Testimony of Under Secretary Cohen Before the Senate Subcommittee on Financial Services and General Government (Excerpts)

April 2, 2014

Weapon Program: 

  • Nuclear

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Our unprecedented sanctions on Iran have led the way in demonstrating the power and efficacy of our financial measures.  

From the outset of the Obama Administration, we have pursued a dual-track strategy that paired an offer to Iran to rejoin the community of nations if it addresses the international community’s concerns over its nuclear program with increasingly powerful and sophisticated sanctions if it continued to ignore those concerns.

When Iran initially chose another path, we responded by crafting and implementing the most comprehensive, powerful, and effective set of sanctions in history.

Today, Iran stands isolated from the global financial system with slashed oil revenues, an eroded currency, and a severely weakened economy. 

Our oil, financial, and trade-based sanctions helped drive Iran into deep recession. Since 2011, oil sanctions imposed by the EU and the U.S. have cost Iran over $100 billion in lost sales.  Last year, Iran’s economy contracted by six percent and is expected to perform badly this year as well.  Its currency, the rial, has lost about 60 percent of its value against the dollar since 2011.  And its inflation rate is about 30 percent, one of the highest in the world.

This enormous pressure on the Iranian economy did not come about overnight.  We have worked side-by-side with Congress to craft sanctions that target Iran’s key sources of economic strength.  We maximized the impact of these sanctions through TFFC’s robust and persistent engagement with foreign governments and the private sector.  Working alongside our interagency partners, we leveraged our in-house intelligence component, OIA, to identify Iranian pressure points.  And then OFAC took action against illicit actors and their financial networks by targeting them with powerful sanctions. 

This has not been a simple task.  In all, TFI enforces a sophisticated and complex regime of sanctions on Iran that encompasses 10 statutes, 26 E.O.s, and 4 United Nations Security Council Resolutions.  We supplement these tools by issuing public guidance, licenses that advance U.S. objectives, and advisories warning of concerning trends and practices.

Although our sanctions have proved to be incredibly potent, we have not imposed sanctions for sanctions’ sake.  All along, the goal of our sanctions has been to induce a shift in the decision making calculus of the Iranian government and to build the necessary leverage for serious negotiations about its nuclear program. 

We are now in the midst of those negotiations.  In the Joint Plan of Action (JPOA) that went into effect in late January, Iran agreed to take important steps to halt the advance of its nuclear program in exchange for limited, targeted, and temporary relief for six months.  And as Iran has implemented its commitments to date, we have worked to fulfill our own.     

Even as we now seek to negotiate a comprehensive solution over Iran’s nuclear program, the core architecture of U.S. sanctions—especially our potent oil, financial and banking sanctions—remains firmly in place.  And over the remaining four months of the JPOA period, we will continue to vigorously enforce these sanctions as well as the broad array of sanctions targeting Iran’s human rights abuses and its support for terrorism.

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