New U.S. Sanctions, Humanitarian Channel

January 30, 2020

On January 30, U.S. Special Representative for Iran Brian Hook announced sanctions on the Atomic Energy Organization of Iran (AEOI) and its chief, Ali Akbar Salehi. “The Atomic Energy Organization of Iran has played a big role in Iran breaching its key nuclear commitments [under the 2015 nuclear deal],” Hook said. “It has exceeded the limits on its uranium stockpile and enrichment levels. The head of AEOI personally inaugurated the installation of new advanced centrifuges to expand its uranium enrichment capacity.”

But Hook said that that the United States would renew sanctions waivers on Iran’s nuclear projects for 60 days. The waivers have allowed Russian, Chinese and European companies to continue work on the Arak heavy-water research reactor, the Bushehr nuclear power plant, the Tehran Research Reactor and several other joint initiatives. Hook added that the waivers would make it harder for Iran to develop a nuclear weapon by limiting projects to peaceful nuclear energy. “We will closely monitor all developments in Iran’s nuclear program and Secretary (Mike) Pompeo can end these projects as developments warrant,” he said.

The United States also announced a new Swiss humanitarian channel that would ensure the sale and delivery of cancer drugs to Iran. Humanitarian goods have always been exempt from U.S. sanctions, but foreign banks had been hesitant to conduct business with Iran. The new payment mechanism assured that companies had a "secure payment channel with a Swiss bank through which payments for their exports to Iran are guaranteed," according to the Swiss government.

 

Hook accused the Iranian government of mismanaging humanitarian funds. “Last year, President Rouhani’s chief of staff sent a letter to ministers seeking an explanation for the, quote, “disappearance” of over one billion Euros intended for medical supplies,” Hook said. “There are reports that two million Euros intended for heart stints were instead spent on electrical cable.  $180 million for medical supplies were instead spent on tobacco and cigarette paper.”  But Hook said that the United States would conduct “strict due diligence measures to avoid misuse by the Iranian regime.”

Hook told reporters that three shipments of cancer drugs had already been made to Iran using the new humanitarian channel. The Treasury Department said that the new payment mechanism provided a “model for facilitating further humanitarian exports to Iran.” The following is a transcript from the Hook briefing and a press release by the Treasury Department.

 

Briefing with U.S. Special Representative for Iran Brian Hook

MR HOOK:   I have a few announcements to make today.  We are announcing new sanctions on the regime and a new humanitarian channel to help the Iranian people.  I also have a progress report on our International Maritime Security Initiative.

Today, we are sanctioning the Atomic Energy Organization of Iran.  These – we are also sanctioning its chief officer, Ali-Akbar Salehi.  These sanctions are pursuant to Executive Order 13382, which targets WMD proliferators and their supporters.  President Trump is committed to denying Iran from ever acquiring a nuclear weapon.

The Atomic Energy Organization of Iran has played a big role in Iran breaching its key nuclear commitments.  It has exceeded the limits on its uranium stockpile and enrichment levels.  The head of AEOI personally inaugurated the installation of new, advanced centrifuges to expand its uranium enrichment capacity.  He also chaired a ceremony when Iran started injecting uranium gas into advanced IR-6 centrifuge machines.

Additionally, the United States is renewing for 60 days four nuclear restrictions on Iran that permit the continuation of nonproliferation projects that constrain Iran’s nuclear activities.  We will closely monitor all developments in Iran’s nuclear program, and Secretary Pompeo can end these projects as developments warrant.

Iran’s continued nuclear escalation underscores the serious challenge the Iranian regime poses to international peace and security.  We call on nations to oppose Iran’s nuclear extortion and to restore the United Nations Security Council standard of no enrichment for the Iranian regime.  That standard was abandoned under the Iran nuclear deal and it needs to be restored.

A big part of our Iran strategy from the very beginning is standing with the Iranian people instead of standing with the regime.  The Iranian regime’s corruption and economic mismanagement frequently diverts resources away from the Iranian people so it can finance warfare in the gray zone.  The victims are the Iranian people who don’t have sufficient access at times to medicines and medical devices.

Today, in coordination with Secretary Mnuchin at the Department of the Treasury, we are pleased to announce that we have completed the sale and delivery of cancer drugs and transplant drugs to Iran.  A few months ago, we announced we were working with the Swiss on a new financial channel for humanitarian goods.  We want companies to take advantage of the exemptions in our sanctions regime for food, medicine, medical devices, and agricultural products.

So it’s a very good thing that Iranian cancer and transplant patients are now receiving critical treatments through this new channel.  This channel applies strict due diligence measures to avoid misuse by the Iranian regime.

While we work to provide the Iranian people with medicine, the regime makes no such effort.  Last year, President Rouhani’s chief of staff sent a letter to ministers seeking an explanation for the, quote, “disappearance” of over one billion Euros intended for medical supplies.  There are reports that two million Euros intended for heart stints were instead spent on electrical cable.  $180 million for medical supplies were instead spent on tobacco and cigarette paper.  I’m sure there are more examples we don’t know about, but the Iranian people know that their regime, not American sanctions, are to blame for their difficulties getting medical supplies.

I would very much like to thank the Swiss Government, as always, for working with us so well to establish this channel.

Finally, I want to give an update, a progress report, on our International Maritime Security initiative.  This ensures the safety of shipping in the Gulf region and helps to disrupt and deter Iranian maritime attacks on commercial navigation.

Earlier today, we marked the first change of command at the Maritime Security initiative at its headquarters in Bahrain.  Commander – Commodore Parkin of the British Royal Navy is now taking over control of the IMSC and we thank the United Kingdom for their excellent leadership.

We are proud of the effectiveness of our international efforts to secure economic commerce transiting the Strait of Hormuz and the Persian Gulf.  We currently have participation from Albania, Australia, Bahrain, Saudi Arabia, UAE, United Kingdom, and the United States.  We expect further participation to be announced very soon.

While the IMSC is separate from our maximum pressure campaign, I think it’s important that the international community ensure the safe – to safeguard global commerce and freedom of navigation throughout the region, which is where so much of the world’s oil supply flows through.

Happy to take a few questions.

PRESS OFFICE DIRECTOR:  Carol.

QUESTION:  Brian, I was wondering what you think Iran’s calculation is that at the same time it is ramping up its nuclear program, it would also be allowing nonproliferation activities to continue by the IAEA.  It would seem to be contradictory and counterproductive.  Why do you think that is happening?

MR HOOK:  That’s probably a question for the regime more than it is for me.  I can only speculate.  The regime has used nuclear extortion for many years and, now that we’re out of the Iran deal, Iran focuses its nuclear blackmail on the E3.  And the European countries in the deal have initiated the dispute resolution mechanism because Iran has breached its nuclear commitments under the deal many times.  It is hard to know whether that will lead to the snapback of UN sanctions and the end of the Iran nuclear deal; that’s something for the – that the Europeans will have to decide.  But they have initiated it, which I think does signal a growing impatience by the international community with Iran threatening to expand its nuclear program.

More than half of the countries in the world that have peaceful nuclear power do not enrich.  There is no need for enrichment.  We need to restore the UN standard of no enrichment for the world’s leading state sponsor of terrorism.  It should have never been lost under the Iran nuclear deal, and if you want to get out of these discussions of breakout cycles and whether Iran is farther or closer away to getting a nuclear weapon, we need to restore no enrichment.

PRESS OFFICE DIRECTOR:  Humeyra.

QUESTION:  Brian, could you tell us why the Trump administration has extended these waivers?  Is it not a little bit contradictory when you’re sanctioning the entity?  And also, do you think Europeans are buying time?  They initiated the dispute mechanism, but nothing has happened since then.  Will – are you guys talking to them to maybe push them to make the next move?

MR HOOK:  On the – so these are for 60 days.  These are designed to limit.  So there’s the redesign of the Arak reactor so that Iran does not revert to the previous design.  There is support for the existing nuclear reactor at Bushehr to prevent any need for Iran to enrich uranium for the reactor and to deny Iran spent fuel from which plutonium could be separated.  There is also a provision for enriched uranium for the Tehran research reactor so that Iran cannot claim any need to resume production of 20 percent enriched uranium for its fuel.  And the fourth one: transferring out of Iran spent and scrapped nuclear fuel so that it cannot be reprocessed into plutonium or be converted.  And so those are the restrictions that will be kept in place for the next 60 days.

What was your next question?

QUESTION:  Do you think Europeans are buying time since the – since they initiated the dispute mechanism, they didn’t make another move?  What are your conversations like with them?  Are you pushing them to do something about it?

MR HOOK:  Well, if you look at Resolution 2231, it sets out a fairly elaborate architecture to resolve disputes.  And so Iran is in breach; they’ve breached a number of times.  The Europeans have shown a great deal of patience with the Iranians trying to get them back into compliance, but that has not worked.  And so now, they’ve started this.

It is – there’s no automaticity in the dispute resolution mechanism.  I think it was given enough sort of elasticity in the – in this process so that member-states to the deal can decide whether they want to go and end it or whether they want to buy time.  And we’ll have to see.

PRESS OFFICE DIRECTOR:  (Off-mike.)

QUESTION:  Brian, you just said that Iran has in violation of the enrichment and centrifuge.  The foreign – UK foreign minister this morning said that they are very close to Washington’s position regarding a new agreement.  So what is the left there in terms of agreement and disagreement?

And just to follow up on the medicine, you just said that the Iranians has wasted all this money to make sure that the medicine reach the people that needed it.  How do you guarantee that this new exemption that actually does reach the people that they need it?

MR HOOK:  Well, we are – on the medicine piece, we have created a framework that involves the Swiss Government and a Swiss bank that companies that have – that are located or that have offices in Switzerland can take advantage of this.  And for those companies that do decide to do it, there’s a very high bar for due diligence.  The Iranian regime has a history of using front companies disguised as humanitarian organizations and then when food or medicine or medical devices are then processed, the regime diverts them and then uses them for the regime elite, medicines for the regime elite, or they sell them on the black market to raise revenue for the government.  They don’t get – make their way to the Iranian people.

So we have created a very high standard of due diligence, but we have now already had one company that has met that, and the cancer drugs and the transplant drugs have already been delivered and the transaction has been processed.

So this is not an impossible bar; it’s already been met by one European company.  There will be more companies that I have been talking with so that we can facilitate especially medicine and medical devices, so you can expect to see more transactions moving through this.  INSTEX, which is a favorite of this press room for asking me about, has not processed a single transaction, so we’re very pleased that we’ve been able to process this transaction.  It’s the first one.  There will be more to come.

QUESTION:  And on the first question —

MR HOOK:  Oh, sorry.

QUESTION:  — the gap between the European and the U.S. position vis-a-vis a new agreement.

MR HOOK:  I think that’s another press favorite, the trans-Atlantic rift over the Iran nuclear deal.  Boris Johnson said a couple of weeks ago that – he said that maybe we should replace the Iran nuclear deal with the Trump deal, and so we were very pleased.  President Trump has asked the members of the nuclear deal – what’s left of it, since it’s going to start expiring in eight months – to join the United States, to leave the deal and join our foreign policy strategy, which is working.  We have applied enormous pressure on the regime so they don’t have the revenue that they used to to fund their war machine and to fund their proxies.  The regime is facing a financial crisis.  They’re facing a crisis of legitimacy and credibility with their own people.  They’re facing their worst political unrest in their 40-year history, and they’re resorting to scare tactics like nuclear blackmail.

So we have a policy that has helped to restore deterrence, that has weakened the regime financially.  We’re ready to make a new deal.  The President has said that clearly.  And so he has invited the members of the deal to join our effort, our diplomatic effort to resolve our differences with Iran peacefully and get to a comprehensive deal that’s much bigger than the nuclear piece.

QUESTION:  Hi.

MR HOOK:  Hi there.

QUESTION:  Two questions.  Regarding the standing with the Iranian people, State Department has opened a channel and asked the Iranians to provide their messages.  I wanted to know if you have an update on the number of the messages received from the Iranians and what are their demands or what are they saying.

And on second question regarding that 60-day waivers, is there a message that State is trying to send to the European – EU3, China, and Russia in order for them to join the maximum pressure?  Thank you.

MR HOOK:  I have no comment on any messages, no update on that, and there is no hidden message with the 60-day renewal.

PRESS OFFICE DIRECTOR:  Go ahead.

QUESTION:  Brian.

MR HOOK:  Nick.

QUESTION:  Did the U.S. threaten tariffs on European car imports if the E3 did not trigger the dispute resolution mechanism?

MR HOOK:  Matt Lee asked that same question the last time I was here and I didn’t have any comment on it because it’s a bilateral question.

What else?  One more question.

QUESTION:  Why – sorry, but why does it matter if it’s a bilateral question?  I mean, it’s the E3 —

MR HOOK:  Because we don’t get into deliberative discussions.  I – so I can’t confirm or deny it, but Matt asked that a couple weeks ago and I answered it the same way.

QUESTION:  Going back to the humanitarian channel, you mentioned the cancer drugs and the transplant drugs that have already gotten to Iran.  Do you know how many Iranians have benefited from that transfer?  And just with regard to timing of this channel opening, is it rewarding Iran for not killing any Americans in those airstrikes in Iraq?

And then just second question – you talk about the benefits of this maximum pressure campaign.  What would you say is the single most successful measurable change that you have seen in Iran because of this maximum pressure campaign?

MR HOOK:  So I want to say that there have been three shipments in this first transaction of drugs that are related to cancer treatment and transplant treatment, and so they’ve been delivered and the transaction’s been processed.

In terms of the accomplishments, when you go back to the beginning – and we’ve had sort of the same strategy – the President announced it in October of 2017.  We updated it after leaving the Iran nuclear deal, but in its basic contours, it has been maximum economic pressure to both deny the regime the revenue it needs to fund its malign activities and to fund the work of its proxies.  It’s standing with the Iranian people.  We’re trying to get to a diplomatic solution through the pressure, but then it’s also restoring deterrence, and deterrence was lost under the Iran nuclear deal because there was an incentive for members of the deal to look away at the non-nuclear threats that Iran presented to international peace and security.

Being outside the deal gives us a great deal of freedom to call those threats for what they are and to address them.  The killing of Qasem Soleimani was only the most recent example of us making clear – and we’ve been doing this since, what, a year and a half now – making clear that there will be consequences if Iran attacks American personnel, American interests, partners.  And we promised decisive action and the President took decisive action.

So I would say our biggest accomplishments is the regime – it’s a kleptocracy.  It’s this Marxist theocratic kleptocracy, and it’s a weak economic foundation.  And so our sanctions are targeted very narrowly at the regime so it doesn’t have the money to spend as it usually does on Hamas and PIJ and Hizballah and proxies in Iraq and Syria and underground cells in Bahrain and the Houthis in Yemen, and their proxies are weaker today.  It’s all been documented by various news organizations.  The regime is facing a massive budget deficit.  I gave a speech at the Council on Foreign Relations documenting Iran’s economic condition, its – the state of its government budget, its limited access to foreign exchange reserves, and the massive tax that corruption places on the Iranian economy.

So I think all of those have been – that was before the killing of Qasem Soleimani.  I think we’re in a – we’re in a position of strength with the regime.  The Iranian people are standing with us.  You saw the video of them refusing to walk, trample upon the American and Israeli flags.  We see them tearing down banners that say “death to America.”  We’ve exposed the lie that the Iranian people would rally around the regime after our sanctions.  So we’re very pleased with the success we’ve had with our policy.

 

Treasury Press Release

The U.S. Department of the Treasury today announced the completion of initial financial transactions benefitting Iranian medical patients through a humanitarian channel in Switzerland. Iranian cancer and transplant patients are receiving treatments through this channel, which is subject to strict due diligence measures to avoid misuse by the Iranian regime. The successful completion of these transactions provides a model for facilitating further humanitarian exports to Iran. Efforts to establish this humanitarian channel, in coordination with the State Department, were previously announced on October 25, 2019.

“The United States is determined to ensure the Iranian people have access to food, life-saving medicines, and other humanitarian goods, despite the regime’s economic mismanagement and wasteful funding of malign activities across the region,” said Secretary Steven T. Mnuchin. “This Administration has full confidence that, together with our partners abroad, this mechanism will improve the flow of humanitarian goods to the Iranian people. Humanitarian transactions are currently allowed under our sanctions programs, and we encourage companies to use this humanitarian mechanism. We would like to thank the Swiss authorities for working with us.”

The United States has a consistent policy of maintaining broad exceptions and authorizations allowing for the sale of agricultural commodities, food, medicine, and medical devices to Iran.  For more information on the humanitarian mechanism and recommended measures for improving transparency for trade with Iran that is excepted from U.S. sanctions, please refer to the guidance published on the Treasury’s website on October 25, 2019.

 

Statement by Secretary of State Mike Pompeo

In response to the Iranian regime’s series of provocative nuclear escalations, the Department of State designated the Atomic Energy Organization of Iran (AEOI) and its head, Ali Akbar Salehi, pursuant to Executive Order 13382, which targets Weapons of Mass Destruction (WMD) proliferators and their supporters.  The United States is committed to taking any action necessary to prevent Iran from acquiring a nuclear weapon. 

AEOI and Salehi were designated for having engaged, or attempted to engage, in activities or transactions that have materially contributed to, or pose a risk of materially contributing to, the proliferation of WMD by a foreign country of proliferation concern.  AEOI has played a leading role in Iran’s nonperformance of its key nuclear commitments, such as exceeding the limits on its uranium stockpile and enrichment levels.  Ali Akbar Salehi, the head of AEOI, personally inaugurated the installation of new, advanced centrifuges as part of Iran’s recent effort to expand its uranium enrichment capacity and chaired a ceremony at which Iran started injecting uranium gas into advanced IR-6 centrifuge machines.  

The United States also renewed four nuclear restrictions on Iran for an additional 60 days.  We will closely monitor all developments in Iran’s nuclear program and can adjust these restrictions at any time.

Iran’s continued nuclear escalation underscores the serious challenge the Iranian regime poses to international peace and security.  The time is now for the international community to stand together against Iran’s nuclear extortion.  If the world is concerned with Iran’s behavior now, it should consider how Iran would behave with a nuclear weapon.