Minimizing Potential Threats from Iran: Administration Perspectives on Economic Sanctions and Other U.S. Policy Options

James B. Steinberg
Deputy Secretary of State
Opening Statement before the Senate Banking, Housing and Urban Affairs Committee
Washington, DC
October 6, 2009

DEPUTY SECRETARY STEINBERG: Well, thank you, Mr. Chairman. Thank you, Member Shelby, and all the members of the committee. It's always good to be back in the Senate.


I want to express appreciation on behalf of the whole administration for the interest that you, this committee and the entire Congress has expressed in this subject. It's an important issue for all of us. And I'm confident that we will have a very useful discussion this morning about how we can best achieve our common objective, which is how to address the challenge posed by Iran's nuclear programs. Strong congressional interest in this issue is extremely valuable to us in our efforts, and I'm appreciative of all the work that you've already done on this.


I ask, obviously, that my full statement be put in the record, but I'll just make a few points in summary. I want to begin by being clear about our objective. Our goal is to prevent Iran from achieving a nuclear weapons capability. And we will work with our allies and partners towards that goal, as well as to counter Iranian actions that threaten to destabilize the Greater Middle East and the rest of the world.


To that end, as you've observed, we've pursued a dual-track strategy of economic sanctions and engagement.


We think that only by using them together and coordinating them closely can we achieve this important objective.


Let me just take a minute to explain how we're implementing this strategy, including last week's meeting in Geneva. And I would be happy to take your questions when I'm finished.


But we understand Congress's concerns and sense of urgency that you've all expressed this morning and look forward to working with you and consulting with you on any legislative effort with the aim of maximizing our ability to pursue this two-track strategy to convince Iran to meet its obligations while preserving the president's flexibility to carry out the strategy successfully. This committee and others have already provided crucial leadership and important work, and we appreciate the importance of working with you in a shared objective.


I want to emphasize that we're pursuing engagement not because we believe in talking for talking's sake, but because we believe it will advance our goals. In the past, as we've attempted isolation without engagement, Iran has developed a growing mastery of the nuclear fuel cycle while flagrantly flouting its international obligations. Its leaders have neglected the rights of its citizens; its government has continued to pursue a wide range of destabling (sic) activities abroad.


Now, we are realistic about the prospects of engagement. We are and we have forcefully presented our concerns to Iran's leaders and made clear the choices they had before them. But engagement not only increases the chances of achieving our goals through negotiations. As so many of you observed, it also forges a strong consensus with others if negotiations do not produce the results that we seek.


Our objective is a positive outcome that successfully addresses the security concerns posed by Iran's nuclear program to the United States, to Iran's neighbors and to the international community. We are making clear the steps that Iran can take to help resolve our concerns and those of the international community and the benefits that that would bring in turn.


Iran must demonstrate through its actions the exclusively peaceful intentions of its nuclear program. That means allowing unfettered access to international inspectors, cooperating fully with the IAEA's investigation and taking up the long-standing proposals of the P-5 plus one, including a halt to uranium enrichment. In response to the clear and unified message of the P-5 plus one in Geneva last week, Iran pledged to take several concrete steps along these lines, including IAEA inspections of the previously undisclosed facility at Qom, now scheduled for October 25th, and an agreement in principle regarding a supply of low-enriched uranium for the Tehran research reactor.


If implemented, and I stress if implemented, this agreement would limit Iran's potential to achieve a short-term breakout, in developing weapons-grade highly enriched uranium, and in so doing would help demonstrate whether Iran is serious about proving its peaceful, exclusively peaceful, intentions.


But as Chairman Dodd noted in quoting President Obama earlier last week, he said, this is a constructive beginning but it must be followed by constructive action by the Iranian government.


We will look for and judge by the constructive actions ahead of another meeting of the P-5 plus one with Iran, which we anticipate to take place later this month.


While we're beginning this diplomatic process, our patience is not limitless. We are sensitive to the security concerns of many countries in the region. And these concerns have heightened our sense of urgency.


In the event that Iran passes up this opportunity, our engagement will make it possible to mobilize international action more effectively. By our openness to a negotiated resolution, we can clearly increase our ability to persuade others to stand by with us, if more forceful action is needed.


Our efforts to convince Iran to change course will be more effective if we act in concert with others. Our efforts have already shown some signs of paying off.


Three years ago, the United States was virtually alone in applying pressure on Iran. Now a growing number of countries share our concern about Iran's negative policies and have signaled willingness to join our dual-track strategy.


We have pursued a progressive tightening of U.N. sanctions on Iran with Resolution 1737, 1747 and 1803. We have worked with our colleagues at Treasury and with the international financial community through the Financial Action Task Force.


The European Union has adopted measures to limit the granting of export credits. And as a result of sanctions and international efforts, the cost of doing business with Iran is going up.


I also want to note, as so many of you have done, that our concerns with Iran go beyond the nuclear issue. The Iran government's terrible repression of peaceful protesters, opposition politicians and journalists following the elections revealed to the world much about the character of that government and has increased its isolation.


We are also deeply concerned about the American citizens held in Iran and urge the Iranian government to promptly return them to their families. We have expressed those concerns directly to the Iranian government.


Tehran's aggressive foreign policy presents another threat. In recent years, Iran has benefited from and exploited instability in Iraq, Afghanistan, Lebanon and the Palestinian territories. Our strategy in the greater Middle East is aimed at bolstering security for our partners while reducing Iran's ability to exploit these challenges for its own gain.


We've been working with our regional partners, including Egypt, Jordan, Iraq, Israel, Lebanon and the Gulf states to develop cooperation that will enable us to manage the political, diplomatic and security challenges that Iran poses. These efforts are beginning to show signs of success, including the GCC-plus-three forum, inter- Arab cooperation to help address the political crisis in Lebanon, security and military talks with the Gulf states and Arab government's increasing support for Iraq.


We are also working actively on a comprehensive Middle East peace process, and some regional governments have chosen to conclude model nuclear-cooperation agreements in partnership with the United States, thus disproving Iran's claims that the West seeks to block the pursuit of peaceful nuclear energy by countries.


Well aware of the regional and global consequences of a nuclear Iran, we will continue with our dual-track strategy. We in the international community very much hope that Iran will make the correct choices for itself, the region and the world. Yet we will be prepared to move ahead swiftly and effectively with additional measures with the confidence that our engagement today will make such measures unified and effective.


So in conclusion, again, Mr. Chairman, thank you for you, for your interest in this, for all the members of the committee. And we look forward to working with you in the days and weeks ahead.