Remarks by Senator Mark Kirk

December 9, 2010, Washington, (As Prepared for Delivery)

Thank you to the Foundation for the Defense of Democracies for having me here today. FDD is doing good work –my staff worked closely with the Foundation as we developed our gasoline sanctions legislation – and you continue to be a resource to the Congress.

As a congressman, I spent a lot of my time focusing on the growing threat we face in Iran. And now as a Senator, I will do the same.

When we look at Iran today, we don’t see a lot of good news.

On November 23rd, the International Atomic Energy Agency released its latest report on the implementation of Non-Proliferation Treaty safeguards in Iran and the status of Iran’s compliance with U.N. Security Council Resolutions 1737, 1747, and 1803. Read More>>

The findings showed the average monthly rate of Low-Enriched Uranium (LEU) production increased with many additional centrifuges working by end of reporting period.

Iran’s total LEU production at the Natanz Fuel Enrichment Plant (FEP) as of October 31st was reported to be over 3,100 kg of low-enriched uranium hexafluoride, including 380 kg estimated by Iran to have been produced since August 6th.

As of November 5th, Iran was enriching uranium in 29 cascades with over 4,800 P-1 centrifuges, up from under 3,800 centrifuges at the end of the last reporting period.

Separately, the UN Security Council released a report on North Korea on November 10th, detailing North Korean cooperation with Iran on nuclear and ballistic missile activities.

According to the report, quote, “The Panel of Experts has reviewed several government assessments, IAEA reports, research papers and media reports indicating continuing DPRK involvement in nuclear and ballistic missile related activities in certain countries including Iran, Syria and Myanmar.”

The report continues: “Evidence provided in these reports indicates that the DPRK has continued to provide missiles, components, and technology to certain countries including Iran and Syria since the imposition of these measures.”

“The DPRK is also believed to use air cargo to handle high valued and sensitive arms exports. Such cargo can be sent by direct air cargo from the DPRK to the destination country. Some modern cargo planes, for example, can fly non-stop from the DPRK to Iran (when routed directly through neighboring air space).”

Before we ask “where do we go from here,” it’s important to quickly review where we have come from.

In 2005, Congressman Rob Andrews (D-N.J.) and I conducted a careful analysis of Iran’s economy and discovered a surprising weakness. Despite its status as a leading OPEC oil nation, the regime so mishandled its economy that it lacks sufficient refining capacity to turn its own oil into gasoline.

In 2005 and again in 2006, we introduced resolutions calling for a multilateral restriction of gasoline deliveries to Iran as the most effective economic sanction to bring Iran’s leaders into compliance with their commitments under the Nuclear Non-Proliferation Treaty.

Recognizing its exposed weakness, Iran implemented a nationwide gasoline rationing program to reduce its dependence – and hired international firms to help develop domestic refineries. Even with these measures, most experts still put imports at 25-40% of Iran’s total gasoline supply – a critical weakness we must exploit.

In 2007, we authored the Iran Sanctions Enhancement Act, which extended current U.S. sanctions to the provision of gasoline to Iran.

Last year, I successfully offered an amendment to the State-Foreign Operations Appropriations Act prohibiting U.S. Export-Import Bank financing for any company involved in providing gasoline to Iran – the first gasoline sanction to pass the House of Representatives and become law.

Also last year, I reintroduced the Kirk-Andrews bill with Congressman Brad Sherman (D-CA) – and a version of our legislation was included in the final comprehensive Iran sanctions bill signed into law on July 1st.

That comprehensive bill went beyond just gasoline sanctions, and included key sanctions targeting banks with corresponding relationships with banks doing business with Iran…and sanctions targeting abusers of human rights.

In addition, the act required the Administration to make a series of reports to Congress on those in violation of the law.

In my view, we should move forward in the weeks ahead with a five-pronged strategy.

First, enforce the Iran Sanctions Act (ISA) of 1996, which prohibits investment in Iran’s oil and gas sectors. The Congressional Research Service (CRS) identified a number of companies that may be in violation of ISA. Congressman Ron Klein (D-FL) and I wrote to the Administration repeatedly on this issue.

These companies may include:

Other companies identified by CRS, which have pending or preliminary deals to invest in Iran’s energy sector, include:

But amazingly, the Administration has so far sanctioned only one entity under ISA – the Swiss-based Naftiran Intertrade Company (NICO) -- despite clear evidence of involvement in the Iranian energy sector of these other firms.

In fact, five companies – ENI of Italy, Total of France, Statoil of Norway, Royal Dutch Shell of Britain and the Netherlands; and INPEX of Japan – were given an official reprieve through a “special rule” under the new Comprehensive Sanctions bill.

This “special rule” allows the Administration to indefinitely delay investigation of companies, as long as the company has “pledged” to stop doing business with Iran.

Under Secretary of State Burns stated before the House Foreign Affairs Committee last week that he expected companies protected by the Special Rule to be out of Iran “within weeks.” So instead of decisive action, as authorized by U.S. law, we are still taking these companies at their word.

But according to research conducted by this Foundation, there is no evidence these firms will end their existing contracts in Iran.

Moreover, according to the Congressional Research Service as of yesterday, the Administration has not delivered to Congress two key reports that were due by October 1st:

  1. A report on investments in Iran’s energy sector since 2006; and
  2. A report on the activities of export credit agencies of foreign countries in guaranteeing financing for trade with Iran.

These reports would provide impetus to pursue violators, as mandated under the law, and the Administration should immediately provide them to Congress.

Second, we need to enforce the new gasoline sanctions enacted in the Comprehensive Iran Sanctions bill. While we have seen reports of several companies ending their business with Iran since enactment, we see others moving in to supply the regime. Sanctions are meaningless if not enforced.

According to research conducted by this Foundation, the following companies provided Iran with gasoline since July 2010:

We also see the disturbing trend of China – a permanent member of the UN Security Council that sanctions Iran – stepping up to provide energy investments in Iran. As documented in the Foundation’s September 2010 report, Chinese companies including CNOOC, CNPC, Sinopec, and Zhuhai Zhenrong Corporation, continue to do business in Iran.

In fact, in July 2010, Iran’s deputy oil minister stated that China invested approximately $40 billion in Iran’s energy sector, that “the volume (of Chinese investment) in upstream projects is $29 billion,” and that China had signed roughly $10 billion worth of contracts with Iran for petrochemicals, refineries and pipeline projects.

For all of the companies I’ve named here today – no matter where they are in the world - the Administration should enforce U.S. law and sanctions designed to prevent the emergence of the greater danger.

Third, we need to start enforcing the new banking sanctions enacted in the Comprehensive Iran Sanctions bill. Under the new law, banks must stop doing business with banks that do business with Iran. If enforced, the provisions will make it more difficult for Iran to access the dollar and, potentially, other major currencies. Although the Treasury Department issued the relevant regulations on August 16th – laudably, ahead of the mandated deadline – no entities have actually been held accountable under the Act.

Separately, the Administration should move quickly to sanction Iran’s central bank – Bank Merkazi – and prohibit U.S. bank dealings with any financial institution that helps the Central Bank facilitate circumvention of U.N. resolutions on Iran. This was originally authorized by Section 311 of the USA Patriot Act and also called for in the new Comprehensive Sanctions bill.

Fourth, we must continue targeted financial sanctions against individuals and entities that support terrorism and proliferation – especially entities with ties to the IRGC. Treasury Under Secretary Stuart Levey has done a great job on this front to date and we should support his continued efforts.

Finally, we must do more to help Iran’s “Green Movement” and promote human rights inside the regime.

The United States needs a cohesive and comprehensive strategy to promote human rights and democracy in Iran.

I believe the threat we face in Iran has a parallel to the threat we faced in the Soviet Union: a repressive dictatorship that denies its citizens basic human rights while bullying its neighbors, building nuclear weapons and threatening doom and destruction on American allies.

History teaches us how to win. In the end, we won the Cold War because we never lost the conviction of our own convictions.

It’s time for a new American strategy to promote human rights in Iran.

To start, this Administration should make human rights a central tenant of future negotiations with Iran. No meeting should go by with Iranians without an American diplomat raising the issue of human rights, specifically including the names of prisoners of conscience.

The President should speak directly and publicly to the dissidents of Iran – name their names from the White House podium – make them heroes in homes across America.

He should invite members of the Green Movement to meet with him at the White House – and if any U.S. Government official is invited to visit Iran, they should not accept the invitation unless they are secured meetings with Iranian dissidents.

Overall funding for Iran democracy promotion should be increased in a dedicated appropriations line item called Iran Freedom Support – with control of the funds transferred from the State Department to the National Endowment for Democracy.

The United States should take the lead to facilitate Green Movement conferences outside of Iran – whether in the United States or Europe.

We need an injection of creativity and originality in our international broadcasting programs. While Radio Farda continues the mission of Radio Free Europe, we should work to establish new public/private partnerships to fund independent Iranian filmmakers and producers —a new way to foster more original content. VOA Persian and Radio Farda should set up a “Green Hour” for their broadcasts and expand their interaction with Iranian dissidents.

With the recent prison sentencing of Iran’s Baha’i leadership just for practicing their religion, this mission should be personal for Illinois families.

As Ronald Reagan did during the Cold War, the President should speak out regularly about human rights abuses in Iran and make individual political prisoners household names throughout America.

For the Bahai’s in prison, I for one am not afraid to speak their names out loud:

To these and all other political prisoners in Iran we say: American families know your struggle and we think about you everyday.

And we know this: An Iranian government that respects the rights of its own citizens will be less likely to sponsor international terrorism or seek the destruction of her neighbors.

Finally, we must continue to increase our military deterrence against Iran’s growing ballistic missile threat – so that if in the end, our diplomatic efforts are unsuccessful, the United States and our allies – especially Israel – have a bottom line.

From 2001 to 2003, I worked to provide Israel with access to “Eyes in the Sky” – real time satellite data to increase Israel’s early warning time to 12 minutes from less than one.

Eyes in the Sky established the precedent of U.S.-Israel cooperation on early warning. But it only solved one challenge: missile launch detection. It did not contribute to intercept capability.

For that, we needed to deploy a forward-based X-Band radar to Israel to maximize our intercept opportunities.

For years, Israel relied on its Green Pine radar that can only acquire missile threats at ranges up to 500 km. With such a short detection range, Israel would be forced to launch its Arrow anti-missiles before the threat missile's trajectory was accurately known.

I proposed we dramatically upgrade Israel's capability with the best the U.S. had – the X-Band (AN/TPY-2) radar. This would give our ally the ability to double the current range of its radar, sending its interceptor missiles in a far more accurate and successful direction.

After months of hard work, we finally got the X-Band delivered – the first permanent deployment of the US military to Israel. And last year, I had the chance to visit the site of the deployment.

Now we must do more.

  1. Complete the Arrow-3 missile system, to give Israel a very long range interceptor to hit the more-advanced Iranian Shahab-3 missile; and
  2. Deploy the Airborne Laser to Israel to show Iran the United States and Israel are collaborating on breakthrough technology to eliminate Iranian missiles over Iran.

Ballistic missiles are most vulnerable in their earliest stage of flight, because they are moving very slowly with a fifty-foot sheet of flame to show their location.

The Airborne Laser (ABL) will provide speed-of-light capability to destroy ballistic missiles quickly, letting the Iranians to deal with their own missile garbage as it falls back on their territory.

The ABL operates at more than 40,000 feet in altitude and can fire beyond 600 km.

On February 11th, the ABL successfully destroyed a ballistic missile over central California.

Given the existential threats posed by Iranian ballistic missiles to Israel, the United States should begin full cooperation with Israel in the Airborne Laser program.

In the end, democracies are best when they stick together. And the United States has no greater ally in the Middle East than the State of Israel. But we know that Iran’s nuclear program does not only threaten Israel – it poses a direct threat to regional stability, to Europe’s security and to the national security of the United States and our interests.

An Iranian bomb will also likely give birth to a Saudi and Egyptian bomb. In Sum, the Middle East of the future could become a chamber of horrors for the coming generation of American admirals and generals.

For too long, Administration after Administration dragged its feet on meaningful, biting sanctions. We have not brought the full weight of economic sanctions to bear to bring the Iranians to the negotiating table in a serious manner.

Time is not on our side. We must act now or suffer in a very, very dangerous brave new Middle East with Iranian nuclear weapons.

Thank you, God bless you and God bless the United States of America.

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