Mr. Chairman, and Members of the Subcommittee, I would like to thank you for the opportunity to testify before you today on an issue of vital national interest, U.S. policy on Iran. I want to review with you Iran's pattern of unacceptable behavior, our response to that behavior, our work to bring our friends and allies into closer harmony with that response, and some prospects for the future.

Iran poses a significant threat in a region where we have vital national interests. Its policies have not changed for the better over the last four years. The Iranian regime still seeks to project its regional influence through a conventional military build-up and through the development of weapons of mass destruction and their means of delivery. We are particularly concerned by Iran's continued pursuit of nuclear technologies, chemical and biological weapons components and production materials and missile technology. Iran's acquisition of ever more sophisticated missile technology from North Korea and China presents an increasing threat to our friends and our military presence in the Gulf.

Iran's threat is not limited to the military arena. Iran seeks to expand its influence by promoting violence around the world. Iran has used terror to disrupt the Middle East Peace Process. Iran seeks to gain influence through disaffected elements in neighboring countries and by promoting subversion of neighboring governments. It has supported terrorist activity from South America to the Far East. Iran's use of terror recognizes neither allies nor frontiers, age nor sex, religion nor ethnicity.

Not even Iran's own people are protected from its violence. Iran's human rights record is among the worst in the world. Iran's ethnic and religious minorities and women regularly feel the lash of Iran's repressive system. Its disrespect for the right to free expression is vividly demonstrated by the regime's public offer of money for the murder of another country's citizen, Salman Rushdie, because of what he wrote. Others who dare stand for freedom of ideas, like Iranian writer Faraj Sarkuhi, also suffer for their courage.

Iranian oppositionists face less public, but equally dire threats. One week ago, a German court found that the assassination of four Iranian Kurds at the Mykonos restaurant in Berlin was ordered by the highest levels of the Iranian government. These murders were part of a broad pattern of state murder that has claimed the lives of some 50 Iranian dissidents since 1990. What more tangible proof could I offer of Iran's willingness to use terror and violence in pursuit of state goals?

Meanwhile, the A1-Khobar investigation continues; we have not yet reached any conclusions. If the evidence demonstrates involvement by Iran or any other state, we will take appropriate action to ensure that justice prevails.

What is the goal of U.S. policy on Iran? We seek to change Iranian behavior through economic and political pressure while directly limiting Iranian capabilities. In the interim, we seek to constrain the resources Iran has to pursue activities that threaten us and our allies. We seek neither to permanently isolate Iran, nor to overthrow the Iranian regime. We do not object to Islamic government. We want Iran to abandon those policies which have made it an international pariah. To achieve that, we are, and always have been, willing to have a dialogue with an authorized representative of the Iranian government.

Our approach includes counter terrorism and nonproliferation efforts combined with economic and political pressure. To combat global terrorism, we are developing a common agenda with our European allies based on the P-8 counter-terrorism measures. In the non-proliferation arena, Iran has demonstrated a determined effort to develop and acquire weapons of mass destruction (WMD), ballistic missiles capable of delivering them and dangerous advanced conventional weapons. In the nuclear area, Iran has dedicated civilian and military organizations that are acquiring nuclear facilities and technologies that are inconsistent with a purely peaceful nuclear program. Iran's chemical warfare program is among the largest in the Third World, producing some 1,000 tons of CW agent per year, on top of already existing stockpiles of CW agents. In the missile area, Iran has a vigorous program to acquire completed ballistic missile systems as well as the goods and technology that would allow Tehran to develop an indigenous missile production capability.

Clearly, Iran poses one of the greatest proliferation threats. The U.S. has pursued a vigorous international campaign to prevent the transfer to Iran of facilities and technologies that could further that country's efforts to develop WMD and their means of delivery as well as advanced conventional weapons. Preventing such development remains one of our top foreign policy priorities. We have worked closely with other governments to sensitize them to the scope of the problem and we have often cooperated with supplier governments to ensure that exporters operating within their borders do not unwittingly cooperate with Iran's WMD and missile programs.

The U.S. has been active in all the multilateral nonproliferation regimes to make other states aware of the nature of Iran's procurement practices as well as to strengthen international export controls. A number of changes have been made in the way these regimes operate as a result. The Nuclear Suppliers Group (NSG), for example, has adopted a "Non-proliferation Principle" calling on suppliers to authorize transfers of nuclear components and technology "only when they are satisfied that the transfers would not contribute to the proliferation of nuclear weapons or other nuclear explosive devices." In other words, suppliers have agreed to exercise caution in considering transfers to states such as Iran even though they are parties to the NPT with full-scope IAEA safeguards. The U.S. has similarly worked within the Australia Group and the Missile Technology Control Regime and we are actively opposing efforts by Iran to delegitimize Australia Group export controls.

The U.S. has addressed the issue of conventional transfers to Iran primarily in the context of the Wassenaar Arrangement where thirty- three countries, including Russia, have agreed not to transfer conventional armaments and sensitive dual-use technologies to countries whose behavior is a cause for serious concern. Iran is one such country. Further to Russia's participation in Wassenaar, President Yeltsin publicly pledged in 1994 that Russia would not enter into new arms contracts with Iran and would close out existing contracts within a few years. The details of that commitment were finalized in 1995 during meetings between Vice President Gore and Prime Minister Chernomyrdin.

Any transfers to Iran of advanced anti-aircraft missile systems such as those in the S-300 series, as has been reported in the press, would provide Iran with new dangerous capabilities and would violate the 1995 agreement. We have raised the subject of reported transfers of missiles from Russia to Iran at the highest levels of the Russian government and have received firm assurances that such transfers would not occur. We continue to monitor this closely.

We remain concerned by the transfer from China to Iran of C-802 anti- ship cruise missiles. Such missiles, whether installed on land or on patrol boats, will add to the maritime advantage that Iran already enjoys over other Gulf states and will put commercial shipping in the Gulf at risk. Especially troubling is that these cruise missiles pose new, direct threats to deployed U.S. forces. We have concluded that the C-802 transfers that have occurred so far do not meet the standards defined in the Iran-Iraq Arms Nonproliferation Act and have not, therefore, imposed sanctions on China because of the sale. Nonetheless, we are very concerned about these transfers, and will continue to monitor Chinese and Iranian activity for any additional transfers that might cross the threshold of sanctionable activity.

The U.S. is working to strengthen other global agreements as well. For instance, we have worked closely with the IAEA in developing the so- called 93+2 enhanced safeguards program which will give the IAEA an increased ability to detect undeclared nuclear activities. We expect the IAEA Board of Governors to approve that program in May. The Chemical Weapons Convention will provide important new tools to impede Iran's CW activities. It will outlaw any assistance to anyone's CW program and either subject Iran to challenge inspections if it joins the CWC or subject it to sanctions and political isolation if it does not. On the Biological Weapons Convention, the U.S. is working with other states on a protocol that will provide transparency and build confidence in the BWC's provisions.

In the bilateral context, we approached a number of supplier governments when we had information' to suggest that companies that operate within their borders might be exporting technologies, equipment or materials that would contribute to Iran's WMD and missile programs. We have been particularly active in the nuclear area. We have found most supplier governments to be responsive to our approaches and our actions have prevented the transfer of a number of items to Iran that we believed were to be used in WMD and missile development. Most have adopted policies of not cooperating with Iran's WMD and missile programs.

Most have also opted not to pursue any peaceful nuclear' cooperation with Iran, with Russia and China being notable exceptions, because of the risk that such cooperation would be misused to advance Iran's nuclear weapons program.

The U.S. has pursued a senior level dialogue with Russian and Chinese leaders on this issue. Vice President Gore and Russian Prime Minister Chernomyrdin have discussed in detail on a number of occasions Russia's planned nuclear cooperation with Iran. Presidents Clinton and Yeltsin have also dealt with the issue on several occasions, most recently at the Helsinki Summit. While Russia continues to pursue construction of the Bushehr nuclear power reactor, Russian officials have agreed to limit the scope of nuclear cooperation with Iran. We will, however, continue to make clear to Russian officials our opposition to any nuclear cooperation with Iran.

The U.S. has also engaged in a dialogue with Chinese leaders both at the senior political and experts level and urged them to curtail nuclear cooperation with Iran. While there continue to be differences between our governments on the issue of nuclear cooperation with Iran, we can point to some successes such as China's decision to terminate negotiation for the supply to Iran of two power reactors, probably for siting and financing reasons. Whatever the reason, we consider this to be a positive step. China is currently seeking to put in place a national nuclear export control regime that will allow China to have the necessary political review of sensitive nuclear-related exports to countries of concern. We have pressed Chinese officials to put in place this revamped regime as quickly as possible.

On missile-related exports, we have, over the years, worked successfully to bring Russia into the MTCR. We are, of course, concerned by reports of Russia-Iran missile cooperation. We have pursued this issue at the highest levels of the Russian government and will continue to do so. Similarly, we have frequently raised with Chinese officials information we have received about missile-related cooperation by Chinese entities with Iran and urged Beijing to take effective steps to avoid any Chinese contribution to Iran's missile programs.

Because of Iran's determined effort to develop WMD and their means of delivery and their continuing support for terrorism, we have combined non-proliferation and antiterrorism efforts with economic and political pressure. We seek to demonstrate to Iran that its policies will not only fail but will bring a significant cost to Iran's economic and political interests and to the well-being of its people. Targeting weaknesses in Iran's economy, particularly its need for technology and foreign capital, our unilateral efforts have limited Iran's policy options. For example, Iran has had difficulty attracting foreign investment into its oil industry in part due to the threat of U.S. sanctions, enacted by Congress last year in the Iran and Libya Sanctions Act. Iran must, therefore, choose between development and funding the very policies to which we object. Similarly, our success in limiting Iran's international influence and activity contrasts starkly with its desire to be a leading regional power.

I've outlined for you our response to the threat posed by Iran. Now, I'd like to discuss how we could be more effective. Our current tools -- economic sanctions such as the Iran and Libya Sanctions Act and the President's embargo, the missile and CBW sanctions laws, the Iran-Iraq Nonproliferation Act, the sanctions for lethal military assistance to terrorist-list countries, and the many nuclear sanctions laws -- reach the limits of effective unilateral initiatives. The U.S. has already imposed sanctions on Iran for transfers in the WMD and missile areas. We sanctioned Iran for missile-related transfers from North Korea and we have imposed sanctions on entities providing assistance to its CW program. The fact that very few supplier governments cooperate with Iran's WMD and missile programs is testament to the strength of our efforts and to the fact that most governments have developed a common policy on the need to prevent the further development of these programs. Even in cases where we have some differences, such as with China and Russia, we believe there is fundamental agreement on the need to prevent Iran from further WMD development.

We would be much more successful if we had a cooperative effort, beyond counter-terrorism and nonproliferation, with our allies to use our common political and economic clout to have a real tangible impact on Iran. We have pressed our allies to adopt such an approach and to restrict Iran's access to foreign capital and technology. We seek a coordinated, multilateral response that imposes clear consequences on Iran for its choices.

What would a successful common approach look like? The steps taken on April 10, the recall of EU ambassadors, suspension of the Critical Dialogue, expulsion of certain Iranian intelligence operatives, are solid initial steps. A common strategy that brings us closer together would have a greater impact. It would make clear to Iran that support for terrorist groups is unacceptable, period. We must be perfectly clear on that point. No support for terrorism for any reason, at any time, in any country. We must take an equally firm stand on proliferation of weapons of mass destruction. While the world community is working to reduce and eliminate these horrible weapons, we can not remain silent while Iran develops its capabilities.

The Europeans have said they will meet April 29 to consider additional measures. We hope that the EU's decision will move our approach closer together by including measures that pose a tangible cost on Iran. We want to create an impetus for Iran to change.

What do I mean by meaningful change? I don't mean dialogue for its own sake. Efforts to engage Iran have not achieved any notable successes. Has dialogue stopped assassinations in Europe? No. Has dialogue ended Iranian supported terrorism? No. Has dialogue stopped Iran's use of its embassies to coordinate arms procurement and terrorist action? No. Has dialogue even succeeded in lifting the threat against Salman Rushdie? Again, no. Simple engagement has not conferred immunity from terrorism, nor caused Iran to change.

Iran's revolution continues to evolve. Periodically, internal voices are raised to criticize the regime's internal and external policies that put at risk Iran's own development and stability. Unfortunately, those voices are not being given a serious opportunity for expression in next month's presidential election. The candidates in that election share a common investment in the status quo and its unacceptable policies.

As long as Tehran continues to seek to project Iranian power, violence and terror in a way that threatens our interests and international stability, the U.S. will work to isolate Iran and limit that threat. We will use all of the tools at our disposal to protect our friends and our interests, responding forcefully to Iranian actions.

We call on our allies to join us in applying a real cost to Iran for its policies. We hope that U.S. leadership and the growing realization of European nations that Iran's murderous behavior is unacceptable and will provide an opportunity for us to work more closely together. We are confident that Iran will not prevail and that the Iranian people will, in their own interests, force their revolution to evolve and yield a regime that respects international standards of behavior in the interests of all Iranians and their regime.