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QUESTION: Given that those new sanctions are designed to discourage investment with those designees, and also given that the State Department has yet to implement existing Iran Sanctions Act and Under Secretary Burns has said, look, that kind of involvement would undermine our coalition, our diplomacy, what makes any company think that these new sanctions are anything but the little boy crying wolf?

MR. MCCORMACK: Well, first of all, you have the Iran Sanctions Act and every single case that I am aware of where the actions of a country or a company have triggered the law, it has been looked into. And those decisions are arrived by consensus in the U.S. Government when you're examining whether or not to take actions. So it is not a passive process, it's an active process in looking at these various cases. In terms of the actions that the Secretary -- Secretary Rice, Secretary Paulson announced last week, I don't think that Iran should take any comfort whatsoever in the fact that these were announced. These are tough measures. I would point only to the example of the Banco Delta Asia as a way of showing that when the Treasury Department implements these sanctions and when we take steps, they're very serious and they have implications beyond the application to American citizens and American companies and banks.

QUESTION: Well, what were those legal ramifications? I mean, what can you actually do to a third party company, like Total or NorskHydro or Sinopec that it's investing billions of dollars into Iran? What can you actually do?

MR. MCCORMACK: There are a number of different actions that are allowed for under the law under the Iran Sanctions Act. But I would point out one thing and that is beyond the black letter of the law, that there are effects beyond that. And those involve reputational risks and the reputational risk assessments that private companies, international financial institutions are going to make for themselves. They -- banks and financial institutions are already looking at their business with Iran because there's a level of uncertainty about with whom you are doing business and with whom those people might be involved and what they are doing. So a banker or somebody in the international financial system is now going to take note of the fact that there's a high level of uncertainty as to with whom you are really doing business and what activities that individual may be involved in when you are dealing with entities related to -- related in some way to the Iranian Government. And it is not going to be worth the possible risk to them to, in many cases, continue doing business and that has a real effect on the ability of the Iranian Government to access and use the international financial system.

QUESTION: But please forgive me for pressing you on this. I understand the reputational risk, but what are the actual legal risks for a company? There seems to be nothing written that says that you will actually apply this? I know plenty of things that companies can and do do to avoid this reputational risk. Halliburton's been operating through subsidiaries for decades and numerous other companies. So I'm -- we're still quite -- not quite sure about what you're actually threatening to do and what you are going to do.

MR. MCCORMACK: Well, in terms of the sanctions that were announced last week?

QUESTION: In terms of the companies that are investing with the designees?

MR. MCCORMACK: The companies that are investing with the designees. Well, again, if they are found to be doing business with -- well, Chris, I have to back up -- you have different executive orders that are in play here and they have different rules and regulations, so you have to go through -- and off the top of my head, I don't have the -- you know, how it breaks down. But under certain executive orders, if a company is found to be doing business with a group or entity that has been designated for terrorist activities or supporting terrorist activities or for supporting activities related to proliferation of weapons of mass destruction, there are potential legal penalties and you can very quickly get down to a choice, either on a legal basis or a reputational risk basis, of choosing between your American business and choosing -- and your business in Iran, for example.

So there are -- depending on the executive order that you're talking about, and again, I don't have them in front of me right now, you -- companies oftentimes are forced to make that choice, either because of a precise legal requirement or because of a reputational risk assessment.

Yeah.

QUESTION: If I can stay in Iran, do you have any comment on the visit of Russian Foreign Minister Lavrov in Tehran? Do you think it serves the common interest of the P-5+1?

MR. MCCORMACK: Well, I'll let Foreign Minister Lavrov speak for himself about his visit. We knew about the visit in advance and we would expect that he would deliver the same message that the P-5+1 has been delivering and that is that Iran has a choice, that they can go down one pathway or another.

One pathway which they are currently on is one of continued isolation from the international community, which brings with it real costs and real consequences. The other one is engaging with the P-5+1, realizing negotiations about the possibility of a peaceful nuclear energy program in Iran as well as any other topics that they want to bring up. So that's what we would expect and I fully expect that that was part of his message to the Iranians, but I'll let him speak for himself about, sort of, the tone and what he encountered when he was in Tehran.

QUESTION: So they informed you in advance about this?

MR. MCCORMACK: Yes, (inaudible).

QUESTION: And is it a topic that will be discussed on Friday for the -- during the P-5+1 political director meeting?

MR. MCCORMACK: Well, they are going to -- they are going to talk about the text of a resolution, the elements, the language of a resolution. Nick Burns is making his way in the direction of London for the P-5+1 political directors meeting. He's in -- let me check here, he's in Paris today, he's going to be splitting time between Paris and Vienna, I think on October 31st. Today's the 31st, right? Yeah, so he's in Vienna today and then tomorrow, in -- tomorrow, in London he'll have a variety of different meetings and one of the main topics is going to be the P-5+1 political directors meeting.

QUESTION: Do you have the -- just so we're -- everybody's clear on it, do you have the exact dates? I think his meetings in Vienna are mostly on Thursday and --

MR. MCCORMACK: What I have here is October 31st, he'll depart for Vienna, so perhaps tomorrow, it's -- the main body of his meetings, he'll talk to the OSCE and the IAEA.

QUESTION: Right. And then on -- can you say whether the -- I think the P-5+1 is indeed Friday, as Sylvie suggested. Do you have that there to put it on the record? There was some talk of it being Thursday night, but I think it's actually Friday.

MR. MCCORMACK: Yeah, so the meetings will be on Friday. Yeah, on (inaudible) he'll depart for London. Okay, so maybe part of the day on the 1st is a travel day.

QUESTION: Okay. And then just staying with Iran, Foreign Minister Motaki said that Iran is going to hold further talks with the United States on improving security in Iraq. Two questions: one, are there any plans for such further talks either via the ambassadorial channel, or secondly, are there any plans for such talks involving potentially the Secretary on the sidelines --

MR. MCCORMACK: Nothing on the books, nothing on the books. If that changes, I'll let you know, but nothing on the books that I'm aware of.

QUESTION: On either one?

MR. MCCORMACK: Yeah.

QUESTION: And every time I've checked in recent months, including with Mr. Satterfield about this, the tone has been almost hostile to the idea of additional talks at the ambassadorial level. And obviously, they haven't happened. Every time I ask, it's like, you know, we got nothing the first time around so. Are you -- even if there's nothing on the books, are you disposed, are you still open to this or are you --

MR. MCCORMACK: It's still a channel that each side could avail itself of if they agree upon it mutually, but as you point out, thus far, it has yielded little to nothing if not a worsening of the situation on the part of Iranian behavior in Iraq.

So if any of that changes -- and certainly we'll try to keep you up to date on it. We've tried to be pretty good and pretty transparent about -- about these meetings, and I expect that that would continue in the future if there - if we had more.

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