MODERATOR: Good afternoon ladies and gentleman. Thank you for coming here to the American Embassy auditorium for this press conference. My name is Karen Kelley and I’m the Press Attaché here at the Embassy. This will be an on-the-record briefing. It is my pleasure and privilege to introduce to you the Special Advisor for Nonproliferation and Arms Control Mr. Robert Einhorn and the Deputy Assistant Secretary of Treasury for Terrorist Financing and Financial Crimes Mr. Daniel Glaser. They will speak to you shortly and will take a few questions. Once we get to the question and answer period, I’d be grateful if you could approach the mikes here in front and give us your name and your organization before you ask your question. Without any further ado, may I introduce Mr. Robert Einhorn.
SPECIAL ADVISOR EINHORN: Karen, thank you very much. And thank you all for being here. The United States and Japan are two of the strongest supporters of the global nonproliferation regime. Yesterday and today our State Department/Treasury Department joint team has been consulting with our Japanese hosts on two of the greatest challenges to this nuclear nonproliferation regime, namely North Korea and Iran.
On North Korea, we discussed steps that Secretary Clinton announced on July 21 to strengthen the implementation of sanctions against the DPRK, including those required by United Nations Security Council resolutions and those that have been adopted on a national basis and that we continue to adopt on a national basis. We are pursuing these measures to prevent North Korean proliferation, to halt North Korean illicit activities that help fund North Korea’s nuclear and missile programs, and to discourage further provocative actions, such as the torpedoing of the
Cheonan.
On Iran, we discussed the implementation of UN Security Council Resolution 1929, which was adopted in June. We also discussed possible national measures that could complement and build upon the provisions of 1929. The purpose of these measures is not to harm the Iranian people. Pressure is not an end in itself. The purpose of pressure is to alter the Iranian leadership’s calculation of costs and benefits, and to bring them to the conclusion that the interests of the Iranian people are best served by complying with Security Council resolutions and seriously addressing the international community’s concerns about Iran’s nuclear program.
We need to send a clear signal that the international community is unified in urging Iran to negotiate seriously. The international community has already begun to send such a unified signal. Just eight days ago, nine days ago on July 26, the 27 countries of the European Union adopted a strong series of sanctions against Iran and those measures included measures across a wide spectrum of sectors – trade, finance, energy, transportation, just to name a few. The international reaction was not confined to the European Union. A number of non-European Union states have taken similar steps including Canada, Australia, and Norway. Now we look to Japan, as a leader of the global nonproliferation regime and a close ally of the United States, to play a strong role in this effort. We welcome the Japanese cabinet’s decision of yesterday to implement Security Council Resolution 1929, and to consider in the weeks ahead additional measures that can build upon 1929. We look forward to working with Japan and sending a strong, clear signal to Iran, and promoting a negotiated solution to the question of Iran’s nuclear program. That’s the end of my statement. I’ll ask Danny Glaser to take the podium.
DEPUTY ASSISTANT SECRETARY GLASER: Thank you. It’s very nice to be here in Tokyo today. The United States government is continuing to vigorously implement new and existing measures to apply financial pressure and disrupt the illicit activities of both Iran and North Korea. The international community has become increasingly united in its opposition to Iran’s and North Korea’s non-compliance with their international obligations. It is important that leading countries throughout the world now act together to deny North Korea and Iran’s access to the international financial system and to support their illicit conduct. We are confident that Japan will be an important part of this effort.
In the case of Iran, over the last several weeks, the international community and the United States have significantly enhanced our ability to apply financial pressure on Iran and obstruct its ability to develop its nuclear capabilities. In particular, new sanctions adopted by the United Nations, United States, the European Union, Canada, Australia, and Norway highlight Iran’s increasing isolation. These multilateral and national measures give us new and powerful tools that enable us, acting in concert with the private sector, to increase the financial pressure on Iran and further protect the international financial system from Iran’s abuse. We welcome Japan’s cabinet’s decision yesterday implementing UNSCR 1929. We in particular, look forward to its next steps that go beyond its UN requirements. These additional measures will demonstrate that Japan intends to be an integral component of the international community’s united front.
Regarding North Korea, the U.S. continues to seek vigorous global implementation of strong financial provisions of UNSCR 1874, even as we develop new tools to strengthen our own ability to implement 1874, and in fact go beyond it in targeting a wide variety of North Korean illicit activities. We have seen on prior occasions how powerfully the private sector reacts to U.S. actions that expose the entities that facilitate those illicit activities. The Treasury Department is committed to working with Japan in employing all appropriate new and existing authorities to protect the international financial system from North Korean abuse. That’s the end of my statement. Mr. Einhorn and I are available for questions.
MODERATOR: As I said, if you would approach the microphone and give us your name and your organization before you ask your question. We have a question right here, please.
QUESTION: Thank you very much, Ms. Kelley. My name is Shogo Kawakita, with Kyodo News, Japanese news wire service, former Washington and UN correspondent. I have two questions if I may: one on Iran, the other on North Korea. On Iran, Mr. Einhorn, you said something about Japan’s cabinet decision yesterday. My question is: How would you read Foreign Minister Okada’s statement yesterday in which he said sanctions that wouldn’t have impact on Japanese companies wouldn’t be very effective. How would you read that? In other words, what would you expect Japan to take, particularly in terms of Tokyo’s possible new investment in Iran and on some roles of the big financial institutions, such as Mitsui, Mitsubishi, and Mizuho. That’s my question on Iran. The other thing on North Korea – you said something about a vicious circle in Seoul yesterday. You said, I quote, “We can’t repeat the kind of cycles that we went through in a number of previous occasions where North Korea engages in talks and then abandons those talks.” If we talk about the sanctions against North Korea, we always face these kinds of headaches, I mean, we have these kinds of possible risks. On North Korea, my question is: How would you strike a balance between the pressure and deterrence? North Korea has already warned that they would start a sort of a “sacred war” based on their nuclear deterrence and if we go too far, it could bring about some negative reaction from Pyongyang. What do you think about this matter of balance? Thank you very much.
SPECIAL ADVISOR EINHORN: It’s our strong belief that Japan can join some 30, 31 other responsible, advanced industrial states in a growing consensus to put greater pressure on the Iranian regime and it could take these steps without harming Japan’s security. Japan imports a lot of oil from Iran, but the steps we are asking Japan to take would not interfere in any way with Japan’s energy security, its import of oil from Iran. I would advise you and your colleagues, as we’ve advised the government of Japan, to look at the measures already adopted by the European Union. These are strong measures, but Japanese adoption of these strong measures would not adversely affect the economy of Japan.
On North Korea, we don’t want to repeat the cycle of the past, where North Korea makes commitments, then reneges on those commitments and conducts provocative actions, and then expects to get paid to come back to the talks. The Obama Administration has made very clear that we are not going to pay North Korea to come back to the talks. It has to demonstrate, especially in light of provocative actions over the last couple of years, that it’s serious, that it’s sincere about denuclearization. It has to take some tangible steps to demonstrate its sincerity that it really wants to resume the Six-Party Talks, and perhaps, if it does show genuine willingness to make progress, we can break what has been an unacceptable cycle from the past. As far as North Korean rhetoric is concerned, I don’t think we can be guided by North Korean belligerent rhetoric. We’ve heard a lot of that rhetoric in the past. We can’t dismiss it altogether. All we can do is to serve our own interests – the interests of Japan, the interests of the United States and our other partners - in pressing North Korea to fulfill the commitments it’s already made, including the commitment in September 2005 to denuclearize completely, irreversibly, and verifiably.
DEPUTY ASSISTANT SECRETARY GLASER: If I could just add regarding the portion of your question relating to financial relationships with Iranian banks. I think it’s important to keep in mind where the international community is right now with respect to Iranian banks and Iranian financial institutions. The United Nations has already called for enhanced vigilance with respect to all Iranian banks. It has highlighted two particular banks especially in that regard, and it has applied sanctions to two other Iranian banks. The UN has also said that one Iranian bank in particular, Bank Mellat, is responsible for financing hundreds of millions of dollars of proliferation activities for Iran. That’s just the UN. Following on from this overall UN framework, you have the United States that has applied sanctions to a wide variety of Iranian banks, the European Union that has applied sanctions to a wide variety of Iranian banks, as has Australia and Canada. In addition to that, the European Union has taken very, very important steps with respect to significantly limiting, regulating, and monitoring the financial transactions that are permitted to occur. So this is the direction that the entire international community is moving in with respect to transactions involving Iranian banks, and I do think it’s important for Japanese banks to take that into account and I’m quite sure the Japanese government is looking very closely at steps that other countries have taken. We look forward very much to working with the Japanese government as it moves forward on these things.
QUESTION: Thank you. My name is Kaori Iida with NHK Japanese public television, a former Treasury reporter in Washington. Just following up on the last point – the Japanese global banks, the megabanks insist that their major involvement with Iranians are financial settlements in connection with oil purchases from Iran, which I believe is not prohibited under the UN sanctions. I was wondering if you are looking forward to seeing a total ban, a total halt of these financial settlements between the Japanese megabanks and the Iranian banks. Also, what do you say to countries like China who step in to fill the void, so to say, immediately after Japanese or European companies decide to move out of Iranian oil and energy projects. Thank you.
DEPUTY ASSISTANT SECRETARY GLASER: Well, thank you. I’ll of course leave the second part of your question with respect to backfilling on oil projects for Mr. Einhorn. The Japanese government announced that it is very seriously considering taking new measures that go beyond the UN Security Council resolutions, and I’m quite confident that Japan is going to have a very intensive process of working through that. To the extent that we could be helpful, we would be happy to work very closely with the Japanese government as it comes to its own decisions on these things. There is no broad prohibition on Japanese banks financing oil transactions. However, as I said in my answer to the last question, there are tremendous risks out there for dealing with Iranian banks, and these are risks that have been long identified by the international community and which in very recent weeks have become even more significant and even more intense. Again I point to the actions taken by the European Union, which completely cut off from the European financial system certain Iranian banks, and even with respect to the transactions that are continuing to occur, imposed very, very strict limitations on them, and very, very strict monitoring, and very, very strict regulation, because I think our friends and allies and partners in Europe understand that that’s what’s required. Those types of steps are necessary in order to protect the European financial system from Iranian abuse. We certainly have taken measures in the United States that go even beyond that to protect the U.S. financial system from Iranian abuse and I’m quite confident that Japan will take measures to protect the Japanese system from Iranian financial abuse.
SPECIAL ADVISOR EINHORN: The question of China stepping forward to fill in on deals and contracts that have been abandoned by others is a serious one. We take it very seriously. We’ve already raised this question with the Chinese leadership and we will continue to raise it. China has great and pressing energy security needs of its own, and we don’t wish to deny China in any way the ability to fulfill those needs. But China is also a permanent member of the UN Security Council. It has major responsibilities for international peace and stability and nonproliferation, and as a responsible stakeholder it shouldn’t be backfilling. It shouldn’t be stepping in and taking over deals where responsible countries have stepped back for the sake of nonproliferation and international security. This is an issue we are going to have to continue raising with China.
QUESTION: I’m Satoru Suzuki with TV Asahi, which is a Japanese television network. I have a question for Mr. Einhorn. Ambassador John Roos is going to visit Hiroshima on Friday to represent the United States at the ceremony marking the 65
th anniversary of the atomic bombing there. He will be the first U.S. ambassador to do so in 65 years. Now, in your capacity, how important, how significant his visit to Hiroshima will be, especially in connection with President Obama’s strong commitment to seeking a world without nuclear weapons? What kind of message would you like him to send to the city and citizens of Hiroshima, as well as to the citizens of Japan and the rest of the world? Thank you.
SPECIAL ADVISOR EINHORN: I think you stated it as well as I could state it. I think it’s appropriate that in this administration, it’s the first time that an American ambassador has gone to Hiroshima and paid his respects. This is an administration led by a president who believes in the vision of a world without nuclear weapons. It’s a vision shared by the people of Japan and the government of Japan. The Obama Administration has already taken a number of important steps toward that goal. President Obama is not naïve. He knows that you can’t achieve a world without nuclear weapons overnight, but you’ve got to begin that process, and you have to set your sights on that vision. And that’s what President Obama has done, and that’s why Ambassador Roos is making the trip he’s about to make.
QUESTION: My name is Kumagai from Platts Energy News. I have two questions for Mr. Einhorn. You told a congressional committee last week that the United States government has reduced the list of 41 non-U.S. companies that have aided Iran’s energy sector to less than 10 companies for possible sanctions. Could you identify the new list? If not, could you confirm whether Japanese companies are still on the list?
SPECIAL ADVISOR EINHORN: Thank you for your question, but if I couldn’t answer that question under oath to the U.S. House of Representatives, I’m unlikely to answer it here at a public press conference. All I can say is this: we are serious about implementing our law. In this case, it’s the Iran Sanctions Act. We, as I mentioned to the Congress, we began in the fall with an extensive list. We investigated each of those charges very thoroughly, and we removed many of those companies from the list. Now we have a list that’s fewer than 10. We’re in the final stage of the process. This particular law gives authority to the Secretary of State to make these designations. We’re in the process of getting the views of other agencies and advice to the Secretary from other agencies. When we get it, we will submit it to her and she’ll make her determinations. But I’m really not at liberty to reveal the names of companies. I’ll give you a reason why. Some of these companies may not be found by the Secretary to have engaged in sanctionable acts, but if I reveal the names of those companies, it could have a serious market effect for those companies. So you can see why it’s simply not appropriate to start talking about companies specifically before the Secretary has carried out her responsibility.
QUESTION: Thank you very much. This is Masakatsu Ota with Kyodo News. It’s very good to see you, Mr. Einhorn, and welcome Mr. Glaser. I have a question to Mr. Einhorn regarding the U.S.-India nuclear deal, so it’s out of the scope of today’s discussion, but just yesterday India and Washington inked the new arrangement for future reprocessing. This is the third case provided by the U.S. as a privilege for other countries for reprocessing, after the EU and Japan, so why did you make such a decision to give some special privilege to India, even though India is outside of the NPT?
And also, as you know, Japan has started discussions with India on the future nuclear cooperation. Do you want Japan to take the same action? I mean allowing a reprocessing process for Indian authorities? Thank you very much.
SPECIAL ADVISOR EINHORN: On your last question, I’m not going to give advice to the Japanese government on its nuclear dealings with India.
The Bush Administration made a decision in July 2005 to exempt India from U.S. law and to seek an exemption of India from Nuclear Suppliers Group policy to permit civil nuclear cooperation. It believed that this important gesture would have a very major impact on U.S.-Indian relations and it would help bring India into the non-proliferation mainstream. The U.S. Congress agreed with that approach and amended U.S. law to permit that, and the Nuclear Suppliers Group, by consensus – and there were 46 countries in the Nuclear Suppliers Group – agreed by consensus to make an exception for India.
The Obama Administration took office and made a decision to go forward and implement the act, and that’s what we’re doing. And that’s – you saw yesterday we initialed this, or a few days ago, initialed this reprocessing arrangement. By the way, there are only a few countries around the world to which we give U.S. advance consent to reprocess U.S.-origin fuel. India is now one of them, but of course Japan is another.
QUESTION: Anthony Rowley, Singapore Business Times. Mr. Einhorn, you referred to the torpedoing of the
Cheonan. Two Korean nationals, one of whom is a professor of physics, I think, at the University of Virginia in the United States and the other who also has professorial status in the U.S., made a presentation recently at the Foreign Correspondents Club of Japan here in Tokyo. They argued that they’d done their own inquiries, including simulation tests, and that the damage suffered by the
Cheonan was not consistent with a torpedo attack, but there were inconsistencies in the timing of the sinking, the place of the sinking. And they called for a new, wider international inquiry to look at the whole thing again. So my question is, do you have any general comment on that, and, secondly, do you think the United States would support such an inquiry?
SPECIAL ADVISOR EINHORN: U.S. authorities – U.S. experts – with qualifications to look at this kind of material have gone over the results of the investigation, and we consider the conclusions sound. This was not a South Korean investigation. This was not an American investigation. T his was a multilateral investigation. And all of the participants came up with the same conclusion. So we take this as settled, and we don’t support reopening or conducting a new investigation.
QUESTION: Ken Moriyasu from Nikkei. I f we could go back to Iran, could you tell us the U.S. government’s assessment how far Iran is from the actual weaponizing of nuclear weapons?
SPECIAL ADVISOR EINHORN: Obviously it’s hard to answer. One can only estimate, and it’s not just a question of the capability. It’s a question of intention. Do they want to move as quickly as they could move? All I can say is that Iran is moving ahead with various elements of its nuclear program, and not just its centrifuge enrichment program. If you followed its missile development program, it’s making a lot of progress in acquiring a ballistic missile capability capable of delivering nuclear weapons, and that’s of concern. At the beginning of this year, it took another provocative step. It boosted its level of enrichment from 3.5% to close to 20%, which gets it much closer to weapons-grade uranium.
We’re very concerned, not just with these elements that I just mentioned, but with Iran’s unwillingness to be transparent, with its lack of cooperation with the International Atomic Energy Agency. Director General Yukiya Amano has published two reports since he’s been director general of the agency, and both reports have been rather incriminating. Director General Amano takes a very straightforward approach, a very objective approach to his work. He believes that his effectiveness depends on his impartiality, and he’s been scrupulously impartial, but those reports that he’s issued have been very incriminating. So we’re concerned about the direction of Iran’s nuclear program, and most countries of the world are concerned about it. And that’s why Resolution 1929 was adopted.
QUESTION: Takashi Yokota, Newsweek. Mr. Einhorn, I remember you mentioned that North Korea needs to take tangible steps toward talks resumption. Could you define what these tangible steps could actually be? Thank you.
SPECIAL ADVISOR EINHORN: I’m not in a position now to identify specifically the kinds of steps North Korea could take. If I did, North Korea might take this as a challenge not to take those very steps. I think it’s important for the United States to consult closely with its partners in the Six-Party process. Today was an opportunity to have some discussions with our Japanese colleagues, and we did. But one has to be conscious about the timing of resuming these Six-Party Talks. I don’t know that we’re ready today to resume those talks. I think we have to understand better the nature of North Korean recent behavior, including its torpedoing of the
Cheonan. I think North Korea’s actions raise legitimate questions in the minds of people about whether they’re actually prepared to live up to their obligation to disarm completely, verifiably, and irreversibly. So if the North Koreans are sincere about getting back to the Six-Party process, they have to take some convincing, tangible steps. But we’re not in a position to discuss those steps at this point.
QUESTION: Charlie Reed, Stars & Stripes. Mr. Einhorn, you said that China was key to sanctions against North Korea. How do you get China on board? What’s the key to that? And then also, what do you say to criticism of the effectiveness of such sanctions, seeing as how many of the counties that deal with North Korea are sympathetic to their regime and therefore – again, those who question the effectiveness of such sanctions?
SPECIAL ADVISOR EINHORN: I’m sorry, explain the second one again?
QUESTION: There’s some criticism of sanctions against North Korea because many of the companies who deal with North Korea are sympathetic to their regime, and therefore, convincing them to stop ties with North Korea basically wouldn’t work. So what do you say to that criticism?
SPECIAL ADVISOR EINHORN: First, on the China question: China wants to be a responsible stakeholder in the international community. Part of that responsibility involves ensuring that other countries abide by their commitments. I think China really needs to join other responsible countries – including the European Union, the United States and Japan, and South Korea – to send a signal to Iran that it’s got to abide by its international obligations, and we hope China recognizes its responsibility to join with us in sending that signal.
As far as addressing North Korea is concerned, I think a vast number of countries do support the various Security Council resolutions that are aimed at North Korea, and it’s essential that we enforce existing obligations as strenuously as we can, and that’s one thing that I and my colleagues are trying to do, look at these resolutions – Resolution 1718, Resolution 1874 – and urge countries to enforce those scrupulously. We’re doing that. We’re doing that with China, and with other key countries in East Asia and around the world.
DEPUTY ASSISTANT SECRETARY GLASER: If I could also just add to that, in response to the second part of your question: I think we’ve shown in the past that sanctions have been very effective in applying pressure on North Korea. I think we’ve shown in the past that we can take targeted measures with respect to North Korean entities involved in illicit activities and have those measures have a profound systemic effect on North Korea’s ability to engage with the international financial system. So as we move forward, we’re going to continue to look for opportunities to identify North Korean illicit activity, identify how they’re using the financial system to do that, and then close those opportunities off to North Korea. And we think that will continue to have a resonating effect throughout the globe.
QUESTION: Hello, I’m Yoree Koh from the Wall Street Journal. I want to ask about North Korea today. Japan has one of the strongest sets of sanctions against North Korea in the world, a virtually across-the-board ban on imports and exports with the country. Despite that, there seems to be increased number of cases of illegal arms exports that are still originating from Japan to North Korea and increasingly by way of third countries. Given that Japan already has such strict measures, how do you propose they strengthen sanctions against North Korea? Would there be increased cooperation between the U.S. and Japan in those efforts, and also would the U.S. and the global community be interested in applying further pressure to the third countries, such as China, Myanmar, Malaysia and others in the Southeast Asia region? Thank you.
SPECIAL ADVISOR EINHORN: Well, all countries will have to decide what they want to do. We recognize that different countries are in different positions, so they’re all going to take different measures. T he question of remittances, for example, from Koreans living in Japan is a special issue that Japan has, so every country is going to adopt its own kinds of measures. But one point you alluded to: We need international cooperation to make this work. We need international cooperation to interdict illicit shipments coming from North Korea, going to North Korea, and that requires strong international cooperation. This is not anything the United States or any single country can do on its own, and this is our approach to sanctioning North Korea -- building broad international support -- but that doesn’t mean every country has to do the same thing. There will be different measures for different countries, and Japan will have its own set of effective measures. And Japanese measures are effective.
QUESTION: Thank you very much. My name is Shirato from Mainichi newspaper. My question is very simple. It is said that North Korean supreme leader Kim Jong-il has some health problem. Let me ask Mr. Einhorn, do you think whether Kim Jong-il can decide a clear decision? That means, is he in a situation that he can make a clear decision about any kind of political issue, including Six-Party Talks and so on?
SPECIAL ADVISOR EINHORN: Well, I don’t know if I’m qualified to make that judgment, but travelers who’ve been to North Korea and have had meetings with Kim Jong-il have indicated to us that they think that despite some physical ailments that are apparent, that he seems to be of sound mind and seems to be talking and acting effectively. So all we know is what we hear from people who’ve met with him, but beyond that, I can’t make any statements.
QUESTION: Thank you. My name is Khaldon Azari from Petra Jordan News Agency and Pan Orient News. The feeling in the Middle East, if you read a lot of commentaries, gives you the impression that they don’t really feel that the United States is serious against nuclear weapons, but it’s rather selecting certain countries for political reasons, targeting their nuclear programs. Otherwise you could have seen enthusiastic sanctions against Israel that is known to have a nuclear program and not signing the NPT, so are you planning to have such action against that country? Thank you.
SPECIAL ADVISOR EINHORN: The United States believes that all countries in the Middle East should join the NPT. It supports the goal of a Middle East without any nuclear weapons, but we also recognize that there are some current impediments to achieving those goals. One is a lack of a comprehensive peace in the region. Another is the non-compliance by a number of countries with their obligations. Now Iran clearly has violated its nuclear non-proliferation obligations. This is not the United States speaking; this was a finding of the IAEA Board of Governors and the UN Security Council. In fact that finding was made a number of times, so it’s not just the United States. The world is concerned with Iran’s nuclear program. As to other countries in the region, we do support a Middle East free of all weapons of mass destruction, all nuclear weapons, but we recognize that conditions don’t exist for moving to that goal overnight.
QUESTION: Hi, Nobuo Kurokawa from Sankei newspaper. Thank you for the opportunity. Just one question regarding sanctions against Iran: How do you assess the recent Turkish government’s approach to Iran? Reportedly Turkish companies have started sending petroleum to Iran or opening up ports to do trade with Iran instead of Dubai. How do you see the effect of this kind of effort on the sanctions against Iran?
SPECIAL ADVISOR EINHORN: Sorry sir, what country were you talking about?
QUESTION: Turkey.
SPECIAL ADVISOR EINHORN: Obviously Iran’s neighbors have a variety of types of trade with Iran, and the objective of the Security Council resolution, the objective of the national measures, is not to impose a total embargo on Iran. Legitimate trade between Iran and its neighbors can and should continue, but there are certain provisions in the Security Council resolution which prevent major categories of arms from going to Iran, that prohibit arms transfers from Iran, prohibit a wide range of illicit activities as well. We will encourage all of Iran’s neighbors to implement the resolutions faithfully, but we’re not going to urge them to impose a total embargo on Iran.
MODERATOR: Do we have another question? If not, this concludes our press conference today. Thank you very much for coming. I look forward to reading your reporting.
