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Remarks by Rep. Howard Berman (D-CA)

December 8, 2011

Thank you for that kind introduction and for the invitation to address this distinguishedconference today. I want to say special thanks to FDD President Cliff May and FDD Chairman Jim Woolsey.

In particular, FDD has been one the most committed and creative voices in Washington regarding the Iran nuclear issue and specifically Iran sanctions. Your ideas inspiredimportant components of the sanctions bill I authored and passed last Congress when I was Chairman of the House Foreign Affairs Committee, and your ideas continue to enrich my thinking about sanctions as we move forward. My recent conversation in my office with Mark Dubowitz was one of the most enlightening I’ve had regarding Iran sanctions and oil markets.

Last year President Obama signed into law my Comprehensive Iran Sanctions, Accountability, and Divestment Act – or CISADA. This law provided the tools for the Administration to impose strengthened sanctions against companies that support Iran’s energy sector and against financial institutions that support Iran’s Islamic Revolutionary Guards Corps, or IRGC.

The bill has been effective in many ways. It has impeded Iran’s access to international financial markets, as no less an expert than Iranian President Ahmadinejad noted recently, when he told the Iranian Parliament, “Our banks cannot make international transactions anymore.” And CISADA has led every major Western energy company to draw down its Iranian operations, throwing into doubt Iran’s ability to maintain high levels of oil production in the future. It also laid the groundwork for the UN Security Council to impose tough sanctions and for the European Union, Canada, Australia, and some others to impose even tougher ones.

I was pleased to work with the Obama Administration in developing a timetable for passage of CISADA that facilitated the imposition of multi-lateral sanctions on Iran.  Although I have occasionally criticized some aspects of their implementation of sanctions, I want it known that, of the three Administrations that have dealt with this issue, the Obama Administration has been far and away the best.  I think the Administration deserves major kudos for the priority it has given the Iranian nuclear issue and for the effectiveness of its actions. They have devoted massive amounts of time, energy, and focus to the Iran nuclear issue – both internally and working with foreign governments. 

In fact, I think that people who say President Obama isn’t serious about sanctions – or that the Administration is preparing to accommodate itself to containment of a nuclear Iran -- are flat wrong.  Some of those critics are attacking the President purely for purposes of political gamesmanship and to create a phony wedge issue.  It’s not only unfair; it’s simply inappropriate to play politics with a national security issue.  We have to remember that we are Americans first, not Democrats or Republicans.

But, all of that said, I want to make clear that it is often necessary that Congress set the pace on national security issues, and this has certainly been the case regarding the Iran nuclear-weapons issue. Every Administration wants total discretion in foreign policy. But that is an impulse that Congress must always resist. The American people, through its elected representatives, must have a strong voice in national security issues. My general rule is this: if the Administration is to be strong, Congress must be stronger.  I will not – and Congress should not – give in to entreaties from the Administration or elsewhere to dilute our approach to sanctions on the Central Bank of Iran’s petroleum transactions.

In recent days, there has been a great deal of discussion of whether and how to increase the pressure on the Iranian regime by sanctioning the Central Bank of Iran,which plays a key role in financing Iran’s nuclear weapons program and support for terrorism.  In early November, I authored an amendment to the Iran Threat Reduction Act that would cut the Central Bank off from the global financial system within thirty days after the President signs it into law.  Myamendment was adopted unanimously in the Foreign Affairs Committee, and thebill is scheduled to be taken up on the floor next week.

A second approach was taken by the Obama Administration on November 21, in declaringthat the entire Iranian banking system is laundering money for the regime’s threatening activities, warning the world’s banking system to stop doing business with Iran.

A thirdapproach, the Menendez-Kirk amendment, was agreed to by the Senate last Thursday and falls somewhere in between my approach and the Administration’s.

Let’s put the details aside for a minute and focus on the fundamental problem: Iran’s nuclear weapons program.  The problem is that all the sanctions now in place – ours, the UN’s, the EU’s, and others – are not putting enough pressure on the Iranian regime to stop its nuclear program.

The absolute goal is to stop Iran’s nuclear program.  There can be no alternative to achieving that goal – no temporizing, no half-measures, no compromise.  We cannot accept a nuclear-armed Iran.

But there is one inescapable fact: Iran is moving steadily toward a nuclear weapon capability. We are running out of time, and we have very few options to achieve our goal peacefully.  But we must achieve it.

This brings us back to the Central Bank of Iran.  It is the regime’s lifeline to the global banking system and to the world’s petroleum markets, for both exporting and importing.

If we do not move to cut off the Central Bank – and the regime – from its one remaining lifeline, then we will give up precious time to stop Iran’s weapon.

That is the genesis of my amendment.  Now is the time to take action.

The Administration is pleading for flexibility and more time to ratchet up the pressure on the Central Bank and on Iran’s oil customers and suppliers.  I am willing to give some flexibility, but I am not willing to give them 6 more months.  And I am not willing to settle for a mere warning to the world’s banks and oil markets.

The Menendez-Kirk amendment to the National Defense Authorization Act is a goodamendment, and it has the advantage of being in a bill that will likely be enacted very soon, probably next week. My only hesitation about it is that it delays sanctions on petroleum transactions for 180 days after enactment. That means mid-June, at the earliest.

I appreciate the logic that produced this extended time-frame, which would allow the President time to build an international coalition to support sanctions against the Central Bank, and to address disruptions to the world oil market.

However, we need to consider something else: whether waiting a full six months to tighten the screws on the Central Bank for transactions that produce most of Iran’s  revenue may  enable the Iranian regime to cross a key threshold in acquiring a nuclear weapons capability.  This delay would mean that Iran could continue to harden its underground uranium-enrichment facility at Qom and fortify the rest of its existing infrastructure without the impediment, and the disincentive, of powerful sanctions on its Central Bank.  And some experts have said that six months, or something quite close to that, is exactly the time-frame Iran needs to make those facilities fully impervious to conventional military action.

I do not advocate use of military force, but I do consider the threat of military action, in combination with sanctions, a critical element of our strategy for persuading Iran to halt its nuclear program. Most important, keeping the military option on the table is an ongoing warning to Iran about the consequences of its defiance of the international community. But the threat of military attack is also a useful inducement to other states to cooperate with our sanctions regime: Our friends and allies, such as Canada and Western Europe, genuinely oppose Iran’s nuclear quest and generally join our sanctions regime on principle, but China and other like-minded countries are solely motivated by their bottom line, which could be threatened by regional instability and disruptions in the world oil market.  Our strongest talking point in urging China and the like to cooperate with sanctions is this: If sanctions fail, military action – destabilizing the region and sending oil prices through the roof – could well follow.  If we lose the military option, we lose the force of that argument.  So, the only way to convince Iran to halt its nuclear activity before crossing this threshold is to impose tough sanctions on the Central Bank sooner rather than later.

So it may be that the only way to convince Iran to halt its nuclear program before crossing this threshold is to impose draconian sanctions on the Central Bank of Iranmuch sooner than 180 days.

I am a conferee on the defense bill, which includes the Menendez-Kirk amendment. Yesterday I proposed to my fellow conferees from the House and Senate that Menendez-Kirk be modified so that sanctions on petroleum transactions go into effect 120 days after enactment, instead of 180 days as it stands now.  This is a reasonable compromise between the time frame contained in my original measure on Central Bank sanctions – 30 days -- and the one currently found in the Menendez-Kirk amendment.

Reducing the time frame to 120 days would still allow the President time to build an international coalition to support sanctions against the Central Bank, and to address any disruptions to the world oil market. And it more accurately reflects the extreme urgency of the situation we now face.   Again – I want to reiterate – I will not, and Congress should not, give in to efforts to persuade us to dilute this sense of urgency.  

There are other important ideas out there that could have a powerful and immediate impact. Some of these ideas originated in this think-tank. For example, we need to consider whether we should sanction Iran’s national oil company, whose current chairman was once an IRGC kingpin.  This isn’t 1996, when the Iran-Libya Sanctions Act was first passed -- or 2003, when the EU-3 undertook a failed diplomatic initiative with Iran. Iran has been moving inexorably to nuclear-threshold status, and it is now very close. And we have no time to tinker; we have to act, and quickly.

As I have said previously, we need a sanctions-regime that is as bold as the Iranian nuclear program is brazen.  I believe sanctions on the Central Bank of Iran are a critical step in that direction.

Thank you. I’ll be happy to take your questions.

Rep. Howard Berman (D-CA) represents California’s 28th district. Rep. Berman serves on the Foreign Affairs Committee, where he was Chairman in the 110th and 111th Congresses and is currently a ranking member. He sponsored the Hezbollah Anti-Terrorism Act of 2011 to ensure that U.S. taxpayer dollars are not used to fund terrorist entities in Lebanon, and for other purposes. Rep. Berman is an effective legislative veteran who is considered one of the leading voices on immigration and foreign policy in the House. Rep. Berman has also been one of the strongest congressional supporters of Israel, sponsoring the Anti-Boycott Act in the House this year, which prohibits American individuals and organizations from actively boycotting Israeli goods.