Hearing Of The Senate Committee On Banking, Housing, And Urban Affairs- Minimizing Potential Threats From Iran: Administration Perspectives on Economic Sanctions And Other US Policy Options

Statement

Thank you, Mr. Chairman and Ranking Member Shelby.

And welcome to our esteemed witnesses who have agreed to testify at this important and timely
hearing, including my colleagues Senator Bob Casey and Senator Sam Brownback.
Mr. Chairman, I would like to thank you for calling this hearing, and I commend you for putting
forth a comprehensive plan to arm the administration with the tools they need to put a stop to
Iran's rogue nuclear program.

I believe that when it comes to Iran, we should never take the military option off the table.
But I have long argued that economic sanctions are the preferred and probably most effective
way to choke Iran's nuclear ambitions.
The Obama administration has recently begun direct diplomatic negotiations with Iran, and the
first round of these talks did yield some important concessions from the Iranians last week.
These negotiations should continue, but they do not supplant the need for action by this
Congress. Iran, when it is caught red-handed, has a habit of promising just enough to avoid a
strong response from the international community. Not this time.
We should continue to talk to the Iranians, but we should not trust them. The threat of new
sanctions will only serve to strengthen the President's hand as we pursue a diplomatic solution.
By giving the administration the capability to impose crippling sanctions on Iran should they
continue to pursue a nuclear weapons program, this Committee today is exploring a tough and
smart plan to address the real threat Iran poses to the U.S. and our allies, particularly Israel.
First, Mr. Chairman, I want to commend you for including in that plan key provisions of the Iran
Sanctions Enhancement Act of 2009, a bill introduced by Senator Evan Bayh of which I am an
original cosponsor.
This bill sanctions companies that export gasoline to Iran. This is one of the few pressure points
where we can act unilaterally and have a real effect. The world knows that Iran does not
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currently have the refining capacity to meets its domestic gasoline needs and is dependent on
imported gasoline. So now is the time to reduce Iran's energy supply if they fail to suspend their
nuclear enrichment program as called for in several UN Security Council resolutions.
I am also glad that we will be strengthening export controls to stop the illegal export of sensitive
technology to Iran. During the recent Iranian elections we witnessed the Iranian regime go as far
as to block the internet and mobile phone communications of their own citizens.
That is why I and Senator Lindsey Graham introduced "The Reduce Iranian Cyber Suppression
Act" or "RICA", a bipartisan bill that would bar companies that export sensitive communication
technology to Iran from applying for or renewing procurement contracts with the United States
Government. I look forward to working with you to make sure that the key provisions of this bill
are also included in our plan.
Our comprehensive plan will also address the role that global financial institutions play in
enabling Iran to develop a nuclear program. Mr. Chairman, I have long argued that financial
sanctions are one of the most effective way to crack down on the dangerous Iranian regime. But
we have to make sure that they are designed effectively.
Last year, 27 Democrats joined me and called for the Iranian central bank, known as Bank
Markazi, to also be included in our economic sanctions, as they have been heavily involved in
terrorism and helping finance acquisitions of nuclear and conventional weapons technology. The
central bank has also played a role in helping other Iranian banks circumvent U.S. financial
sanctions. We should also include the central bank in the sanctions plan we are developing in this
Committee.
All of these actions will go a long way to strengthen global security and reverse Iran's dangerous
course. Yet unless we have a fool-proof enforcement regime in place, any new tools we deploy
will be less than effective.
Our existing sanctions are riddled with leaks in the form of trading partners who funnel our
exports through a backdoor to Iran.
We can help plug these leaks by increasing the amount of inspectors we have stationed in the
United Arab Emirates and in other countries where black markets are serving to circumvent our
sanctions.
A 2007 GAO report found that enforcement is lacking, particularly for products that are sold to
the UAE. At the time of that report, Treasury and Commerce Departments each only had one
inspector stationed in the UAE.
To increase the effectiveness of any new sanctions, we must authorize the Commerce and
Treasury Departments to enhance their manpower on the ground in UAE and other black market
areas to ensure that Iran is not skirting our sanctions. That is why today I am calling on the
administration to deploy more inspectors to the UAE and other areas of vulnerability in our
enforcement of sanctions.

I hope these proposals are given serious consideration and I look forward to working with the
Chairman to passing this important.

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