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Clinton and Geithner's Remarks on Iran Sanctions, November 2011

Speakers: Hillary Rodham Clinton, and Timothy F. Geithner
Published November 21, 2011

Secretary of State Clinton and Treasury Secretary Geithner gave these remarks on November 21, 2011, regarding the presidential executive order introducing new sanctions on Iran. The State Department also provided a fact sheet and background briefing on the topic.

SECRETARY CLINTON: Well, good afternoon, everyone. I am delighted to welcome Secretary Geithner here to the Treaty Room of the State Department, and I also welcome his team and thank my team for the work that they have been doing with respect to Iran.

Recent days have brought new evidence that Iran's leaders continue to defy their international obligations and violate international norms, including the recent plot to assassinate the Saudi Ambassador here in the United States and as verified by the new report from the International Atomic Energy Agency that further documents Iran's conduct of activities directly related to the development of nuclear weapons. Now, this report from the IAEA is not the United States or our European partners making accusations; this is the result of an independent review and it reflects the judgment of the international community.

There have to be consequences for such behavior. So on Friday, Iran was condemned in votes at the UN in New York and at the IAEA in Vienna. And earlier today, the UN General Assembly again strongly reprimanded Iran for continuing human rights abuses, persecution of minorities, and forcible restrictions on political freedom. The message is clear: If Iran's intransigence continues, it will face increasing pressure and isolation.

Today the United States is taking a series of steps to sharpen this choice.

First, President Obama signed an Executive Order that, for the first time, specifically targets Iran's petrochemical industry, a significant source of export revenues and a cover for imports for sanctioned activities. This will allow us to sanction the provision of goods, services, and technology to the petrochemical sector. To accompany this new measure, we will launch a worldwide diplomatic campaign to encourage other countries to shift any purchases of Iranian petrochemical products to other suppliers.

Second, in the same Executive Order, we are expanding sanctions on Iran's oil and gas business. U.S. law already sanctions large-scale investments in up-stream exploration and development of oil and gas, and now it will also be sanctionable to provide goods, services, and technology for those activities as well. This will make it more difficult for Iran to work around the sanctions and will further impede efforts to maintain and modernize its oil and gas sector.

Third, under an existing Executive Order, we are designating a number of individuals and entities

for their roles in assisting Iran's prohibited nuclear programs, including its enrichment and heavy water programs. Their assets subject to U.S. jurisdiction will be frozen and American individuals and entities will be prohibited from engaging in any transactions with them.

And finally, as Secretary Geithner will discuss in more detail, the Treasury Department is formally identifying Iran as a jurisdiction of primary money laundering concern. This is the strongest official warning we can give that any transaction with Iran poses serious risks of deception or diversion.

These steps were accompanied today by complementary measures by the UK and Canada, and we expect additional sanctions by other international partners in the days ahead.

Together, these measures represent a significant ratcheting up of pressure on Iran, its sources of income, and its illegal activities. They build on an extensive existing sanctions regime put into place by the UN Security Council and a large number of countries, including our own, acting nationally and multilaterally to implement the Council's measures. And these sanctions are already having a dramatic effect. They have almost completely isolated Iran from the international financial sector and have made it very risky and costly a place to do business.

Most of the world's major energy companies have left, undermining Iran's efforts to boost its declining oil production, its main source of revenues. Iran has found it much more difficult to operate its national airline and shipping companies, and to procure equipment and technology for its prohibited weapons programs. And those individuals and organizations responsible for terrorism and human rights abuses, including the Revolutionary Guard Corps and its Qods Force, have been specifically targeted.

The impact will only grow unless Iran's leaders decide to change course and meet their international obligations. And let me be clear: Today's actions do not exhaust our opportunities to sanction Iran. We continue actively to consider a range of increasingly aggressive measures. We have worked closely with Congress and have put to effective use the legislative tools they have provided. We are committed to continuing our collaboration to develop additional sanctions that will have the effect we all want: putting strong pressure on Iran.

Now, the Administration's dual-track strategy is not only about pressure. It is also about engaging Iran, engagement that would be aimed at resolving the international community's serious and growing concerns about Iran's nuclear program. And the United States is committed to engagement, but only – and I say only – if Iran is prepared to engage seriously and concretely without preconditions. So far, we have seen little indication that Iran is serious about negotiations on its nuclear program. And until we do, and until Iran's leaders live up to their international obligations, they will face increasing consequences.

Now I would like to invite Secretary Geithner to explain in more depth how some of these sanctions will be working.

Tim.

SECRETARY GEITHNER: Thank you, Secretary Clinton, and my compliments also to your colleagues and to ours – to mine, led by David Cohen and Danny Glaser, for doing such a great job today on these very significant financial actions.

Since the President came into office, this Administration has executed a very aggressive strategy to stop Iran's illicit activities. A key part of this strategy has been to impose overwhelming financial pressure on Iran, and because of this strategy, Iran has been subjected to new and damaging levels of financial and commercial isolation.

First, we have dramatically reduced Iran's access to the international financial system. Iranian banks are losing the ability to do business around the world, which in turn has reduced the ability of the government to finance activities opposed by the international community.

Second, Iran's national shipping line, which has transported material in support of Iran's missile program, is now shut off from many of the world's major ports and routinely finds its ships seized or turned away.

And third, Iran's primary source of revenue, its oil sector, is in decline because it cannot attract the foreign investment that it desperately needs to maintain levels of production.

Together, the intensification of sanctions by this Administration, alongside our partners around the world, has inflicted substantial damage to the Iranian economy. To continue these efforts, the Treasury Department today is designating additional entities for their support of Iran's nuclear and proliferation-related activities.

Today, we are taking the very significant step of acting under Section 311 of the Patriot Act. For the first time, we are identifying the entire Iranian banking sector, including the Central Bank of Iran, as a threat to governments or financial institutions that do business with Iranian banks. If you are a financial institutions anywhere in the world and you engage in any transaction involving Iran's central bank or any other Iranian bank operating inside or outside Iran, then you are at risk of supporting Iran's illicit activities: its support – its pursuit of nuclear weapons, its support for terrorism, and its efforts to deceive responsible financial institutions and to evade sanctions. Any and every financial transaction with Iran poses grave risk of supporting those activities, so financial institutions around the world should think hard about the risks of doing business with Iran.

We are taking this action, as the Secretary said, alongside our partners in the United Kingdom and Canada, who announced earlier today that they were implementing similar measures to insulate their banks from Iran. And as a result of this coordinated effort, Iran is now cut off from three of the world's largest financial sectors. We encourage other leaders around the world to take forceful steps like these actions to prevent Iran from simply shifting financial activity to banks within their nations.

As we put these new measures in place and as we continue to work to expand their reach around the world, we will continue to explore other measures. No option is off the table, including the possibility of imposing additional sanctions on the Central Bank of Iran. The policies Iran is pursuing are unacceptable, and until Iran's leadership agrees to abandon this dangerous course, we will continue to use tough and innovative means to impose severe economic and financial consequences on Iran's leadership.

Thank you.

SECRETARY CLINTON: Thank you all very much.

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