Transcripts For CSPAN Asst. Treasury Secretary On Iran Terrorist Financing 20240714

Talks about efforts to counter irans Illicit Financial Networks. The Atlantic Council hosted this our 20 minute forum. [indistinct chatter] william hello, everyone, and welcome to the Atlantic Council. Welcome to everyone here and those watching on cspan and our livestream. My name is william wechsler, and i lead Atlantic Councils work on the middle east. Im delighted to welcome you to an event cohosted for strategy and security and our Global Business and economics programs initiative. This event is on the record, and please tweet if you are so inclined, and if so, use the hashtag shapingsanctions. Today, we are here to learn more about hezbollah and its finances. Hezbollah is one of the most sophisticated terrorist organizations and stabilizing factor in the middle east. Organizations in the world, and a key destabilizing factor in the middle east. Iran reportedly provides the terrorist group with hundreds of millions of dollars annually. This money has advanced the iranian agenda, undermining lebanons political system and balance, challenging the Lebanese Armed forces as the sole legitimate protector of the countrys security, providing ondemand proxy Ground Forces for irans more in syria, maintaining top terrorist capabilities in the region and around the world, and directly threatening israel. But in relation to its direct financing from tehran, hezbollah has built its own world of financiers that facilitate the procurement of weapons and dualused goods for its activities in lebanon and around the world. Some hezbollah senior members have engaged directly in illicit activities that bring the group and themselves additional revenues, including narcotics trafficking, and practically every kind of global crime. In his remarks that we will hear today, Marshall Billingslea, the assistant treasury secretary for terrorist financing, will address how the Trump Administrations maximum Pressure Campaign against iran has targeted hezbollahs Business Operations, including direct transfers from iran and independent global illicit activities. Clear signs have already emerged that this campaign has been successful in limiting the revenue currently available to hezbollah. Time will tell if those limitations will diminish their ability to fight in syria, undermining lebanon, threatening israel, and continue to maintain perhaps the worlds most strategically worrisome terrorist network. After, marshall will be joined by a National Security correspondent for a brief moderated discussion from the washington post. They will then open the forum to the audience for questions. There will be microphones around the room. I do have to stress that when asking questions, please, make them brief, and as said in jeopardy, in the form of a question, not in the form of a monologue or soliloquy. Before i hand over the podium, let me close by saying a few words about our two participants. Before becoming assistant secretary of treasury, Marshall Billingslea was managing director for Deloitte Financial Advisory services, running its federal Business Intelligence group. He previously held a number of government positions, including deputy under secretary of the navy, assistant secretary of nato, Principal Assistant secretary of defense for low intensity conflict. He also served as a staff member on the Senate Foreign relations committee, he holds degrees from dartmouth, and the fletcher law of school at tafts. Miss ryan is really one of the washington posts best reporters. She covers the pentagon, the full range of military issues, and National Security in general. Before joining the post in 2014, she worked as a correspondent with reuters, including coverage on middle east correspondents but she has reported from egypt, libya, been on afghanistan, peru,an, mexico, argentina, and im sure im forgetting a number of countries. She was a white house fellow from 2012 to 2013 and is a graduate of Harvards Kennedy school and georgetown university. Please, everyone, give a warm welcome to assistant secretary billingslea. [applause] asst. Sec. Billingslea good morning. Thank you for those kind words. Ambassador, good to see you. It is good to see all of the members of the audience here and those online to talk to you today. Thank you to the Atlantic Council for hosting this event, and, missy, thank you for moderating. Im pleased to return to the Atlantic Council to discuss one of our nations most critical National Security challenges. This is the Illicit Financial Networks that sustain iran and its proxy, hezbollah. The Treasury Department, alongside our inner agency colleagues, have in the tip of the spear and advancing them administrations Pressure Campaign against iran and disrupting support to a wide range of terrorist organizations and this mission is at the heart of our work in the treasury and is central to this administrations efforts to secure our homeland, promote peace in the middle east, and given the fact that iran and hezbollah have mounted globe spanning plots, to ultimately protect the safety of all people around the world. I had the heart wrenching experience this past summer in july to attend the 25th anniversary memorial of the bombing of a Jewish Cultural Center and for no saris. I raise this because the symbiosis between iran and its proxy has below finds no clear expression then the bombing in argentina. Perpetrated by hezbollah suicide bomber at irans direction and with their support, that tubular that massacre took the lives of 85 innocent civilians and wounded hundreds more. Again, this was a Jewish Cultural Center they attacked. It followed a similar bombing two years earlier in buenos aires that killed many in israeli, 29, and injured many others. These events were not single events or anomalies. They exemplify the evil that iran and hezbollah stand for. Since then, plot after plot, some successful and some not, demonstrate their continued intent to shed innocent blood as they seek regional domination and influence. As a case in point, iran and hezbollah together have back to backed the assad regime and in syria as it has slaughtered hundreds of thousands of civilians and displaced millions more. Including many now displaced into lebanon itself. That illustrates the link to which they will go to further their nefarious aims. First, im going to talk about what we are doing to cripple the iranian support network. Irans economy bankrolls its aggression. That is white treasury is actively targeting irans key industries, to drive the administration by Supreme Leader that economic collapse is inevitable. Is inevitable, if iran does not stop its sponsorship of terror and perforation activities and return to the negotiating table. We are focusing in particular on oil, which is irans primary source of funds, as well as other areas, including banking, petrochemicals, shipping, and metals, steel, aluminum, copper and so forth. All of these sectors help benefit irans revolutionary guard corps, its cuds force, and ultimately it is the patron of hezbollah. A central element of our work involves identifying and dismantling the International Networks that are illicitly supplying the regime and its proxies with revenue. In recent days, you have seen us focus on a joint iranianhezbollah oil for terror shipping network, which we have targeted several times now under our terrorism abilities and with other actions in tandem with the department of justice, homeland security, the federal bureau of investigation, the department of state. We did this first of november 2018 and twice within the past two weeks. This Network Alone has illicitly sold more than half 1 billion worth of iranian crude, just this year. Predominantly, again, to the brutal the assad regime in syria. This network is operating at the kuds force commanders direction. It is a network of 37 publicly identified individuals, identities and vessels, which is operated by hezbollah members, on behalf of the qf. It relies upon layers and layers of intermediaries to obfuscate the role of the kuds force in the scheme. It does this nexus of terrorism and oil that drives our continued pursuit. In recent days of the vessel andriy and dario one, formerly the graceland, which is among the latest of irans efforts. We will relentlessly pursue those who undertake or assist such efforts. It is also important to stress unambiguously that iran lied to the United Kingdom and gibraltar, promising the adgrian dario would not go to syria. But that is precisely what it did. Releasing it from gibraltar was an extensive mistake, risking putting more than 100 million into the coffers of the kudss force and has below. This is something that never should have happened three of our allies should not need reminding that iran should not be trusted, but perhaps, just maybe, this experience will be remembered in the future. Of course, it is not just irans oil sector funding terror. Such conduct also goes to the very heart of its financial apparatus. The United States has exposed three times in the past year how senior officials at irans central bank, the bankers of the iranian government, and extensively the supervisor of iranian banks actually facilitate Financial Transactions to the benefit of both the qudss force and hezbollah. Central to such schemes is the widespread use of deceptive practices to obscure who the true participants are, the beneficiaries are, and the ultimate purposes of the banking activity is. These illicit means include misusing banks and exchange houses, operating opaque procurement networks, many front and shell companies, and exploitation of commercial shipping. In working to degrade irans ability to fund terror, the Trump Administration has designated let me be very clear the Trump Administration has designated more than 1000 individuals and entities using a range of terrorism, wmd, human rights, and government of iran focused activities. We are also working to prevent and disrupt this activity through diplomatic activity, private sector consultation, a wide range of industry advisors, information sharing, and all the things that my office does that you dont necessarily see splashed on the front page. Our efforts are having an impact, clearly. Leaving iran with scarce funds to spend in its perfidious pursuits. Consider the following indicators. The imf has predicted irans gdp since april 2018, the iranian rial has lost more than half its value, sticking to a historic historic low in september this past year. Our call on importers of iranian oil to refrain from contravening our sanctions as resulting in irans exports falling, to around 500,000 barrels a day, according to a wide range of estimates, compared to the peak production of 2. 5 Emmanuel Macron Million Barrels a day following the agreement. Foreign direct investment and Business Activity within iran has all but evaporated. As the risks for the private sector continue to grow. Over 100 Financial Firms have cut all ties with iran, including swift, the society for Worldwide Bank communication. There has been banned from landing in other jurisdictions and the consequences for iran continue to mount, and they will do so for as long as the regime maintains its current course. We will now turn to talking about how this relates to targeting hezbollahs illicit networks. As a result of the pressure we are applying to iran, hezbollah is also feeling the squeeze. Hezbollah fighters have been furloughed or assigned to the reserves, where they earn far lower salaries. Media employees have been laid off. Payments to the families of fighters have been slashed. And in march, hezbollahs leader, bemoaned hezbollahs financial situation and called on supporters to increase donations, echoing his call for a jihad for money, quote, unquote. They have since increased his exploitation of charitable donations, diverting the funding to pay for militants and relying on political coercion and intimidation of bankers and the central bank itself in lebanon to squeeze lebanons Financial Sector for money. Designated one of his thugs, a hezbollah member of parliament, and his appointment. We have now sanctioned a bank into liquidation but i will come back to that. Hezbollah receives the bulk of its funding from iran, and we thought probably around 700 million a year in its heyday following the jcpoa and the cash that were delivered to the iranians under the previous administration. That has been greatly reduced in this day and age. But draining irans revenue alone is not going to be 2 to simply deplete its coffers. A supplement by using businessmen to operate a wide range of companies to favor contracts and monopolies and prominent sectors. As one example, one of the most egregious examples, a key hezbollah financier, who has been designated, as has his son, exploited his political connection with the gambian dictator. Through Human Trafficking and the supplying of under age girls that he would personally select out of a syrian refugee camps, he built a Global Network that spans europe, middle east, africa, all to hezbollahs benefit and negotiated key concessions in the gambia to gain a monopoly over the supply of electricity and oil to that country. Hezbollah benefits in this manner from a wide range of other International Criminal schemes. It includes money laundering, drug trafficking, counterfeiting. This is the party of god that engages in these activities, and these networks are operated by hezbollah supporters, sympathizers, and members. This is undeniable. Illustrating their links to criminal activities, this past april, the Treasury Department designated lebanese money launderers and his love network, that was moving money on the half of hezbollah and the colombian drug organization, as well as lebanese money laundering, and this Network Expands across latin america, moving tens of millions of dollars a month for the narcos and terrorists. It is a textbook example of how hezbollah benefits from criminal syndicates. Just as we have done to iran, we are demonstrating our unfaltering resolve to dismantle hezbollahs financial infrastructure. Root and stem, we will rip it out. Since 2017, the United States treasury has denied agents to this system at an unprecedented rate, designating more than 50 specific individuals and entities alone. Jamaal trust bank, the bank i just referenced , we targeted this think on august 29. This bank illustrates how hezbollah penetrated seemingly legitimate firms. They have had a long standing financial relationship with key entities, such as hezbollahs counsel and lebanons branch of the marder foundation. That marder foundation is the organization that funnels money to the families of killed and imprisoned terrorists, including suicide bombers. It enables hezbollah to subsidize those who commit acts of atrocity against innocent civilians. Additionally, jamaal bank trust maintained a deep tie to the structure that hezbollah uses as cover for financial activity. In fact, all senior officials had to do was walk through the front door and identify themselves as affiliated as such and that allowed them to then open personal Bank Accounts through which they conducted hezbollah business. Jamaal trust banks downfall was not brought about by a lapse of standards. No way. They knew their customer. It was hezbollah. This action sends a signal that providing Financial Services to hezbollah will put an entire business at risk. For too long, hezbollah and Companies Like Jamaal Trust Bank, have prioritized the. Errorists agenda of iran Jamaal Trust Bank broke lebanons own laws and violated the public stress. We expect lebanese authorities to ensure that there are consequences for this, starting, as i mentioned, with immediate liquidation of the bank and ending with a full range of criminal and civil consequences. One final point on hezbollah. We are also using long existing authorities in new ways, particularly in partnership with the department of state. I am talking about the rewards for justice program. By incentivizing people to come forward with information regarding hezbollahs financial mechanisms, we receive tips from across the world. Leads are now coming in from south america, west africa and lebanon itself. We recently expanded the rfj program to elicit tips on the cuts force program i discussed. Let me send another clear message, if you give us information, that leads to the blahcial disruption of has we will reward you for it. We , will pay as much as 10 million for such leads. We encourage people to come forward and take advantage of this offer. What i will now do was pivot quickly to a discussion on International Cooperation and engagement because the United States is by no means alone in this effort. We enjoyed the support of broad range of actions by friends and allies across the world. As i finished our u. S. Presidency and the Financial Action task force over the past year, this gave us another opportunity to galvanize the International Community. This past june in orlando, for the first time, the fda of reimpose the countermeasure on iran, calling on all jurisdictions in a mandatory fashion to require increased Supervisory Examination for branches and subsidiaries of iranian banks. The fatf also agreed to reimpose two countermeasures this october if iran does not promise to do what it did 3. 5 years ago they lied, and they have not performed what they promised to do and that is ratification of the conventions. If they, in fact, have not done so by the time they meet, i fully expect that enhanced reporting mechanisms and increased audit requirements for iranian branches and subsidiaries will be required by the fatf. These actions seem technocratic, and they are, but in the banking world, what im talking about translates into real costs. It also raises the stakes for iranian banks, whose illicit activities invariably will be discovered through intensified regulatory scrutiny. Our joint actions, collaborative actions, leveraging law enforcement, intelligence, have demonstrated a coordinated approach by this to hezbollah. We are also working closely with allies. The targeting center for terrorist financing, located in riyadh and comprised of members of the goals Ordination Council with saudi arabia as the host, but all of us together designated has belows senior leadership, including numbers of their counsel, as terrorists. Together with our partners, we designated Hassan Nasrallah as such. We are encouraged by steps in the United Kingdom, the netherlands, paraguay, argentina, all of whom have explicitly prescribed hezbollah as a terrorist organization and have done away with this complete fiction that there is a military or political wing. This is a fiction that even nasarallah rejects. We are gratified and we now must use these authorities in these countries to concretely disrupt hezbollah operations. Together, with our partners, we have taken major steps toward depriving iran and hezbollah the funds they need, but preventing another bombing requires the result of the entire International Community, and we do call upon the International Community to see, based on clear evidence, that we continue to present that purchasing iranian likeunds terror, groups the quds force and hezbollah itself, and opposing terrorism means not finding it. Including by not buying iranian oil. To this end, we must and we will continue our aggressive actions to disrupt elicit iranian and hezbollah activity. As nasarallah has said and i quote as long as iran has money, we have money, we heard him loud and clear. Both parties have a lot less after our efforts but less is still not enough. We at treasury, and in tandem with international partners, will relentlessly your relentlessly deprive these terrorists and their sponsors of the funds they need to shed innocent blood. Terrorists and patrons will always try to find new ways, but we can and we must stop them in their tracks. They will try to slip past our sanctions, but we must preserve the effectiveness of these critical tools. Terrorists will always need funding, and we must criminalize such conduct and punish those who engage in it to keep the International Community safe. I greatly appreciate the Deputy Assistant secretary wexler for hosting this at the Atlantic Council. It is great to be back. I appreciate the opportunity to speak with missy and to the audience, and i welcome your questions. Thank you. [applause] thank you. Can everyone hear me . Thanks very much, assistant secretary. Thank you for your detailed overview of what the Trump Administration is doing visavis hezbollah and proxy activity related to iran. We have a bunch of questions, im sure, in the audience but we will do a moderated discussion for 25 minutes and then open it up to the folks in front of us. I want to start with an easy question for you, which is, how does the departure of a john bolton affect the campaign visavis iran . Itt. Sec. Billingslea doesnt. We are implementing the president s policies. We will maintain it in recent days. Missy what would be the impact on all of the work you have been doing over the last 18 months, if there was a decision at the president , who seemed to suggest he might consider easing some financial pressure to pave the way for some sort of negotiation with iranian leadership . Asst. Sec. Billingslea i think the president said the opposite, which is he is prepared to meet, we are not easing up. He will negotiate from a position of strength. We have from day one said that the purpose of the Pressure Campaign is to compel the iranians back to the negotiating table, so the objective has always been a discussion. The Treasury Department, when we imposed our sanctions, in fact, we say this in each and every sanctions release, that our sanctions are designed explicitly to cause a change in behavior. Absence of change in behavior, there will be no easing up. To clarify, so they have not said they are easing up in any way prior to the meeting. Asst. Sec. Billingslea we continue to engage in robust and unadulterated targeting of the Iranian Networks and lebanese networks, as of today. Show less missy great. Can you tell us how the new executive order we have announced earlier this week impacts the treasurys ability to target hezbollah in regards to the measures you talked about . Thanksec. Billingslea for that. That release of the executive order was a big deal. It was their first time we have been able to modernize the cornerstone of our financial counterterrorism authorities since right after 9 11. And what the expanded executive order does for the Treasury Department is it smooths the way, gives us new authorities, but also smooths the way to allow us to target terrorist leadership more without having to specifically associate a given leader of a terrorist organization with a given terrorist attack. It allows us to also go after those who engage in training overseas for terrorist activities, or even just conspiring to do so, and very crucially what it does is it applies or gives the treasury the ability to impose secondary sanctions on Financial Institutions, who continue to transact with terrorist organizations notwithstanding the sanctions designations. Missy basically what you said regarding the leadership and their lengths to particular tech, does that imply lowering of the evidentiary standard at all . Asst. Sec. Billingslea we still need all the evidentiary standards that both the treasury, legal team, and apartment of justice require, but it explicitly allows us once we have proven that a given individual is the leader of a terrorist group, it allows us to target them without tying them to any particular act of violence. Missy you mentioned in your remarks that hezbollah is believed to receive 700 million a year from iran at a certain point. Can you provide the audience with a ballpark of what the impact and span of the activities you gave an overview of and how much has it has reduced is that . Asst. Sec. Billingslea i cannot give you a specific figure but it is quite a dent in his budget. Nasarallah has been seen to try to raise money with telethons. He just issued a speech the other day threatening the central bank. He is feeling that, for sure. And he will tell you that. Missy ok. If the goal is reducing hezbollahs or one of the goals is reducing hezbollahs ability to act as a powerful militant organization in the region, how do you measure how successful you are in that regard . And if the overall military balance in the region does not appear to have changed dramatically, you know, hezbollah may have some forces out of syria, but even members of the Trump Administration have said they increased their activities in yemen, there are ongoing links between hezbollah and organizations in iraq, they still have this big mess of missile arsenal how do you , measure this concrete Operational Impact of what you are doing . Well,sec. Billingslea that is one of the toughest things to do in this business, right . In the counterterrorism business. Ultimately, i dont think maybe those are the right metrics. What i would suggest is it is incumbent upon the lebanese political system to unify against hezbollah for the threat it poses to democracy and the financial integrity of the government of lebanon. This is not something that is an obligation of the United States or our allies to solve for the parties of the government of lebanon. This is not something for the United States or allies to solve. This is the obligation of the lebanese people themselves to protect their democracy and expunge this terror group from its activities in the country. Ultimately, that is the objective and key metric that would determine the success, not degradation of terror activities here, there, or yonder. Missy how do you take into account the political stability of lebanon, which you know has been delicate to say the least, in recent years, given the significant role hezbollah has played in their political space . Well,sec. Billingslea the iranians only have one play, and the play is to sabotage arab democracies or the establishment of proxy groups at insert themselves into political discourse, paralyze democracies as a result and engage in violence supplant the legitimate Security Forces of the given country. This is like they do in lebanon, what they endeavor to do in iraq, and it is important that all Political Parties fight back against this. Hezbollah, unfortunately, has been allowed through a series of disastrous political alliances to insert itself into the daily political discourse of lebanon, and to establish itself as a blocking function on their democracy. The lebanese people have got to understand that at the end of the day, lebanese people have got to understand that at the end of the day, Hassan Nasrallah does the persian bidding and does not look out for the interests of the lebanese people. Missy one more lebanon question. Will the United States or are you considering extending sanctions to hezbollah allies within lebanon, or other shiite parties . Asst. Sec. Billingslea i will not prejudge or forecast treasury actions, but when we act, we act with decisions decisively, and we have made clear, if you provide support to a terrorist group, we will target you. Missy ok, lets talk about yemen. In a recent oped, yemen was characterized as irans other terror front, and said iran is seeking to build a new hezbollah in yemen. At the same time, there is a hope that the United Nations will be able to broker a Peace Agreement to staunch the humanitarian losses in yemen, which is now at the worlds worst humanitarian crisis. I think it is acknowledged by everyone that they would have to play some role in the political transition within yemen. How are you thinking about the who these as what the Trump Administration describes as another proxy actor of the iranian government and then the need to deal with them, the International Community and potentially the United States directly to get yemen to a better place . Asst. Sec. Billingslea that is an excellent question. There are a lot of strands to that, and the vast majority should be answered by the department of state. What i can tell you is the contribution that the treasury is making to the crisis in yemen is along several lines. One is that we have not i that tariffs financial targeting center, where all organizations the gu lf organizations agreed to join together. Through the tftc in riyadh, we have designated multiple terror actors in yemen, including al qaeda on the peninsula, and the linkages there that are for and against the fighting with the houthis. We also have we have engaged in a series of efforts to degrade the way the houthis are receiving funds and Material Support by the quds force. We will not go further into that. Finally, one of the overlooked roles that my office plays is we support financial banks around the world and we are working with the central bank of yemen, who ultimately had to free and relocate. So we work with them quite often to provide support to them, with others. Missy do you think it would be an impediment to the process, which has not gotten far, to designate houthi leaders . Asst. Sec. Billingslea if they engage in activities, which are sanction of wonder of existing authority, they should be aware. Absolutely. But i want to be careful about casting some broad net regarding a very definable ethnic group. Missy just a quick question on the terrorist financing targeting center. To what extent is the gulf crisis affecting the operation . Asst. Sec. Billingslea it really hasnt helped, and we urge all of the gulf nations to find a way forward together. We are very appreciated that the saudi host have been helpful on this, and have enabled the work. There have been a number of designations, joint designations, that have been issued by the entire group, as well as parts. One of the most recent actions we took against the hamas financiers operating out of turkey was in partnership with oman. But we organized all of that through the tft c, so it is functioning, but we would like to move past the gulf dispute. Missy i would like to talk about syria a little more. You mentioned the role of hezbollah fighters. Could you provide more details about how the stations and the Financial Measures that the sanctions and the Financial Measures that you discussed are affecting their role, and to what extent is that changing because of those actions and it may be difficult to distinguish these two things, to what extent is the hezbollah role changing in syria because of the american Pressure Versus the war being at a different stage now . Asst. Sec. Billingslea well, the issue when you have the kind of budget shortfall that nasrallah now faces, he has to make tough decisions on where to cut, and one of the places he is cutting is in his ability to fund such a large number of fighting forces globally, so he is cutting back. We are seeing manifestations of that. He has prioritized funding the families of dead terrorists, and he wants to continue to make that a central part of his budget. As the costs continue to grow, his budget shortfall will be further exacerbated. Missy have you seen anything, anyone stepping in to fill the void that the departure of hezbollah forces from syria has created in terms of additional quds forces or iraqi shiite militias, or is this something now that as the outside regime consolidates its control of much of the country, is now being taken on by Syrian Forces . Asst. Sec. Billingslea that is the question the department of defense has to answer. What i would tell you is sometimes it is a bit overlooked, but we, in the treasury continue our campaign to deny a finances, and we have taken action in recent days against a network that he was using, including in the uae to raise funds and move funds, and that continues unabated. Missy i would like to ask about iraq. The designated government has sanctioned many iraqi militias, and many are title tightly linked to the Iraqi Government, which is american ally and a part of the iraqi Security Forces. What is your approach to dealing with those political realities, and i think the tension that exists for the iraqis that they consider the American Government may be a primary security ally, but iran has deep cultural, social, religious ties and will be the neighbor forever. What is your approach to that . Asst. Sec. Billingslea the certainly are a victim of geography in that respect. I have a Good Relationship with my iraqi counterparts with the finance minister, with the Central Bank Governor. They understand everything the United States does to assist the functioning of their economy. We will continue to insist that when we implement designations on those who facilitate qf or rigc, hezbollah or other proxy finances for terrorists, that it is not a negotiation. We expect, unequivocally, that those sanctions will be honored and implemented. As you may know, we have habeeb the Third Largest bank in iraq, where these activities, and we expect, like with Jamaal Trust Bank, that those funds stay frozen and it be liquidated in an orderly process consistent with international standards. We have showed in that case we will not hesitate to act, even against a Large Financial Institution with political connected members of parliament. Governmentthe iraqi complies with that . Asst. Sec. Billingslea yes, but it is an ongoing topic where we continue to make our view crystal clear. Missy what is their message to you when they say, look, we need electricity . We need to have trade relationships . What do they tell you . Asst. Sec. Billingslea look, we have not, and are not, prescribing every imaginable form of transaction with iran. We have never targeted humanitarian aid. We have never targeted foodstuffs or medicines. Those kinds of transactions are things that are normal and expected. We understand that Iraqi Government and iraqi people are dependent on iran for electricity, and i think we have arrived at a good outcome on the proper way to handle that. But we ultimately expect the government of iraq to look out for its own interest. It is ridiculous that the iraqi people are beholden to iran for electricity. Iraq is a net exporter of energy. It is not a ludicrous thing to request that they move forward with becoming selfsufficient with their own energy requirements. Asst. Sec. Billingslea missy they have been trying to do so for a decade now, but there are a asst. Sec. Billingslea it is quite something though, right . Missy can you tell us a little about about the interactions with european allies on the issues and what is the conversation like when you are trying to make sure that the measures that the United States are taking visavis Iranian Companies or entities as they relate to europe . Asst. Sec. Billingslea right, so, it is impossible to characterize a single set of interactions with europe. Europe is a pretty diverse place with a lot of different perspectives on the matter. We have a number of nato allies who completely understand our security concerns, acknowledge that the iranians are in fact a terrorist regime, acknowledge that the ministry of intelligence has conducted assassinations on european soil in the most horrific ways, and who are supporting us on a lot of these measures. We have excellent intelligence cooperation with our nato allies and partners. We do have a difference of opinion with some, but by no means all, on the europeans right way forward on the diplomatic front but we will , continue to Work Together because at the end of the day, i am here at the Atlantic Council, and transatlantic unity is something we really strive for. Is there any way to characterize to the audience the extent to which a Diverse Group of countries and circumstances that European Countries are supporting and executing the steps the United States would like them to take visavis the Iranian Pressure . Asst. Sec. Billingslea the vast majority of European Countries, it was not actually a tough call for many because most of their Big Industries had taken a look at the Iranian Market after the jcpoa, and decided the reason iran has an advantage is it is a nontransparent, highly corrupt Business Environment in iran, and most of the big european players had decided it was not worth the candle. So talking to those companies about the fact the president was clear on the jcpoa from day one. Even so, we gave all of these Companies Six months to wind down any particular Business Activities they had, and pretty much they all have done so. Even in countries where, for whatever reason, the government itself has taken a contrarian view to the u. S. Position, we have messaged directly to the private sector and made very clear to companies that, look, you can do business with iran, if you want, that is a business decision, but we hope you engage in an informed risk discussion with your company because if you trade with iranians and something is sanctioned by the United States, we will cut you off from the United States Financial System and you will not do business with us. What about china . Asst. Sec. Billingslea we had the same dialogue with Chinese Companies as with turkish companies, british companies, you name it. Missy i would like to ask a Bigger Picture question. There has been some reporting about the impact to ordinary iranians in the American Campaign that the maximum Pressure Campaign and the toll it has taken on the iranian economy and what that means for people who are not involved in the quds force or anything like that. Can you tell us about to what extent track that and to how do you take that into account when youre thinking about the measures that should be implemented, especially given the fact that the iranian government has shown, as you suggested during your remarks, low sensitivity to the Financial Hardship that occurs for ordinary iranians or a higher willingness to move money around into the activities that partake in these . That isc. Billingslea a lack of respect for human rights, the caller all of these dictatorships, whether we talk about iran, north korea, venezuela. They dont care about the people on the street. The iranians, the regime has engaged in some of those horrific brutalities against student protesters. They have beaten people to death in prisons. They have hammer down on the middle last. There is no iranian democracy. They do not allow moderate candidates to run for office. They have a system to deny people to participate in iran. Everything at the end of the day is controlled by the Supreme Leader, and the Supreme Leader and his people have made the economy a basket case. Iran was having huge economic problems ore the tree in position reimposition of sanctions because of this corruption that runs out a society. You just have to read Iranian Press to see all of the corruption that has been dealt in the municipality alone, in which the rgc was involved, so the iranian people know this, and they know the root problem the economy faces is this corruption and penetration of the economy by the Supreme Leader and the rigc. We have not targeted the kind of transactions that are necessary to support a lot of the basic commodities that people need. If the Iranian Regime is having problems importing these items, it is simply because of their own gross mismanagement. Missy you acknowledged there is an impact on ordinary iranians and this is the most aggressive set of pressure measures that have been put in place visavis iran. Asst. Sec. Billingslea it is incumbent upon the Supreme Leader to realize he has an obligation to return to the negotiation table. Missy finally, you talked a little bit about the oil shipping measures that have been introduced. How does that relate to the operational sense in place, to Different Countries to the table to try to patrol waters in the middle east to make sure the rigc is not coming into contact in any way with problematic shipping. They seem to be able to continue to do the shipping to syria, is what you were suggesting. To what extent are you expecting there to be a big reduction in their illicit shipping activity . Asst. Sec. Billingslea well, we intend to make it so, so it was regrettable that gibraltar let the vessel go on the basis of iranian lies. Hopefully there will not be a repeat, but i think we clearly demonstrated our ability to look at this network, and our financial interdiction measures will intensify. As i mentioned, we have worked with the department of state now to be able to offer reward money to also arrest that transportation of this oil for terror type of behavior. On top of that, as i mentioned, we engage with industry. We have issued a circular to industry, cautioning the shipping industry to be aware of the kinds of fabrications and misrepresentations and obfuscations and with iranians engage as they operate the network. It is important that the shipping industry take a learn a lesson from the indianbased Flight Company structure used to operate a lot of these hezbollah managed vessels, and for Ship Management companies that supply the crew because these vessels are rented tankers that are internationally crewed. I think Ship Managing Companies have to understand if you cannot do Due Diligence into who is behind the shipments, and you put a captain and crew on a vessel that violates eus sanction laws, there will be consequences. To what extent are you seeing them move from these now affected Economic Activities into other countries, or other organizations . I imagine they can do that to some extent and how quickly can you respond . Asst. Sec. Billingslea they are doing that. They have tried to relocate a lot of their sanctions of asian activities into jurisdictions far away. We follow them closely. I mentioned the intelligence cooperation we we have with a huge number of partners. We use our financial tools in tandem with many, many other efforts, which sometimes are less obvious. But we are active in targeting them day in and day out. Missy ok. I am sure there are a lot of questions here. Please identify yourself when you ask a question, your affiliation, and please make sure your question is a question. The gentleman here. We have a microphone. Thank you. Mr. Secretary, that was great. Good to see you again. My name is timothy, 30 years Foreign Service officer in the state department, United States ambassador in paraguay, when there were a lot of bad actors there for 30 years, and thats where the stuff started that you mentioned in your first sentence, the killing of 75 and in buenospeople aires. My question is, are we doing enough when you emphasize the importance of International Cooperation . This hemisphere, our neighborhood is very dangerous today and especially next month. The guys that came down from paraguay and killed those people i was gone by then were terrorists. A few years after that, a wonderful prosecutor in argentina went to see the president of paraguay, a lady named ms. Kirchner who will be Vice President next month. She will have a wimpy president , so she will run the show. She is the one that when the prosecutor went and said, we are working on the terrorists and the terrorist network to buenos aires and killing people, she blew him away. He was supposed to meet with her next day and they found him dead in his house. They say oh, he committed suicide. Wrong, he was killed. The president of argentina, who is going to be Vice President in a month, said no. I am working with iran and hezbollah works with iran, so im not going after them. Pompeo was great. Talking with terrorists does not do it. You have to get down and do something. Why not make sure that that senator, a killer, is not going to be the next leader in that wonderful country of argentina . Asst. Sec. Billingslea thanks for that question, ambassador. The first question you had, are we doing enough . In fighting terrorism, you can never do enough. There is always more that must be done. I was with secretary pompeo at that commemoration ceremony. It was at a series of meetings he had with counterparts from across the region that president macri issued a president ial decree, which does a lot more than just call hezbollah a terrorist group. It allows them to Block Financial support to hezbollah operatives. Specifically the bombing individual im not even going to call them suspects, because they are clearly involved, they have been working with us on additional targets. Paraguay, were you ably read our diplomatic representation in the past, has now followed suit. We are working with them to round out the financial dimensions to the president ial decree that they have issued. Likewise, we are in active discussions across the hemisphere with brazil, because they play a key role in clamping down on the use of the triborder area for hezbollah financing. In recent days, this does not get a lot of attention, but there has been an excellent degree of cooperation between the three nations in disrupting a hezbollah Business Operation in the triborder area and getting some of those individuals not just arrested, but extradited to the United States, argentina, and other places. The cooperation in the region is good. It is intensifying. We are obviously following the argentinian election closely and will continue to work away at this. Latin america is turning against hezbollah, albeit slowly but inevitably. Hezbollah will find that latin america is a denied area to them because of the violence they have practiced. We panama alone, we cut them surveilling the panama canal. My name is joyce with the national, thanks, mr. Billingslea. I have two quick questions. One, there was a report today that goes the president is flirting with a ch proposal to give orion iran the 15 billion credit line if anything were to happen. Would that undermine sanctions and what do you think about the proposal generally . My second question on lebanon, when you talk about private businessmen, businesswomen, helping and supplementing hezbollah, can you be a bit more clear . Are you looking at people from the private sector across secretary sectarian lines in lebanon . Asst. Sec. Billingslea thank you. On the first question i will refer you to the white house, but our course remains constant and unchanged in terms of the efforts to degrade iranian finances. When it comes to lebanon, it is not about any kind of identity. This is about hezbollah. If you are a collaborator with hezbollah, regardless of your political party, ideological affiliation or religious background and are assisting them, we are going to target you. Has a lot engages in zbollah engages in a wide range of illicit Business Activities in lebanon pharmaceutical Companies Come to mind, abuse of free trade zones, airports, seaports. This is where it is incumbent upon Good Government in lebanon to take back control of their own country. We look forward to working very closely with the lebanese government along the lines. Ian talley, wall street journal. Good to see you. Public reporting suggests there are more like 12 or more, including the central bank, handling hezbollah accounts, including companies that are known to be owned by confessed hezbollah agents. Why not cut them all off from the u. S. Dollar . What risk do you see in that . Theyll have correspondent accounts in new york. Secondly, given the 700 million from tehran, given the global activity of hezbollah controlled and contracted operations that seem to be run in the billions of dollars globally, is that number really significant . We will leave it at that. Can i get 10 million . [laughter] asst. Sec. Billingslea it is good to see you again. So we have to be careful to be very precise, because no bank and no Financial System is foolproof or failsafe. That is why we have regimes that banks have to implement. I meet routinely with the bankers from across lebanon, i meet with the banking, the abl, the banking organization. I am looking forward to meeting the new chairman, if he is able to make it to d. C. Or if i can see him in lebanon, who is the chairman of the bank of beirut. The challenge we face is that hezbollah engages in some pretty sophisticated Financial Engineering to hide what they are really up to, and it is less about requiring that we catch them at each and every turn and more about making sure when a bank discovers that they have inadvertently allowed some kind of penetration of the Financial Institution to occur, that they rapidly solve the problem. That is the way we have to deal with it. This is lebanons problem. It is the same issue we work on in the United States with narcotics traffickers and other issues. I think we have to be very mindful with the fact that the international Financial System is vulnerable and it is protected and given a countrys supervisors are able and willing do they have the political will and do they have the capacity, and can they demonstrate they are stepping up to the challenge . In the case of lebanon we have this confidence. We have a great relationship with the Central Bank Governor and his supervisory team. He is under a lot of pressure. I mentioned the fact that he has been physically threatened by mafia type thugs. They have also threatened other bankers. They planted a bomb outside of buff bank a few years ago. We are mindful of the fact that this is an organization that will assassinate Prime Ministers, to say nothing of bankers in lebanon. That said, when we find a bank like Jamaal Trust Bank that brazenly and knowingly colluded with hezbollah to funnel money, we will not hesitate to act. The financial consequences are what they are but at the end of , the day, the lebanese people need to realize that this is hezbollah causing the risk to lebanon, not the United States. [indiscernible] asst. Sec. Billingslea it is not billions. It is just not billions. There is an additional money there is additional money that they get from the iranians. As he has gone on television domestically, we expect the call has gone up to business operatives around the world to generate more funds for him. That is like officers are focusing on the triborder area, but there are other jurisdictions, we have disrupted them. One network disrupted in west africa, another in gambia. We are working on his european footprint as well. He tries to hide his operations under his son. We designated him and his business concerns. We are chasing this money around the world and we will not stop. I am a member of the Atlantic Council, and thank you, sir, for this great talk. My question to you is, dont you think this maximum pressure policy, in order to be effective, would be if we eased the sanctions and bring the iranians to the table, and somehow renegotiate the jcpoa, this maximum pressure, i can rest assure you that this is not very effective. It only affects the average iranian on the street, and we have, you know, put sanctions on iran for the past 40 years. I can assure you that the irani government has a phd in going around these economic sanctions. In order to navigate hezbollah, a big issue for american the syrian power block, the best solution would be to bring them to the table and renegotiate and then address these issues. I thinkc. Billingslea you and i have a difference of opinion, but the goal has always been to compel the regime to return its behavior and return to the table to stop the terrorism, stop the Missile Program and agree to a nuclear deal that does not have such glaring pitfalls or blind spots as the previous one did, like the sunset clause alone. It has always been a change in behavior. That is what we are seeking to achieve. Until we see that change in behavior, the Pressure Campaign will continue. The woman in the white blazer in the back . I lebanon. According to our sanctions on hezbollah is justified. But expanding the sanctions to include supporters from the Shiite Community or other sites may upset the stability in lebanon on which the u. S. On is keen preserving. Another question, the measures to tighten the sanctions more to what extent does the u. S. Believe the sanctions are effective . And the last question, the levin eyes the Lebanese Bank has advised [inaudible] this might shake the banking system. Are there any measures to limit this damage . Let meec. Billingslea start backwards. I will go back and see if i can remember all of the questions. Jamaal trust bank was not what we would call a systemically important bank. It was around 26th or so on the banking side. There is a liquidity problem that bank has, of course. They were violating lebanons own laws in regards to money laundering. They were lying to the central bank about who they were transacting with, and the governor has undertaken the necessary steps to bring the bank under centralbank control and begin the liquidation process. These are always complicated issues, but from what we see, the right approach is being taken. There was innocent money, people who were innocent, citizens of the country who had money in that bank, and it is outrageous that the Bank Managers would jeopardize innocent peoples money in this way by taking on this terrorist funding. The government of lebanon understands there is innocent money tied up in there and they are working towards recognizing legitimate accounts so people can get their funds back, while at the same time keeping the bank account itself and the hezbollah money frozen. If we see hezbollah money exiting that bank, we are going to have issues. In terms of the overall political situation in lebanon, lebanon is a democracy. We respect that fact very much. That is the whole point here, to ensure the lebanese people decide who runs the country. We have excellent working relationships with the Prime Minister and the president as well as the Financial Sector. It will be very incumbent that all key players in lebanon understand that if you provide Material Support to hezbollah, regardless of your Political Political Party or ideology, your ethnic background, you are at risk. The Treasury Department may well target you. [indiscernible] asst. Sec. Billingslea i would not forecast such a saying, even if i could. Thank you. I am from syria. The question, if we make lebanon the model, do you expect you expect the lebanese government to push back against hezbollah and you are supporting that by sanctioning. My question to you, how you are providing [inaudible] you can not just asked them to act. [indiscernible] and so many people who were against iran. Now the people, in their mind, they remembered they will be killed. At the same time, they are under pressure from the United States to act. This is the equation that needs to be filled, and another question, i think hezbollah, i think they have their own Financial Resources inside syria. They are contracting with the government, they are smuggling, a lot of things. How do you act on this so its easy to follow them . I thinkc. Billingslea its really important to stress that the United States government, the whole of our government has a deep relationship with the government of lebanon across the full spectrum of activities. There is an enormous amount of collaboration and support that the department of defense and command provide to the lebanese forces. There are a wide range of assistance programs that the United States, department of state and aid have. The entire conference that was hosted in paris to examine additional Investment Opportunities in water, electricity and so on was something robustly supported by the United States. So we have a Close Partnership on all of these issues. But we have every expectation that the lebanese government will expunge this terrorist cancer from its body politics. This is an organization with the blood of not just hundreds of americans, argentinians, and others on its hands, but the blood of lebanese people as well. We expect we will Work Together to preclude this terrorist group and drive it back from where they are today. Missy and in the front row . You said that you may sanction asst. Sec. Billingslea i did not say that. If they are engaging in activity that are related to terrorism. Asst. Sec. Billingslea very precise here. We do not designate ethnic groups. We designate individuals who engage in terroristic behavior. Raising money for hezbollah. Since hezbollah is designated as a terrorist organization and you are going after [inaudible] you dont think you are putting too asst. Sec. Billingslea we are going after hezbollah inside and outside of lebanon, very actively. I mentioned west africa, the triborder area in paraguay, i mentioned europe wherever we see it, wherever we find it. Is there such a thing as too much pressure against terrorism . I would argue there is not. Ms. Ryan in the blue blazer . Yes. As said last night, the secretary of labor says he is also going to target allies with hezbollah, not only for the financial activities, but also politically. You met throughout the year. Is there any guarantee that he will not be targeted . Technically speaking, is it like political decisions would be, if you want to put any sanctions on these two groups, would it be through the state department or through a different mechanism . Asst. Sec. Billingslea i want to be very clear, i dont give guarantees on anything, right . There is some speculation that i tamped down. We are not targeting ethnic groups. We are not targeting the houthi people, we are not targeting the shia group either. We are targeting hezbollah. I do not care what party you are from or your religious background or the ethnic background you have, if you are giving support to hezbollah, you are by definition a terrorist in your own right, and you will be targeted by the department of the treasury. I have not seen his comments, but his office and mine work very closely together, and we follow the department of state lead on the answers to this very complicated issue. I will leave it at that. Ms. Ryan the gentleman in the pink shirt in the aisle . Hi, im with the center for international policy. Thank you for your time. You mentioned the u. S. Aid to Lebanese Armed forces. The u. S. Has provided lebanon with 1. 6 billion in aid since 2000 six. 2006. There are reports that a significant part of the Lebanese Armed forces are compromised the people of shia background, it is not easy to determine where they pledge their allegiance, whether it is with hezbollah or the laf. There are reports that say there are close ties between the two as well. At the same time, hezbollah is getting a degree of institutional support, whether it is comments from the president saying they are, quote unquote, Major Players in the defense apparatus. The Un Security Council 1701 obligates the Lebanese Armed forces to disarm all armed groups in lebanon, which they have to a large degree not complied with. It is not giving Material Support, but i would argue that ignoring something as serious as this leads to the same effect. If the u. S. Is giving laf aid with the aim to reduce hezbollahs relative presence, i would say largely it has not worked. Their military is still far ahead of laf. If this someday my prince will come strategy is not working, do you think it is time to start conditioning this aid or put more checks and balances in the system that can actively counter hezbollah, rather than providing aid that does not show much progress . Asst. Sec. Billingslea so you are asking a great set of questions. The integrity of the laf is of the utmost importance, not just the United States but to the president as well. We discussed this. It is important that the laf ensure that there is not penetration of its ranks by hezbollah or it is not otherwise colluding or engaging with hezbollah. Very much, just as we have the same expectation on the banking side of the Financial System, we have the same expectation of the Lebanese Armed forces. I would say that our department of defense feels very good about the relationship and very close with the laf and the key role that they play. Ms. Ryan my final question right here, the gentleman in the back . Thanks, nick waters from bloomberg. So far, the administration has largely shied away from targeting big chinese banks, peoples bank of china, given the concerns about the broader financial impact. Could you explain why that is in light of fairly strong evidence that some of the big chinese banks have been involved in financing Iranian Oil Imports . Also in regards to north korea and dealing with the north korean government. Is the concern of the impact would be too big on the Global Economy . Asst. Sec. Billingslea we has shown with a number of our actions, including in the russia context, there is no such thing as too big to be targeted. I will not stray into a north korea discussion today. That is a whole set of other issues we could talk about there. Actually, i would not overstate any kind of complicity by large chinese banks with respect to iran and the oil trade. We have been talking with and working with chinese governments on the payment mechanisms that were being used prior to the expiration of the waivers, and the fact that we do expect importation of iranian oil to go to zero, and those that were previously associated with world purchases were allowed under the waivers previously, how those funds are handled. There are chinese institutions, but they are institutions we acknowledged at the time of the waivers, now we are working with the government to take the next step and really drive down importation of oil. Of course, it would be unacceptable for us to see any kind of surge in chinese importation of oil, just as it is unacceptable to see these tankers slipping through on their way to syria. Ms. Ryan well, i want to respect our time constraint here and thank everyone for showing up today for such an interesting and informative conversation. I want to thank assistant secretary billingslea for his time. [applause] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] [inaudible conversations] [inaudible conversations] cspans washington journal, live every day, with news and policy issues that impact you. Morning, wallay street journal politics reporter Gabriel Rubin discusses the latest in congress and campaign 2020. And ceo esident naacp president will be on to discuss voting discrimination. And Sebastian Gorka on president trumps reelection strategy. Be sure to watch washington journal, live at 7 00 eastern on salmon morning. Join the discussion. Today at 6 00 eastern on the civil war, the 1863 Tullahoma Campaign in tennessee. Orders were given to concentrate on tullahoma. After they leave the highland rim, is somewhat anticlimactic. At tullahoma,ragg hes ready to fight it out in the trenches. Deborah lipst 00, data on her 1996 lawsuit against holocaust denier david irving. 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