack of
detail in terms of both infrastructure and nuclear material.
What was the stated objective in 2004 in signing that
agreement with North Korea?
Mr. Melito. That is outside the scope of what GAO did. I
can talk to you a little bit about how State is implementing
sanctions on North Korea, but actually what the State
Department was thinking when it signed that agreement I could
only--I can only speculate on that.
Mr. Higgins. Well, was it to keep North Korea from
obtaining nuclear weapons?
Mr. Melito. I am--that seems like a reasonable expectation.
Mr. Higgins. And how many nuclear weapons does North Korea
have today?
Mr. Melito. I know they have more than one.
Mr. Higgins. And they have a pretty considerable atomic
program? What inspections are in place relative to the North
Korean nuclear program?
Mr. Melito. We reported last month that the U.S.
Government's imposition of sanctions on North Korea had been
hampered by the need to identify specifically North Korean
individuals. And given their closed regime--and we don't have
good access--following the Sony hack late in 2014, the
President signed a new Executive Order which changed the way
sanctions against North Korea are implemented.
Mr. Higgins. Right.
Mr. Melito. Now, if we are confident that an individual is
either a member of the Worker's Party or a member of the
Government of North Korea, we can sanction. They don't
necessarily want to do that just because of those things, but
it allows them to have a lower level of evidence before they
can actually implement a sanction. So they think that is going
to actually help in the months ahead.
Mr. Higgins. And how is that going?
Mr. Melito. Well, it just got implemented.
Mr. Higgins. I see. Well, you know, it seems like--I mean,
there are some fundamental differences here between North Korea
and Iran. I mean, you know, the domestic policies of Iran, or
politics of Iran, are that a vast majority of that population
is very young and wants to normalize relations with the rest of
the world. And that is, you know, fundamental I think to
America's leverage in negotiating a deal with Iran, where North
Korea, it is almost--they kind of pride theirselves on being
isolated from everybody.
It just seems to me that, you know, there is a pride in
North Korea boasting that its atomic arsenal is enshrined in
its constitution. And so it just seems like, you know, this is
a weak agreement to begin with, and more cosmetic than it is
substantial, which I suppose the good thing is maybe it has
influenced or informed the negotiations with Iran, that this
has to be a lot more serious than the one with North Korea,
because it is almost like we don't have an agreement with North
Korea.
Mr. Melito. There is nothing equivalent to the TPOA with
North Korea. That is correct.
Mr. Higgins. Yes, yes. Okay.
All right. I will yield back.
Ms. Ros-Lehtinen. Thank you so much, Mr. Higgins.
Mr. Issa of California.
Mr. Issa. Thank you, Madam Chair.
Mr. Melito, I am trying to go back to some basics and
understand this a little. President Clinton signed a law
requiring this report. President Bush twice signed laws
requiring this report. Before we get to President Obama, either
one of those Presidents make progress on delivering reports in
a timely fashion from your looking at history?
Mr. Melito. We identified some delays in the past, but we
focus on INKSNA, so we really focus heavily from 2006 forward.
Mr. Issa. Okay. So previous Presidents were not perfect. We
are not going to give either one a pass. But since 2009 when
President Obama came in, you have seen this problem of
essentially almost non-compliance, going through the motions,
but 3 years seems like not even a close to a semi-annual
report. Is that right?
Mr. Melito. That is correct.
Mr. Issa. And their statement to you is, ``We are going to
do better.'' That is kind of like the guy that owes you money
saying he will pay you when his brother straightens out, but
then you find out his brother is a hunchback. Okay. You know,
he will not straighten out.
This does--I know that is so insensitive. The fact is, this
is a problem that is not going to straighten out in the last 18
months of this administration. Isn't that true?
Mr. Melito. I think----
Mr. Issa. I know you believe in the redemption of souls, I
am sure, but excluding that kind of an event, do you see it
happening?
Mr. Melito. We have given State a possible new process,
demonstrated that there is a process that could make this go
quicker. And State has sort of acknowledged that they need to
do something, so I guess my perspective, I just need to see
what happens now.
Mr. Issa. Okay. So we are back to hope. Okay. Excluding
hope for a moment, you earlier said that you were given access,
sort of very broad but not very high, that you--up to a point
you were given good access, and then after that some of the
details, that higher level that would have helped you
understand the problem and maybe suggest more, you were denied.
Is that correct?
Mr. Melito. Well, from our perspective, we got the access
we needed to complete the work, so that is important to note.
And the focus was on the process. So we spoke with all of the
key parts of State that was dealing with the actual creating of
the report.
When we recognized, though, that this process and how it is
run is probably above the people who are doing it, and the
decisions on changing it are not up to them, we thought it
would be a good idea to actually seek out some views of the
higher level officials. And we did request those meetings, but
we didn't get them.
Mr. Issa. So one thing that Congress could do in
appropriation or other appropriate areas is insist that you
have that access so that perhaps beyond hope you could also
have participation. Is that correct? You are not lobbying; we
are asking.
Mr. Melito. From our perspective, we got the access we
needed, because I thought it was actually in State--it would
have been to their advantage to have had a meeting. If it
actually--if I needed that meeting to complete the work, then I
probably would have gone through a more legalistic process. But
I did not need that meeting to finish my work, but I thought it
would have been helpful if State had had that conversation.
Mr. Issa. Let me just close--and I know, Madam Chair, this
has been said many, many times. But since I alluded to, you
know, we are not going to get where we want to be in the next
18 months, you, at GAO, are great at giving corrective action
and then advising Congress in your role in our branch on what
to do in the future.
If you could take the remaining time, to the extent that
you can, and tell us, how could we better write and oversee
requirements like this so that we could get and expect
compliance? Is it that we need to pre-negotiate? It sounds like
they have said 6 months was enough; they are just behind. What
is it we could do different? Because I know the chair would
like to do better next time, so that we wouldn't be at fault
for these reports.
Mr. Melito. I think the law is quite clear, so I don't know
if the law needs to be clearer. So I----
Mr. Issa. So you are just saying that you need people who
will obey the law?
Mr. Melito. I think there probably would have needed to
have been a dialogue between the Congress and State earlier. I
mean, these laws--these reports have been delayed for a long
time now. So it is possible that they didn't think that they
needed to meet the law. I don't know. It is a question they
have never really answered, but I think Congress' concerns were
not necessarily being received.
Mr. Issa. Well, you know, the interesting thing is State,
in another committee, told us that the reason that Ambassador
Stevens didn't get more security is he didn't ask enough. He
didn't insist enough. That after asking for and saying things,
including on the day he died, that it wasn't a question of if,
but when, there would be an attack, he didn't ask enough. I
appreciate it, Director, and we will try to figure out how to
ask more.
I thank the gentlelady and yield back.
Ms. Ros-Lehtinen. Thank you, Mr. Issa.
Mr. Clawson of Florida.
Mr. Clawson. So thank you for coming today. Appreciate it.
The process slows almost to a halt. It takes a long time to get
the final decision. Then, it takes even longer to get a final
decision.
In the meantime, that creates space, time for the State
Department to renegotiate deals they don't like anymore, slow
down on details, redo--you know, use the threat of the sanction
that is out there that we haven't really applied yet because
our process is so low--or so slow.
So you kind of have this--you know, and then we blame it on
bureaucracy. But if it really is bureaucracy, it kind of helps
the State Department and the administration around the intent
of the original process, so that they can retrade the deal and
do what they really want to do with these folks.
And so it doesn't sound like a bureaucracy problem at all.
It sounds like somebody playing on the margins of the law in
order to create space, to retrade a deal they don't like
anymore, or never did like, and then we are in a position where
we have no recourse, unless we want to change the law, which is
hard to do because there is a Democrat in the White House that
likes retrading these deals.
Did I summarize that correct?
Mr. Melito. I think GAO provided you the ``what.'' You are
asking me for the ``why,'' and I can't really give you the
``why.'' But your narrative is as reasonable as any others I
have heard.
Mr. Clawson. But I am saying that the focus on procedural
delays, when those procedural delays coincidentally help the
State Department retrade the deal, I mean, we are--we have got
a mishmash of incentives here that we are not being--you know,
the American people deserve clarity. If I am going to sit up on
this committee, I am going to speak clear about what is really
going on as opposed to yakking around the edges about
bureaucracy and steps in the process.
Mr. Melito. And I understand perfectly. GAO, though, can
only really talk about what we can observe, and you are asking
about things we could not observe.
Mr. Clawson. I have nothing, then, I can add to that. You
know, we need to figure out, you know, how to use the power of
the purse or the power of change in the law, so that what we
do, you know, the process actually reflects reality on what the
original intent was.
Thank you. I yield back.
Ms. Ros-Lehtinen. Thank you so much, Mr. Clawson.
Dr. Yoho, also of Florida.
Mr. Yoho. Thank you, Madam Chair. Appreciate you being
here, sir. In their response to the GAO's studies, they stated
that ``Further challenging the ability of the Department to
deliver INKSNA reports within the statutory timeframe, the law
has subsequently expanded its scope along its evolution.''
The last time the law was amended was in 2006, adding North
Korea. What was State's response to the fact that despite no
changes in the scope of the law since '06, the time that State
requires to produce a report for Congress has increased? I
mean, what was their reasoning?
Mr. Melito. State mentioned that they thought because of
scope changes that that was contributing to it. But we don't
think the scope has changed.
Mr. Yoho. Well, they have had since 2006 to get their act
in order.
Mr. Melito. And that is the period of time we are looking
at, and we also observed that the time between reports is
getting longer, not shorter.
Mr. Yoho. Right. And you have offered, you know, the
suggestion of, do we need to expand it to a year, but yet they
said no.
Mr. Melito. They did not think the law needed to be
changed.
Mr. Yoho. All right. What do you believe would be the most
efficient method for eliminating the current backlog, and also
keeping up with the future deadlines?
Mr. Melito. I think State could implement a 6-month
reporting cycle. They could.
Mr. Yoho. Is it a shortage of help? Funds?
Mr. Melito. They did not say they needed resources, but I
think if State--State may want to actually have a conversation
with Congress about that, because they--it was at the bureau
level. I think that should really be at the deputy level to
really decide that.
Mr. Yoho. Who is the person at State, the individual, that
is responsible for that study?
Mr. Melito. It is an individual in the International
Security and Nonproliferation Bureau. I would rather not name
the name, because----
Mr. Yoho. You don't have to, but there is one person that
is held accountable for this.
Mr. Melito. There is one person, although ultimately it is
the Deputy Secretary, because ultimately the Deputy Secretary
is the deciding official.
Mr. Yoho. All right. So somebody can be held accountable.
Mr. Melito. Yes.
Mr. Yoho. And somebody, if they are held accountable and
they are not performing their job, in the private sector would
be removed from that job. That could happen here, correct?
Mr. Melito. I assume so.
Mr. Yoho. I would hope so.
And I think that is something, Madam Chair, for another
meeting would be wonderful.
Let me ask you this. What is the impact of--what impact has
State's delay in reporting had on sanction decisions?
Mr. Melito. The way the INKSNA law is written, you can't
make an INKSNA sanction decision until you first report to
Congress. So in December 2014, we get the--we got the decision
on 23 cases that were observed in 2011. So between the time the
State Department became aware of a problematic transfer and
actually sanctioning was between 36 and 48 months later.
Mr. Yoho. And with the critical negotiations where they are
at with Iran right now, a period of time delay like that is
unacceptable. I mean, it is--you are reporting on something
that happened 24 to 30 months ago on today's decisions. And I
just--would you feel that would weaken our hand at the
negotiating table?
Mr. Melito. We observe, separate from any of the
negotiations. We are concerned about the credibility of the
sanctioning process.
Mr. Yoho. I was going to get into that here.
Mr. Melito. To my mind, the sanctioning process requires
relatively timely action.
Mr. Yoho. Yes. I mean, you want it timely. It is like
disciplining a child when they are wrong. You don't want to
wait until they are 18.
According to your report, State Department officials told
GAO that they believe that the threat of imposing sanctions can
be effective with what you just brought up as imposing
sanctions in achieving the behavior changes sanctions are
intended to motivate. However, did they quantify this claim?
And if they believe that, they would be reporting quicker,
wouldn't you think so?
Mr. Melito. As to the first part, I think they may have a
couple of examples, but any example cannot be done publicly. So
I would think that you would benefit from a briefing from them
in a classified setting, where they would give you some of
those examples.
Mr. Yoho. I have got an example here. Seventeen of the 18
foreign persons that have had sanctions imposed on them have
actually had the INKSNA sanctions imposed on them for more
than--actually, more than once. That is correct, isn't it?
Mr. Melito. Yes.
Mr. Yoho. In your opinion, would that undermine State's
suggestion that the mere threat of a sanction is just as
effective as the imposition?
Mr. Melito. That is a very fair question.
Mr. Yoho. And, again, you know, you can only threaten so
long before you act.
Mr. Melito. Yes.
Mr. Yoho. Let us see. What is the effect of the
administration's failure to implement these nonproliferation
sanctions, particularly against Iran? And I think I kind of
covered that and you kind of answered that. But in this----
Mr. Melito. I cannot talk about individual countries.
Mr. Yoho. Okay. I understand.
Mr. Melito. Yes. So----
Mr. Yoho. Thank you, sir, for your time. And I yield back.
Ms. Ros-Lehtinen. Thank you, Dr. Yoho.
Mr. Weber of Texas.
Mr. Weber. Thank you. Director Melito, forgive me if some
of this is redundant, because I came late so I didn't hear your
remarks. I am looking at your testimony here. According to your
testimony, you talk about from 2006 to May 2015 that State
imposed sanctions on 82 foreign persons located in 10 nations,
including China, Iran, Syria, North Korea, Sudan, and Russia.
Once imposed, INKSNA sanctions are in effect for 2 years at
State's discretion. Okay. So there was 82 foreign people in
those 9 years that you have identified.
Mr. Melito. Yes.
Mr. Weber. So you go in and you look at the process. Is
that number, that percentage of people who are identified and
sanctioned, is it rising? Is it raising or lowering?
Mr. Melito. It goes up and down, but their most recent
report covering 2011 has the most in any of the years, which is
from 2006 to 2011. And 23 was the single largest year.
Mr. Weber. So that was the largest year. So that kind of
answers the doctor's question about, does the statement--even
the threat of sanctions seems to work. If you looked at the
numbers, that would kind of be antithetical, wouldn't it?
Mr. Melito. It seems the activity may be increasing, but I
actually don't know that, and that would actually be----
Mr. Weber. Well, you don't think they just chose those
people out of a hat.
Mr. Melito. We don't know----
Mr. Weber. I mean, the activity is obviously increasing.
Mr. Melito. Part of this is actually becoming aware of
activity. So some of it may have occurred before 2011. But,
again, any of this kind of conversation requires information
that cannot be discussed publicly.
Mr. Weber. So how far--did you go back to 2006?
Mr. Melito. Yes.
Mr. Weber. Okay. So did you identify, in 2006, what the
first report due--where the problem was? Where did--who was
responsible? Where did the buck stop?
Mr. Melito. We have a table in the statement for the
hearing, not for the report, which gives you how long, in
months, each of the six steps take, and we----
Ms. Ros-Lehtinen. Okay.
Mr. Melito [continuing]. Our general summary is the steps
that are inside State's control take the longest. And in the
most recent report, the actual final approval by the Deputy
Secretary took the longest.
Mr. Weber. But identifying 2006, that first person, that
first step, that never got the ball rolling. I mean, you can do
it by a position; you don't have to do it by person's name. Can
you do that by position?
Mr. Melito. So for the--so the report that covers 2007,
because we----
Mr. Weber. Let me restate it this way. Does State have a
process whereby they start to put this report together? Have
they built that outline?
Mr. Melito. I guess, and we did review the statements of--
--
Mr. Weber. All right. Now we are getting somewhere. In that
outline, what is the first office it goes to?
Mr. Melito. We have a flowchart in the report.
Mr. Weber. Okay.
Mr. Melito. In the actual report itself, on page 9, which
goes through the 12 steps.
Mr. Weber. Okay.
Mr. Melito. It starts--so there are these expert groups----
Mr. Weber. I don't want to turn to page 9.
Mr. Melito. But I am going to just say one thing quickly.
Their expert groups, which are responsible for missile
proliferation, biological/chemical/nuclear, they are meeting
every 2 to 4 weeks.
Mr. Weber. Okay.
Mr. Melito. They are not meeting just for----
Mr. Weber. So somebody compiles the report of these expert
groups.
Mr. Melito. Yes.
Mr. Weber. Help me. Who is that office? What position is
that?
Mr. Melito. That is the International Security and
Nonproliferation Bureau of State Department. They are the ones
who are responsible for----
Mr. Weber. Is that same person there now that was there in
2006?
Mr. Melito. We actually do not know.
Mr. Weber. You actually do not know.
Mr. Melito. We didn't ask that question.
Mr. Weber. Okay. So----
Mr. Melito. My staff just told me that they think he was.
Mr. Weber. They think he wasn't there, but now he is there.
Mr. Melito. They actually--they are telling me that the
person who----
Mr. Weber. He is there.
Mr. Melito [continuing]. Is running the office now is the
same one who was there then, yes.
Mr. Weber. Do you know the reason why?
Mr. Melito. I do not know.
Mr. Weber. Could it be he or she wasn't held accountable?
Mr. Melito. That is a question for State.
Mr. Weber. Okay. But you are the GAO. You come in and you
weigh in on these things, the process, right?
Mr. Melito. We actually do not think that that Bureau
itself was where the problem was. That Bureau was following the
process it was told to follow. We would like the question to go
to the Deputy Secretary.
Mr. Weber. In your testimony, you state, ``State's delays
in reporting on transfers and acquisitions have recently
increased.'' Why?
Mr. Melito. The ``why'' is hard to answer. We can show you
which parts of the process it is taking, and it is taking much
longer for the Deputy Secretary to approve it. Why it is taking
him longer, I cannot tell you.
Mr. Weber. Okay. So let me ask you this question. I have
got 22 seconds left. You don't know--well, you do know who is
responsible, and there is--first, you didn't think that person
was still there, and now you think that person is still there.
So we have a backlog.
So is it a good premise to say, ``To fix this problem, let
us let the backlog sit for a minute, and let us start today now
and get somebody accountable in that process that has got to,
say, report in less than 6 months.'' Is that feasible?
Mr. Melito. I think it is possible for State to decide this
year to start reporting every 6 months, and they would release
whatever decisions have already been completed.
Mr. Weber. Okay.
Mr. Melito. And those decisions would cover multiple years.
And they could do that and I think--and still continue to fully
vet the cases that take too long, that take a long time.
Mr. Weber. Okay. That doesn't make me happy, but, Madam
Chairman, I will yield back. Thank you.
Ms. Ros-Lehtinen. Thank you so much. Those were excellent
questions, Mr. Weber.
And if I could just ask one question. Is the State
Department taking longer to make these reports and implement
the sanctions? If that is what is happening, does this diminish
or bolster the credibility of the threatened sanctions? Because
if sanctions are not being effectively implemented, and the
delays in reporting are hindering their application, how
credible is the threat to impose INKSNA sanctions? And did you
raise this issue with State? And, if so----
Mr. Melito. Yes.
Ms. Ros-Lehtinen [continuing]. How did they respond?
Mr. Melito. GAO observes in the report that a long period
of time between observing a sanctionable action and sanctions
probably undermines the credibility of the sanctions. State
disagreed with that, but, to my mind, 3 or 4 years after you
observe something is too long.
Ms. Ros-Lehtinen. It is too long. Thank you very much.
Director, please give your thanks to your team for excellent
work.
Thank you, ladies and gentlemen.
And with that, our subcommittee is adjourned, but we look
forward to working with you and making sure that they follow
the law.
Thank you.
[Whereupon, at 2:57 p.m., the subcommittee was adjourned.]
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