Sanctions are put in place afterward . That is a gray area. It is a detail, and i realize it is not the biggest issue, but it does create concerns about people rushing in now to establish contracts, which we see happening now. Senator, i dont think that is an unimportant issue. I wouldnt describe it as a detail at all. I think it is essential. Companies could enter into contracts and then somehow be protected against snap backs, then we would have a very weak snap back indeed. We were in tent not to let that happen. Iran may want to put grayness into the issue, but they understand the issue as well. When sanctions are lifted, the business allowed by that lifting can occur. If sanctions are snapped back, any protections on an existing contract or a new contract are sanctionable. Our friends in the u. K. , france, and germany understand that. If there is any doubt, i want to remove it today. Senator if we could have a letter from the other parties that agree to that, that would be helpful. If you could get the other parties, including china and russia, to agree that is the case because we are getting very mixed i think it would just help us, to some degree, at least with people who are on the bubble about the issue. Ambassador sherman i spoke with the u. K. Ambassador to the United States this morning. I know he has talked to many of you. He shared with me and email an email that i believe he sent to your office about this. He said that in fact he is committed, and you are committed to snap back and to the ability to apply sanctions for other forms of an acceptable activity. He also said to me on the phone this morning that he absolutely understands, all europeans understand and helga schmidt, the deputy of the europeans high Representatives Office just held a meeting to affirm the very fact that you questioned, that indeed companies have no grandfather clause whatsoever. Senator thank you, senator corcoran. Senator graham. I appreciate senator corcorans concerns about this issue. The military option, obviously, is always on the table. Its a political agreement that any party can obviously pull out of, just to make that clear. Again, i appreciate senator corkers comments. Im not sure about the analogy of 50 versus 100. I want to get to that in a moment. I dont know if analogizing that to the size of our economy really gets us anywhere. But that aside, lets talk about sanctions release and this is the jurisdiction of this committee and the primary area of jurisdiction. I know you opposed, secretary sherman, a pay for Performance Model in the iran agreement, and i would like you to discuss, generally, the steps iran will have to go through before receiving any new sanctions relief under the agreement on implementation take, if you would walk through that with us. Ambassador sherman sure. Iran has to uninstall two thirds of its centrifuges. It has to get its stock pile down 98 from 12,000 tons to 300. It must take the core of the iraq reactor out and fill it with concrete so that is unusual unusable. It must set up with the iaea all of the verification processes. The iaea must have access on a 24 seven basis. There will be Realtime Data transmission. There will be electronic monitoring so that the iaea will know if something is tampered with in real time. The iaea will have eyes on production for 20 years. For 25 years, the iaea will have eyes on uranium from the time it comes out of the ground until it is milled, from its mining until its milling, conversion set into gas so that they will not be able to divert one ounce of uranium, one portion of uranium. We will always know where goes. I wrong, in essence iran, in essence, would have to create an entire new supply chain covertly to get a Nuclear Weapon. In addition to all of these new measures which have to be put in place, iran has to take all of the steps the iaea requires on pmd. That is supposed to happen around october 15, adoption day as opposed to implementation day, so even sooner. All of these things have to take place and all of these are detailed in annex five of the agreement, before there is any sanctions relief whatsoever. All sanctions relief is a lifting, not a termination. Termination comes 20 years later or when the iaea reaches broader conclusions, meaning they have no undeclared fifth ladies and undeclared facilities, and they can certify that their program is completely peaceful. Senator if you could certify what sanctions remain in place that will help us manage, combat, eliminate as much as possible, various activities in terrorism in the region. Within that answer, if you could talk about the 50 billion figure, why it is 50 and not 100, in terms of obligations. Second, if you could speak to the 500 billion i think you used the term hole in the iranian economy, what that pressure is on their government to supply domestic needs as some of this money is available. Absolutely. The sanctions regime that remains in place to combat terrorist activities, their support of has a lock, the ongoing violence in yemen, their support to shia militants in iraq, their support in syria, that sanctions regime fully remains in place and it is very extensive. It is an ongoing authority that we have, that the europeans maintain, and that many of our allies maintained to go after these actors. Senator if i could interrupt, you are confident our allies stay with us on those sanctions, unlike suggestions we hear from others that particularly china and russia will not be there with the broader sanctions that take place overall. One does need to distinguish. When it comes to irans regional activities, there is a coalition of countries that are highly concerned and working alongside us. Increasingly, we are seeing cooperation from the gulf countries who for obvious reasons are increasingly troubled by irans activities. We saw a number of hezbollah leaders just a few months back the concern is very high. But our concern about hezbollah, i dont want to mislead the committee, is not shared worldwide. I dont think we will see china and russia stepping up in the way we have seen our allies in europe, in israel and the gulf, with respect to a lot of these regional interventions. Senator secretary sherman, the singular goal that we have discussed of the five plus one negotiations is to make sure that iran does not obtain a Nuclear Weapon. Many of the opponents to this agreement have talked about the dollars that have been that will be available because of the lifting of sanctions and what discord and terror iran could sow in the region. Speak to what the administration is doing to combat that. Ambassador sherman indeed, we share the concerns this committee has and our country has about irans activities in the region. Not only will he have all of the sanctions rules tools that were laid out, but iran has but obama has provided more security to israel than any other president. Every president has held on the efforts of the previous president , but this president has offered the most assistance. This president has commissioned technology that allows us to take action in iran in a way no resident has before. And to ensure we have the options that we need to commission and deploy those options. In addition, as you know, the president had all of the goal Cooperation Council to the meeting at camp david to talk about how to develop security for the region and the regional strategy. That has been fold up with a meeting that secretary kerry just had in doha. It will bring more security to the region. I think that would help to better improve those capabilities, whether in training, intelligence sharing, having the right armaments to deal with these efforts, and really working coalition. I think we are all in common cause. This is quite critical and we will be following up on a daily basis. Secretary of defense carter was in israel. We are ready when ever the Prime Minister of israel is ready to discuss further enhancements. I neglected to answer. On the 50 billion we have a high degree of confidence that it is 50 billion. I know we have a classified session with you and the senate later this afternoon. Thank you. I would be pleased to. The reason the 100 billion figure has been out there is that there are 100 billion in foreign reserves that have been inaccessible to it. Some of that has been due to the sanctions, some of it because it is obligated, and some of it has been spent. One can list it on the books, but it is not there. Obviously, those latter baskets, the funds that have been spent and are now in place as collateral, cant be recovered, even when sanctions are lifted. What remains is about 50 billion to come back to iran. With that, one needs to keep the perspective of the 500 billion dollars or more that iran needs to meet fundamental needs in terms of unpaid military pensions and salaries, needed infrastructure, their oil sector, which is crippled. The final point i want to add how much of that 500 billion hole would be required to get the oil sector up and producing so they could bring the wealth into the country that they aspire to . Their oil minister has stated they require 160 billion to 200 billion just for the oil sector repairs alone. That is not to take their sector into the future. That is to take it back to the baseline and undo the damage. Across the economy, we see a seven year lag due to the sanctions. Upon sanctions relief in the middle of next year, the Major Economic sanctions abroad are relieved, it will be seven years before iran comes back to where they ought to be today. Even if they invested the money, it would take them that long . That wasnt a comment on the oil repairs. The oil repairs might happen in a shorter amount of time, 23 years. I need to get back to you on that. If you look at their gdp curve, and where it ought to have been, it had this radical break due to the international sanctions, and it only gets back in seven years to where it ought to have been today. The hole that they are in cannot be overstated. 50 billion coming back to them does not begin to meet the needs. Whats more, that 50 billion is not spending money. That is all of their freed up foreign reserves. No country is going to exhaust its foreign reserves down to zero, risking huge and stability instability to do so. We estimate that they will use it for their domestic economy and will need to leave some in reserve in the way any country would with its foreign reserves. Last question. Secretary sherman, many of us have raised concerns about the prospects of the u. N. Embargoes in iran and conventional arms being lifted in five years, and Ballistic Missiles in eight years. I know all of us would have preferred to retain these embargoes longer. Russia and china felt differently. Outline briefly what specific specific legal authorities remain in place to combat irans conventional arms and missile efforts. Ambassador sherman sure. We will be able to rely on other Un Security Council resolutions that levy embargoes. So, all of those remain in place. We will continue to work with over 100 countries around the world that have signed the Proliferation Security Initiative to limit imports or exports. The Missile Technology control regime also remains in place and will play a Critical Role in that regard. We have bilateral cooperative tools. We have ongoing sanctions in place as adam has pointed out, executive orders which authorize u. S. Sanctions on a foreign persons that contribute to the proliferation of missiles. We will make use of those executive orders. The iran, north korea, syria proliferation act connected to iranian ballistic and Cruise Missile activities and the sanctions of the 2006 provision of the foreign assistance act of the fine assistant act, iran amended in the iran proliferation arms act, all and impose sanctions on entities. The Un Security Council resolution that was just recently passed has not let the program off the hook. The current prohibitions on the supply of Ballistic Missile related items in place and are still required to prevent transfers of missile related items. They are still required to prevent provision to iran technology, technical assistance, and other services. They are still required to prevent transfers of Ballistic Missile of items that happen to pass through their territory. I can go on. There are about 10 things that it still continues to require states around the world to do. Frankly, yes. Would we have liked them to go on forever . Of course. We have kept them on far longer than iran, china, or russia wanted them to stay on. We have kept them on under article 41, chapter seven, which means they are enforceable. We have other Un Security Council resolutions and other tools unilaterally to make sure that where arms and missiles are concerned, we can keep moving forward in every way we need to. Thank you, mr. Chairman. enter to me senator toomey thank you, mr. Chairman. I thank the witnesses for appearing today. I want to go back to the issue raised by senator corker. Ambassador sherman, the Iran Nuclear Review act of 2015 is abundantly clear that congress is supposed to receive all the documentation, all of the agreement, annexes, related materials. It says right in the beginning referring to the transmission of agreements, the President Shall transmit to the impersonal appropriate congressional committees and leadership the agreement as defined in subsection hone, including all related materials. Subsection hone specifies that this agreement includes and i quote the last part of this any additional materials related thereto, including annexes, appendixes, compasses, site agreements, implemented materials, guidance, or other understandings, and any related agreements. I think that is clear that that is meant to be all encompassing. Yet we discovered that there is a secret side agreement, which presumably compliments that contemplates the previous dimension of activities, which strikes many of us as a very Important Information to have and evaluating whether or not future activities are in violation of this agreement or not. Now senator corker asks why you have not given us the documents. You said it was because we dont have the documents. Knowing this statute, the intent of the statute, and that the letter of this law, why did you not insist that this essential to enforcement document be disclosed . Senator, thank you very much for your question. As you point out, we dont have the document. The United States senate has every single document that the United States government has. Secondly, the reason we did not insist is because we want to protect u. S. Confidentiality. This is a safeguard protocol on the iaea protection of confidential understandings and arrangements between the United States and the iaea. I know you will say this is a different situation. I grant you that this is an International Understanding to try to stop iran from having a Nuclear Weapon, and that is a different circumstance. In the development of where the iaea was going, they did come to us for Technical Expertise as they came to every other member, and in a classified briefing this afternoon, i will share everything i know about this. I am also grateful that the director general on his own cognizance is meeting with the Senate ForeignRelations Committee in an informal setting. It is extreme he on usual, because every other country wonders why he is. You did not see the final document . I was shown documents, but whether there were other discussions you know, what this is about is about the technical modalities that the iaea uses, and i will share with you this afternoon in a classified setting every single thing i know about that, and i think it will give you great confidence that the iaea is doing what it needs to. I look forward to that. It is still disappointing to me. We are being asked to vote on an agreement in which the enforcement depends on a very important document that we are not allowed to see. It is not clear to me that you have read the final document, or anyone else in our government. You do not have it your possession. I have seen the document, as i said. As we were going to the technical discussions with the iaea, but what is important here, senator, ultimately what we are talking about is the credibility of the iaea, whether in fact we believe they are credible, independent, verifiable organization, which it is. They have done a superb job on the joint plan of action. All of those reports have come up here. They have done a very fine job. I have trust and confidence in their ability to do a fine job on the joint conference plan. Im glad you do. I think that is a document we ought to have before us. Let me ask a separate question. Paragraph 36 grants to either party the opportunity to walk away from this agreement. Anybody can raise an objection about what the other side is doing. After an adjudication process, if this objection is not resolved to the satisfaction of the claiming complaining participant, then the complaining participant can then so we walk away, either side. So iran for any reason that iran deems sufficient can walk away from the agreement, after they have their 50 billion or 100 billion, or whatever the figure is. Here is my concern. I am concerned that this dynamic creates a very this fact creates a very dangerous dynamic, one in which the administration will have a hard time enforcing anything other than a massive violation. Former secretary of state shultz and kissinger wrote a widely read piece that suggested that most likely if a violation occurs, it would not be a clearcut event, but the gradual accumulation of ambiguous evasions. So lets say we start to discover the gradual accumulation of ambiguous violations, which strikes me as possible. If we were to take any measures at all, any enforcement mechanism of any kind, iran could invoke paragraph 36 and say this is unacceptable. Since this administration has told me that the alternative to this is war, and so we have to have this agreement, and we have to make all these concessions after concessions after concessions to get this agree