UPDATE 6-Oil rises 2 pct as supplies seen tightening
* China is No.3 overseas destination for U.S. crude - EIA (Adds settlement prices, comments, U.S. refining details)
WASHINGTON, July 15 Reuters White House Correspondent Jeff Mason interviewed Susan Rice, National Security Adviser to President Barack Obama, on Wednesday on the Iran nuclear deal. Here is a full transcript of the interview.
Q. Ambassador Rice, thank you very much for joining us today.
A. Good to be with you, Jeff.
Q. I'd like to start by just getting straight into the weeds of this deal. It gives Iran 24 days before it has to grant access to suspicious sites. Does this include all military sites? And is granting access an obligation to Iran if the committee decides that? Or is it simply a request as some people have interpreted?
A. Well, let me give you the whole context. In the first instance, recall that all of Iran's known nuclear facilities will be under 24-7 monitoring, continuous monitoring, by the IAEA, so that's the first point. Secondly, the IAEA and international inspectors will have continuous access to the entire supply chain of Iran's nuclear program - so its uranium mines, its mills, its manufacturing facilities, its centrifuge manufacturing facilities, as well as any facilities that are actually spinning centrifuges. So the whole supply chain has continuous monitoring.
So what we're talking about and what you're asking in your question is, if we have information about a non-declared suspicious site, what is the process for investigating that site. So let me explain it.
In the first instance, let's say that the United States, for example, gathers some information that we believe indicates that there is a suspicious or secret site. We would take that information to the IAEA. The IAEA would investigate. The IAEA would go to Iran and say, 'We want to visit this site. We want to check it out.'
And by checking it out, it's not just visiting, it's doing environmental sampling, soil sampling, radioactive materials would be tested for and if they are detected. If the Iranians said, 'No, you can't see that site,' whether it's a military site or not, the IAEA, if it deems the site suspicious, can ask for access to it. So there are no limitations on the type of facility that can be accessed but there has to be a reasonable suspicion.
So, if Iran says no, what happens is, there is a process that has to conclude finally within 24 days, during which time if Iran and the IAEA can't agree on the terms of access or otherwise satisfy the IAEA, it comes to an entity called the Joint Commission.
The Joint Commission is comprised of all the signatories - parties, I should say - to the agreement. So that would be the U.S., the U.K., France, Germany, the European Union, Russia, China and Iran, ok? So if five of the eight of those members of the Joint Commission say, 'No, we're concerned, this has to be investigated,' and that would just be the United States and our European partners, that makes five, then ... Iran, is bound to grant that access.
And if it doesn't, if it still refuses, then it is in violation of the entire agreement. So, um, and that entire process has to be completed in 24 days or less.
So let's say it's in violation, then what happens? What happens is the United States or any of the five permanent members of the Security Council can go straight into the Security Council and say, 'There has been a, there is a dispute. We believe there has been a violation. There needs to be a meeting of the Security Council. And a decision from the Security Council.' There's no need for the other members of the commission to be involved in that. The United States can go straight in itself.
And then after a process in the Security Council, the United States can unilaterally - or France or the UK or even Russia - can go in unilaterally and say, 'I want the sanctions to snap back,' meaning come back into effect in full immediately. And then there would be a vote which, in which the sanctions would snap back unless the United States said 'No.'
So we, in other words, Jeff, have complete ability on our own, without Iran, without any other country coming to the same conclusion, to go into the Security Council with evidence of a violation after a process and snap those sanctions back into place.
Q. And it's more than a request then for those -
A. It's not a request. It's a requirement.
Q. You mentioned the 24 days.
A. And by the way, Jeff, just to be clear, I'm sorry.
Q. That's all right.
A. We were talking about an access-related violation. There are other potential sorts of violations of the agreement that would not necessarily be related to access. And they, too, are subject to this dispute-resolution procedure that can result in a snap-back of sanctions.
Q. You mentioned the 24 days. Given Iran's history, isn't it likely that they would have some time in that period to hide at least some of evidence of suspicious activity before the inspectors arrived?
A. Good question. But let me also explain why our nuclear experts are very confident that 24 days is plenty -
Q. It seems like a lot -
A. Is more than an adequate time and we shouldn't be worried.
First of all, the kind of facility we're talking about would have to be a secret facility or unknown facility in which nuclear activity was taking place. That's not a place the size of this room or even perhaps the size of this building. That would be a major facility.
And in that facility, given the nature of the materials we're talking about, which are highly radioactive, and given the sophistication of the testing equipment that the IAEA and we now have, any residual would be detectable for many, many not just days but months and years thereafter.
So they can't hide the evidence of that in any meaningful way in that kind of period of time. And you can't hide a facility of that size very easily for long.
And by the way, Jeff, if we were worried about a facility in that scenario that I just described, we would be watching it very carefully throughout the duration of the period of our suspicion until our suspicions were resolved satisfactorily. So we are very confident and our most capable nuclear experts are confident that this procedure is more than adequate.
Q. Where will the stockpile of enriched uranium and centrifuges go as they are drawn down? Will it be to Russia, and do you have any wider security concerns about that?
A. Well, let me, so there are two different things here.
Q. Yeah, two questions.
A. The enriched uranium stockpile will have to be reduced by 98 percent. So that can be accomplished through a number of different means. It can be shipped out to a third country, like Russia. That's probably the most likely means.
And we have, Russia has its own fissile material, it's handled it appropriately, we're not concerned about that. They are responsible when it comes to the handling of that kind of material, and that's been amply demonstrated for decades.
They could down-blend it and turn it into material that's not usable in the same way, so that's another alternative. Or there is a market, an international market, a responsible commercial market for this kind of material, so it's possible that it could be rendered safe and then sold on the open market. So there are a variety of ways that could be accomplished.
Centrifuges will be dismantled. They will be taken out, the piping, all of the materials that are involved in the installation and operation of those centrifuges will be taken out.
Right now Iran has roughly 19,000 operating centrifuges. Under this deal, they will go down to 6,000. Those that are removed will go into storage. They will be monitored 24/7 by the IAEA. As I said, all of the piping and related materials would be taken out.
So they will be under lock, under 24/7 monitoring, with cameras and everything else, so they will be rendered out of commission, unusable. And the only way that they would be used is if one, if a centrifuge that is allowed to operate broke down, they could - with the IAEA's approval and knowledge - take one out of the stockpile to replace it. So that's the way the centrifuges will be dealt with.
Q. Moving on, but still on Iran, the president talked in his press conference today about wanting to continue communication with Iran. Do you now have a forum to hold talks on other issues or areas of disagreement like Iraq, Syria, or the detention of U.S. nationals?
A. I wouldn't say we have a forum; I'd say we have channels. And frankly, we've had channels for a period of time. When I was the ambassador up in New York, on occasion if there was a need to transmit a message, we would transmit a message to their ambassador in New York. Now we have other channels.
We have always had the Swiss channel. The Swiss government is our protecting power in Tehran that, since we don't have an embassy there, they pass messages for us.
But what's happened over the course of the almost two years of these negotiations is that Secretary Kerry now has a relationship with Foreign Minister Zarif. Undersecretary of State Wendy Sherman has a relationship with her counterpart. So there are other channels that we can utilize.
And when it is in our interest to utilize them, we wouldn't hesitate to do so any more than we have in the past.
Q. Do you expect there to be progress, particularly on that issue of American nationals, given these channels that you have?
A. We are working very hard, Jeff, on the issue of our Americans who are detained in Iran and have been not only throughout this process but since the time of their detention.
And we were very specific about the need not to link their fate to that of the negotiations because we had no idea for certain whether negotiations would succeed or fail. We didn't want to give the Iranians a bargaining chip to use against us in the negotiations.
So whether or not these negotiations had succeeded, we've made it a very, very high priority to get our people back, and we're going to continue to work hard to do that.
Q. It's no secret that Israel and some of the Gulf allies are worried or opposed to this deal. What new measures is the administration considering to beef up security protections for those allies?
A. Well first of all, Jeff, in our judgment, and I think in the judgment of many thoughtful people in those countries, the best thing we can do for their security is to ensure that they don't have a neighbor with nefarious intentions armed with a nuclear weapon. And this deal does that.
Q. They would see that differently.
A. Some would, some have, but they can't argue that this is, this deal would accomplish the objective of preventing Iran from getting a nuclear weapon for many years to come.
What they're arguing is that in Iran, out from under sanctions, if in fact eventually Iran fulfills its obligations under this deal - and they don't get any sanctions relief until they've completely fulfilled their key obligations - but if they have, and we can then verifiably determine that they are not in a position to obtain a nuclear weapon, then there will be incremental sanctions relief.
The concern is that with that sanctions relief, Iran will have more resources and perhaps more international stature to be a menace in the region, which it already is, and we know that.
Q. So what ...
A. And that's a concern. And let me, I'll answer the question about what we will do, but I also want to make sure people understand that this deal was never about trying to prevent Iran from using proxies in the region, or destabilizing the region.
This was always about our principle and primary concern as shared by the government of Israel and their neighbors in the region. Israel has said that an Iran with a nuclear weapon is an existential threat. We are addressing that threat directly and effectively in this deal.
But we understand that Iran has played a very destabilizing role in the region, it continues to foment unrest and to have supported terrorism, so we want to do what we can to bolster the capacity of our allies and partners in the region to resist that.
So when the president hosted the Gulf countries at Camp David in May, we outlined a series of mutual steps that we have agreed to take to bolster their security - security assurances, concrete support to those countries to step up their own capacity to defend themselves, whether directly with conventional military means or through counterterrorism cooperation, or countering cyber-intrusions. We have a whole series of stepped-up support that we and our Gulf partners have agreed to provide each other.
And similarly with Israel, Israel is obviously our closest ally and partner in the region. Our security and intelligence relationship with Israel is stronger and deeper than it has ever been. Prime Minister Netanyahu has said that publicly on many occasions.
And it will remain so. And we will also be looking forward, if the Israelis are interested and willing - they haven't said so yet - to discuss with them how we might further deepen and strengthen our security and intelligence cooperation, which has always been in our mutual interest, and remains so and perhaps more so today.
Q. But I'm not hearing any new initiatives. Is that accurate?
A. No. There are a series of new initiatives that were announced in May.
Q. I mean after this agreement.
A. No, because we, we thought it was essential to do it before an agreement, whether or not there was an agreement. Because in the context of an agreement, they'll have certain concerns that we want to satisfy. In the context of no agreement, their concerns and the threat they may face or feel they face, could be even greater.
So we were saying very clearly to our Gulf partners, that our interest in, our mutual interest in stepping up our cooperation exists in either scenario, so let's get started now.
Secretary of Defense Ash Carter will be going out to Israel this weekend, and to Saudi Arabia, and he will be continuing our practical cooperation with both Israel and our partners in the Gulf as to dealing with the whole range of regional security challenges, but particularly their concerns and our shared concerns about Iran.
Q. Let me ask you about energy as a part of this deal. What are the geopolitical implications of a lot of oil now flooding onto the market once this deal is put in place?
A. Well first of all Jeff, our expectation is this will be gradual. As I said earlier, there will be no sanctions relief including of the oil sanctions unless and until Iran fulfils all of the steps that it needs to take under this agreement related to its nuclear program.
So it's got to dismantle two-thirds of its centrifuges. It's got to get rid of 98 percent of its uranium stockpile. It's got to allow continuous and extraordinary access to its nuclear facilities. It's got to take steps to make inoperable its current heavy-water plutonium reactor, among other steps.
It's got to satisfy the IAEA that any questions that the IAEA has that remain about Iran's past history of pursuing nuclear weapons have been resolved satisfactorily. Those are all prior steps, before any sanctions relief, that Iran has to take.
So let's say they do all those things. And based on their performance under the interim agreement, where they've done everything they said they would do, I think there's reason to expect that they will fulfill those steps.
If they do, then the sanctions will begin to be lifted. And the financial and the oil sanctions in particular will come off.
We think that will be many months from now, because it's going to take time for Iran to fulfill those requirements, but when they do, the oil won't come all on to the market at once.
It's going to take time for that to ramp up. And we do think - obviously, you know oil's a commodity, so there's a supply and demand equation, and given what other supply may be on the market at that time, it could have the effect of at least for a period of time reducing oil prices.
For those of us who drive, that's arguably a good thing. For those of us worried about the environment - and I do both - it's an issue to be taken into account. And geopolitically, obviously if oil prices come down, it will affect the revenue streams of the oil-producing countries.
And they are not only Middle Eastern countries, there's some in Latin America, like Venezuela. There's some in Africa, like Nigeria and Angola, and of course Russia.
Q. It would leave the United States in the rare position of being the last industrialized country that does not allow exports of oil. Would you advocate for that to change?
A. That's an unrelated issue. That has nothing to do with whether or not Iran is out from under its oil sanctions.
Q. Sure but it's an interesting factoid. Is that something the administration will encourage a shift on?
A. I have nothing to add on that one.
Q. Let me close with one question that's not related to Iran. It's related to China.
A: Totally different topic.
Q: Totally different topic. Administration officials have indicated that China is likely the culprit behind the hacking of OPM (Office of Personnel Management). Given that, are you considering any consequences, and could that range from criminal or any other type of sanctions on China?
A. Jeff, we have not made any public determinations or attributions about who is behind the OPM hacking. And there's been a lot of speculation. So I'm not going to get ahead of the curve and try to do that.
Obviously, we have very serious concerns about the intrusions at OPM, and other concerns that we've expressed privately and publicly about China's cyber activities, and we're going to continue to press those concerns and take appropriate action.
Q. Will there be tension on that with China for a while?
A. This is an issue that we're always discussing with the Chinese, at my level, at the president's level, across the government, and we'll continue to do that.
Q. Ambassador Rice, thanks very much for being with us today.
A. Thank you. (Reporting by Jeff Mason; Additional reporting by Lisa Lambert, Megan Cassella and Roberta Rampton; Editing by Toni Reinhold)
* China is No.3 overseas destination for U.S. crude - EIA (Adds settlement prices, comments, U.S. refining details)
NEW YORK, March 29 Stocks rose slightly on Wall Street on Wednesday, just enough to buoy a global equities index, while crude futures hit a week high after a smaller-than-expected build in U.S. inventories.