WASHINGTON - Today, U.S. Senator Tom Udall chaired a hearing of the Financial Services and General Government Appropriations Subcommittee on the importance of sanctions in U.S. foreign policy and to ensure the U.S. Treasury Department's Office of Terrorism and Financial Intelligence (TFI) has the resources it needs to fulfill its critical mission. Udall also asked about the foreign policy consequences of a budget shortfall.
The TFI is a small, specialized unit of the U.S. Treasury Department, plays a critical foreign policy role, and is under the jurisdiction of Udall's subcommittee. TFI safeguards our financial system and implements congressional and executive branch sanctions against rogue nations, drug kingpins, terrorists, and proliferators of weapons of mass destruction. The office is in the spotlight now as it enforces sanctions during a key period in negotiations over the future of Iran's nuclear program.
Udall, who also serves on the Senate Foreign Relations Committee, specifically discussed the effectiveness of sanctions in Iran and the most recent sanctions in response to Russia's annexation of Crimea.
Udall said, "During this time, most sanctions are in full effect on Iran, and there are concerns that some companies are taking things a bit too far. So I'm interested to hear commitments that the sanctions regime is still strong."
"Sanctions can help achieve foreign policy goals, but they are a means to an end - not the end itself," Udall continued. "The United States Senate gave the president new tools to punish the Russian government for destabilizing Ukraine and seizing Crimea. I hope to hear more about these new sanctions - how they will be implemented by the Treasury Department to carry out our foreign policy goals with regards to Russia. And also how existing sanctions have worked with the Iranian government, using the right leverage, at the right time."
A webcast of the hearing is available HERE .
The following is Udall's full opening statement:
Good afternoon. I am pleased to convene this hearing of the Appropriations Subcommittee on Financial Services and General Government.
I would very much like to welcome our Chairwoman, Senator Barbara Mikulski, as well as the ranking member of our subcommittee, Senator Johanns and our other colleagues here with us today.
I also want to welcome our witness, Undersecretary for Terrorism and Financial Intelligence, Mr. David Cohen. Thank you for your service. I look forward to your testimony.
The Office of Terrorism and Financial Intelligence (TFI) is a small, specialized unit of the Treasury Department. But it is a critical component of our foreign policy. TFI safeguards our financial system and implements sanctions against rogue nations, drug kingpins, terrorists, and proliferators of weapons of mass destruction.
The employment and use of sanctions has changed greatly. In 2008, US sanctions against Iran were largely ineffective because of Iran's ongoing oil exports and trade with other nations.Since 2008, it's a different story. Congress has passed new sanctions against Iran. The administration has led an international effort to leverage those sanctions. The Iranian economy is crumbling; inflation is rampant, oil exports have been slashed, and the currency is in free-fall.
These sanctions brought Iran to the table. Not only are the United States and Iran talking, but with the four other permanent members of the UN Security Council and Germany, known as the "P5 plus 1," we have negotiated a Joint Plan of Action and are working to negotiate a final agreement to prevent Iran from acquiring a nuclear weapon.
This is an important example. Sanctions can help achieve foreign policy goals, but they are a means to an end - not the end itself.
The progress in Iran is also a reminder. Sanctions can be implemented in many different ways. It makes a large difference in the outcome, depending on how we use this powerful tool.
A great deal depends on who is pursuing the sanctions. Analysis shows sanctions are most effective when more nations are enforcing them. Unilateral sanctions are less likely to be effective.
And also, effectiveness depends on when we use them. If sanctions are applied at the wrong time, such as while our negotiators are working to iron out a deal. The Administration has strongly urged Congress to hold off further sanctions on Iran at this sensitive time because it could derail negotiations and limit our options.
During this time, most sanctions are in full effect on Iran, and there are concerns that some companies are taking things a bit too far. So I'm interested to hear commitments that the sanctions regime is still strong.
Properly applied, sanctions can work. We have seen this in Iran. And we have seen a renewed interest in sanctions as a foreign policy tool.For example, last week, in response to Russia's annexation of Crimea. And continued defiance of the international community. The United States Senate gave the President new tools to punish the Russian government for destabilizing Ukraine and seizing Crimea.
I hope to hear more about these new sanctions. How they will be implemented by the Treasury Department to carry out our foreign policy goals with regards to Russia. And also how existing sanctions have worked with the Iranian government, using the right leverage at the right time.
Elsewhere, there have been failures, such as the sanctions against Saddam Hussein's Iraq. And the ongoing failure of Cuban isolation that has continued for more than 50 years. They are a reminder too - sanctions should be used in concert with diplomacy and other efforts.
This committee has an important oversight responsibility: ensuring that federal funds are spent wisely for the American people. We have two basic questions. What are the funding requirements of TFI to fulfill its critical mission? And what is the consequence of a shortfall?
I have the honor of chairing this subcommittee. And serving with Sen. Johanns, and I look forward to working with him on this topic.
I now turn to our Ranking Member, Senator Johanns, for any remarks that he would like to make.
