Program. Sanctions policies also playing a role in the fight against terrorist organizations, including the islamic state. For all those reasons and more, im pleased to have jack back at this table. Welcome. Jack great to be with you. Charlie give us a sense of what sanctions have achieved and not achieved in our history. Jack if you look at sanctions, theyve evolved dramatically from what they were before. They started out as kind of blunt instruments. An example is an embargo on cuba. Cut off a country. If you do it alone and you do it without the support of the world, it doesnt work very well. It doesnt change policy. The purpose of sanctions is not just to inflict pain, its really to get a government, a sovereign state, to change its policy. You look at what weve done in the last 10 years, iran is obviously a central example. By working systemically to bring other countries along and to work as a Global Community and to put pressure on iran, it actually changed irans calculus. Iran decided to come to the table and to negotiate, to remove its work, to back away from its work on a Nuclear Weapon. And in return we have agreed to lift Nuclear Sanctions. Now, its not an easy thing to do. Its not easy to say a country that supports terrorism, were going to relieve the pressure weve put on them. But how do did we put the pressure on them . We put the pressure on them by getting the whole world to agree that it was a threat to the region and to the globe for iran to get Nuclear Weapons. And we got a diverse range of countries, including china and india, that are very dependent on iranian oil, to cooperate with us. And it was only because of the pressure that came from the world standing together with the United States at the lead that iran felt the pressure in a way where they ultimately were willing to negotiate away their Nuclear Weapons program. What weve learned from that is how important it is to work on an international basis. How the pressure is greatest. Weve also learned how important it is that when you have an agreement, thats predicated on change your policy and get relief from the sanctions, there has to be relief from the sanctions. Otherwise no one will ever respond to a sanctions regime by changing their policy. Charlie and the argument is made that it will be very, very difficult, if iran ryevates the policy, that theyve violates the policy that theyve agreed to or their behavior that theyve agreed to, to put the sanctions back together. Because it was so difficult to put them in place in the first place. Jack i dont think thats correct. Charlie that argument is made. Jack the argument is made but one of the really important features of the iran agreement is that we have retained the ability to snap back sanctions, both u. S. Sanctions and International Sanctions charlie but can you get the International Community to agree . Thats the question. Jack at the risk of getting into the details, the way the international snapback was constructed, if iran violates and if that violation is brought to the u. N. , we could veto any effort to stop the snapback. So it is very much incumbent on iran to keep its agreement. Now, i am very much of the view that we have to keep pressure on iran in areas like their support for terrorism. To change their behavior. These past few days weve designated entities in iran and around the world that have supported irans development of missiles, which we believe are unacceptable. Which have supported Iranian Airlines that ship for the irgc. Charlie these werent snapbacks, these were new sanctions. Jack these were new designations. The Nuclear Sanctions were lifted, the other sanctions stay in place. Cot Nuclear Sanctions come back if they violate . Yes, they could. Charlie what sort of community would agree to that . The community of nations that came together jack there would have to be a real violation. What we cant do and what ive argued to congress is you cant, in the name of one, pressure iran on other issues, bring back the Nuclear Sanctions fazz you didnt have an agreement. The agreement is iranbacks iran backs away from a Nuclear Program and the other sanctions are lifted. Wove made it clear the other sanctions would stay in place. Iran is not the only country thats subject to sanctions right now. We have a very important set of stankses sanctions in place with regard to north korea. With regard to russia. And with regard to north korea, heres another lesson on the importance of international cooperation. China worked with us at the u. N. China is the neighbor to north korea. They have more influence over north korea than any other country. They worked with us at the u. N. And we have since that u. N. Resolution had our teams working with the chinese to execute against it and to implement it. In the case of russia, russia is one of the u. N. Security Council Permanent members. We have sanctions against russia working with our g7 partners and others around the world. There are multiple ways to work. The International Community charlie heres whats interesting about that. Secretary kerry just returned from moscow where hes trying to work something out with vladimir putin, the president of russia, about syria. So hes there trying to work out something about syria. At the same time that were imposing sanctions not only on russia, but on some of their leading friends of the president. Jack the reality is, we are working with russia, we worked with russia on the iran negotiation. They were part of the negotiating group. Charlie the president said they were very helpful. Jack they were helpful. Were working with them, trying to change the conditions in syria. But were also making it clear to them that their aggressive saxes to take crimea and to move in Eastern Ukraine are unacceptable. And the sanctions that we put in really reflected a highly sophisticated way of putting pressure on the government in ways that they noticed, that are having a real impact. But without causing the kind of Collateral Damage to europe or the Global Economy that would have made it harder to get the collaboration with other countries. Charlie youve heard all these arguments, i know, when people talked about the iran agreement and were critical of it. They all said, look, whatever you think about the agreement were getting, and there were lots of differing views in terms of the benefit to the United States, and whether it would truly inhibit iran, but they also said, you know, by eliminating these sanctions, youre giving them at least 100 billion in which they can use for an engagement in all these behavioral things that we object to. Jack well, first, the number is not as big as people think it is. The not really 100 billion. Because a lot of that money is locked up and cant go back to iran. Theres maybe 50 billion that thee letically could go back but thats the money they need to do international trade, they have to keep foreign reserves. Irans own estimate is theres maybe 30 billion that they could bring back. Theyve had difficulty bringing that money back. Theyve had difficulty reengaging with the Global Financial community. Weve actually made the case that the sanctions are lifted and been clear that that money is money that they do have access to. Weve also made clear that if it goes into the wrong hands, if they support terror, if they support regional destabilization, we reserve the right to go against that separately. One of the things that ive made this case to congress and i truly believe, at the height of the sanctions program on Nuclear Sanctions, they were still supporting terrorism and regional destabilization. Those sanctions didnt stop all of irans bad activity. So the notion that you can take it to zero wasnt even true under the most severe sanctions program. What we know, what we know, is that irans domestic needs are enormous. Hundreds of billions of dollars of domestic investment that they need to get their oil industry able to produce at historic levels. To pave their own military pay their own military that hasnt been fully paid because they dont have the money. To provide services to their citizens. Everything we hear is that the domestic needs are enormous. I am going to do everything i can to keep track and to take action, if we see money going to malign activities. But what weve got out of the iran deal is of critical importance. We got iran to back away from all the pathways to developing a Nuclear Weapon, they have a much smaller and peaceful Nuclear Program, we will see if they cheat, we will take action if they violate the agreement. I think the world is a safer place. I think the region is a safer place. With iran backed away from a Nuclear Program. And the sanctions were put in place to accomplish that, did their job. One of the points i will make in the speech is, if you want sanctions to work, if you want countries to change their behavior, when they do what youre telling them to have to do, there has to be a response. Theres no person or institution that will respond the way you want if that doesnt happen. Sanctions wont have any effect. Charlie is this sanctions policy that you will announce in this speech, and add to our understanding of sanctions, also part of this argument that e United States has many arrows that are available to it in terms of response to practices that we dont approve of, and we object to, and its not always necessary to make it a military response. Jack one of the things that i think is very important is we have developed these economic sanctions as a way to give the current president and future president s tools to choose what tools to use when they need to confront situations that are just unacceptable. I believe that military force should be the last, not the first, resort. And having a variety of options, i think its critically important, especially in when theyre powerful and effective. One of the things we have to be careful about is when we talk about the use of force, we understand that it has a lot of consequences. It also has consequences when you put sanctions in place. It has consequences in terms of the direct impact and the indirect impact. In terms of how other countries in the world fare economically. We cant shy away from using sanctions because it will slow down growth. But we cant do it frivolously either. We have to do it in a way thats very clear headed. That doesnt treat it as being some sort of light treatment. Its a serious step and its something that has to be guarded in order to have it in the future when you need it. Charlie one of the criticisms of sanctions in the past has been youre not hurting people who make decisions in a country. You are hurting the people who live in the country. Jack i think the old broadbased sanctions had that problem. And it also hurt our own country, cutting us off from trade and commerce. I think if you look at the russia sanctions, theyre very targeted. Theyre targeted at the centers of power, where the decisions are being made, and theyre targeted at the key industries, particularly sectors that are highly dependent on technology and other collaboration with the west, like finance. I think that what weve done has caused a real impact. Im not going to pretend the current Economic Situation in russia is all due to sanctions. Low Energy Prices are clearly a major factor. But without lower Energy Prices, the sanctions have had a real impact. Its not low Energy Prices that are making it hard for russia to obtain financing internationally. I think that what weve done in the case of russia actually proved the point im making. There were some who at the time we were designing the ukrainerussia sanctions were saying, do everything all at once. Now, if we had done everything at all once, europe would have been very, very hard pressed to go along with us. Because it was going to have a much bigger impact on europes economy than on the u. S. Economy. But doing it in an incremental way, by doing it in a targeted way, we have kept a unity between the United States and europe that i dont think russia expected. In the case of the iran sanctions, doing the Oil Sanctions incrementally, putting them in place so that china and india could adjust over a period of time, kept them with us. Its easy to stand up and say, use all your ammunition right at the start. But you wouldnt do that in war and you shouldnt do it with sanctions. Charlie just tighten the pressure. Jack you tighten the pressure and show youll ratchet it down if theres a change of behavior. Charlie do we assume sanctions were part what have led to the great change in south africa . Jack i think economic pressure did lead to the change in south africa. And it took a very long time to put an International Consensus together. I think that things like the jackson amendment helped to change russias policy on its human rights policies, particularly with regard to soviet jews. We learn from each of these that there are ways to change how countries think. You cant mandate what another country does. You cant change the way they make their decisions. You can change the incentives. You can change the structure. And i think that by doing it internationally, by doing it in a way that shows well go up and down, depending on the response, weve made it clear that theres a rational set of decisions to be made. Obviously in the case of russia, theyve decided they can endure a lot of pain. Charlie they have. Jack i dont know how long that will last. But what weve also said is if they continue, the sanctions just by virtue of time get more severe over time because time makes them mount. They wont go away unless russias changing its policies. Charlie so far youve not seen a change in russias response because of the sanctions we have imposed . Jack i think we probably have seen a change. We havent seen a complete correction. What russia needs to do is implement the accord. Charlie they say the same thing. We need to implement that accord. Jack but they are the ones who have to take actions to do it. Obviously ukraine has to take actions as well. I think ukraine has shown its willingness to take actions. And russia charlie the government of ukraine. Jack yeah. The government of ukraine. I think that its hard to say what russia would have done absent sanctions but i think its clear that theyre trying to explore a way to not have it get worse. Charlie help us understand how it looks. If in fact youre a country that imposed sanctions, and youre cut off from International Markets and youre cut off from International Sources of finance, and give us a sense from their point of view what it is, it does to their economy, that might change their policy . Jack it affects the economy both in the financial and the real economies. Charlie you cant sell your products. Jack if you cant acquire the technology you need, you know, for a country like russia, for them to do the kind of deep, Arctic Drilling for oil that need ed, they international cooperation. Its a big deal to their economy. Right now with oil prices low, you might think that thats a thing of the past. But arctic drill something about the future. Its not about the current. Its longterm planning. If you need to issue bonds and you want to do it in dollars or euros, your ability to do so is limited. Weve made it very much much more cumbersome for them to do it legally and because of that, there are some who wont theres things that banks are told they cant do, and then theres other things they choose not to do. Just because they dont want to get close. Charlie how much violations have there been of the sanctions against russia . And the sanctions against iran . Before they signed the nuclear deal . In other words, were people willing to risk penalties, because there was money to be made and economic advantage by carrying on trade . Jack one of the things we worried about a lot with the russia sanctions was not creating spaces where we are or another country would step out, another country would step in. To move together, so that you wouldnt have what we call back fill, where without concerted, unified action, theres relief essentially. Because you deal with countries country y instead of country x. By working closely with our partners around the world, weve limited that quite considerably. Charlie how much support for sanctions from china . In other words, how often does the Chinese Government support you in the imposition of sanctions . Jack china has a view that the multilateral sanctions are the right way to do it. And i think working with us in the United Nations on the north korea sanctions, it was a very important statement. Enacting sanctions in the u. N. Is step one. Implementing them is step two. Since the u. N. Security council acted, weve had our senior officials in china meeting with the chinese about implementation. I think thats very important. They worked with us on iran charlie what about the sanctions with iran and russia . Jack they worked with us on iran. And they were part of the 5 p5 plus one. There were japanese entities that were violating and weve taken action. But in general, they have been part of the international ffort. Charlie at the extent that you would prefer they be part of the International Effort. Jack i think that the fact that they cooperated with us on the Oil Sanctions against iran was very important. I think the fact that theyre part of the International Effort on north korea is critical. Are there things that they could do to toughen up on how they look at what happens between their eco