Mr. Chairman and members of the Committee, I want to thank you for the opportunity to speak to you today and present the Administration's views on Iran. Under Secretary Bolton wanted to be here, but unfortunately he is in Moscow today for meetings on the Proliferation Security Initiative.

Before I turn to my substantive remarks on Iran, let me give you a little background about my position in the Department. I am proud to serve as the Assistant Secretary for the State Department's Bureau of Verification and Compliance. The bureau is charged by law with ensuring that arms control, nonproliferation, and disarmament agreements and commitments are effectively verifiable; with assessing compliance with such agreements and commitments once they are reached; and with serving as the policy community's primary liaison to the U.S. Intelligence Community on verification and compliance issues. For a number of years, the Verification and Compliance Bureau has monitored Iran's compliance with its various treaty and nonproliferation commitments. Along with the Bureau of Nonproliferation we work closely with Under Secretary Bolton's office and the rest of the Department to halt Iran's efforts to acquire and develop Weapons of Mass Destruction (WMD).

My remarks today will focus on two areas of considerable concern regarding Iran: its noncompliance with its international obligations relating to the development of weapons of mass destruction programs and its support for terrorism.

Weapons of Mass Destruction

As you all are aware, Iran is a party to the Nuclear Nonproliferation Treaty (the "NPT"), the Chemical Weapons Convention and the Biological Weapons Convention. Despite these obligations, Iran is pursuing the indigenous development and production of nuclear, chemical, and biological weapons along with the means to deliver them. While Iran aims to have indigenous capabilities in these areas, it has relied heavily on goods and materials procured from foreign sources to establish its WMD infrastructure.

Of foremost concern are Iran's efforts to develop nuclear weapons. Iran adhered to the NPT in 1970 and concluded a safeguards agreement with the IAEA [International Atomic Energy Agency] in May of 1974. Despite these steps, last year in the Annual Noncompliance Report, the U.S. Government determined:

"Based on the totality of the available information, the United States assesses that Iran is pursuing a program to develop nuclear weapons. Aspects of this activity are in violation of Iran's NPT commitments."

Iran had clearly been engaged in a clandestine effort to acquire sensitive nuclear capabilities. This effort at deception and denial only makes sense as part of a nuclear weapons program. Iran is trying to legitimize as "peaceful and transparent" its pursuit of nuclear fuel cycle capabilities. However, the development of these capabilities would give it the capability to indigenously produce fissile material for nuclear weapons. This process includes everything from uranium mining and extraction, to uranium conversion and enrichment, reactor fuel fabrication, and heavy water production.

Iran's attempts to explain why it needs an indigenous nuclear fuel cycle are simply not credible. We are being asked to believe that Iran needs to have the ability to mine, process, and enrich uranium for reactors that do not yet exist and that it is necessary to support its domestic power needs. Yet Iran does not have enough indigenous uranium resources to fuel even one reactor over its lifetime. Moreover, it burns off enough gas at its wellheads to generate electricity equivalent to the output of four Bushehr-type reactors. Finally, and most importantly, if there were truly "peaceful and transparent" reasons for Iran's acquisition of these technologies, why would Iran hide these activities from the IAEA? In fact, the IAEA only learned of the many hidden Iranian nuclear facilities when the rest of the world heard about it in the press leading to a rigorous IAEA investigation that revealed a range of Iranian nuclear safeguards violations and failures. We and many other countries, fear the consequences of waiting for another press report to further reveal the extent of Iran's attempts to develop a nuclear weapon.

Even in the light of these disclosures and in the face of IAEA inspections, Iran has continued its efforts to hide or deny other equally troubling aspects of its program. For example, the IAEA Director General's August 26 report states that in February 2003, Iran told the IAEA that it had started developing its gas centrifuge enrichment program in 1997 based on information from open sources and extensive modeling and simulation and that tests had been conducted without nuclear material. The report reveals that these assertions were misleading and incomplete. For example, the report notes that environmental samples from the IAEA inspection of Iran's Natanz gas centrifuge facility indicate the presence of highly-enriched uranium at that site. By the August 2003 IAEA visit, Iran had changed its story stating that it began its centrifuge program in 1987 and had acquired components from foreign sources and that the presence of highly enriched uranium in the IAEA samples must have come from contamination from those foreign components. The IAEA is continuing to investigate Iran's claims. For the IAEA to do its job effectively, Iran must abide by the terms of last Friday's IAEA resolution, and be more honest and forthcoming about the many questions raised during recent months.

The U.S. Government is convinced that there is sufficient information in the June and August IAEA reports to support a finding by the IAEA Board of Governors that Iran is not now in compliance with its IAEA safeguards agreement. Such a finding by the Board requires the Agency to report the noncompliance to the UN Security Council. However, prior to last week's IAEA Board of Governors meeting it became clear that a majority of Board members wanted a two-step process before reaching such a finding. The U.S. then co-sponsored a resolution that was ultimately agreed to by all members of the IAEA Board of Governors except for Iran. Despite the near unanimous conclusion, Iran's Chairman of the Expediency Council Rafsanjani called the resolution "unjust, unilateral, and bullying."

The September Board of Governors resolution provides a deadline of October 31st for Iran to take urgent and essential steps to answer fully all unresolved IAEA questions about its nuclear activities. The resolution also requests that IAEA Director General ElBaradei submit a report in November or earlier to allow the Board to reach "definitive conclusions" about whether the IAEA is able to verify that there has been a diversion of nuclear material for illicit purposes in Iran. Finally, the resolution calls upon Iran to sign, ratify and fully implement the Additional Protocol "promptly and unconditionally". Iran's previous offer to start "negotiations" over signing an Additional Protocol seem little more than further foot-dragging. The substance of the model Additional Protocol for Iran is not subject to negotiation. In light of Iran's ongoing noncompliance, signing and fully implementing the Protocol would be important positive steps, but this alone would not be sufficient to resolve current concerns. Full Protocol implementation would help give the international community some confidence regarding future activities, but Iran's past activities, clear safeguards violations and ongoing noncompliance must be addressed now.

If Iran fails to take those steps by the deadline, it would be clear to all that Iran was undertaking a clandestine nuclear weapons program; a view that the United States has held for a number of years now. The impact of a nuclear-armed Iran in an already volatile region cannot be underestimated. As President Bush has made clear, that cannot be allowed to happen.

We are also concerned that if left unchallenged, Iran's development of a nuclear weapons program will seriously weaken the NPT and the IAEA. Already faced with North Korea's brazen disregard for its treaty obligations, the NPT would be undermined still further if Iran were able to disregard its treaty obligations in a similar way. We are determined to ensure the integrity of the NPT regime and continue the IAEA process.

The U.S. Government will therefore continue to monitor Iran's compliance with all of its NPT commitments. The damning results of the IAEA investigations make it even more urgent that Iran not be permitted to continue to conceal its activities, while declaring itself in compliance with its NPT obligations. We are particularly concerned that Iran's denial and deception activities will continue. The IAEA resolution has set forth a clear yardstick by which to measure Iran's compliance with its IAEA safeguards obligations. If it does not measure up, it will be clear to one and all that the matter must be referred to the UN Security Council where the international community can take appropriate action.

The U.S. Government also has serious concerns about Iran's illegal chemical and biological weapons programs. We believe that Iran previously manufactured a wide variety of chemical agents and weaponized some of these agents into artillery shells, mortars, rockets and aerial bombs. Iran became a State's Party to the Chemical Weapons Convention (CWC) in 1997 and despite the Convention's prohibition on the development, production, stockpiling, and use of CW agents and weapons, we believe Iran has retained a stockpile of such weapons. Nothing Iran has done as a CWC member has dispelled our concerns with respect to Iran's past and on-going chemical weapons-related activities. Because of these activities, in the most recent Noncompliance Report, the U.S. Government determined:

"Iran has not submitted a complete and accurate declaration, and in fact is acting to retain and modernize key elements of its CW program. Some of these elements include an offensive R&D CW program, an undeclared stockpile and an offensive production capability. Such activities are inconsistent with the CWC."

Iran is also judged to have a biological weapons program in violation of its Biological Weapons Convention commitments. We believe Iran probably has produced some BW agents and may have some limited capability for biological weapons deployment. Iran continues to seek dual-use materials, equipment, and expertise to assist these programs. This program is embedded within Iran's extensive biotechnology and pharmaceutical industry so as to obscure its activities. Because of these activities, in the most recent Noncompliance Report, the U.S. Government determined:

"The United States judges, based on available evidence, that Iran has an offensive biological weapons program in violation of the BWC. Iran is technically capable of producing at least rudimentary biological warheads for a variety of delivery systems, including missiles."

Finally, in addition to its efforts to develop weapons of mass destruction, Iran continues its extensive efforts to develop the means to deliver them. With foreign assistance from entities in North Korea, Russia, and China, Iran is able to produce a variety of liquid and solid-propellant ballistic missiles, including the 1,300 km range Shahab-3 missile which is a direct threat to Israel, U.S. forces in the region, and other U.S. allies. In addition, we believe Iran has programs to develop longer-range missiles that will be able to strike at additional targets throughout the region or that will allow Iran to launch missiles against Israel from locations further within Iranian territory. Finally, Iran is likely to develop IRBMs or ICBMs capable of delivering payloads to Western Europe or the United States. I want to emphasize one point here: Iran is acquiring the means to produce ever more sophisticated and longer range missiles. If they are successful in this endeavor, our attempts to slow the missile trade will have little effect on Iran's already developing indigenous missile capability.

Terrorism

Let me now turn to the subject of terrorism.

U.S. policy toward Iran on this subject is firm. The regime must end its support of international terrorism. Iran is the most active state sponsor of terrorism. Its Islamic Revolutionary Guards Corps and Ministry of Intelligence and Security continue to be involved in the planning and support of terrorist acts and continue to support a variety of groups that use terrorism to pursue their goals. Iran's support includes funding, providing safe haven, training, and weapons to a wide variety of terrorist groups including Lebanese Hizballah, HAMAS, the Palestinian Islamic Jihad, and the Popular Liberation Front for Palestine-General Command. Its support of HAMAS and Palestinian Islamic Jihad is of particular concern, as both groups continue their deliberate policies of attacking Israeli citizens with suicide bombings.

In addition to halting this support, Iran must cease its opposition to the Middle East Peace Process. Iran's leadership continued to encourage anti-Israeli activity and Supreme Leader Khamenei has even referred to Israel as a "cancerous tumor". The Israelis and Palestinians are entitled to live in peace and security without the interference of Iran. The goal of Middle East Peace will be achieved through diplomacy and mutual understanding, not hatred and violence.

Finally, the U.S. Government insists that Iran cease its current policy of providing a safe-haven to al-Qaida and Ansar al-Islam operatives and cooperate with international efforts to bring them to justice. The United States has been concerned for some time about the presence in Iran of al-Qaida members, including senior al-Qaida leaders. We believe that some elements within the Iranian regime have helped al-Qaida terrorists transit or find safe-haven inside Iran. Moreover, we believe senior al-Qaida terrorists inside Iran played a part in the planning of the May 12 Riyadh bombings.

We call on Iran to abide by the requirements of UN Security Council Resolution 1373 to deny safe-haven to those who plan, support, or commit terrorist acts and to affirmatively take steps to prevent the commission of terrorist acts by providing early warning to other states by exchange of information. Furthermore, we call on Iran to turn over any al-Qaida to the U.S. or to third countries for interrogation.

Iran has made public statements about its willingness to turn over to third countries the al-Qaida terrorists. Despite its alleged willingness, the regime has not taken any action in this regard.

President Bush has made clear that international pressure is important and necessary to change Iran's policies, but can only be effective if the international community remains resolute in its commitment to international security and the human rights of the Iranian people. We note with some encouragement that international pressure on Iran has increased over the last few months, especially with regard to its development of nuclear weapons and its support for terrorism. The United States will continue to rally this pressure and lead by example by maintaining its strong stance against the Iranian regime's unacceptable behavior.

The President has made clear that the problems between the U.S. and Iran are the result of the destructive policies the Iranian government has pursued; we have no argument with the Iranian people, who we support in their clearly demonstrated quest for political and economic freedom. As the President has said, "As Iran's people move towards a future defined by greater freedom, greater tolerance, they will have no better friend that the United States of America."

Mr. Chairman, that concludes my prepared remarks and I would be happy to take any questions you might have.