Text: Indyk Remarks to the Asia Society on US-Iran Relations Oct. 14

"The United States has an interest in better relations with the Islamic Republic of Iran, but for this to happen we must find a way together to address the respective concerns on each side," says Assistant Secretary of State Martin S. Indyk.

"The United States wants Iran to changes its policies that are in support of terrorism, violent opposition to the Middle East Peace Process and the proliferation of weapons of mass destruction," Indyk said in remarks October 14 at the Asia Society.

"And Iran wants us to change our policies on sanctions."

"We believe the best way to achieve these changes is through a parallel process that can only be developed through an authoritative government-to-government dialogue, without preconditions," he said.

In an address to the same group a year ago, Secretary of State Madeleine Albright reached out to Iran, signaling that "we are prepared to develop with the Islamic Republic a road map in which both sides would take parallel steps to deal with the issues of concern to each other so that together we could lay the foundations for building and sustaining a normal relationship. Since then, President Clinton has made clear his own personal commitment to this approach and his desire to acknowledge, past differences and overcome current ones," Indyk said.

Regarding sanctions, Indyk said "it is important to remember that U.S. sanctions policy seeks to influence the behavior of regimes, not to deny their people basic humanitarian necessities. Sales of food, medicine and other human necessities do not enhance a nation's weapons of mass destruction capabilities or its ability to support international terrorism."

One of the objectionable Iranian government practices that Indyk noted is its continued support to a variety of terrorist organizations. He said senior Iranian officials have condemned terrorism and the killing of Israelis and would accept a peace acceptable to Palestinians. However, Iranian policies do not reflect these words.

Iran continues to give aid to the Hezbollah in Lebanon and President Khatami met with leaders of the Palestinians opposed to the peace process in Syria in May, Indyk said.

He said that while these activities continue, the United States would oppose investment in the development of Iran's energy sector, support any international debt restructuring effort, or extension of favorable credit terms by Iran's principal foreign creditors.

However, Indyk said, "we have made clear that we stand ready to change all of these policies as soon as Iran changes its practices." He noted that the United States and Iran have worked together on such issues as the eradication of the illegal drug trade through the UN Drug Control Program; the exchanges of scholars and athletes and on the situation in Afghanistan.

"We continue to work with Iran in the Six-Plus-Two forum in Afghanistan, where the Islamic Republic has played a constructive role in the search for a peaceful solution to the civil strife in that war-torn country," he said.

Indyk noted that last week the State Department added to its list of terrorist organizations the National Council of Resistance (NCR) as an alias for the Mujahedin-e Khalq (MEK), a group which has assassinated Iranian officials.

"Such designations have the effect of making it illegal to provide financial support to these organizations. This will further reduce the Mujahedin-e Khalq's ability to generate support in this country," he said.

Following is the text of Indyk's remarks, as delivered:

(begin text)

Assistant Secretary of State Martin S. Indyk
Remarks
Asia Society
October 14, 1999

"Iran and the United States: Prospects for a New Relationship"

(Text as Delivered)

Thank you very much Nick. Ladies and Gentlemen it is a real pleasure and honor for me to appear at a forum sponsored by the Asia Society. Ever since Congressman Steve Solarz took South Asia away from the Near East Bureau, we have not had the opportunity to work much with such a respected think tank that does such excellent work promoting U.S. relations with the vast area that encompasses Asia. Our only overlap in fact is Iran, where the Near Eastern Bureau has responsibility. Therefore, we were delighted that the Secretary of State, Madeleine Albright, was able to make her milestone speech on Iranian policy before the Asia Society last year. I am delighted to have a chance to follow in that tradition to address the prospects for a new relationship between Iran and the United States today.

As you look across the region for which I am responsible at the State Department, which covers the area from the Maghreb through the Middle East across the Gulf to Iran, one is struck by the changes underway. The Israelis and Palestinians are moving forward quickly to implement their interim commitments and negotiate a framework agreement on final status issues designed to end the conflict between them. We are working with Israel and Syria to lay the groundwork not only for resuming negotiations but also. for bringing them to a prompt conclusion. Within the next year, there is a very real opportunity to settle this long-standing Arab-Israeli conflict in a comprehensive way, once and for all. Elsewhere, in Algeria, Egypt, Turkey and Jordan, extremism is on the retreat. Moderation and pragmatism are on the march. And as we've seen in Jordan, Morocco, and Bahrain, a new generation of leaders is coming of age in the region, leaders who bring with them a new vision and a new energy for a new millennium.

Iran too is engaged in a process of change. In recent years, drawing on their proud and glorious history of tolerance and justice, the Iranian people have demonstrated a powerful desire for greater participation in their governance, freedom from undue interference by the state in their private affairs, and greater openness and contact with the outside world. Iran's leaders have taken steps to address these concerns, conducting fair presidential and local elections, allowing increased public debate, placing greater emphasis on the rule of law, and shifting in some important areas from a foreign policy of confrontation to one of dialogue and cooperation.

Secretary Albright acknowledged these changes in her Asia Society speech last year. The main point that she made at the time, in signaling a willingness to change our policy towards Iran, was that we are prepared to develop with the Islamic Republic a road map in which both sides would take parallel steps to deal with the issues of concern to each other so that together we could lay the foundations for building and sustaining a normal relationship. Since then, President Clinton has made clear his own personal commitment to this approach and his desire to acknowledge, past differences and overcome current ones. Unfortunately, the Iranian Government's response to this overture has been, for the most part, hide-bound and unimaginative, insisting that the U.S. must first take a number of unilateral steps as some kind of precondition for an official dialogue.

Given Iran's current reluctance to begin a bilateral dialogue, we have pursued other avenues that can serve to broaden our engagement with Iran. We have worked constructively with Iran in multilateral settings on issues of common concern, such as countering the spread of narcotics and the situation in Afghanistan. Last year, Iran's eradication of its poppy crop meant that Iran no longer met the criteria for inclusion on our list of major drug producers. Accordingly, we removed Iran from that list, and we fully support the UN Drug Control Program's plans to increase its cooperation with and activities in Iran. This is a case where positive Iranian actions have been met with a positive U.S. response. We also continue to work with Iran in the six-plus- two forum on Afghanistan, where the Islamic Republic has played a constructive role in the search for a peaceful solution to the civil strife in that war-torn country.

We have also supported greater contact between our two peoples, for we believe that such exchanges can increase mutual understanding and respect and can help overcome decades of mistrust. We have streamlined our visa policies and supported academic and athletic exchanges. We have hosted wrestling teams, newspaper editors, film directors and musicians, and numerous Iranian scholars here in the United States. At the same time, we are pleased that Iran has opened its doors to increasing numbers of American visitors -- wrestling teams, scholars, graduate students, and museum officials. We were glad to note yesterday a clear public statement by a high Iranian official about the need to ensure the safety of tourists in Iran, and visitors, including Americans. We have also, on a regular basis, permitted Iranian government representatives to travel to a variety of locations in the U.S. to take part in these "people-to- people" exchanges. We think it's time that Iran allowed U.S. officials the same privilege in their country.

Additionally, and within the context of a broad review of U.S. sanctions policy, President Clinton announced in April his decision to exempt commercial sales of food, medicines and medical equipment from future and current sanctions regimes where we have the authority to do so. The Treasury Department in August published regulations implementing this policy change. This decision has enabled the sale of certain U.S. items to Iran, notably bulk sales of U.S.-origin grain.

This change in our policy does not conflict with our effort to apply economic sanctions on the Government of Iran. Any benefit derived will accrue to the Iranian people and of course to American farmers and manufacturers, It is important to remember that U.S. sanctions policy seeks to influence the behavior of regimes, not to deny their people basic humanitarian necessities, Sales of food, medicine and other human necessities do not enhance a nation's weapons of mass destruction capabilities or its ability to support international terrorism.

Apart from this recent adjustment, our sanctions policy remains in force vis-a-vis Iran. The reasons behind this policy of applying economic pressure remain the same today as they did when that policy was first invoked. U.S. sanctions are a response to Iranian Government practices that violate international norms and threaten our interests and those of our allies. Their intent is to deprive Iran of the resources to pursue those activities and to demonstrate to Iran's leaders that pursuing such policies comes at a price. That they cannot threaten Western interests and yet enjoy the benefits of normal relations with the West In this regard, we will continue to oppose investment in the development of Iran's energy sector, bilateral debt rescheduling, Paris Club debt treatment for Iran, and the extension of favorable credit terms by Iran's principal foreign creditors. We will also continue to oppose loans to Iran by the international financial institutions. But we have made clear that we stand ready to change all of these policies as soon as Iran changes its practices in the areas of our concern.

Some of these objectionable Iranian Government practices unfortunately have continued, although not to the same degree in all areas, under the present government. Iran remains on this year's State Department list of state supporters of terrorism. While Iran apparently conducted fewer anti-dissident assassinations abroad in 1998 than in 1997, Iran continues to support a variety of groups that use terrorism to pursue their objectives.

At the same time, Iran is also a victim of terrorism. In 1998 several high-ranking members of the Iranian Government were attacked and at least two were killed in attacks claimed by the terrorist group Mujahedin-e Khalq (MEK). More recently, that same group claimed responsibility for the assassination of Iran's deputy chief of staff. We condemn these acts as we condemn all acts of terrorism. In this regard, just last week we redesignated the MEK as a foreign terrorist organization and, for the first time, listed the National Council of Resistance (NCR) as an alias of the MEK Such designations have the effect of making it illegal to provide financial support to these organizations. This will further reduce the MEK's ability to generate support in this country.

Senior Iranian officials have publicly denounced terrorism and condemned the killing of innocents, including Israelis; the Iranian government has also stated that Iran would accept a peace acceptable to the Palestinians. We assume that these statements are sincerely made, and it is therefore also reasonable for us to expect that the actions and policies of the Islamic Republic should reflect them. Unfortunately, so far this has not been the case. Iran was harshly critical of the Wye Agreement and again criticized the recent Sharm al Sheikh agreement. Iran's Hezbollah proxy in Lebanon has threatened Chairman Arafat's life for the supposed sin of making peace with Israel. President Khatami himself met with leaders of the Palestinian rejectionist groups when he visited Syria in May and apparently promised them more support. And this Iranian encouragement comes at a time when Syria itself is telling most of these groups to cease their "military" activity and Libya is apparently evicting Abu Nidal operatives from its territory and forbidding other terrorist elements from entering Libya.

This is no small matter. At a time when the rest of the Arab world is looking towards a future of peace and reconciliation with Israel, what business is it of Iran to encourage terrorist activity involving Hezbollah, Hamas, Palestinian Islamic Jihad, and Ahmed Jibril's PFLP-GC with the intention of destroying the hopes of Israelis and Arabs alike for a comprehensive peace? Why is Iran still fomenting trouble in Jordan and giving support and safe haven to Egyptian extremists at the same time as it is moderating its policies towards most of its Arab neighbors across the Gulf? Is it because Egypt and Jordan play a leading role in the peace process?

We have made clear to Iran that there not cannot be a lifting of the sanctions we have imposed or an improvement in relations until Iran takes meaningful steps to end its support for terrorism and cooperates in the fight against terrorism.

In the case of the attack on U.S. personnel at Khobar, Saudi Arabia, our investigation is ongoing. This week, we removed Hani al Sayegh to Saudi Arabia, where we expect him to stand trial for his involvement in the Khobar bombing. We are investigating information concerning the involvement of Saudi nationals, Iranian government officials and others. We have not reached a conclusion regarding whether the attack was directed by the government of Iran. Iran has denied any involvement in the bombing. Cooperation by Iran in this investigation would be an important signal that it is changing its policy of threatening our interests and those of our friends and allies in the Middle East.

We are also concerned by Iran's continued drive to develop weapons of mass destruction and the ballistic missiles necessary to deliver them. Clandestine efforts to procure nuclear, chemical and biological weapons continue despite Iran's signature on relevant international nonproliferation conventions. In this regard, we are particularly concerned about Iran's nuclear drive. Iran has also tested a ballistic missile -- the Shehab III -- capable of delivering warheads 800 miles and is reported to be close to producing a missile with an even greater range. These developments pose significant potential threats to our friends in the region and to our own presence there.

Clearly, our concern about Iranian WMD and missile development must be considered in a regional context, in which states of the region -- including Iran -- need to feel secure. We continue to support a Middle East free of all WMD. But the kind of proliferation we see in the region today -- be it in Iran, India or Pakistan -- is leading exactly in the wrong direction. Proliferation on the eastern side of the Persian Gulf is, among other things, increasing nervousness on the other side of the Gulf and could drive other countries to seek their own weapons systems. Thus Iran's drive for what may be intended as a deterrent capability has the potential to be deeply destabilizing for the Middle East region.

Iran's efforts to develop WMD and ballistic missiles, together with its other ongoing policies of concern, are the reason we oppose investment in Iran's petroleum sector, Iran's participation in the development and transport of Caspian resources (including pipelines across Iran), multilateral lending to Iran, and Iran's full integration in international economic fora. A change in the U.S. position on these issues will require Iran to begin to bring its practices into line with international norms.

Finally, we continue to observe with great interest internal developments in Iran. As we have often said, we fully respect Iran's sovereignty and the right of the Iranian people to choose their system of government as they see fit. We have no interest in and we have no policy of interference in Iran's internal affairs. However, we will not shy away from expressing our support for values that we believe to be universal: human rights, rule of law, and democracy. In this regard, both the presidential election in 1997 and the recent municipal elections were remarkable for their openness and the level of participation of the Iranian people. Iran faces another important election in February of next year, when the Iranian people will again exercise their constitutional right to choose their parliamentary representatives. Statements by Iran's elected leadership in support of human rights and the rule of law deserve acknowledgment and support. Further, a vigorous press continues to assert itself admirably in the face of efforts at censorship. These are important developments that represent real change.

At the same time, we are concerned at the gap that remains between words and deeds. A revolutionary court judge recently announced that four of the student demonstrators arrested in July had been tried and sentenced to death. Many others remain in custody. We have also seen the continuing detention, without formal charge, of 13 members of the Jewish communities of Shiraz and Isfahan, on unfounded accusations of espionage. Our recently published report on religious freedom in Iran detailed the persistent mistreatment by the Iranian government of the Baha'i religious minority. The systematic oppression of the Baha'i, including the denial of their right to worship, elect officers within their religious hierarchy and educate their young, as well as arbitrary arrest, detention and torture of Baha'i followers led the Secretary to designate Iran as a country of particular concern for religious freedom under the terms of the International Religious Freedom Act. In sum, we have seen real change for the better in Iran, but the picture remains mixed and the outcome still uncertain.

We continue to believe that nations upholding respect for democratic values, tolerance and the rule of law internally will also respect and abide by internationally accepted norms of behavior in their foreign policies. This is a principle that underlines our approach to Iran, as well as to other parts of the world.

The United States has an interest in better relations with the Islamic Republic of Iran. But for this to happen, we must find a way together to address the respective concerns of each side. For our part, we want to encourage Iran to change its policies on terrorism, violent opposition to the peace process and the proliferation of weapons of mass destruction. For their part, they want us to change our policies on sanctions. We believe the best way to achieve these changes is through a parallel process that can only be developed through an authoritative government-to-government dialogue, without preconditions. We should move beyond the stage of gestures and symbols. Indeed, it is time for the United States of America and the Islamic Republic of Iran to engage each other as two great nations: face-to-face, and on the basis of equality and mutual respect When the Government of Iran is ready to engage, we will be too.

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(Distributed by the Office of International Information Programs, U.S. Department of State.)