SECRETARY KERRY'S REMARKS ON FY 2016 BUDGET TO HOUSE FOREIGN AFFAIRS COMMITTEE

FROM:  U.S. STATE DEPARTMENT
02/25/2015 12:42 PM EST
Advancing U.S. Interests in a Troubled World: The FY 2016 Foreign Affairs Budget
Testimony
John Kerry
Secretary of State
Testimony Before the House Foreign Affairs Committee
Washington, DC
February 25, 2015

Well, thank you very much, Mr. Chairman, Congressman Engel, Ranking Member, all the members of this committee. To respect your time, I will try to summarize my comments. Mr. Chairman, I hope I can do it in five minutes. There’s a lot to talk about. And your questions will, needless to say, elicit an enormous amount of dialogue, which I really welcome. I can’t think of a moment where more is happening, more challenges exist, there’s more transformation taking place, some of it with great turmoil, a lot of it with enormous opportunity that doesn’t get daily discussion, but all of it with big choices for you, for us – you representing the American people, all of us in positions of major responsibility at this important time.

We rose to the occasion, obviously, and we’d like to extol it. We all talk about it. I did, certainly, as a senator. I do as Secretary of State. And that is the extraordinary contribution of the Greatest Generation and what they did to help us, and our leaders did, Republican and Democrat alike, who put us on a course to win the battle against tyranny and dictatorship and to win the battle for democracy and human rights and freedom for a lot of people. And no country on the face of this planet has expended as much blood, put as many people on the line, lost as much of our human treasure to offer other people an opportunity to embrace their future, not tell them what it has to be. It’s really a remarkable story.

And now we find ourselves at a moment where we have to make some similar kinds of choices, frankly. I don’t want to overblow it; I’m not trying to. But this is a big moment of transformation where there are literally hundreds of millions of people emerging on this planet, young people. Count the numbers of countries where the population is 65 percent under the age of 30, 60 percent 30 and under, 50 percent under the age of 21. I mean, it’s all over the place. And if they live in a place where there’s bad governance or corruption or tyranny, in this world where everybody knows how to be in touch with everybody else all the time, you have a clash of aspirations, a clash of possibilities and opportunities.

And to some degree, that’s what we’re seeing today. That certainly was the beginning of the Arab Spring, which is now being infused with a sectarianism and confusions of religious overtones and other things that make it much more complicated than anything that has preceded this. By the way, the Cold War was simple compared to this: bipolar, pretty straightforward conversations. Yeah, we had to make big commitments, but it wasn’t half as complicated in a context of dealing country to country and with tribes, with culture, with a lot of old history, and it’s a very different set of choices. In addition, that’s complicated by the fact that many other countries today are growing in their economic power, growing in their own sense of independence, and not as willing to just take at face value what a larger G7 or G20 country tells them or what some particular alliance dictates. So that’s what we’re facing.

And I heard the Chairman say we shouldn’t compromise the day-to-day operations of the Department, but let me say to you the day-to-day operations of the Department are not confined to making an embassy secure. We need to do that, but if that’s all we do, folks, we’re in trouble. We’re not going to be able to protect ourselves adequately against these challenges that we’re faced-- that we’ll talk about today.

In the United States, we get 1 percent of the entire budget of the United States of America. Everything we do abroad within the State Department and USAID is within that 1 percent – everything. All the businesses we try to help to marry to economic opportunities in a country, all the visas, the consulate work, the diplomacy, the coordination of DHS, FBI, ATF. I mean, all the efforts that we have to engage in to work with other countries’ intelligence organizations, so forth, to help do the diplomacy around that is less than 1 percent.

I guarantee you more than 50 percent of the history of this era is going to be written out of that 1 percent and the issues we confront in that 1 percent. And I ask you to think about that as you contemplate the budgets. Because we’ve been robbing Peter to pay Paul and we’ve been stripping away our ability to help a country deal with those kids who may be ripe for becoming part of ISIL. We’ve been diminishing our capacity to be able to have the kind of impact we ought to be having in this more complicated world.

Now, I’m not going to go into all of the detail because I promised I’d summarize. But I believe the United States is leading extraordinarily on the basis of that 1 percent. We have led on ISIL, putting together a coalition for the first time in history that has five Arab nations engaged in military activity in another Arab country in the region against – Sunni against Sunni. I don’t want to turn this into that sectarian, but it’s an important part of what is happening. We are – we helped to lead in the effort to transition in Iraq a government that we could work with. Part of the problem in Iraq was the sectarianism that the former prime minister had embraced, which was dividing his nation and creating a military that was incompetent, and we saw that in the context of Mosul. So we wanted to make sure that we had a government that really represented people and was going to reform and move in a different direction. And we worked at it and we got it. We have it today. Is it perfect? No. But is it moving in the right direction? You bet it is.

In Afghanistan, we rescued a flawed election, brought together the parties, were able to negotiate to get a unified unity government, which has both of the presidential candidates working together to hold Afghanistan and define its future and create a – and negotiate a BSA that defines our future going forward, and give Afghanistan a chance to make good on the sacrifices of 14 years of our troops and our contributions and so forth.

On Ebola – we led that fight. President Obama made a brave decision to send 4,000 young American troops there in order to set up the structure so we had a capacity to be able to try to deal with it. One million deaths were predicted by last Christmas at the time that we did that. And not all the answers were there for questions that were real. But the President sent those people in, we have made the difference, and now there’s a huge reduction in the cases in Liberia, Sierra Leone, Guinea, and we’re getting – not finished, but we’re getting to a place where you’re not seeing it on the nightly news every day and people aren’t living in fear here that they’re about to be infected.

On AIDS, we’re facing the first AIDS-free generation in history because of the work that we have done.

On the Ukraine, we’ve held together Europe and the United States in unity to put in place sanctions. The ruble is down 50 percent. There’s been $151 billion of capital flight from Russia. There’s been a very significant impact on day-to-day life, on food product availability. The economy is predicted in Russia to go into recession this year. And we are poised yet to do another round, potentially, depending on what happens with Minsk in these next few days.

On Iran, we’ve taken the risk of sitting down, of trying to figure out is there a diplomatic path to solve this problem. I can’t sit here today and tell you I know the answer to that, but I can tell you it’s worth trying before you go to more extreme measures that may result in asking young Americans yet again to put themselves in harm’s way.

We are pursuing the two most significant trade agreements of recent memory, the TPP in Asia Pacific and the TTIP in Europe, both of which represent about 40 percent of GDP of the world in order to have a race to the top, not a race to the bottom. And if we can achieve that, we will be achieving a major new structure with respect to trade rules on a global basis.

In Africa, we held the African Leaders Summit, an historic summit with more than 40 African leaders coming to Washington, out of which has come a series of events that will help, we hope, to meet our obligation to help transform Africa.

And finally, on climate – there are other things incidentally, I’m just skimming the surface of some of the most important – I know not everybody here is a believer in taking steps to deal with climate. I regret that. But the science keeps coming in stronger and stronger and stronger. On the front page of today’s newspapers are stories about an Alaskan village that’ll have to be given up because of what is happening with climate change. It is – there’s evidence of it everywhere in the world. And we cut a deal with China, improbable as that was a year ago – the biggest opponent of our efforts has now stood up and joined us because they see the problem and they need to respond to it. And so they’ve agreed to a target for lowering their reliance on fossil fuel and a target for alternative and renewable energy by a certain period of time, and we’ve set targets. And that’s encouraged other countries to start to come forward and try to take part in this effort.

So I will adamantly put forward the way in which this Administration is leading. I know not everybody agrees with every choice. Are there places where we need to do more? Yes, and we’ll talk about those, I’m sure, today. But we need to work together.

And I’ll end by saying that historically, that 1 percent has produced more than its monetary value precisely because your predecessors were willing to let foreign policy debate and fight become bipartisan, let politics stop at the water’s edge, and find what is in the common interest of our country. That’s what brings me here today. That’s why I’m so privileged to serve as Secretary of State at this difficult time, because I believe America is helping to define our way through some very difficult choices. And frankly – and last thing, this is counterintuitive but it’s true: Our citizens, our world today is actually, despite ISIL, despite the visible killings that you see and how horrific they are, we are actually living in a period of less daily threat to Americans and to people in the world than normally— less deaths, less violent deaths today than through the last century. And so even the concept of state war has changed in many people’s minds, and we’re seeing now more asymmetrical kinds of struggles.

So I would say to you that I see encouragement when I travel the world. I see people wanting to grow their economies. I see vast new numbers of middle-class people who are traveling. I see unbelievable embrace of new technologies. I see more democracy in places where it was non-existent or troubled – big changes in Sri Lanka and other countries. We can run the list. But I hope you will sense that it is not all doom and gloom that we are looking at. Tough issues? Yes. But enormous opportunities for transformation if we will do our job and continue to be steady and put on the table the resources necessary to take advantage of this moment of transformation.

Thank you, Mr. Chairman.

U.S. DOD OFFICIAL TELLS CONGRESS IRAQ MUST DEAL WITH EXTREMIST THREAT

FROM:  U.S. DEFENSE DEPARTMENT 

Iraq Must Do Its Heavy Lifting, Pentagon Official Says

By Terri Moon Cronk

DoD News, Defense Media Activity

WASHINGTON, July 23, 2014 – Though the United States must protect its people and is helping Iraq to face the threat posed by the extremist group Islamic State of Iraq and the Levant, it is up to Iraq to do the heavy lifting, a senior Defense Department official said today.

Elissa Slotkin, performing the duties of the principal deputy undersecretary of defense for policy, told the House Foreign Affairs Committee that the United States has a vital national security interest to ensure Iraq and other countries don’t become safe havens for terrorists who could threaten the U.S. homeland, its citizens or interests abroad, or its partners and allies.

The immediate goals are to protect American people and property in Iraq, gain a better understanding of how the United States might train, advise and assist Iraqi security forces as necessary, and expand the nation’s understanding of ISIL intelligence, Slotkin said.

All three factors are critical, she said, to any future U.S. strategy involving Iraq, and the nation has three measures in the strategy:

-- The United States added forces to protect its people in Iraq. “The safety of U.S. citizens and personnel throughout Iraq is our highest priority,” Slotkin said, adding that DoD is meeting all requests from the State Department for extra security for the U.S. Embassy and the airport.

-- Defense Secretary Chuck Hagel ordered the amphibious transport ship USS Mesa Verde into the Arabian Gulf. “Its presence adds to the other naval ships there, such as the aircraft carrier USS George H.W. Bush and provides the president with additional options to protect American citizens and interests,” she said.

-- Intelligence, surveillance and reconnaissance assets are part of the U.S. ramping-up effort. “We’ve significantly surged ISR capabilities into Iraq, [to] over 50 sorties a day, compared to one a month in previous months,” Slotkin added.

“We are now capable of around-the-clock coverage of Iraq, and have been focusing particularly on ISIL-controlled territory and around Baghdad,” she said.
The small teams of 300 U.S. military advisors in Iraq are assessing and evaluating how the United States might potentially help Iraqi security forces, Slotkin said.
Hagel and Army Gen. Martin E. Dempsey, Joint Chiefs of Staff chairman, received the draft assessment from U.S. Central Command last week, she told the panel.
“Department leaders are taking a deliberate approach and reviewing this lengthy assessment,” Slotkin said, adding that the assessments will be used to make recommendations to the president.

“Additional assessment work continues in and around Baghdad with respect to the developing situation on the ground,” she added.

ASSISTANT SECRETARY BROWNFIELD'S CONGRESSIONAL TESTIMONY ON NARCOTICS AND U.S.-MEXICO RELATIONS

FROM:  THE STATE DEPARTMENT 

The Future of U.S.-Mexico Relations

Testimony

William R. Brownfield

Assistant Secretary, Bureau of International Narcotics and Law Enforcement Affairs

Statement Before the House Foreign Affairs Committee

Washington, DC

May 20, 2014

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Chairman Royce, Ranking Member Engel, and Members of the Committee, thank you for the opportunity to be here today to discuss our important partnership with the Government of Mexico. Through this unprecedented partnership forged between our two governments over the past seven years, great progress has been made in strengthening the capacity of Mexico’s justice sector to counter organized crime and protect our shared border. And working in partnership with the Peña Nieto administration, we are continuing our strong collaborative efforts with the Government of Mexico to advance our shared citizen security objectives.
In 2008, at the start of the Merida Initiative, drug cartel-related violence in Mexico had been increasing dramatically, corruption was a threat to rule of law, and Mexican institutions were not able to deal effectively with the impunity of these powerful criminal networks. The people of Mexico had little confidence in their institutions, and the unmitigated flow of illicit money and narcotics clouded the prospects of Mexico’s licit economy. In 2008, Mexico took the important first step of passing constitutional reforms to overhaul its entire justice sector including the police, judicial system, and corrections at the federal, state and local levels. Mexico’s institutional reforms and its objective of building strong institutions that its citizens can depend on to deliver justice provided a foundation for U.S. cooperation.

Since 2008, our assistance under the Merida Initiative has helped advance Mexico’s implementation of these reforms. To date, the U.S. government has delivered approximately $1.2 billion worth of training, capacity building, and equipment. By no means do we go it alone: the Government of Mexico has contributed billions of its own resources, outpacing our own, to our shared security goals. And because our assistance is designed jointly with the Government of Mexico, many programs form integral parts of Mexico’s justice sector reforms and enjoy a high level of sustainability.

Our partnership with Mexico has demonstrated results, through it we have: helped advance the transition to the accusatory justice system through the training of over 8,500 federal justice sector personnel; augmented the professionalization of police units by providing training to more than 22,000 federal and state police officers, 4,000 of which are federal investigators; improved the capacity and security of its federal prisons, supporting the expansion of secure federal facilities from five with a capacity of 3,500 to 14 with a capacity of 20,000; provided civic education and ethics training to more than 700,000 Mexican students; and improved the detection of narcotics, arms, and money at the border, reaching nearly $3.8 billion in illicit goods seized. In addition, since 2009, Mexico has apprehended more than 70 senior and mid-level drug trafficking organization (DTO) leaders, notably Joaquin “El Chapo” Guzman Loera, significantly disrupting all major Mexican DTOs. These are noteworthy outputs that, with continued collaboration and political commitment, will help enhance security for citizens on both sides of the border.

The Initiative continues to be structured around the four pillar framework: 1) Disrupting the operational capacity of organized crime; 2) Institutionalizing Mexico’s capacity to sustain the rule of law and protect human rights; 3) Creating a 21^st century border; and 4) Building strong and resilient communities. This framework, combined with the shift toward training and an emphasis on building capacity at the state and local level, is the basis for our security cooperation with the Peña Nieto Administration going forward.

When President Peña Nieto took office in December 2012, he and his Administration took a close and deliberate look at the U.S.-Mexico bilateral relationship, including our security cooperation. After a careful review, the Government of Mexico has committed to continuing our collaboration on security issues under the four-pillar Merida framework, with a sharper focus on crime prevention and rule of law. The Peña Nieto Administration has laid out its long-term plans for improving citizen security through its ten-point security strategy that includes crime prevention and effective criminal justice, police professionalization, transforming the prison system, promoting citizen participation and international coordination on security, transparent statistics on crime rates, coordination among government authorities and regionalization to focus efforts, and strengthening of intelligence to combat crime. These elements track well with the planning and direction of the work that I manage, International Narcotics Control and Law Enforcement (INCLE) programming, which aims to help build professionalized and credible civilian security.

In recent months, we have reached agreement with the Government of Mexico on areas of programmatic focus for our security cooperation under Merida. We have launched a robust process for getting security assistance programs green lighted that consists of joint executive level meetings between INL Mexico and the Ministry of Foreign Affairs (SRE) and the Ministry of Government (SEGOB). Since November 2013, 78 projects, totaling more than $430 million have been approved through this process. These projects span all four pillars of Merida with a focus on bilateral priority areas – assistance to the states in law enforcement capacity building, support to the Government of Mexico’s efforts on its southern border strategy, and justice sector reform.

In seeking to further justice sector reform, the Attorney General’s Office (PGR) has demonstrated commitment to advancing the transition to the accusatory justice system and recently agreed to several programs supporting this transition at the federal and state level. We will continue building the skills of prosecutors, investigators, and experts, enhancing the technical capacity of courtrooms throughout the country to handle oral trials, and helping to train law school students in crucial oral trial skills. Additionally we are working with the PGR’s criminal investigation arm, akin to the Federal Bureau of Investigations, to enhance its human and technological capacity to pursue complex investigations.

To help Mexico build policing capacity for its communities, we are putting in place the building blocks to expand police training to the state and municipal level. We have strengthened police academies in the states of Chihuahua, Sonora, Nuevo Leon, and Puebla, enabling them to serve as the backbone for training programs and to conduct regional training. We are building our joint state training program around this regional structure but expanding it to reach all of Mexico’s 31 states and the Federal District. Some programs will be regional in their application, enhancing cooperation between law enforcement officials in neighboring states as they implement reforms. Contending with transnational crime and violence against communities takes collaboration and partnerships. And that is why, in addition to regional training academies, we are supporting task forces at the state level to better develop and share police intelligence, augmenting local capacity to combat criminal organizations.

Building on the Peña Nieto Administration’s agenda for police professionalization, we will work with the Government of Mexico to enhance and professionalize existing law enforcement institutions to develop federal standards for Mexican officials in the areas of recruitment, training, discipline and promotion. Drawing upon expertise here at home, U.S. Federal, state, and local partners will help to advise their Mexican counterparts on policing standards and best practices, and facilitate regional working groups that integrate state, local, and federal entities. Police professionalization, greater observance of civil and human rights, and greater trust among the Mexican public in its police will result.

Greater border security capacity, along Mexico’s northern and southern borders is also a significant bilateral priority. Our governments have committed to further enhancing the Government of Mexico’s ability to interdict illicit narcotics, arms, and money as well as strengthen control of porous border areas. Using the train the trainer method to multiply the impact of our assistance, we have already provided specialized training for police, military, and Mexican Customs officials that address advanced border security and import/export processing techniques and methodologies. On Mexico’s southern border, we expect that our assistance programs will help to improve communications among Mexican law enforcement, immigration, and community officials, increasing their interoperability and capacity to share information to adapt to evolving criminal tactics. This is important to Mexico’s national security and it is to ours as well. It goes without saying that strengthening Mexico’s capacity to control its border with Belize and Guatemala, which Mexico is already taking steps to do, will improve security on our own southern border.

In addition to new programs that we expect to have underway in the year ahead, we continue to build on the success of several ongoing programs. For example, Mexico’s federal corrections system continues to be a recognized international leader in corrections reform, with eight federal facilities already certified by the independent American Correctional Association. The reforms already underway, including the creation of an objective prisoner classification system and the construction of new facilities, are making great strides. Mexico’s success in reforming the corrections systems at the federal level can serve as the launching point for supporting similar reforms at the state level, where significant challenges remain. We will support Mexico in assessing state facilities and in its efforts to undertake similar reforms at the state level.
We will also continue supporting Mexico’s efforts to improve information sharing among its agencies involved in the fight against money laundering and illicit finance, a priority area for the Peña Nieto administration. Enhanced Mexican interagency coordination will lead to more prosecutions and cash seized. We have already provided funding for the training of the Financial Intelligence Unit’s (FIU) personnel, sophisticated financial analysis software, and the accompanying computer hardware. Given the expanded responsibilities of the FIU under the new anti-money laundering legislation passed in late 2012, we are providing additional support for upgrades and expanding their data center.

Complementary to our assistance at the institutional level, we will also continue to support local communities by promoting behavioral changes for improving rule of law from the ground up, such as through our Culture of Lawfulness program. This program offers a civic education curriculum to schools throughout Mexico, professional ethics education for the federal and state police as well other public officials, and informs citizens on the process for reporting crime and collects feedback on their experience of reporting crime through on-site monitors at local public prosecutors’ offices in Mexico City.

These examples of past, current, and future security collaboration with Mexico are just that, examples. Building strong and able justice sector institutions capable of dealing with organized crime and the accompanying violence and corruption is a difficult and long-term endeavor. It takes years of dedicated and sustained work across numerous institutions and sectors, the political will to affect change, and the resources and stamina to see it through. This is the path toward secure and safe communities and secure and safe economies. Our work with Mexico over the past seven years has achieved far reaching results and I am confident that our collaborative efforts will continue.

Thank you, Chairman Royce, Ranking Member Engel and other distinguished Members for your time. I look forward to answering any questions you might have.

SECRETARY OF STATE KERRY'S STATEMENT ON AGREEMENT WITH IRAN ON NUCLEAR PROGRAM

FROM:  U.S. STATE DEPARTMENT, 
The P5+1's First Step Agreement With Iran on its Nuclear Program
Testimony
John Kerry
Secretary of State
Opening Remarks Before the House Foreign Affairs Committee
Washington, DC
December 10, 2013

SECRETARY KERRY: Well, Mr. Chairman, thank you very, very much. Ranking Member Engel, Members of the Committee, thanks very much for welcoming me back, and I am happy to be back here. There’s no more important issue in American foreign policy than the question of the one we’re focused on here today.

And obviously, from the Chairman’s introduction, you know that I come here with an enormous amount of respect for your prerogatives on the House Foreign Affairs Committee, as we did in the Senate. And it’s entirely appropriate that we’re here to satisfy your questions, hopefully allay your concerns and fears, because I believe the agreement that we have ought to do that and I think the path that we’re on should do that. And as I describe it to you, I hope you’ll leave here today with a sense of confidence that we know what we’re doing, our eyes are open, we have no illusions. It’s a tough road. I don’t come here with any guarantees whatsoever. And I think none of what we’ve done in this agreement begs that notion. In other words, everything is either verifiable or clear, and there are a set of requirements ahead of us which will even grow more so in the course of a comprehensive agreement. And we can talk about that – I’m sure we will – in the course of the day.

Let me just begin by saying that President Obama and I have both been very clear, as every member of this committee has been, that Iran must not acquire a nuclear weapon. And it is the President’s centerpiece of his foreign policy: Iran will not acquire a nuclear weapon. This imperative is at the top of our national security agenda, and I know it’s at the top of yours as well. So I really do welcome the opportunity to have a discussion not only about what the first-step agreement does, but also to clarify – I hope significantly – what it doesn’t do, because there’s a certain, as there is in any of these kinds of things, a certain mythology that sometimes grows up around them.

The title of today’s hearing is “The Iran Nuclear Deal: Does It Further U.S. National Security?” And I would state to you unequivocally the answer is yes. The national security of the United States is stronger under this first-step agreement than it was before. Israel’s national security is stronger than it was the day before we entered into this agreement. And the Gulf and Middle East interests are more secure than they were the day before we entered this agreement.

Now, here’s how:

Put simply, once implemented – and it will be in the next weeks – this agreement halts the progress of Iran’s nuclear program – halts the progress – and rolls it back in certain places for the first time in nearly ten years. It provides unprecedented monitoring and inspections. While we negotiate to see if we can conclude a comprehensive agreement – if we can conclude – and I came away from our preliminary negotiations with serious questions about whether or not they’re ready and willing to make some of the choices that have to be made. But that’s what we put to test over the next months. While we negotiate to see if we can conclude a comprehensive agreement that addresses all of our concerns, there’s an important fact: Iran’s nuclear program will not move forward.

Under this agreement, Iran will have to neutralize – end – its entire stockpile of 20 percent enriched uranium, which you all know is a short step away from weapons-grade uranium. So if you remember when Prime Minister Netanyahu held up that cartoon at the UN with the bomb in it in 2012, he showed the world a chart that highlighted the type of uranium that he was most concerned about – and he was talking about that 20 percent stockpile. Under this agreement, Iran will forfeit all – not part, all – of that 20 percent, that 200 kilogram stockpile. Gone.

Under this agreement, Iran will also halt the enrichment above 5 percent and it will not be permitted to grow its stockpile of 3.5 percent enriched uranium. Iran cannot increase the number of centrifuges in operation, and it will not install or use any next-generation centrifuges to enrich uranium.

Under this agreement, we will have increased transparency of Iran’s nuclear program, giving us a window into their activities that we don’t have today. We will have access to Fordow, a secret facility in a mountaintop that we’ve never been in. We will now get into it not once or twice – every single day. We will get into Natanz and have the ability to know not once or twice, but every single day what is happening in Natanz. And we will have access each month to the Arak facility, where we will have an extraordinary ability to be able to know through inspections whether or not they are complying with their requirements.

Now, this monitoring is going to increase our visibility into Iran’s nuclear program as well as our ability to react should Iran renege on this agreement. And taken together, these first steps will help prevent Iran from using the cover of negotiations to continue advancing its nuclear program in secret – a concern that everybody on this dais shares.

Now, in addition – this is very important – one of our greatest concerns has been the Arak – A-r-a-k – nuclear reactor facility. And this is a heavy-water, plutonium-capable reactor. That’s unacceptable to us. In the first step, we have now succeeded in preventing them from doing any additional fuel testing, from transferring any fuel rods into the reactor, and from installing any of the uninstalled components which are critical to their ability to be able to advance that particular reactor. So it’s frozen stone cold where it is in terms of its nuclear threat and capacity. Iran will not be able to commission the Arak reactor during the course of this interim first-step agreement. That’s very important.

Now, we have strong feelings about what will happen in a final comprehensive agreement. From our point of view, Arak is unacceptable. You can’t have a heavy-water reactor. But we’ve taken the first step in the context of a first step, and they will have to halt production of fuel for this reactor and not transfer any fuel or heavy water to the reactor site. It cannot conduct any additional fuel testing for this. and Iran is required to give us design information for the site. We’re actually going to have the plans for the site delivered to us. We’ve long sought this information, and it will provide critical insight into the reactor that has not been previously available to us through intel or any other sources.

Now, those are the highlights of what we get in this agreement. And I know many of you have asked, “Well, what does Iran get in return?” And I’ve seen outlandish numbers out there in some articles talking about 30, 40, 50 billion dollars and so forth, or disintegration of the sanctions. My friends, that’s just not true. It’s absolutely not true. We have red-teamed and vetted and cross-examined and run through all the possible numbers through the intel community, through the Treasury Department, through the people in charge of sanctions, and our estimates are that at the end of the six months, if they fully comply, if this holds, they would have somewhere in the vicinity of $7 billion total.

And this is something that I think you ought to take great pride in. I was here as chairman when we put his in place. I voted for these sanctions, like we all did in the United States Senate. I think we were 100 to nothing as a matter of fact. And we put them in place for a purpose. The purpose was to get to this negotiation. The purpose was to see whether or not diplomacy and avoidance of war could actually deliver the same thing or better than you might be able to get through confrontation.

Now, sanctions relief is limited to the very few targeted areas that are specified in this agreement for a total of about the $7 billion that I’ve described. And we will continue to vigorously – Ranking Member Engel, we will absolutely not only will we – I mean, this is going to actually result in a greater intensity of focus on the sanctions because I’ve sent a message to every single facility of the United States anywhere in the world that every agency is to be on alert to see any least movement by anybody towards an effort to try to circumvent or undo the sanctions. We don’t believe that will happen. And one of the reasons it won’t happen is we have a united P5+1. Russia, China, the United States, France, Germany, and Great Britain are all united in this assurance that we will not undo the sanctions and that we will stay focused on their enforcement.

Now, all the sanctions on Iran further on its abysmal human rights record, over its support for terrorism, which you’ve mentioned, and over its destabilizing activities in places like Syria – those sanctions will all remain in effect. They’ve nothing to do with the nuclear. They’re there for the reasons they’re there, and we’re not taking them off. This agreement does provide Iran with a very limited, temporary, and reversible relief. And it’s reversible at any time in the process if there is noncompliance. If Iran fails to meet its commitments, we can and will revoke this relief. And we will be the first ones to come to you if this fails to ask you for additional sanctions.

The total amount of relief is somewhere between the 6 and 7 billion that I described. That is less than one percent of Iran’s $1 trillion dollar economy, and it is a small fraction of the $100 billion-plus of oil revenue alone that we have deprived Iran of since 2012.

I want you to keep in mind this really pales in comparison to the amount of pressure that we are leaving in place. Iran will lose $30 billion over the course of this continued sanctions regime over the next six months. So compare that – they may get $7 billion of relief, but they’re going to lose $30 billion. It’s going to go into the frozen accounts. It will be added to the already 45 billion or so that’s in those accounts now that they can’t access.

And during the six-month negotiating period, Iran’s crude oil sales cannot increase. Oil sanctions continue as they are today. There’s no diminishment of the oil and banking sanctions that you put in place. We have not lifted them. We haven’t eased them. That means that as we negotiate, oil sanctions will continue to cost Iran about the 30 billion I just described, and Iran will actually lose more money each month that we negotiate than it will gain in relief as a result of this agreement. And while we provide 4.2 billion in relief over the six months, which is direct money we will release from the frozen account, we are structuring this relief in a way that it is tied to concrete, IAEA-verified steps that they’ve agreed to take on the nuclear program. That means that the funds will be transferred not all at once, but in installments, in order to ensure that Iran fulfills its commitments. And it means that Iran will not get the full measure of relief until the end of the negotiating period, when and if we verify, certify, that they have complied.

So now we have committed – along with our P5+1 partners – to not impose any new nuclear-related sanctions for the period of the six months. I’m sure there are questions about this. I know I’ve seen, and there are some in Congress who’ve suggested they ought to do it. I’m happy to answer them. I will tell you that in my 29 years, just about shy of the full 29 I’ve served in the Senate, I was always a leading proponent of the sanctions against Iran. I’m proud of what we did here. But it was undeniable that the pressure we put on Iran through these sanctions is exactly what has brought Iran to the table today, and I think Congress deserves an enormous amount of credit for that.

But I don’t think that any of us thought we were just imposing these sanctions for the sake of imposing them. We did it because we knew that it would hopefully help Iran dismantle its nuclear program. That was the whole point of the regime.

Now, has Iran changed its nuclear calculus? I honestly don’t think we can say for sure yet. And we certainly don’t just take words at face value. Believe me, this is not about trust. And given the history – and Mr. Chairman, you mentioned the question of deception – given the history, we are all rightly skeptical about whether or not people are ready to make the hard choices necessary to live up to this. But we now have the best chance we’ve ever had to rigorously test this proposition without losing anything. At least twice in this agreement, it is mentioned that nothing is agreed until everything is agreed, and that is specific as to the final agreement. In addition, where it does talk about the potential of enrichment in the future, it says “mutually agreed upon” at least four times – three or four times in that paragraph. It has to be agreed. We don’t agree, it doesn’t happen.

Every one of us remembers Ronald Reagan’s maxim when he was negotiating with the Soviet Union: Trust, but verify. We have a new one: Test, but verify. Test, but verify. And that is exactly what we intend to do in the course of this process.

Now, we’ve all been through tough decisions. Those of you in the top dais have been around here a long time, and you’ve seen – we all know the kinds of tough decisions we have to make. But we’re asking you to give our negotiators and our experts the time and the space to do their jobs, and that includes asking you while we negotiate that you hold off imposing new sanctions.

Now, I’m not saying never. I just told you a few minutes ago if this doesn’t work, we’re coming back and asking you for more. I’m just saying not right now. Let me be very clear. This is a very delicate diplomatic moment, and we have a chance to address peacefully one of the most pressing national security concerns that the world faces today with gigantic implications of the potential of conflict. We’re at a crossroads. We’re at one of those, really, hinge points in history. One path could lead to an enduring resolution in international community’s concerns about Iran’s nuclear program. The other path could lead to continued hostility and potentially to conflict. And I don’t have to tell you that these are high stakes.

We have an obligation to give these negotiations an opportunity to succeed. And we can’t ask the rest of the P5+1 and our partners around the world to hold up their ends of the bargain if the United States isn’t going to uphold its end of the bargain. If we appear to be going off on our own tangent and do whatever we want, we will potentially lose their support for the sanctions themselves. Because we don’t just enforce them by ourselves; we need their help. And I don’t want to threaten the unity that we currently have with respect to this approach, particularly when it doesn’t cost us a thing to go through this process knowing that we could put sanctions in place additionally in a week, and we would be there with you seeking to do it.

I don’t want to give the Iranians a public excuse to flout the agreement. It could lead our international partners to think that we’re not an honest broker and that we didn’t mean it when we said that sanctions were not an end in and of themselves, but a tool to pressure the Iranians into a diplomatic solution. Well, we’re in that. And six months will fly by so fast, my friends, that before you know it we’re either going to know which end of this we’re at or not.

It's possible, also, that it could even end up decreasing the pressure on Iran by leading to the fraying of the sanctions regime. I will tell you that there were several P5+1 partners at the table ready to accept an agreement significantly less than what we fought for and got in the end.

Mr. Chairman, do you want me to wrap?

CHAIRMAN ROYCE: If you could, Mr. Secretary.

SECRETARY KERRY: Okay. Let me just say to you that the Iranians know that this threat is on the table.

I do want to say one quick word about Israel and Prime Minister Netanyahu. I speak to the Prime Minister usually a couple times a week or several times. I talked to him yesterday morning, and I am leaving tomorrow and I'll be seeing him Thursday night. We are totally agreed that we need to focus on this final comprehensive agreement. And Yossi Cohen, the national security advisor to the Prime Minister, is here in Washington this week working with our experts. And we will work hand in hand closely, not just with Israel, but with our friends in the Gulf and others around the world, to understand everybody's assessment of what constitutes the best comprehensive agreement that absolutely guarantees that the program, whatever it is to be, is peaceful, and that we have expanded by an enormous amount the breakout time.

This first-step agreement, Mr. Chairman, actually does expand the breakout time. Because of the destruction of the 20 percent, because of the lack of capacity to move forward on all those other facilities, we are expanding the amount of time that it would take them to break out. And, clearly, in a final agreement, we intend to make this failsafe that we can guarantee that they will not have access to nuclear weapons.

So I’d just simply put the rest of my testimony in the record, Mr. Chairman. I look forward to your questions.

TESTIMONY BEFORE HOUSE FOREIGN AFFAIRS COMMITTEE ON EXPORT CONTROL REFORM

FROM: U.S. DEPARTMENT OF STATE
Export Control Reform: The Agenda Ahead

Testimony
Thomas Kelly
Acting Assistant Secretary, Bureau of Political-Military Affairs
Statement Before the House Foreign Affairs Committee Hearing on Export Control Reform
Washington, DC
April 24, 2013

I thank the Chairman for his introduction, and would ask that my written remarks be entered into the record.

Chairman Royce, Congressman Sherman, Committee Members: it has been two years since the Committee last met to hear testimony on the President’s Export Control Reform Initiative. A lot of work has been done in the intervening period. I would like to start by thanking thw Committee on behalf of the State Department for its bipartisan support throughout the process.

As the pace of technological advance accelerates, and as technological capability spreads around the world, the need to update our Export Controls is increasingly urgent. We are no longer in an era in which a handful of countries hold the keys to the most sensitive technologies, as was the case during the Cold War. Today, a whole range of nations have advanced technological capability.

At the same time, because of the diffusion of technology, many U.S. companies must collaborate with foreign partners to develop, produce and sustain leading-edge military hardware and technology. Their survival depends on it.

But because our current export controls are confusing, time-consuming, and – many would say-- overreaching, our allies increasingly seek to ‘design out’ US parts and services, thus avoiding our export controls and the end-use monitoring that comes with them in favor of indigenous design. This threatens the viability of our defense industrial base, especially in these austere times.

Our current system has another problem. It can prevent our allies in theatre from getting the equipment and technology they need to fight effectively alongside our troops in the field.

This system has its basis in the 1960s, and has not undergone significant update since the early 1990s. It is cumbersome, complex and incorrectly controls too many items as though they were "crown jewel" technologies.

What that has meant is that an inordinate amount of agencies’ resources – both in terms of licensing and compliance activities – has been expended on nuts and bolts as well as our REAL "crown jewel" technologies.

In November 2009, President Obama directed a White House task force to identify how to modernize our export control system so that it will address the current threats we face, as well as account for the technology and economic landscape of the 21st century.

His direction was grounded in national security, with the goal of putting up ‘higher fences’ around the items that deserve the greatest protection, while permitting items of lesser sensitivity to be exported more readily when appropriate.

To address the problems the task force identified, they recommended reforms in four key areas: licensing policies and procedures; control lists; information technology; and export enforcement.

The President accepted the recommendations, and since early 2010, agencies have been working hard to implement them.

Much of agencies’ efforts have centered on revising the U.S. Munitions List and the Commerce Control List. This reform will draw a "bright line" between the two lists using common terms and control parameters. This will help our exporters determine far more easily which list their products are on. The reform will ensure that those items of greatest concern to us from a national security and foreign policy perspective will remain on the USML, and thus be subject to the most stringent licensing requirements, while items of less sensitivity will be moved to the CCL.

I want to emphasize a key point: items moving to the CCL are going to remain controlled. They are not being "decontrolled", but in specific circumstances, they will be eligible for export under Commerce’s more flexible licensing mechanisms.

I am confident that the revised lists will permit State to continue to perform its national security and foreign policy mandates in export licensing.

I will also note that we are making tremendous progress in the effort to rewrite the categories. We have published twelve rebuilt USML categories in the Federal Register for public comment. The proposed rules for the seven remaining categories have been drafted and are either undergoing or awaiting interagency review so that we can then publish them for public comment.

On April 16, the Departments of State and Commerce published companion rules that implement the revised USML Categories VIII (Aircraft) and XIX (Engines). This is the first pair in a series of final rules that put in place the rebuilt export control lists. Our goal is to publish the revised USML in its entirety on a rolling basis throughout this year.

In the last phase of our reform effort, we will need legislation to bring the initiative to its logical conclusion by creating a single licensing agency. The Administration has not yet determined when to approach this effort, but we will fully engage our oversight Committees and know that we can count on your support when we do.

On that note, one final point I want to make is that this has not only been an interagency process, but a cross-government process. Over the course of the last three years, we have had the opportunity to work closely with this Committee, and with many others across the Congress, on both the broader strategic questions of national security, and the finer technical details of our proposals. Our work together shows what we can achieve together. I am grateful for your bipartisan support for this initiative and look forward to continuing to work closely with you on the remainder of the reform effort.

With that, I want to thank you for inviting me to testify. I now would like to turn the floor over to Commerce Assistant Secretary Kevin Wolf.