[inaudible conversations] larry metz remarks from treasury secretary jack lew. Hes expected to discuss Lessons Learned in these distinctions on international inc. To tease. Hes speaking at the Carnegie Endowment for International Peace did we expect this to start in just a moment life here he spent two. Cspan2. It is a great pleasure to welcome all of you here this morning. A special pleasure to welcome my friend and colleague, secretary of the treasury, jack lew. But the open above the market that promise to make the introductions very worried the distinguished career and all of you know what an enormous mark is made on our country. Im not even referring to the idiosyncratic signature on the dollar bill. A handful of people who have served including a series of important jobs that the department is in a common management and budget and not treasury. Only a person of extraordinary conviction, integrity and it is only secretariat jack lew can coop attended this year. During our time together at the state department, and i grew to admire enormously checks go in that community. He is a magnetic force. A brilliant but attractive problem with the precision and steady hand of a surgeon. He embodied tip oneills charge to take the job seriously but not yourself in a truly embodied everything one could ever want. Secretary lews experience was across the executive ranch, making him uniquely suited to talk about the past and future of the u. S. Sanctions policy. My own 33 years in Diplomatic Service would become smarter, sharper, more strategic. Ive seen them affect me in total avail. Ive heard concerns from our own Business Community about the effects of sanctions and competitiveness and about the risk to the health of the economy and criticisms about the weaponization of finance and words of praise and thanks from activist to Senior Leadership change course at least in part to sanctions. The call policy tolls, sanctions have Great Potential in the next. As the resume power a new economic actors reshape the International Political landscapes, its only appropriate to pause and reflect how we might be this true in the future to best effect. We could not ask for a better person to help us think through this important question. I hope youll join me and give me a warm welcome to the secretary of the treasury, jack lew. [applause] thanks so much for that very kind introduction. As you now, ambassador burns and never close colleagues at the state department. Hes one of the great diplomats of our day in his good friend. He is here with all of you today. Id like to thank the Carnegie Endowment for hosting me this morning. They done so much to strengthen understanding of International Affairs in the nation to the difficult National Security issues. As we continue to confront complex global challenges in the months and years ahead, your work will remain vital to our efforts. 75 years ago, one day after germany invaded norway and denmark, president roosevelt established an office of the Treasury Department to freeze the assets of the governments of norway and denmark and eventually the assets of many other u. S. Allies. The executive order signed on the day in 1940 prevented from seizing the assets of terror spread across europe at that time, but threats changed in the International Economy has involved a move or find capacity to sanctions. Not that long ago, conventional but then dismiss sanctions upon an effective instrument. The old model of old model of the countrywide embargo which provided little flexibility with innocent civilians close in the targeted countries and here at home. At the same time, early efforts to ensure humanitarian but they fell short of the goal. The sanctions we employed today are different. They are informed by financial intelligence, strategically designed with public and private partners to focus pressure on back or even create clear incentives while limiting collateral. Recent sanctions program of the listed groups including narcotics traffickers as well as shattering companies and stopping facilitators and traveling. Sanctions concentrated that mimic lowpressure abusing their own population in places like sudan, burma and libya. They form the internationally sponsored russia and ukraine can muster not to play with the International Community we put in place sanctions that impose massive class on in helping to bring it to the negotiating table and culminated in a comprehensive understanding that both active Nuclear Program and ensure that it is and will remain useful. Economic sanctions have become a powerful force with clear and coordinated Foreign Policy objectives. Smart power for situations where the end military force, not the on. They must remain a powerful option and that is why the lessons weve learned from our experience need to guide our approach to sanctions and we must be strategic in how we apply sanctions challenging the situations around the world. The power of our sanctions is inextricably linked to a leadership all over the world. They should interpret the context of our conditions somewhat lethargic economy and the predominate role of the u. S. Financial system plays. We must guard against the impulse to reach her sanctions where they will have impacts. And the with the overuse of sanctions and undermine Leadership Vision within the Global Economy and the effectiveness of our sanctions as well. While every situation will require an approach come at the underlying goal of the law sanctions in the effort to change behavior, sanctions are not meant to dole out punishment for past action through their intended to keep up with the context out of our system and create pressure to change future behavior. The foundational principle is different which are meant to address. Building on its principle, three bbravo lessons across a wide spectrum. First, we learned that sanctions are most effective at changing behavior when we were close with our partners to build a port for common object is. The more International Support there is her sanctions and further underline the fact is, the more effective they will be. We learned this lesson of the last decades of our unilateral embargo in cuba. Not only did we feel International Support, we saw our closest partners like canada and the European Union enacts legislation forbidding Domestic Companies and following sanctions. As a result, foreign subsidiaries of u. S. Companies were subjected to ball and we were at odds with many neighbors in latin america. The outcome has been an effective sanction. We have the best chance of success when Government International bodies align their sanctions. In some cases, u. N. Security Council Resolutions that the best way to reach content is as we achieved in december against isaf and last month again to you. The best approach may involve sanctions by the g7 or an Informal Group of allied countries. While it must always reserve the right to act alone to protect the National Security, unilateral action should be the exception, not the rule. Our sanctions against iran Nuclear Program at the most powerful example of how broadbased effort coupled with serious he can proceed. As i went Nuclear Ambition to focus and repeated the deprived calls of the international accord, successive administration has been trying to change the calculation through various tools of Foreign Policy including sanctions. The United States began by imposing its own sanctions and own sanctions on complicit iranian banks and businesses but it quickly became clear we needed to work with partners around the world to shut down safe havens and increase pressure on irans economy. We travel to explain the threat posed by ambition and with support for common action get allies in the European Union, canada and oster alea is a country with close ties with china, russia and india. By 2010, for annuity security Council Resolutions raise pressure on iran economically in the world banks are increasingly weary of participating in iranian transactions. The u. S. Congress and the administration were together to amplify the pressure, implementing measures that can very sanctions that threaten Foreign Companies to serious penalties for offshore transactions even if no u. S. Persons were involved. The new measures targeted Irans Crude Oil sale, Financial System and other key sectors with the iranian economy in the Nuclear Program. Working with governments and banks around the world come to sanctions on iran had a powerful effect. They damaged irans few remaining ties to legitimate initial systems. The next step is to slow down irans oil revenue. An immediate halt to all it ran an oil text for wouldve looked much tougher than an incremental approach that is what is imposed an intolerable burden like china, japan and south korea wouldve likely fail from the start. So the sanctions pressed the International Partners to ratchet down their important every six months over two years to the efforts resulted in the 60 drop in the most expert putting massive pressure on iranian government revenues while preserving the option to further read by pressure. By building pressure over time, we maintain broad International Support, maximize impact and effectively restricted or blocked nearly all of the central bank of the foreign reserves. Ultimately irans choice pursue an illicit Nuclear Program or rejoin the Global Economy. In 2012 we opened a narrow window to see the diplomatic solution was possible. That possible. Back when bill prince and deputy secretary of state and i served as white house chief of that, we broke up a small group. The process which was set which was about idea raining people guide to which froze nuclear can be the diplomatic efforts by secretary kerry as well as former undersecretary Wendy Sherman with the support of the department of state treasury and energy in our International Partners we should try to comprehensive engagement to cut off pathways of Nuclear Weapons and the threat of further destabilization. The goal of sanctions is to pressure bad actors to change their policy. They must be prepared to guide relief. If the followthrough we followthrough we undermine her credibility and damage our ability to sanctions should drive policy change. The experience with iran demonstrate that difficult this can be, essential as it is very to achieve its goal of lifting sanctions, iran had to accept a comprehensive nuclear deal is to help achieve on change in iran calculation and that in and give coupled with tough print above diplomacy worked. If tehran cap defended the deal, the responsibility to uphold ours. This reason it is vitally important in vitally important indentation debris lifted the sanctions that profit to provide guidance to make clear where congress can resume. The implementation weve engaged in widespread global outreach to help governments and businesses provided them critically sanctions in place. We can support terrorism and regional destabilization and human rights violations. Irans Nuclear Program poses a special threat to Many Companies have globally and for countries that get to a potentially at essential threat. Theres no question that removing the Nuclear Threat can make the region and world safer. As attorney general knows, and i put it, without a doubt the nuclear joe between iran and historic turning point is a big change in terms of the direction that everyone was headed and in the way that we saw. Following through the other actors changing behavior. Two years ago when regrets in life and matched in Eastern Ukraine and occupied, it was clear that the world needed to raise bond. It was also quickly apparent that economic sanctions to be the most superb route to respond. While it u. N. Security Council Major is on through the u. N. Security council impossible, work is other likeminded partners the International Plan to respond to russia with the gold a change in russias policy choice. Russias economic promise of Global Financial and powerful sanctions would need to be carefully designed to avoid consequences and spillovers in the Global Economy. While some call for it to respond with every intersections arsenal, president obama developed a coordinated concert with our allies that would deliver strong but measured pressure in which good preserve our options if they ratcheted up or down over time, depending on russias behavior. We moved quickly to impose sanctions on key officials in the crisis in ukraine with a particular focus on the inner circle of russias leadership and associated company. In broader measures, we sat at asymmetry, the russian by don the financing with the smallest possible spillover effect on us, our allies in the russian people. The impact has been significant. Sanctions have contributed to financial initiatives of our investment in russia. While russias very deep economic amplified a dramatic drop in oil prices, targeted sanctions have worked imposing gray costs on russia with the limited macroeconomic effect of the u. S. And european economies. The password will depend on russias economy. Russia has made commitment in the sanctions will be lifted. If not, sanctions will continue along with the pressure they imposed over time. A third lesson we have learned is they are in is shown not to be effect is, sanctions programs required an investment in infrastructure to support and implement efforts. Powerful sanctions require investigators and analysts to track how key actors move and store their money and build detailed cases drawing on intelligence analysis. They rely on investigating violations and penalties. Targeted sanctions means the commitment will be freezing assets and separate access as a powerful step that requires decisions to be appropriately reviewed in reverse where appropriate. This requires a careful review of evidence in a rigorous legal process. Finally using mice and as we can protect against unintended effects on the innocent. To authorize exports of food, medicine and medical devices as we did in the aftermath of the earthquake in iran and burma. Here at home, we spent decades building a system to them to implement sanctions and foreign governments to understand how sanctions applied to a complex range of industries and transaction. We were closely to maintain Twoway Communications with companies wellpositioned to observe the effect of our sanctions and often assess where they can be approved. This behind the scenes for this but its an effective program. We need more partners internationally to help which is why we are working to build capacity in countries around the world. At the outset it ensures sanctions primarily inaccurately targeted continues inevitably seek to evade sanctions. Internationally we must work with the council and expert Monitoring Team in the task force with the best practices to deal with a list of those. They have the most developed capability combining intelligence, regulatory and worse than under one roof. We need to enhance and it will work with counterparts in other government to build their own capability. We must take the Lessons Learned and apply them to the critical threat of today and tomorrow like north korea and no lesson is more important when it comes to north korea than the need for International Support. The United States were closely with china and other members of the u. N. Security council this month unanimously adopt a resolution that significantly ratchet up the sanctions on pyongyang and underlined the north korean regime the result of the International Community that stops it Nuclear Missile program. The president then issued an executive order to implement the resolution and astrologist nation passed a congress. Taken together, these multilateral sanctions will increase the pressure on north korea and several key Economic News including banking, transportation, mining and metal in labor. We are mindful that north koreas leadership has prioritized Nuclear Weapons over just about anything else including Economic Growth of the daytoday lives of its own people. It is precisely because of that we must work closely with china and others in the region to ensure a strong implementation of the new sanction only with Robust International cooperation can we convince pyongyang to ch