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BERMAN: The committee will come to order.
I also would like to say a few words about Iran's continuing efforts to develop a nuclear weapons capability. As you are well aware, a nuclear-capable Iran would pose a dire threat to the United States, our allies in the region. It would act as a hegemonic power in the Middle East and cause a cascade of proliferation.
In short, we can't allow Iran to acquire this capability. Regrettably, the previous administration's policy failed to impact the Iranian regime's destabilizing behavior, and there is no reason to believe that doing more of the same will result in a different outcome.
We need a new approach to dealing with Iran, one that offers direct engagement in a bilateral or multilateral format. I believe this is reflected in the administration's recently completed Iran policy review.
But such engagement can't be open-ended. Indeed, Tehran continues to enrich uranium, and every day moves closer to the nuclear threshold.
I would urge you to seek support in advance from key members of the international community to impose crippling sanctions, the kind that would compel or at least maximize the chances of compelling a change in the regime's current course if engagement does not yield positive results.
Finally, after 25 years of grappling with the enormous economic losses caused by intelligence property piracy and counterfeiting, I would urge you to put this issue high on the list of the State Department's economic agenda.
Madam Secretary, I am excited about the prospect of working with you on the many challenges facing our nation.
And I am now pleased to recognize my friend and the ranking member of the committee, Representative Ileana Ros-Lehtinen, for her statement.
Thank you, Ranking Member.
Greetings to many friends and former colleagues. It is a pleasure to be here with you this morning. This committee has been the source of many advances in our nation's foreign policy, and I look forward to working with you to continue that tradition.
When I appeared before the Senate -- that's that other body on the other side of the capitol -- I spoke during my confirmation hearing of a commitment to pursue a policy that would enhance our nation's security, advance our interests and uphold our values.
Today, nearly 100 days later, I am pleased to report that we have begun making progress toward achieving that goal.
I want to begin by recognizing and thanking the men and women of the State Department and USAID who are serving our country around the clock and around the world. I'm extremely proud of their work.
With their talents and under President Obama's leadership, we have put forward a new diplomacy powered by partnership, pragmatism and principle.
Our priorities are clear. We are deploying the tools of diplomacy and development along with military power. We are securing historic alliances, working with emerging regional powers and seeking new avenues of engagement.
We're addressing the existing and emerging challenges that will define our century -- climate change, weak states, rogue regimes, criminal cartels, nuclear proliferation, terrorism, poverty and disease.
We're advancing our values and our interests by promoting human rights and fostering conditions that allow every individual to live up to their God-given potential.
Now, I know that many of your questions today will deal with longstanding concerns -- Afghanistan and Pakistan, Iraq, Iran, certainly the Middle East, the fallout from the global financial crisis. I will speak briefly to those, and I look forward to answering any questions you might have.
As you know, in Afghanistan and Pakistan, the president has outlined a strategy centered on a core goal -- to disrupt, dismantle and defeat Al Qaida, and to prevent their safe return to havens in Afghanistan or Pakistan.
We combined our strategic review with intensive diplomacy, and nations from around the world are joining our efforts. More than 80 countries and organizations participated in the international conference in the Hague, and a donors' conference just concluded in Tokyo raised over $5 billion.
In Iraq, we're working toward the responsible redeployment of our troops and the transition to a partnership based on diplomatic and economic cooperation.
We're deploying new approaches to the threat posed by Iran, and we're doing so with our eyes wide open and with no illusions. We know the imperative of preventing Iran from obtaining nuclear weapons. After years during which the United States basically sat on the sidelines, we are now a full partner in the P-5-plus-1 talks.
In the Middle East, we engaged immediately to help bring the parties together to once again discuss what could be done to reach a two-state solution.
We're maintaining our bedrock core commitment to Israel's security, providing economic support, security assistance, and we are also doing what we can to bolster the Palestinian Authority and to alleviate the humanitarian crisis in Gaza.
BERMAN: Well, thank you very much, Madam Secretary.
And we will now, just your luck, go into a period of questioning for members of the committee, and we will have -- we'll strictly observe the five-minute rule, which includes the questions and the answers.
So if you intend to have an answer to your question, pace yourself, and -- and in order of seniority based on members who were here at the time that we started the hearing.
I'll yield myself five minutes for a few questions.
Madam Secretary, as I noted in my opening statement, I -- I -- I do support a policy of engagement with Iran. At the same time, I -- I can't get away from the fact that Iran's efforts to acquire a nuclear weapons capability keep going ahead, and -- and that this engagement can't be so open-ended that we essentially pass the threshold that we're seeking to avoid by virtue of the engagement.
So I am -- my two questions -- one, what kind of time frame do you have in mind for the Iran engagement? And -- and -- and the second question is based on the assumption that the engagement is more likely to work and to work in a reasonable time if the regime understands that a failure to respond to our efforts will -- will result in truly crippling sanctions.
And to get that level of sanctions, we can't do it ourselves. This is going to have to be an international effort, and I'm curious -- I would like to know, are we -- are we pursuing the -- the default position, the -- the leverage that I think will make the engagement more likely as we deal with key members of the international community and the Security Council?
CLINTON: Well, thank you, Mr. Chairman. I think your question very accurately describes the efforts we're undertaking.
We have concluded that it is going to be a more successful engagement if our partners around the world understand that they must work with us and support our efforts, including tougher sanctions.
And I've had a number of conversations over the course of the last 90-plus days with allies, partners and other nations concerned about Iran's continuing ambitions for nuclear weapons.
I think there are three points I would make, Mr. Chairman. One, the fact that we are engaging, that we have fully participated in the P-5-plus-1 process, actually gives us more leverage with other nations.
Number two, I think the fact that we have been willing to go even beyond the P-5-plus-1 and to reach out to Iran, to invite them, as I did, to the conference in The Hague on Afghanistan increases even further our ability to ask more from other nations.
And finally, I think our engagement, which we have no illusions about, as I mentioned to you, puts us on much stronger international footing. So I want to assure you that we will be operating on dual tracks.
Yes, we are more than willing to reach out to the Iranians to discuss a range of issues, assuming they're willing to reach back. As the president said in his inaugural address, we'll hold out our hand. They have to unclench their fist.
But we are also laying the groundwork for the kind of very tough -- I think you said crippling -- sanctions that might be necessary in the event that our offers are either rejected or the process is inconclusive or unsuccessful.
BERMAN: Well, thank you very much.
ACKERMAN: Thank you, Mr. Chairman.
Welcome, Madam Secretary. You make all your New York homies very, very proud.
I had to look up for a moment. I thought we were in the Judiciary Committee and had the attorney general in front of us listening to -- to some of the remarks a moment ago.
I don't think we have to lecture you or remind you. Besides some of the political prisoners, besides some of the terrorists we have in the prisons, besides some of the miserable people that are intending to do damage to our country, the Constitution of the United States is also a very high value target. Let's all do our job and protect it first. Everything else will surely follow.
If I could follow up on the -- on the chairman's concern, which I think is one that is overwhelming, and the -- it's the issue of Iran. Are -- are we prepared, talking about sanctions?
Because as we know, in order for them to be effective, they have to be comprehensive, and they have to be complete, and they have to be participated in by almost the entire world for it to work.
Are we prepared to place sanctions on some of our friends and allies if they don't conform to a sanctions regime which is, as the chairman says, the preferable default position, rather than the unthinkable default position?
CLINTON: Congressman, we believe that we can make a very strong case for exactly the kind of sanctions regime that you and the chairman have referred to.
We actually believe that by following the diplomatic path we are on, we gain credibility and influence with a number of nations who would have to participate in order to make the sanctions regime as tight and crippling as we would want it to be.
So I think the short answer is it is our expectation that we will be able to put together such a comprehensive sanctions regime in the event we need it, and it is our commitment that we will pursue that if we are either unsuccessful or stonewalled in our other approach.
ACKERMAN: Thank you.
SHERMAN: Thank you, Mr. Chairman.
Madam Secretary, thank you for being here. And I've got so many questions, I hope you'll respond for the record.
I want to echo Mr. Royce's comments about the need to warn American business of places where they'll face unfair government practices.
As to the Iran Sanctions Act, we've had, through the past administration, this strange approach to the rule of law, where they say, "Well, the Iran Sanctions Act isn't law because we don't agree with it."
SHERMAN: The law calls upon -- or requires the State Department to identify those situations in which there's investments of over $20 million in the Iran energy sector. It then allows the administration to either impose or waive sanctions.
And I would hope that the administration and -- and especially the State Department that is so dedicated to talking to other countries about the importance of the rule of law would not follow the practice of the past administration, which was to claim that they didn't get their copy of the Wall Street Journal on those days in which the Journal reported a $20 million investment in the Iran energy sector.
I would hope that you would at least identify the companies as required by law and then waive the sanctions if you choose. Better yet, I hope you impose sanctions.
Also, I hope that you would take efforts to discourage firms from selling gasoline to Iran and, perhaps more importantly, discourage firms from selling refining equipment technology to Iran.
I know it's difficult to deal with Iran. Here's an easier one: Canada. Canada was found by the OECD to be the number-one Western country in violation of intellectual property, and I hope that you'll have a chance to talk to our friends to the north about the importance of protecting intellectual property, both for their own businesses and for ours.
As to the United Arab Emirates and the 123 Agreement, before you move forward with that agreement, I hope that you would get much better enforcement by the UAE of their laws to prevent transshipment and diversions, particularly from the port of Dubai, to Iran.
The UAE has become the home of literally hundreds of companies affiliated with the Revolutionary Guard. They have passed a good statute, perhaps, but they have no lead enforcement agency, no regulations, and no real enforcement.
There is talk that this nuclear cooperation agreement will mean a lot of jobs for Americans, but without liability protections in place, such as those in the convention on supplementary compensation, no U.S. company will bid on the contracts. All the contracts will go to the French and the Russians, which are state-owned companies which claim sovereign immunity, and so they don't worry about liability.
So if we're going to tell the American people that there are jobs in this deal, there should be the Convention on Supplementary Compensation as part of the deal.