Press Center

 Remarks by Acting Under Secretary Adam Szubin at Chatham House

As prepared for delivery
LONDON  – Thank you for the kind introduction.  And thank you to Chatham House for hosting me tonight. 
Over the past few days, I’ve traveled to Rome, Berlin, and now London.  I’ve come to reaffirm the strength of the partnership between the United States and Europe.  I’ve come to reinforce our joint efforts to confront the threats we face together.  And I’ve come here tonight to speak with you all about those efforts – to discuss how, working together, we can ensure the safety of Europe, the U.S., and our allies around the world.
On this trip, as with my previous ones, I have not been disappointed.  The close cooperation between our governments endures.  The EU has long been, and remains, one of our strongest partners. 
This is particularly so in the world of illicit finance and counterterrorism, where I have focused my energy since joining the Treasury Department more than a decade ago.
My office is called the Office of Terrorism and Financial Intelligence, or TFI.  The U.S. government created TFI in 2004, in the aftermath of September 11.  Our mission is to disrupt the flow of funds to terrorist organizations, rogue regimes, and other threats to global peace and security. 
We have worked tirelessly to fulfill that mission.  But given the increasing connectedness of the international financial system, we can’t work alone.  Instead, our success often depends on close coordination between the United States and our allies – especially our allies here. 
That has held true for almost all of our key sanctions programs.  And while we work together in so many areas across the globe, I’ll touch briefly tonight on just three:  our programs targeting Iran, Russia, and ISIL.
First, Iran.  Preventing Iran from acquiring a nuclear weapon has long been a national security priority of the highest order.  An Iran in possession of a nuclear weapon would threaten the security of Europe, the United States, and the rest of the world. 
With the EU and the United States taking the lead, we marshalled a unified front of world powers working to prevent this nightmare scenario.  That unity proved essential over the years, as we ratcheted up the pressure on Iran.  It produced multiple tough UN Security Council resolutions and domestic and regional-level sanctions in the U.S. and EU, as well as Japan, Australia, Switzerland, Canada, and elsewhere.  
Iran would not have come to the negotiating table were it not for the powerful array of multilateral sanctions we put in place.  Those sanctions forced Iran to negotiate; it could not continue business as usual in the face of such sustained international pressure.  
Once Iran came to the table, the P5+1 negotiated as one.  And with the coordination of the EU, we reached a diplomatic solution that closes every pathway to an Iranian nuclear weapon.  The Joint Comprehensive Plan of Action, or JCPOA, is a strong deal that will help to ensure the safety of Europe, the United States, and our allies.  It allows for specified sanctions to be lifted, but only after Iran shows it has completed a slate of nuclear-related commitments. 
If Iran complies with the deal, we will lift certain sanctions, which could have a significant, positive impact on Iran’s economy.  It is not our policy to punish or deter business activity in Iran that is consistent with the JCPOA.
Now, we also recognize that even without a nuclear weapons capability, Iran poses a threat—to Europe, certainly, and to the rest of the world.  Iran remains the world’s leading state-sponsor of terrorism.  It is the primary funder of Hizballah.  It supplies weapons to extremists in Yemen.  And it enables the violence and destruction sown by the Assad regime in Syria. 
In the wake of the JCPOA, we must remain united in confronting Iran’s support for terrorism and its human rights violations, and in isolating bad actors from the international financial system.  One place to start is by maintaining listings in the face of litigation challenges and continuing to designate Iran-linked individuals and entities under the EU’s human rights, Syria, and terrorism authorities.
The JCPOA in no way limits our ability to do so.  We have made this posture clear to both Iran and our international partners.  And as we work to enforce non-nuclear sanctions in a post-JCPOA world, close coordination with our European partners will remain vital. 
Such coordination has proven equally vital in responding to Russia’s occupation and attempted annexation of Crimea. 
In response to Russian-backed aggression, the U.S., EU, and the G-7 implemented a series of powerful sanctions targeting separatist leaders, Russian government officials, and companies operating in key sectors of the Russian economy.  In addition, the U.S. and EU banned most trade and investment in Russia-occupied Crimea. 
These sanctions required close cooperation and innovation to identify measures that imposed serious costs, while also minimizing risks to global financial markets.  We have acted together, and we have sent Russia a clear message:  Violations of core international norms will carry real financial costs. 
We have no desire to be in a state of conflict with Russia, and we are ready to ease our sanctions if Russia fulfills its commitments under the Minsk accords.  Until that time, though, together with our allies we are prepared to sustain and, if necessary, increase the pressure on Russia unless and until it ends its aggression in Ukraine and its occupation of Crimea.
On that note, we look forward to the EU’s upcoming vote on extending its sanctions against Russia.  We have worked closely with the EU to maintain economic pressure on Russia until the full implementation of Minsk, and believe strongly that this remains the appropriate benchmark.  An EU vote to extend sanctions will make clear to the Russian government that economic normalization will not happen until it reverses its aggressive and destabilizing activities in Ukraine.
Finally, I must of course mention our work to degrade and defeat ISIL.  I don’t need to tell you about ISIL’s astounding cruelty, its warped ideology, its slaughter of Muslims and non-Muslims alike.  You’ve all seen the headlines.
ISIL presents a challenging financial target.  Unlike many other terrorist groups, ISIL derives a relatively small share of its funding from donors abroad.  Rather, ISIL generates wealth from economic activity within the territory it controls.  This makes it difficult to constrain its funding. 
ISIL has made more than $500 million from black market oil sales.  It has looted between $500 million and $1 billion from bank vaults captured in Iraq and Syria.  And it has extorted many millions more from the populations under its control, often through brutal means.
So ISIL is wealthy.  But it has its vulnerabilities.  Waging a multi-front war while attempting to essentially act as a proxy-state requires steady and renewable sources of funding.  ISIL needs funds to pay fighters and procure weapons, to maintain its infrastructure, and to provide basic services to the people living in the territory it controls.  And, ISIL needs to access the international financial system – to move money abroad, to transfer funds, and to import needed supplies.
We are targeting both of these dependencies – ISIL’s ability to generate revenue, and its ability to use that revenue. 
To this end, we have been working closely with the Government of Iraq to ensure that dozens of bank branches located in ISIL-controlled territory are denied access to the Iraqi and international financial systems.  We also have actively targeted key ISIL financial facilitators.  This year alone, the U.S. has sanctioned more than 30 ISIL-linked senior leaders and financiers. 
Of course, we cannot counter ISIL’s finances alone.  The U.S. is working with a broad coalition of governments around the world, including the EU, to sever ISIL’s ties to the international financial system.  A key component of our efforts has been the Counter ISIL Finance Group (CIFG), a coalition of more than 30 countries and multilateral bodies focused on disrupting ISIL financing.  Our work with our partners in the CIFG has been particularly significant, allowing us to share intelligence and freeze additional ISIL revenue streams.  We will only increase this cooperation in the coming months.
Due to ISIL’s internal funding, another key part of our fight to disrupt ISIL’s revenues is our coalition’s effort on the battlefield.  Most recently, the coalition launched a military campaign – Tidal Wave 2 – which included precision strikes against ISIL’s key energy assets:  oil fields, refineries, and tanker trucks.  We believe these airstrikes are markedly degrading one of ISIL’s most important sources of funding.
Finally, Secretary Lew will chair a United Nations Security Council summit next week on combating ISIL financing.  This meeting is unprecedented – it’s the first time a group of finance ministers are leading a session of the Security Council.  And it marks an important step forward in the international fight to disrupt the financing of terrorism.
Reducing ISIL’s financial strength is critical to weakening ISIL and reducing its claimed legitimacy as a state.  Working together, the U.S., EU and our allies will continue to do so.  This will take time and sustained effort; ISIL is a nimble and determined adversary.  But it can and will be defeated. 
Our financial campaign is just one part – but a key part – of that battle.  We are also working closely with our partners to increase the strength of our respective domestic counter-terrorist finance regimes, to ensure that malign actors cannot exploit the global financial system.  And we are sharing information regularly with our allies, in the hope that we can neutralize threats before they strike. 
Last month, as the dust was still settling from the Paris attacks, President Obama said:  “This is an attack not just on Paris, it’s an attack not just on the people of France, but this is an attack on all of humanity and the universal values that we share.”
I remember hearing similar words from European leaders after September 11.  They were true then, as they are true now.  We are in this fight together, and we stand with you as you have stood with us.
In the fight against terrorist financing, we know that when the U.S. and Europe work together, the effects are multiplied.  We know that when we stand together, our nations are more secure.  And so we know that with all that we have left to do, we need to cooperate more closely than ever.
Thank you again for hosting me this evening.  I look forward to hearing your questions.
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