Remarks by Gary Samore

Remarks by Gary Samore,
White House WMD Coordinator
Countering the Iranian Threat
Foundation for Defense of Democracies
December 10, 2010

As Prepared for Delivery –

Thank you very much for inviting me here. I think it is appropriate that the Foundation for the Defense of Democracies has chosen to focus this year’s Washington Forum on countering the Iranian threat. Iran’s effort to acquire a nuclear weapons capability poses one of greatest international security threats we face. President Obama has stressed many times that “We are determined to prevent Iran from developing nuclear weapons,” because he recognizes the profoundly destabilizing impact of a nuclear Iran in the Middle East and the serious consequences it would have to our global non-proliferation aims.

I would like to focus my remarks on the role that international sanctions play in the President’s overall strategy to prevent Iran from acquiring nuclear weapons.

Sanctions have three functions.

First – in the broadest sense – sanctions against countries that violate the nonproliferation rules are essential to reinforce the credibility and integrity of the international regime of treaties, institutions, and norms that make up the international nonproliferation system. Iran has violated its NPT obligations, IAEA safeguards, and five UN Security Council resolutions, which require Iran to fully cooperate with the IAEA to resolve questions about its nuclear program, especially issues relating to its nuclear weaponization research and development, and require Iran to suspend all reprocessing and enrichment-related activities under IAEA supervision.

The higher price that Iran pays for its violations and defiance, the less likely other countries will be to follow Iran’s example. Conversely, if Iran is seen as successfully defying the Security Council in its bid to acquire nuclear weapons, other countries are less likely to be deferred by the threat of Security Council action. As President Obama said in his April 2009 Prague speech, “Rules must be binding. Violations must be punished. Words must mean something.” This is especially important for countries in the Middle East who feel most directly threatened by Iran’s aggressive behavior and nuclear program and who are most likely to respond by seeking nuclear weapons of their own.

Second, sanctions have a direct impact on the pace of Iran’s nuclear program by making it more difficult for Iran to obtain essential materials and components for its nuclear program. Under the relevant UN Security Council resolutions, all countries are legally required to “take all necessary means to prevent the supply, sale or transfer directly or indirectly from their territories, or by their nationals, or using their flagged vessels or aircraft… of all items, materials, equipment, goods and technology which could contribute to Iran’s enrichment-related, reprocessing, or heavy water-related activities or to the development of nuclear weapons delivery systems.”

Individuals and entities involved in Iran’s nuclear and missile programs have been specifically targeted with travel restriction and financial bans. The most recent resolution adds a ban on Iranian investment in nuclear industries abroad, which is primarily intended to block Iranian efforts to acquire financial interests in foreign uranium mining, and provides robust mechanisms for inspecting Iranian cargo and seizing contraband.

These sanctions – combined with relentless enforcement by the United States and its allies – have had a significant impact on Iran’s nuclear program. Restricted access to supplies of specialized raw materials and finished components has contributed to technical problems in Iran’s enrichment program, limiting the number and reliability of centrifuges it is able to build and complicating Iran’s efforts to develop more advanced centrifuge machines. Completion of the 40 MW heavy water research reactor – a potential source of plutonium – has also been seriously delayed by Iran’s inability to acquire essential components from foreign sources.

Delaying Iran’s nuclear program is essential to buy time for our dual track diplomatic strategy to work. That takes me to the third role of sanctions – affecting Tehran’s calculation of the costs and benefits of continuing to pursue its nuclear weapons program. On the benefit side, President Obama has offered to engage Iran unconditionally on the basis of mutual interests and mutual respect and to improve U.S.-Iranian relations as Iran complies with its international obligations. As President Obama said in Prague, “We want Iran to take its rightful place in the community if nations, politically and economically. We support Iran’s right to peaceful nuclear energy with rigorous inspections. This is a path the Islamic Republic can take.”

Iran however has failed to take advantage of this offer. As a consequence, we have moved to increase the cost side of the ledger, including economic sanctions. Iran’s clear rejection of President Obama’s offer of engagement, as well as the President’s personal involvement in building our international coalition, especially his direct interventions with Russian President Medvedev and Chinese President Hu, has enabled us to produce United Nations Security Council Resolution 1929 in June 2010, which establishes the most comprehensive set of UN sanctions on Iran to date. Iran thought it could block Security Council action with last minute diplomatic maneuvers but the President was determined to demonstrate that the threat of increased pressure is real.

Following the passage of 1929, we have seen the EU, and others in the international community from Australia, Canada, and Norway, to Japan and South Korea adopt additional measures of their own. The EU prohibited the opening of new outlets of Iranian banks, the establishment of any new correspondent accounts by Iranian banks, and the provision of insurance or re-insurance to any Iranian entity. In the U.S., the Comprehensive Iran Sanctions, Accountability, and Divestment Act, which the President signed on July 1, has significantly amplified this effect by making it increasingly difficult for companies doing certain business in Iran to do business with the United States.

There is no doubt that these unprecedented sanctions have caused real economic dislocations inside Iran, especially in the financial and energy development sectors. Iran is effectively unable to access financial services from reputable banks all around the world and is increasingly unable to conduct transactions in dollars, the pound or the euro. International companies, including in the energy sector, are increasingly recognizing the risks of doing business with Iran and are abandoning existing business opportunities, declining to take advantage of new ones, and scaling back any existing relationships. This trend has been replicated across a broad range of industries. Critical examples of companies withdrawing from business with Iran include: Shell, Total, ENI, Statoil, Repsol, Lukoil, Kia, Toyota, Siemens, and foreign subsidiaries of U.S. firms such as GE, Honeywell, and Caterpillar. Iran is increasingly unable to attract the needed foreign investment, financing, and technology to modernize its energy infrastructure, hindering its attempts to expand oil and gas production. At least $50-60 billion in oil and gas development deals alone have been put on hold or discontinued in the last few years.

Moreover, the economic damage caused by sanctions has been amplified by Iranian government’s own economic mismanagement, which has led to high unemployment and inflation. Together, sanctions and mismanagement are adding to political discontent with the Iranian leadership.

It remains to be seen how high Iran’s pain threshold is and whether Iran is ultimately prepared to comply with UN Security Council demands to suspend its reprocessing and enrichment-related activities in exchange for suspension of sanctions measures, as provided for in UNSCR 1929. It may be Iran has decided to resume talks with the P5 plus 1 at the recent Geneva meeting because it believes it can manipulate the appearance of negotiations to weaken existing sanctions and avoid additional measures.

This ploy will not work. In the wake of the Geneva talks, we and our allies are determined to maintain and even increase pressure. We need to send the message to Iran that sanctions will only increase if Iran avoids serious negotiations and will not be lifted until our concerns are fully addressed. Iran has the opportunity to be integrated into the international community or face further isolation; it has the chance to benefit technologically, financially, and politically, and not continue to be ever more squeezed economically. Iran can gain much by fulfilling its international obligations or it can continue to pay an increasing price by continuing its pursuit of nuclear weapons.
The choice is ultimately Iran’s, but we must force Iran to make that choice.

Thank you very much.