And obviously, from the Chairman’s introduction, you know that I come here with an enormous amount of respect for your prerogatives on the House Foreign Affairs Committee, as we did in the Senate. And it’s entirely appropriate that we’re here to satisfy your questions, hopefully allay your concerns and fears, because I believe the agreement that we have ought to do that and I think the path that we’re on should do that. And as I describe it to you, I hope you’ll leave here today with a sense of confidence that we know what we’re doing, our eyes are open, we have no illusions. It’s a tough road. I don’t come here with any guarantees whatsoever. And I think none of what we’ve done in this agreement begs that notion. In other words, everything is either verifiable or clear, and there are a set of requirements ahead of us which will even grow more so in the course of a comprehensive agreement. And we can talk about that – I’m sure we will – in the course of the day.
Let me just begin by saying that President Obama and I have both been very clear, as every member of this committee has been, that Iran must not acquire a nuclear weapon. And it is the President’s centerpiece of his foreign policy: Iran will not acquire a nuclear weapon. This imperative is at the top of our national security agenda, and I know it’s at the top of yours as well. So I really do welcome the opportunity to have a discussion not only about what the first-step agreement does, but also to clarify – I hope significantly – what it doesn’t do, because there’s a certain, as there is in any of these kinds of things, a certain mythology that sometimes grows up around them.
The title of today’s hearing is “The Iran Nuclear Deal: Does It Further U.S. National Security?” And I would state to you unequivocally the answer is yes. The national security of the United States is stronger under this first-step agreement than it was before. Israel’s national security is stronger than it was the day before we entered into this agreement. And the Gulf and Middle East interests are more secure than they were the day before we entered this agreement.
Now, here’s how:
Put simply, once implemented – and it will be in the next weeks – this agreement halts the progress of Iran’s nuclear program – halts the progress – and rolls it back in certain places for the first time in nearly ten years. It provides unprecedented monitoring and inspections. While we negotiate to see if we can conclude a comprehensive agreement – if we can conclude – and I came away from our preliminary negotiations with serious questions about whether or not they’re ready and willing to make some of the choices that have to be made. But that’s what we put to test over the next months. While we negotiate to see if we can conclude a comprehensive agreement that addresses all of our concerns, there’s an important fact: Iran’s nuclear program will not move forward.
Under this agreement, Iran will have to neutralize – end – its entire stockpile of 20 percent enriched uranium, which you all know is a short step away from weapons-grade uranium. So if you remember when Prime Minister Netanyahu held up that cartoon at the UN with the bomb in it in 2012, he showed the world a chart that highlighted the type of uranium that he was most concerned about – and he was talking about that 20 percent stockpile. Under this agreement, Iran will forfeit all – not part, all – of that 20 percent, that 200 kilogram stockpile. Gone.
Under this agreement, Iran will also halt the enrichment above 5 percent and it will not be permitted to grow its stockpile of 3.5 percent enriched uranium. Iran cannot increase the number of centrifuges in operation, and it will not install or use any next-generation centrifuges to enrich uranium.
Under this agreement, we will have increased transparency of Iran’s nuclear program, giving us a window into their activities that we don’t have today. We will have access to Fordow, a secret facility in a mountaintop that we’ve never been in. We will now get into it not once or twice – every single day. We will get into Natanz and have the ability to know not once or twice, but every single day what is happening in Natanz. And we will have access each month to the Arak facility, where we will have an extraordinary ability to be able to know through inspections whether or not they are complying with their requirements.
Now, this monitoring is going to increase our visibility into Iran’s nuclear program as well as our ability to react should Iran renege on this agreement. And taken together, these first steps will help prevent Iran from using the cover of negotiations to continue advancing its nuclear program in secret – a concern that everybody on this dais shares.
Now, in addition – this is very important – one of our greatest concerns has been the Arak – A-r-a-k – nuclear reactor facility. And this is a heavy-water, plutonium-capable reactor. That’s unacceptable to us. In the first step, we have now succeeded in preventing them from doing any additional fuel testing, from transferring any fuel rods into the reactor, and from installing any of the uninstalled components which are critical to their ability to be able to advance that particular reactor. So it’s frozen stone cold where it is in terms of its nuclear threat and capacity. Iran will not be able to commission the Arak reactor during the course of this interim first-step agreement. That’s very important.
Now, we have strong feelings about what will happen in a final comprehensive agreement. From our point of view, Arak is unacceptable. You can’t have a heavy-water reactor. But we’ve taken the first step in the context of a first step, and they will have to halt production of fuel for this reactor and not transfer any fuel or heavy water to the reactor site. It cannot conduct any additional fuel testing for this. and Iran is required to give us design information for the site. We’re actually going to have the plans for the site delivered to us. We’ve long sought this information, and it will provide critical insight into the reactor that has not been previously available to us through intel or any other sources.
Now, those are the highlights of what we get in this agreement. And I know many of you have asked, “Well, what does Iran get in return?” And I’ve seen outlandish numbers out there in some articles talking about 30, 40, 50 billion dollars and so forth, or disintegration of the sanctions. My friends, that’s just not true. It’s absolutely not true. We have red-teamed and vetted and cross-examined and run through all the possible numbers through the intel community, through the Treasury Department, through the people in charge of sanctions, and our estimates are that at the end of the six months, if they fully comply, if this holds, they would have somewhere in the vicinity of $7 billion total.
And this is something that I think you ought to take great pride in. I was here as chairman when we put his in place. I voted for these sanctions, like we all did in the United States Senate. I think we were 100 to nothing as a matter of fact. And we put them in place for a purpose. The purpose was to get to this negotiation. The purpose was to see whether or not diplomacy and avoidance of war could actually deliver the same thing or better than you might be able to get through confrontation.
Now, sanctions relief is limited to the very few targeted areas that are specified in this agreement for a total of about the $7 billion that I’ve described. And we will continue to vigorously – Ranking Member Engel, we will absolutely not only will we – I mean, this is going to actually result in a greater intensity of focus on the sanctions because I’ve sent a message to every single facility of the United States anywhere in the world that every agency is to be on alert to see any least movement by anybody towards an effort to try to circumvent or undo the sanctions. We don’t believe that will happen. And one of the reasons it won’t happen is we have a united P5+1. Russia, China, the United States, France, Germany, and Great Britain are all united in this assurance that we will not undo the sanctions and that we will stay focused on their enforcement.
Now, all the sanctions on Iran further on its abysmal human rights record, over its support for terrorism, which you’ve mentioned, and over its destabilizing activities in places like Syria – those sanctions will all remain in effect. They’ve nothing to do with the nuclear. They’re there for the reasons they’re there, and we’re not taking them off. This agreement does provide Iran with a very limited, temporary, and reversible relief. And it’s reversible at any time in the process if there is noncompliance. If Iran fails to meet its commitments, we can and will revoke this relief. And we will be the first ones to come to you if this fails to ask you for additional sanctions.
The total amount of relief is somewhere between the 6 and 7 billion that I described. That is less than one percent of Iran’s $1 trillion dollar economy, and it is a small fraction of the $100 billion-plus of oil revenue alone that we have deprived Iran of since 2012.
I want you to keep in mind this really pales in comparison to the amount of pressure that we are leaving in place. Iran will lose $30 billion over the course of this continued sanctions regime over the next six months. So compare that – they may get $7 billion of relief, but they’re going to lose $30 billion. It’s going to go into the frozen accounts. It will be added to the already 45 billion or so that’s in those accounts now that they can’t access.
And during the six-month negotiating period, Iran’s crude oil sales cannot increase. Oil sanctions continue as they are today. There’s no diminishment of the oil and banking sanctions that you put in place. We have not lifted them. We haven’t eased them. That means that as we negotiate, oil sanctions will continue to cost Iran about the 30 billion I just described, and Iran will actually lose more money each month that we negotiate than it will gain in relief as a result of this agreement. And while we provide 4.2 billion in relief over the six months, which is direct money we will release from the frozen account, we are structuring this relief in a way that it is tied to concrete, IAEA-verified steps that they’ve agreed to take on the nuclear program. That means that the funds will be transferred not all at once, but in installments, in order to ensure that Iran fulfills its commitments. And it means that Iran will not get the full measure of relief until the end of the negotiating period, when and if we verify, certify, that they have complied.
So now we have committed – along with our P5+1 partners – to not impose any new nuclear-related sanctions for the period of the six months. I’m sure there are questions about this. I know I’ve seen, and there are some in Congress who’ve suggested they ought to do it. I’m happy to answer them. I will tell you that in my 29 years, just about shy of the full 29 I’ve served in the Senate, I was always a leading proponent of the sanctions against Iran. I’m proud of what we did here. But it was undeniable that the pressure we put on Iran through these sanctions is exactly what has brought Iran to the table today, and I think Congress deserves an enormous amount of credit for that.
But I don’t think that any of us thought we were just imposing these sanctions for the sake of imposing them. We did it because we knew that it would hopefully help Iran dismantle its nuclear program. That was the whole point of the regime.
Now, has Iran changed its nuclear calculus? I honestly don’t think we can say for sure yet. And we certainly don’t just take words at face value. Believe me, this is not about trust. And given the history – and Mr. Chairman, you mentioned the question of deception – given the history, we are all rightly skeptical about whether or not people are ready to make the hard choices necessary to live up to this. But we now have the best chance we’ve ever had to rigorously test this proposition without losing anything. At least twice in this agreement, it is mentioned that nothing is agreed until everything is agreed, and that is specific as to the final agreement. In addition, where it does talk about the potential of enrichment in the future, it says “mutually agreed upon” at least four times – three or four times in that paragraph. It has to be agreed. We don’t agree, it doesn’t happen.
Every one of us remembers Ronald Reagan’s maxim when he was negotiating with the Soviet Union: Trust, but verify. We have a new one: Test, but verify. Test, but verify. And that is exactly what we intend to do in the course of this process.
Now, we’ve all been through tough decisions. Those of you in the top dais have been around here a long time, and you’ve seen – we all know the kinds of tough decisions we have to make. But we’re asking you to give our negotiators and our experts the time and the space to do their jobs, and that includes asking you while we negotiate that you hold off imposing new sanctions.
Now, I’m not saying never. I just told you a few minutes ago if this doesn’t work, we’re coming back and asking you for more. I’m just saying not right now. Let me be very clear. This is a very delicate diplomatic moment, and we have a chance to address peacefully one of the most pressing national security concerns that the world faces today with gigantic implications of the potential of conflict. We’re at a crossroads. We’re at one of those, really, hinge points in history. One path could lead to an enduring resolution in international community’s concerns about Iran’s nuclear program. The other path could lead to continued hostility and potentially to conflict. And I don’t have to tell you that these are high stakes.
We have an obligation to give these negotiations an opportunity to succeed. And we can’t ask the rest of the P5+1 and our partners around the world to hold up their ends of the bargain if the United States isn’t going to uphold its end of the bargain. If we appear to be going off on our own tangent and do whatever we want, we will potentially lose their support for the sanctions themselves. Because we don’t just enforce them by ourselves; we need their help. And I don’t want to threaten the unity that we currently have with respect to this approach, particularly when it doesn’t cost us a thing to go through this process knowing that we could put sanctions in place additionally in a week, and we would be there with you seeking to do it.
I don’t want to give the Iranians a public excuse to flout the agreement. It could lead our international partners to think that we’re not an honest broker and that we didn’t mean it when we said that sanctions were not an end in and of themselves, but a tool to pressure the Iranians into a diplomatic solution. Well, we’re in that. And six months will fly by so fast, my friends, that before you know it we’re either going to know which end of this we’re at or not.
It's possible, also, that it could even end up decreasing the pressure on Iran by leading to the fraying of the sanctions regime. I will tell you that there were several P5+1 partners at the table ready to accept an agreement significantly less than what we fought for and got in the end.
Mr. Chairman, do you want me to wrap?
CHAIRMAN ROYCE: If you could, Mr. Secretary.
SECRETARY KERRY: Okay. Let me just say to you that the Iranians know that this threat is on the table.
I do want to say one quick word about Israel and Prime Minister Netanyahu. I speak to the Prime Minister usually a couple times a week or several times. I talked to him yesterday morning, and I am leaving tomorrow and I'll be seeing him Thursday night. We are totally agreed that we need to focus on this final comprehensive agreement. And Yossi Cohen, the national security advisor to the Prime Minister, is here in Washington this week working with our experts. And we will work hand in hand closely, not just with Israel, but with our friends in the Gulf and others around the world, to understand everybody's assessment of what constitutes the best comprehensive agreement that absolutely guarantees that the program, whatever it is to be, is peaceful, and that we have expanded by an enormous amount the breakout time.
This first-step agreement, Mr. Chairman, actually does expand the breakout time. Because of the destruction of the 20 percent, because of the lack of capacity to move forward on all those other facilities, we are expanding the amount of time that it would take them to break out. And, clearly, in a final agreement, we intend to make this failsafe that we can guarantee that they will not have access to nuclear weapons.
So I’d just simply put the rest of my testimony in the record, Mr. Chairman. I look forward to your questions.