Conference Call on UN Sanctions Resolution 1737

(12:30 p.m. EST)

MR. MCCORMACK:  Good afternoon, everybody.  Thank you for joining us.  We're going to have Under Secretary Nick Burns on the record to talk about the vote that just occurred up in New York with a 15-0 vote in favor of a Chapter 7 sanctions resolution on Iran regarding their nuclear missile program. 

So I'll, without further ado, turn it over to Under Secretary Burns.

UNDER SECRETARY BURNS:  Sean, thank you.  Good afternoon, everyone.  Let me just say the following.  I thought I might just run through and let you know what's in this, what are the five major elements of it from our perspective, and then be happy to take your questions.

The United States obviously welcomes the adoption by the Security Council of Resolution 1733*.  It was a unanimous vote; that's very significant.  Also significant that it was passed under Chapter 7 of the UN Charter.  That authorizes the sanctions, that Chapter 7 provision, and it makes the resolution legally binding.  And that was an important point for us all the way through during the two and a half months of this marathon negotiation.

We see five major benefits of the resolution.  First, it requires Iran to cooperate fully with the IAEA, the International Atomic Energy Agency, in resolving the many outstanding questions that have been raised over a number of years about Iran's nuclear program.  And it asks Iran, or it mandates that Iran takes the steps necessary to build confidence in what it's doing.  That's important because Iran has not cooperated fully with the IAEA so this builds pressure on Iran to do so.

Second, it requires Iran to suspend all of its enrichment related and reprocessing activities.  Those are taking place at its plant at Natanz, N-a-t-a-n-z, and it requires Iran to stop work on all heavy water related projects, including the construction of a heavy water research reactor at Arak, A-r-a-k, that has been so controversial.

And what's going to happen is that the IAEA now will be asked to verify whether Iran is doing this, stopping and suspending these activities, and the Security Council in this resolution calls on Mohamed ElBaradei to report to the Security Council on whether or not Iran is complying by February 21st of 2007.

Third, the resolution prohibits all member-states from supplying Iran with items including dual-use equipment.  And those of you who follow this issue will remember this was an early objective of the U.S.  And that is equipment which could contribute to these proliferation activities and could also contribute to Iran's development of a nuclear weapons delivery system.  So it prohibits dual-use exports, which is very significant.  And similarly, it prohibits Iran from exporting any equipment or technology in this area to other countries, and that's important as well.

For those items not included in this ban such as, for instance, the components of a light water reactor, all of those items, in addition, must be reported to the Sanctions Committee which is also established by this resolution, the Sanctions Committee, which is significant.

Fourth, the resolution requires that all states prevent the provision to Iran of any technical assistance or training or financial services that could contribute to a nuclear weapons development program, a ballistic missile system or its enrichment facilities.

And fifth and finally, the resolution requires all states to freeze the assets of individuals and entities, companies, state organizations, identified in an annex to the resolution as having a significant role in Iran's nuclear missile program. And it also requires all states to notify the Sanctions Committee of any travel by the individuals listed in the annex to and outside of Iran. 

This was, for the U.S., the most important part of the resolution, the asset -- the so-called assets freeze.  And there were many attempts to do away with the assets freeze and we refused during the course of negotiations because we feel that denying financial capital to the Iranian program is the most significant thing that we can do.

What happens next?  If Iran fails to comply with the resolution by February 21, 2007, the Security Council will then consider the adoption of additional sanctions.  That was foreseen, as you remember, in Resolution 1696 that was passed in July.

And I would also say now that this resolution has passed, Iran has joined an elite club.  There are exactly, I think, 11 countries of 192 in the UN General Assembly who are subject to UN Security Council sanctions.  And so the message to Iran is an unambiguous message that it has to fulfill its international obligations to stop its enrichment and reprocessing programs, stop its heavy water related research -- all of that is underway right now -- and stop the development of any nuclear weapons related programs or ballistic missile programs that could serve them.  That's a fairly tough resolution in that sense.

I would just make a final point, then I'll be happy to go to your questions.  A perspective.  Chapter 7 is very significant.  It's a big spotlight.  It is going to be humiliating for Iran.  I use that word advisedly.  The Iranians have launched a pretty vigorous international campaign over the last few months to prevent this from happening.  They've tried very hard to divide the U.S. from the EU-3 countries and in turn from Russia and China, and they did not want this to happen.  This will allow -- this Chapter 7 resolution, it will allow countries and institutions that would not have considered their own sanctions separate from the UN to now consider them. 

As we worked over the last 18 months to try to convince countries to be more vigorous on their own, using their own legal systems or institutions such as the European Union to take more vigorous action, the constant refrain to us was, well, we can't do that because the UN Security Council hasn't established a sanctions regime.  That has now happened.  That now opens the way for further action outside the Security Council by states that wish to send a more clear and a tougher message to the Iranians. 

And in that respect, I remember about a year ago as we began to put together the P5 groups, the Russians and Chinese, and Secretary Rice had six meetings with the foreign ministers of those countries in 2006 leading up to this, there was a conventional wisdom, I think, that we weren't going to get Security Council sanctions a year ago today.  And we have done it, and that in itself I think is a significant message to Iran that the Iranians are conducting themselves in such a way that the rest of the world is concerned enough to pass this resolution.

We don't think this resolution is enough in itself.  We want the international community to take further action and we're certainly not going to put all of our eggs in a UN basket.  We're going to try to convince countries, especially the European Union countries, Japan, to consider some of the financial measures that we have undertaken.  These are -- this is a campaign we've launched to convince some of the international lending institutions and private banks that they should shut down lending to Iran.  Iran is beginning to launder its money through some of these financial institutions without the knowledge of the institutions to arm and finance Hezbollah and Hamas and other terrorist organizations.  And it’s interesting that Credit Suisse, Credit Lyonnais and HSBC have all stopped lending to Iran in the last few months.  You may have seen a Financial Times article to this effect a couple of days ago.

And so we would like to see more vigorous national and multilateral action against Iran, stronger sanctions and not just UN Security Council sanctions but outside the Council.  And we'd like to see countries stop doing business as usual with Iran.

So with that, with those comments, I'm happy to take questions.  Any questions, Sean?

MR. MCCORMACK:  Hello.  Any questions?

OPERATOR:  At this time, if you would like to ask a question, please press *1 on your touchtone phone.  You'll be prompted to record your name and then announced prior to asking your question.  Just a moment for the first question.

The first question comes from Jennifer Lovett.

QUESTION:  Hi.  You said that you want the international community to take further action and you're talking about these financial measures.  Are there any other areas that you want -- that either the United States would do unilaterally or try to get other countries to do?

UNDER SECRETARY BURNS:  Well, the United States -- thank you, Jennifer.  The United States has had sanctions on Iran for 27 years and there's not much more that we can do on our own because we have full-scope sanctions on Iran in every conceivable area.  We would like countries to stop selling arms to Iran.  We would like countries to try to limit export credits to Iran.  There are a number of European countries -- I think there are 10 or 11 who have substantial export credits to Iran. 

This resolution now provides an umbrella for institutions like the European Union to take collective sanctions against Iran should they choose to do so.  The aim of sanctions is not that I think that any of us consider them an end to themselves; it's to drive up the cost to the Iranians of essentially what they're doing, which is thumbing their nose at the international community by proceeding with these nuclear technological programs.  And we want to let the Iranians know that there is a big cost to them, and we hope that those Iranians who wish to come back and negotiate with the P5 will then be in a stronger position to argue that's the best case for Iran. 

And if you have a series of sanctions measures -- the UN sanctions taken today, along with national and, say, multilateral regional sanctions from organizations like the EU -- we'll have a much better chance of convincing the Iranians that they've got to stop their science and technological research and they've got to come back to negotiations. 

Remember that the P5 offered back on June 1st, six months ago, two paths to Iran.  One was the negotiating path and the Iranians turned that down in the second week of October.  That's when we started in the Security Council this sanctions resolution that was passed today, two and a half months ago, because the Iranians turned down the opportunity to negotiate with the U.S. and the other perm five countries.

QUESTION:  Thank you.

UNDER SECRETARY BURNS:  You're welcome.

OPERATOR:  The next question comes from Michelle Kellerman.

QUESTION:  Yeah, hi.  Can you hear me?

UNDER SECRETARY BURNS:  Hi, Michelle.

QUESTION:  How are you doing today?

UNDER SECRETARY BURNS:  Very well.

QUESTION:  I was struck this week when we heard Secretary Rice talk about this as the penalty for defiance, but then hearing the Russian Ambassador at the UN saying our idea was not to punish anyone, it was to make sure talks can resume.  And I wonder if you think this two and a half months of going over this has highlighted the differences and sends mixed signals to Iran.

UNDER SECRETARY BURNS:  Well, I think I’d say two things, Michelle.  First, there is an unmistakable signal to Iran; the P5 has acted together and the Security Council has voted unanimously, and for the first time in Iran's history Iran has Chapter 7 sanctions now against it.  That's a very serious step for the Security Council.  This is not done lightly and so Iran should not mistake that. 

And our message for Iran would be; don't overreact to this.  The Iranians have been threatening to kick out all the IAEA programs and inspectors.  If they do that, it will just confirm the many suspicions that we and others have about them.  Our hope is that the Iranians are going to look at this and conclude that they're effectively isolating themselves and that they should accept this offer of negotiations.

Now, I would like to say that we are leaving the offer to negotiate on the table, the P5 is.  We haven't withdrawn it -- that offer from June 1st that the P5 foreign ministers made, including Secretary Rice.  And if the Iranians want to come along and accept it, they have to suspend their enrichment program and then we'll negotiate with them.  That's the first thing I'd say.

The second is this resolution was hard fought.  It took two and a half months of very intense and often very frustrating negotiations among the capitals and up in New York.  We obviously -- we, the United States, have a more tough-minded approach than, say, Russia.  And so we hope the Russian Government, if it wants to join us in concerted action to prevent Iran from acquiring a nuclear weapons capability, we hope the Russian Government is going to work with us in a very active way to send this message of unity to Iran, and we hope Russia is going to take a more vigorous approach itself in what it does with Iran to send that message. 

QUESTION:  And is this what the call from President Bush and Putin this morning was about?

UNDER SECRETARY BURNS:  I think you'll have to ask the White House.  I'm aware that there was a call, but I don't have a significant readout on it.  So you would have to ask the White House what was said in the call.  I know they did talk today about this issue.

QUESTION:  Thank you.

UNDER SECRETARY BURNS:  You're welcome.

OPERATOR:  The next question comes from Colum Lynch.

QUESTION:  Hello.  Hi, Mr. Under Secretary.  How are you?  I just wanted to get a sense, first of all, if you could sort of explain in your view why the Russians have been trying to strip out as much of the punitive provisions in this resolution as possible.  And also, is there a concern that the sanctions, and sort of like so narrowly drawn, that it provides a big hole through the legitimate nuclear trade to bring in the -- you know, the stuff that's on, you know, the list that's banned from being traded with the country?

UNDER SECRETARY BURNS:  Well, we all did agree to allow the Bushehr project to continue for one (inaudible) reason.  For over a year now, we have been saying -- we, the United States -- that we would support, as a way to get Iran to drop its nuclear weapons kick, we would support the provision of nuclear power, civil nuclear power, to Iran without Iranian access to the fuel cycle.  And that is what the Bushehr project is, so it would have been inconsistent for the U.S. or any other country to have objected to Russia going forward with Bushehr simply because Bushehr is protected and it has to follow the IAEA safeguards, meaning that Iran won't have access to the more sensitive aspects of the cycle.

QUESTION:  Right.  But even without Bushehr, I mean, this resolution -- the initial European draft -- called for, you know, an exemption for Bushehr but essentially, you know, would have barred all other even, I guess, legitimate nuclear trade with Iran.  Everything else would have been barred except for Bushehr.

UNDER SECRETARY BURNS:  As Secretary Rice said, I think she said earlier this week in some interview, she said, you know, if we had written this resolution alone we would have written a more tough-minded resolution, we would have exacted more vigorous sanctions against Iran.  This is a process of 15 countries working together for two and a half months, and especially the five members of the perm five, and so there were necessary compromises that had to be made to get everyone on board.  And we felt that in the end getting everybody on board and having this one unified message was a powerful signal to the Iranians. 

But I won't hide the fact, Colum, that, you know, it was sometimes very frustrating to deal with the slow pace of these negotiations, with some of the barriers that were put up by some of the countries involved.  And our advice to Russia and China is -- again, they tell us that they want to deny Iran a nuclear weapons capability.  We need to see more vigorous action by both of them.  We'd like to see an end to the business as usual, the export credits that I mentioned, the military sales that are still going on.  Russia has just announced that it's going to go forward with more missile sales, and we have been a longtime critic of those sales. 

So there are differences among us and those differences are reflected -- were reflected in the negotiation.  And yet I think we feel very strongly that having achieved this, this is a powerful message against Iran.  They've never been under Chapter 7 sanctions and it now provides for a graduated set of stronger sanctions.  So as Resolution 1696 foresaw, this one does as well, if you look toward the end of the resolution, if within 60 days ElBaradei confirms to us that Iran has not complied with the resolution, then the Council has an obligation to take stronger sanctions in the future, and perhaps some of the measures that are not in this one would be included in further resolutions.  So on balance, we think this is a good step forward.

OPERATOR:  Does that conclude your question?

QUESTION:  Yeah.

OPERATOR:  The next question comes from Jim Wolf.

QUESTION:  Mr. Secretary, can you hear me?

UNDER SECRETARY BURNS:  Yes, I hear you fine.  Thanks.

QUESTION:  Yes, thanks.  The U.S. Central Command has asked for a second aircraft carrier to be sent to the Gulf area and Pentagon officials say that a decision is imminent.  What is the relevance, if any, of sending another carrier amid this effort to force Iran to drop its nuclear work.

UNDER SECRETARY BURNS:  Well, first of all, I'm going to have to refer you to Central Command and the United States Navy about the deployment of U.S. Naval vessels.  That's not -- the State Department doesn't speak to the deployment of U.S. military assets.

I will say that it's no surprise that the United States Armed Forces would be present in the Gulf.  We've been present in the Gulf for 60 years, since the end of the Second World War, and the presence of the United States military in the Gulf is fundamental to the security of that area, of our friends in the region and of the flow of oil out through the Straits of Hormuz to both Asia and Europe. 

So I can't -- I don't want to confirm the specifics of your question because the Pentagon will have to do that, but I will say we've had a constant presence for six decades and that presence is going to continue.  And that's a fact of life that the United States is a military power in the region.

QUESTION:  Okay, thank you. 

OPERATOR: The next question comes from Nina.  And I'm sorry I didn't catch your last name.

QUESTION:  Nina Donaghy, Fox News.

UNDER SECRETARY BURNS:  Yes, go ahead.  Hi.

QUESTION:  Thanks, Ambassador.  Can you elaborate first on reservations that China had with the nature of the sanctions? 

UNDER SECRETARY BURNS:  No, I can't.  You'll have to ask the Chinese.  I simply can't speak for the Chinese Government.  I speak for my own government and I think I've spoken about our satisfaction with this step forward.  We do think it's time for an end to business as usual, and in addition to these sanctions -- it wouldn't make much sense to put all of our eggs in the UN Security Council basket. 

And in addition to what the Security Council has been able to do, and I read out the five significant parts of the resolution, the sanctions on Iran, we encourage other countries to take their own national measures.  That's important, too, because outside -- I think there are about four countries in the world that defend Iran.  I think Syria is one, Belarus is a second, and on occasion Cuba and Venezuela.  But apart from the gang, that gang of four, everybody else in the world tells us that they want to deny Iran a nuclear weapons capability.  So if that's the case and that's the object of this sanctions exercise, then we need to see stronger action outside the Security Council to complement what the Security Council is doing.

OPERATOR:  The next question comes from Josh Kurtman. 

QUESTION:  Yes.  Hello?

UNDER SECRETARY BURNS:  Hello. 

QUESTION:  Yes.  I was curious.  Earlier this week, China's national oil corporation signed a $16 billion agreement with Iran related to liquid natural gas.  Will that be covered under the sanctions?  And if not, do you find it disconcerting that $16 billion is going into the Iranian treasury just as China votes with us on these sanctions?

UNDER SECRETARY BURNS:  This particular resolution does not involve oil and gas sanctions, so I believe that the Chinese deal that we've read about would not -- would definitely not come under these particular sanctions.  Our advice to countries is not to work with the Iranians on oil and gas, not to try to develop their fields and not to sign new contracts.  We've had a longstanding opposition to that. 

Our beef with the Iranians is threefold.  First is the clear effort to develop a nuclear weapons program.  Second is the fact that they're, in effect, a central banker funding Hezbollah, Hamas, PFLP General Command and Palestinian Islamic Jihad.  And third, they're a major human rights violator of their own people.  And so our advice to countries like China is not to do business as usual.

QUESTION:  Thank you.

OPERATOR:  I am sorry, no further questions.

UNDER SECRETARY BURNS:  Pardon? 

OPERATOR:  I have no further questions.

UNDER SECRETARY BURNS:  Okay. 

MR. MCCORMACK:  Okay.  No other questions? 

OPERATOR:  No, sir.

UNDER SECRETARY BURNS:  Okay, Sean.

MR. MCCORMACK:  All right.  Thanks very much, everybody.

UNDER SECRETARY BURNS:  Sean, thank you very, very much.