ATTORNEY GENERAL ERIC HOLDER TESTIFIES BEFORE CONGRESS

The following excerpt is from the Department of Justice website:

“Attorney General Eric Holder Testifies Before the U.S. House of Representatives Committee on Appropriations Subcommittee on Commerce, Justice, Science, and Related AgenciesWashington, D.C. ~ Tuesday, February 28, 2012
As prepared for delivery

Chairman Wolf, Ranking Member Fattah, and distinguished Members of the Subcommittee: Thank you for the opportunity to appear before you today – and for your ongoing support of the Justice Department’s critical work.   I look forward to providing an update on our recent progress and future plans – and, specifically, to discussing how the President’s proposed budget for fiscal year 2013 will enable the Department to more effectively fulfill its core missions and build on its extraordinary record of achievement.

The President’s Budget demonstrates a strong commitment to the Justice Department’s work and ensures that we have the resources necessary to meet our essential responsibilities.   Of course, no responsibility is more important than our obligation to protect the American people – from terrorism, violent crime, financial fraud, and a range of threats that put our national security and economic stability at risk.

In each of these areas – and despite the unprecedented demands and fiscal constraints that we’ve confronted in recent years – the Department has made remarkable – and, in many cases, historic – progress.   We’ve also proven our commitment – and ability – to act as sound stewards of precious tax payer dollars.   For example, in response to my call to identify savings across the Department, almost $700 million worth savings have been developed – funds that are being reinvested in critical mission areas.   I also want to note that, in the Department’s FY 2013 Budget of $27.1 billion, proposed spending increases have been exceeded by proposed cuts.

Since I last appeared before this Subcommittee, the Department has achieved several milestones – perhaps most notably in our national security efforts.   For example, last May a grand jury indicted Waad Ramadan Alwan on 23 charges, including conspiracy to use a weapon of mass destruction against U.S. nationals abroad; attempting to provide material support to al Qaeda in Iraq; and conspiracy to transfer, possess, and export explosive devices against U.S. troops in Iraq.   In December, Alwan pleaded guilty to all 23 charges.

In October, the Department obtained a conviction against Umar Farouk Abdulmutallab for his role in the attempted bombing of an airplane full of holiday travelers on Christmas Day in 2009.  Earlier this month, he was sentenced to four life terms in prison.   By working closely with our U.S. and international partners, we’ve also thwarted multiple terrorist plots – including one by two Iranian nationals to assassinate the Saudi Ambassador to the United States, and several others hatched by homegrown violent extremists.   We also secured the conviction of notorious arms dealer Viktor Bout for his efforts to sell millions of dollars in weapons for use in killing Americans.

These are just a few of many examples.   And with the sustained and additional investments included in the President’s Budget – for the Comprehensive National Cybersecurity Initiative, the High Value Detainee Interrogation Group, the Joint Terrorism Task Forces, the Render Safe Program, and other national security efforts – I am confident that the Department can maintain and strengthen our intelligence-gathering and surveillance capabilities.

I’m also confident that, with the targeted investments included in the most recent budget request, we can bring our fight against financial fraud to a new level.   Over the last three years, the Justice Department – and a host of our federal, state, and local partners – have come together in an unprecedented national effort to combat and prevent a wide range of financial-fraud crimes.   We are holding accountable those who have violated our laws and abused the public trust.

Through the work of our United States Attorneys’ Offices and the Justice Department’s Civil and Criminal Divisions – we are making meaningful, measurable progress in this fight to ensure stability, accountability, and – above all – justice.

Through collaboration made possible by the interagency Financial Fraud Enforcement Task Force, launched by President Obama in 2009, we have taken bold steps to address the causes and consequences of our economic crisis.   I am honored to chair this initiative.   The work of the Task Force has resulted in charges against CEOs, CFOs, corporate owners, board members, presidents, general counsels, and other executives of Wall Street firms, hedge funds, and banks involved in financial-fraud activities.

In just the last six months, the Justice Department has achieved prison sentences of up to 60 years in a variety of fraud cases.   We obtained a conviction – and record prison sentence – in the largest hedge-fund insider-trading case in U.S. history.   And we’ve secured lengthy prison terms for the architects of multimillion-dollar Ponzi schemes involving hundreds of investors.

In addition to advancing these and other successful prosecutions, the Task Force has helped us to identify and focus on priority areas.   For example, in recent weeks, it has given rise to two important working groups: the Residential Mortgage-Backed Securities Working Group, which brings together a variety of partners in order to marshal and strengthen current state and federal efforts to investigate and prosecute abuses in the residential mortgage-backed securities market; and the Consumer Protection Working Group, which will enhance civil and criminal enforcement of consumer fraud – as well as our anti-fraud public education efforts.

We’ve taken other steps to assist struggling consumers – and, specifically, struggling homeowners.   Just a few weeks ago, the Departments of Justice and Housing and Urban Development, other agencies, and 49 state attorneys general achieved a landmark $25 billion agreement with the nation’s top five mortgage servicers.   This marked the largest joint federal-state settlement in our nation’s history. Of course, this settlement will not – by itself – cure all that ails our housing market.   But – combined with other measures – it is a step in the right direction toward the housing recovery that our nation so badly needs.

In just the last two fiscal years, we’ve indicted more than 2,100 individuals for mortgage-fraud related crimes.   And, last year, the Department’s Civil Rights Division – through its new Fair Lending Unit – settled or filed a record number of cases – including a $335 million settlement, the largest fair lending settlement in history – to hold financial institutions accountable for discriminatory practices directed at African and Hispanic Americans.

But there is perhaps no better illustration of the effectiveness of our anti-fraud efforts than our recent work to combat health-care fraud.   Over the last fiscal year alone – in cooperation with the Department of Health and Human Services and other partners, and by utilizing authorities provided under the False Claims Act and other critical statutes – we were able to recover nearly $4.1 billion in funds that were stolen or taken improperly from federal health-care programs.  This represents the highest amount ever recovered in a single year.

At the same time, we opened more than 1,100 new criminal health-care fraud investigations, secured more than 700 convictions, and initiated nearly 1,000 new civil health-care fraud investigations.   In fact, over the last three years, for every dollar we spent combating health-care fraud, we’ve been able to return an average of seven dollars to the U.S. Treasury, the Medicare Trust Fund, and others.

The President’s proposed budget also would bolster our fight against international crime networks, drug cartels, gangs, and cyber criminals; and enhance efforts to identify additional ways to protect the most vulnerable members of society, as well as the law enforcement officers who keep us safe.   It also would expand on the critical work being done by our Civil Rights Division to ensure that the rights of all American are protected – in border areas, workplaces, housing markets, and voting booths.

I am proud of these – and our many other – achievements.   And I am committed to building on them.   I know you understand that, in this time of great challenge and consequence, we simply cannot afford to “cut back” on the extent or quality of justice that we are obliged to deliver.   The Department is responsible for protecting this nation and enforcing the law – and these efforts must be appropriately and adequately funded.   I look forward to continuing to work with this Subcommittee and with Congress to accomplish this.   And, now, I am happy to answer any questions you may have.”

HHS SECRETARY KATHLEEN SEBELIUS SAYS NEW HEALTH CARE BILL IN SENATE WILL LIMIT BENEFITS

The following excerpt is from the Department of Health and Human Services website:

Statement by HHS Secretary Kathleen Sebelius on the Blunt Amendment

"Earlier this month, the Department of Health and Human Services reported that over 20 million American women in private health insurance plans have already gained access to at least one free preventive service because of the health care law.  Without financial barriers like co-pays and deductibles, women are better able to access potentially life-saving services, and cancers are caught earlier, chronic diseases are managed and hospitalizations are prevented.

A proposal being considered in the Senate this week would allow employers that have no religious affiliation to exclude coverage of any health service, no matter how important, in the health plan they offer to their workers.  This proposal isn't limited to contraception nor is it limited to any preventive service. Any employer could restrict access to any service they say they object to. This is dangerous and wrong.

The Obama administration believes that decisions about medical care should be made by a woman and her doctor, not a woman and her boss.  We encourage the Senate to reject this cynical attempt to roll back decades of progress in women’s health."

U.S. RECOGNIZES 20TH ANNIVERSARY OF U.S.-AZERBAIJAN BILATERAL RELATIONS

The following excerpt is from a U.S. State Department e-mail:

"The 20th Anniversary of U.S.-Azerbaijan Bilateral Relations

Remarks

Philip H. Gordon
Assistant Secretary, Bureau of European and Eurasian Affairs

Cosmos Club

Washington, DC

February 27, 2012

---

ASSISTANT SECRETARY GORDON: Thanks so much, Ambassador, for that kind introduction.
The Ambassador came to see me the other day, we had a very nice chat. As you left I couldn’t help but think to myself he seems almost as American as I am. [Laughter]. The Toledo, Ohio thing now puts -- [Laughter]. I didn’t know about the Toledo thing. But that explains a lot. We had a good talk then, and I’m really honored and delighted to be here with this distinguished group. You referred to it as a distinguished group and in the few minutes that I’ve been here, just looking around the room, it’s a testimony to the relationship of the people who have turned up here from Congress, from the U.S. military, my colleagues at the State Department, the Defense Department, the White House. It underscores the importance of this relationship, and again, I’m honored to be able to offer a few remarks on this 20^th Anniversary of U.S.-Azerbaijan diplomatic relations.
There are far too many distinguished individuals to single out by name. I would, as you did, note General Scowcroft, I really appreciate your being here; Governor Sununu we keep in touch with on these issues; and so many others and Members of Congress.

It’s of course not a surprise, it speaks to the importance that President Obama, Secretary Clinton place on the relationship with Azerbaijan. When the Secretary visited Baku last year -- I was pleased to be able to accompany her to Azerbaijan -- she said very clearly that the bonds between the United States and Azerbaijan are deep, important and durable, and that’s something I would want to stress here with this group this evening.
We have been building on those bonds in the 20 years since diplomatic relations were established and these links are on multiple fronts but three core areas are really of central importance to the relationship. Those are the areas of security, energy and political and economic reform.

Where international security is concerned our soldiers, American soldiers, Azerbaijani soldiers, have stood shoulder to shoulder in Kosovo, in Iraq, and we are very grateful for Azerbaijan’s continued commitment to the allied effort in Afghanistan where Azerbaijani troops have served with great distinction.
Azerbaijan, of course, has also served as a vital transportation route for supporting NATO operations in Afghanistan with thousands of U.S. military flights transiting over Azerbaijan on the way to Afghanistan. You know the importance this President and Secretary place on our success in Afghanistan and Azerbaijan’s contribution to that success is immense.

You’ve recently taken a seat on the UN Security Council for a two year term, assuming very important responsibilities for promoting global security, and Azerbaijan has also played a critical role in enforcing international sanctions against Iran, another high priority for this administration.
On security, no issue is more important than our commitment to a peaceful and fair settlement of the Nagorno-Karabakh conflict. As a co-chair of the OSCE Minsk Group, the United States continues to work closely with the sides to achieve a lasting negotiated settlement.

The final steps towards peace, of course, are often the most difficult, but we believe peace is possible and necessary. And with commitment and political will from the sides, we can move towards a more secure and prosperous future.

It remains our conviction that only a negotiated settlement can lead to long-term peace and stability and open new opportunities for regional development and cooperation. Again, I want to underscore Ambassador, and to everybody in this room, this administration’s rock solid commitment to that process. Secretary Clinton follows the issue extraordinarily closely and has invested a lot of her time and attention on the issue. It is a commitment that goes to the highest levels of our government and we look forward to working with you. We’re determined to move forward.

We also of course work closely with Azerbaijan on energy security. Again, I’m delighted to see so many distinguished figures from the world of energy both in government and outside here this evening.
We’re building on past efforts like the so-called Contract of the Century and the Baku-Tbilisi-Ceyhan oil pipeline which are the hallmarks of, some of the hallmarks of the past 20 years of our cooperation.
We certainly share Azerbaijan’s goal of establishing a southern corridor in natural gas exports to Europe. We welcome progress made last year including transit agreements that Azerbaijan signed with Turkey last October and that has paved the way for the southern corridor to play a key role in diversifying energy routes and sources for European markets in the years ahead. The southern corridor would be good for Azerbaijan, it would be good for Europe, and it would be good for the United States.

Another important pillar of our efforts, we look forward to continuing work with Azerbaijan on democratic and economic reforms including promoting respect for the rule of law, fundamental freedoms and the development of a vibrant civil society which we believe is essential to Azerbaijan’s long term prosperity and success.
We view Azerbaijan as a country of tremendous potential and we want Azerbaijan to succeed in its goal of developing into a modern democracy and a regional and global leader. It goes without saying that Azerbaijan’s progress in these areas will help to deepen our bilateral relationship. A strong, independent, prosperous and democratic Azerbaijan will always be a friend and a partner for the United States.

Ultimately our people, Americans and Azerbaijanis alike, are the foundation of our friendship as human ties unite our two countries. We have enjoyed real cooperation between our governments, and most importantly over the past 20 years between our societies.

To take just one example among many, American and Azerbaijan -- this is building on the Ambassador’s experience in Toledo -- American and Azerbaijani students participate in academic exchanges every year to broaden our knowledge of each other and to share our ideals.

Over the past 20 years we have welcomed the progress Azerbaijan has made since it gained independence and our relationship continues to advance and deepen. The United States will remain a strong friend and partner.
From our joint efforts on the international stage to our shared cultural and family ties we have a great deal to celebrate about the future of the Azerbaijani-American relationship.
Thank you all again for being here. I’m honored to join you and look forward to building a relationship with you."

PIONEER 10 THE SOLAR EXPLORER CELEBRATES IT'S 40TH ANNIVERSARY

The picture (Right) and excerpt below are from the NASA-Ames Research Center website: 

“Ames Celebrates the 40th Anniversary of Pioneer 1002.29.12 Launched on March 2,1972, Pioneer 10 was the first spacecraft to travel through the Asteroid belt, and the first spacecraft to make direct observations and obtain close-up images of Jupiter. Famed as the most remote object ever made through most of its mission, Pioneer 10 traveled more than 8 billion miles through space in 25 years. (On Feb. 17, 1998, Voyager 1's heliocentric radial distance equaled Pioneer 10 at 69.4 AU and thereafter exceeded Pioneer 10 at the rate of 1.02 AU per year.)

Pioneer 10 made its closest encounter to Jupiter on Dec. 3, 1973, passing within 81,000 miles of the cloudtops. This historic event marked humans' first approach to Jupiter and opened the way for exploration of the outer solar system - for Voyager to tour the outer planets, for Ulysses to break out of the ecliptic, for Galileo to investigate Jupiter and its satellites, and for Cassini to go to Saturn and probe Titan. During its Jupiter encounter, Pioneer 10 imaged the planet and its moons, and took measurements of Jupiter's magnetosphere, radiation belts, magnetic field, atmosphere, and interior. These measurements of the intense radiation environment near Jupiter were crucial in designing the Voyager and Galileo spacecraft.

Pioneer 10 made valuable scientific investigations in the outer regions of our solar system until the end of its science mission on March 31,1997. Pioneer 10’s weak signal continued to be tracked by the Deep Space Network (DSN) as part of an advanced concept study of communication technology supporting NASA's future interstellar probe mission.

After more than 30 years, it appears the venerable Pioneer 10 spacecraft has sent its last signal to Earth. Pioneer's last, very weak signal was received Jan. 23, 2003. The power source on Pioneer 10 finally degraded to the point in 2003 where its signal to Earth dropped below the threshold for detection. NASA's Deep Space Network (DSN) did not detect a signal during a contact attempt on Feb. 7, 2003. The previous three contacts, including the Jan. 23, 2003 signal, were very faint, with no telemetry received. The last time a Pioneer 10 contact returned telemetry data was April 27, 2002.

Pioneer 10 will continue to coast silently as a ghost ship through deep space into interstellar space, heading generally for the red star Aldebaran, which forms the eye of Taurus (The Bull). Aldebaran is about 68 light years away and it will take Pioneer more than 2 million years to reach it. “

U.S. SECURITIES AND EXCHANGE COMMISSION DISCUSSES BROKER-DEALER MONEY LAUNDERING COMPLIANCE

The following excerpt is from the SEC website:

“Broker-Dealer Anti-Money Laundering Compliance – Learning Lessons from the Past and Looking to the Future”
by
David W. Blass
Chief Counsel, Division of Trading and Markets
U.S. Securities and Exchange Commission
SIFMA Anti-Money Laundering & Financial Crimes Conference
February 29, 2012
The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees. The views expressed herein are those of the author and do not necessarily reflect the views of the Commission
or the staff of the Commission.

Introduction
Good Afternoon, I was honored to be asked to speak at this year’s anti-money laundering and financial crimes conference. I would like to thank Kevin Carroll and SIFMA’s AML committee for inviting me here and for SIFMA’s continued commitment over the years in promoting strong practices to combat money laundering.

Working on AML matters in my new role as Chief Counsel in the Division of Trading and Markets is in many ways a return to my roots at the SEC. I joined the Division almost a decade ago, as the primary attorney working in the AML area. Among other things, I represented the SEC during the 2006 FATF Evaluation of the United States and also participated in special due diligence rulemaking for correspondent and private banking accounts. While I have mainly been involved in other regulatory areas before returning to the Division, I’m pleased to be returning to this critically important and interesting area.
As you may know, my office is responsible for legal interpretations and policy issues relating to AML obligations for broker-dealers. Attorneys in the office work with our colleagues internationally, our fellow regulators domestically, in particular, Treasury, the Financial Crimes Enforcement Network, the U.S. Commodity Futures Trading Commission, and the banking agencies. We also work cooperatively with the industry on a variety of AML initiatives.

As I stated, I joined the SEC almost ten years ago, shortly after the passage of the USA PATRIOT Act.1 As I am returning to my original home at the SEC, it has caused me to reflect on the developments in the AML space during this time. I hope today’s talk will highlight the enormous strides made over the years, both by the industry and by regulators, in combating the abuse of the financial system by money launderers and criminal financiers. I also hope to highlight areas for further focus going forward.
Before I do, though, please let me remind you that my remarks represent my own views, and not those of the Commission, any individual Commissioners, or other members of the staff.

PATRIOT Act Transforms the AML Landscape for Broker-Dealers
Getting the basics right.
As we all know too well by now, the tragic events of September 11, 2001, were a watershed moment for the country and for the US financial service industry’s AML and counter-terrorist financing obligations. However, 9/11 was not the beginning of the story for the securities industry in the AML area.

Broker-dealers have been subject to many aspects of the Bank Secrecy Act since it was adopted in the 1970s.2 A focus on AML compliance has been part of the SEC’s program ever since, as evidenced by the early enforcement cases against a few broker-dealers for blatant violations of the Bank Secrecy Act’s currency reporting requirements.3
Still, while some aspects of AML compliance have long been applicable to securities firms, it was only in 2001 that broker-dealers became fully subject to anti-money laundering obligations with passage of the PATRIOT Act. In fact, within a few years of the President signing the PATRIOT Act into law, broker-dealers went from having basic reporting and recordkeeping obligations to a robust and complimentary set of obligations aimed at detecting and deterring money laundering and criminal financing. We at the SEC recognize that implementing those obligations was a significant challenge to the industry, requiring a considerable devotion of resources.

In the immediate aftermath of the PATRIOT Act, our primary focus was on trying to help firms get educated and started with their new AML obligations. In particular, our examiners focused on determining whether broker-dealers had fully implemented adequate AML programs, including identifying customers, detecting and reporting suspicious activity, and in certain cases, developing and implementing enhanced due diligence procedures.

Our enforcement actions from this period reflected that we were in the early days of firms’ AML understanding and compliance. Many firms were cited for failing on the basics. For example: some did not adopt and implement an adequate AML compliance program that complied with the basic AML requirements, including failing to designate an AML officer, to establish an AML training program, to perform basic customer identification, or to create suspicious activity monitoring procedures.4

Lessons learned -- filling out the contours and assessing the gaps
With the passage of time, all of the players – industry, regulators, and, likely, criminals – have become more sophisticated in their approach to AML. With this sophistication and experience, our expectations have changed, and frankly have increased, as is typically the case when a rule has been on the books for a while. As regulators, we have moved beyond the basic question of whether all the required parts are in place and generally functioning to a more nuanced approach addressing the rigor and effectiveness of a firm’s overall AML compliance structure. This evolution is reflective in the enforcement cases that have been brought by the SEC and FINRA over the last couple of years.

Take, for example, a recent action based largely on violations of CIP requirements, which, as you know, broadly require firms to obtain and verify certain identifying information about their customers. In the SEC’s enforcement action, the firm held master omnibus accounts for foreign entities, which in turn were subdivided into sub-accounts for other foreign entities.5 In this case, the holders of the sub-accounts were “customers” for CIP purposes because they were able to conduct unintermediated transactions directly on the US securities markets, but the firm failed to identify and verify the identities of the sub-account holders as required by the CIP rule. Merely calling an account an “omnibus” account did not relieve the firm of its CIP or other obligations with respect to the underlying customer of that account.

Of course, there are many legitimate account structures where it would be appropriate not to look through the account to the underlying accountholders for CIP purposes, and there is some guidance in this area that you may find helpful.6 What this enforcement action should make clear, however, is that we expect firms to look beyond the account label to the substance of their relationship with the underlying accountholders to determine whether those accountholders are in fact “customers” for purposes of CIP.
Moreover, even where firms adequately comply with CIP requirements, they must always consider the risks associated with grouped and other accounts, regardless of whether they are required to look through to the underlying customer for CIP purposes. A recent National Risk Alert on master/sub-accounts prepared by the SEC’s Office of Compliance Inspections and Examinations addressed some of these issues.7

We have also continued our focus on the adequacy of firms’ suspicious activity monitoring and reporting, which is an absolutely fundamental aspect of BSA compliance. As you know, the SAR rule requires reporting of transactions conducted or attempted “by, at or through” the broker-dealer, and we interpret this language broadly. Accordingly, firms should be monitoring any activity for red flags across their business lines, products, and transactions. Monitoring is not limited to “customer” activity or to certain types of transactions such as cash or securities movements. Instead, monitoring extends to all activity conducted “by, at or through” the broker dealer regardless of whether it is conducted by a “customer” of a firm for CIP or other purposes. So, for example, the fact that a trader in a subaccount may not be a “customer” for the CIP rule doesn’t mean that that trader’s transactions can be ignored for monitoring and reporting purposes. As part of this monitoring, we expect firms to have policies and procedures to resolve or report appropriate red-flags in a timely manner.

In one significant customer case brought by FINRA, a firm failed to obtain the names of the beneficial owners of a number of “high risk” accounts due to concerns that obtaining such information could cause the account holders to move their accounts elsewhere.8 This occurred despite repeated and ongoing requests from the firm’s counsel and the firm’s clearing firm to obtain the names of the beneficial owners before conducting transactions in the accounts. Turning a blind eye because of a fear of losing revenue is never an acceptable excuse for failing to fulfill a firm’s AML obligations or any other obligation under the federal securities laws or FINRA rules.

It is also important to note that suspicious activity monitoring and reporting is not only the responsibility of the firm but also individuals at the firm that are directly responsible for filing SARs on the behalf of the firm. The SEC and FINRA have brought a number of cases citing firms’ AML officers or Chief Compliance Officers for failing to follow up on red flags that are presented at the firm. These actions have resulted in significant fines, supervisory bars and industry suspensions.9

We have also become increasingly focused on how AML obligations interact with a broker-dealer’s other obligations under the securities laws and SRO rules, and with ensuring that firms do not silo information or take an overly narrow view of information that they have for other purposes. Firms should not view AML compliance as unrelated to their other obligations. AML obligations should be viewed as both complementary to and enhancing a firm’s compliance function. Firms should consider how to best leverage these corresponding requirements for a more holistic view of their risks. For example, a firm’s suitability and “know your customer” obligations require firms to obtain a significant amount of information about their customers that is useful in conducting the initial and ongoing customer due diligence necessary to assess the risk of and to adequately monitor an account for all suspicious activity, including securities fraud and other violations of the securities laws and SRO rules.

Learning from the Past to Predict the Future
The past ten years have clearly illustrated that AML compliance is not simply a “banking” issue or only a concern of “cash businesses.” Instead, it has affirmed our long-held belief that AML should be among the forefront of broker-dealers’ compliance concerns. The importance of AML compliance for us extends beyond money laundering and terrorist financing. AML compliance helps us detect and prevent securities fraud and other violations of the law. Accordingly, as we look forward, we will continue to emphasize the significance of this area in the securities industry to firms as well as to other regulators.
By looking back at the past ten years, we can also begin to identify some trends that I predict will manifest themselves in the future. Looking at the enforcement actions I have highlighted, it becomes clear that firms have been living under an expectation that they will be engaging in some form of due diligence of their customers and accounts.

While it is true that there currently is no rule that expressly requires due diligence in all instances, firms are required to have an AML program that at a minimum includes the establishment of policies and procedures reasonably designed to detect and cause the reporting of suspicious activity. It seems difficult to envision how a firm can comply with AML program or SAR responsibilities without having risk-based policies and procedures that allow firms to know who their customers are, what activities they may be reasonably expected to engage in, and also to have procedures to keep this information up to date over the course of the customer relationship. Of course, as SIFMA’s AML committee quite correctly explained in guidance issued in 2008, a firm’s AML program should be designed to permit firms the ability to make risk-based determinations about its customers, its customer’s source of income, and the customer’s expected activity.10 A firm should assess any risks associated with particular customers or transactions by evaluating its business to determine the likelihood that suspicious or potentially illegal activity will be present.11 This kind of common-sense approach to knowing who you are dealing with and what your dealings might reasonably entail should be no surprise to anyone in this room.
While I am on the topic of due diligence, I would like to take the opportunity to applaud David Cohen and his staff at Treasury and FinCEN for the issuance of the customer due diligence advance notice of proposed rulemaking earlier today. We in government should acknowledge and embrace our responsibility to speak clearly about our expectations for firms’ compliance. I believe Treasury’s ANPR can provide a solid roadmap of what a rule in this area could look like, or, at the very least, provide a starting point for discussions about that rule. It is my hope that any rulemaking for customer due diligence would further clarify regulatory expectations regarding this critical BSA obligation, and I encourage you to respond to the solicitation for comments.

As I mentioned, I do take seriously the responsibility to at least try to speak clearly about our expectations as regulators. I also believe we should be good listeners, to ensure that we understand the perspectives of all parties affected by our rules. While success is difficult to measure in this area, my goal is to strive to develop a productive, open relationship with the securities industry in dealing with AML concerns. I invite you to highlight for me and my team comments and concerns regarding the AML regime that are specifically targeted to the securities industry, in addition to those that cross industries. Identifying these issues is enormously helpful for us in working with Treasury, FinCEN, and other regulators in developing an effective AML regime.

To help us in this regard, I would like to let you know of a new initiative designed, at least in part, to enhance our understanding of how you comply with your AML obligations. We are partnering with the CFTC to establish a Capital Markets Working Group that will focus on money laundering vulnerabilities in the capital markets. Given the inherently complex and specialized nature of our capital markets, developing an accurate risk assessment requires the expertise and leadership of various public and private stakeholders, including regulatory agencies, the law enforcement community and representatives from the private sector. So we anticipate reaching out to some of you regarding this initiative. I would like to thank Chip Poncy, Katrina Carroll and Lawrence Scheinert, all from Treasury, for their strong support in this area. Also, I should thank the talented team of attorneys with vast AML expertise with whom I have the privilege of working with at the SEC for their continued dedication to all things AML.

Conclusion
To say the least, we have come a long way. But we could not have made such enormous strides in the area of broker-dealer AML compliance without the collective effort of the regulatory community and the securities industry participants.
I would also like to acknowledge you, as industry professionals, for your invaluable contribution to this shared effort. I know that success can often be difficult to measure in the AML area. An AML officer’s job might seem like a thankless job, but I am here to thank you. We in government appreciate the hard task that you and your firms face.
Thank you for the opportunity to speak today and for your giving me your time and attention. I would be happy to answer any questions.”
1

DECLINES IN SEA ICE MAY BE INCREASING AIR POLLUTION IN THE ARCTIC

The following excerpt is from the NASA website:

"WASHINGTON -- Drastic reductions in Arctic sea ice in the last decade 
may be intensifying the chemical release of bromine into the 
atmosphere, resulting in ground-level ozone depletion and the deposit 
of toxic mercury in the Arctic, according to a new NASA-led study. 

The connection between changes in the Arctic Ocean's ice cover and 
bromine chemical processes is determined by the interaction between 
the salt in sea ice, frigid temperatures and sunlight. When these 
mix, the salty ice releases bromine into the air and starts a cascade 
of chemical reactions called a "bromine explosion." These reactions 
rapidly create more molecules of bromine monoxide in the atmosphere. 
Bromine then reacts with a gaseous form of mercury, turning it into a 
pollutant that falls to Earth's surface. 

Bromine also can remove ozone from the lowest layer of the atmosphere, 
the troposphere. Despite ozone's beneficial role blocking harmful 
radiation in the stratosphere, ozone is a pollutant in the 
ground-level troposphere. 

A team from the United States, Canada, Germany, and the United 
Kingdom, led by Son Nghiem of NASA's Jet Propulsion Laboratory in 
Pasadena, Calif., produced the study, which has been accepted for 
publication in the Journal of Geophysical Research- Atmospheres. The 
team combined data from six NASA, European Space Agency and Canadian 
Space Agency satellites, field observations and a model of how air 
moves in the atmosphere to link Arctic sea ice changes to bromine 
explosions over the Beaufort Sea, extending to the Amundsen Gulf in 
the Canadian Arctic. 

"Shrinking summer sea ice has drawn much attention to exploiting 
Arctic resources and improving maritime trading routes," Nghiem said. 
"But the change in sea ice composition also has impacts on the 
environment. Changing conditions in the Arctic might increase bromine 
explosions in the future." 

The study was undertaken to better understand the fundamental nature 
of bromine explosions, which first were observed in the Canadian 
Arctic more than two decades ago. The team of scientists wanted to 
find if the explosions occur in the troposphere or higher in the 
stratosphere. 

Nghiem's team used the topography of mountain ranges in Alaska and 
Canada as a "ruler" to measure the altitude at which the explosions 
took place. In the spring of 2008, satellites detected increased 
concentrations of bromine, which were associated with a decrease of 
gaseous mercury and ozone. After the researchers verified the 
satellite observations with field measurements, they used an 
atmospheric model to study how the wind transported the bromine 
plumes across the Arctic. 

The model, together with satellite observations, showed the Alaskan 
Brooks Range and the Canadian Richardson and Mackenzie mountains 
stopped bromine from moving into Alaska's interior. Since most of 
these mountains are lower than 6,560 feet (2,000 meters), the 
researchers determined the bromine explosion was confined to the 
lower troposphere. 

"If the bromine explosion had been in the stratosphere, 5 miles [8 
kilometers] or higher above the ground, the mountains would not have 
been able to stop it and the bromine would have been transported 
inland," Nghiem said. 

After the researchers found that bromine explosions occur in the 
lowest level of the atmosphere, they could relate their origin to 
sources on the surface. Their model, tracing air rising from the 
salty ice, tied the bromine releases to recent changes in Arctic sea 
ice that have led to a much saltier sea ice surface. 

In March 2008, the extent of year-round perennial sea ice eclipsed the 
50-year record low set in March 2007, shrinking by 386,100 square 
miles (one million square kilometers) -- an area the size of Texas 
and Arizona combined. Seasonal ice, which forms over the winter when 
seawater freezes, now occupies the space of the lost perennial ice. 
This younger ice is much saltier than its older counterpart because 
it has not had time to undergo processes that drain its sea salts. It 
also contains more frost flowers -- clumps of ice crystals up to four 
times saltier than ocean waters -- providing more salt sources to 
fuel bromine releases. 

Nghiem said if sea ice continues to be dominated by younger saltier 
ice, and Arctic extreme cold spells occur more often, bromine 
explosions are likely to increase in the future. 

Nghiem is leading an Arctic field campaign this month that will 
provide new insights into bromine explosions and their impacts. 
NASA's Bromine, Ozone, and Mercury Experiment (BROMEX) involves 
international contributions by more than 20 organizations." 

NEW U.S. EMBASSY IN KYIV, UKRAINE

The following excerpt is from the U.S. State Department website: 

"United States Dedicates New Embassy Compound in Kyiv, Ukraine

Media Note

Office of the Spokesperson

Washington, DC

February 29, 2012

Following the 20^th Anniversary of American-Ukrainian diplomatic relations celebrated on January 20, U.S. Ambassador John F. Tefft dedicated the new embassy facility in Kyiv today. Speaker of the Ukrainian Parliament, Volodomyr Lytvyn; Foreign Minister, Kostyantyn Gryshchenko; as well as Under Secretary for Management, Patrick F. Kennedy; Deputy Chief of Mission, Eric Schultz; and Deputy Director of the Bureau of Overseas Buildings Operations (OBO), Heather Townsend participated in the ribbon-cutting ceremony.
Occupying a 10-acre site in the capital city of Kyiv, the multi-building complex is a platform for increased U.S. interaction with the Ukrainian people. The embassy’s permanent art collection celebrates the exchange of artistic expression between the United States and Ukraine through work by contemporary Ukrainian, American, and regional artists, curated by OBO’s Office of Art in Embassies.

The new embassy incorporates numerous sustainable features, most notably advances in engineering design to maximize efficiency and minimize energy use, a green roof system, and rain gardens which pre-treat stormwater before it is infiltrated on-site. The compound is registered with the Green Building Certification Institute and is entering the formal review process; it is the first LEED® registered project in Ukraine. B.L. Harbert International of Birmingham, Ala., constructed the project, which was designed by Page Southerland Page of Arlington, Va. The $247 million project generated hundreds of jobs in both the United States and Ukraine.
Since 1999, as part of the Department’s Capital Security Construction Program, OBO has completed 88 new diplomatic facilities and has moved more than 27,000 people into safe, secure, and functional facilities. OBO has an additional 41 projects in design or construction."

HILLARY CLINTON'S INTERVIEW WITH NPR ON MIDDLE EASTERN REGION

The following excerpt is from the U.S. State Department website:

“Interview With Michele Kelemen of NPR
Interview Hillary Rodham Clinton
Secretary of StateSofitel Hotel
Rabat, Morocco
February 26, 2012

QUESTION: You got a busy day here and there’s a lot to talk about. (Laughter.) I’d like, first of all, to ask you what did you tell the Egyptian foreign minister about these cases against democracy promoters? Would you ever let these Americans appear in a courtroom in Cairo?

SECRETARY CLINTON: Well, Michele, obviously we’ve been working on this ever since December, when we learned of the actions against not only American NGOs but NGOs from other countries as well. And we have been engaging at the highest levels of the Egyptian Government.

Our two concerns were, number one, to try to understand what the issues were, since both we and the Egyptian Government believed that our NGOs had been invited to help assist in ensuring that the elections were done in a credible way, which they were. But then also, we know that, ever since the Mubarak regime, there are a wealth of laws that are difficult to follow, even if you are intending to do so, which, of course, we were. And our NGOs kept trying to register so they could be viewed as legally entitled to operate within Egypt. So there was a lot of confusion, and the confusion was at all levels of the Egyptian Government as to what this all meant. So we have been engaging persistently and we hope that this matter will be resolved.

QUESTION: And how many Americans are now sheltering at the Embassy
?
SECRETARY CLINTON: I – the exact account, maybe, I think, 16, 17.

QUESTION: Turning to Syria, Syrian tanks have been battering Homs. There’s no sign of aid getting in. What do you and the Friends of Syria do now?

SECRETARY CLINTON: Well, I think, as I’ve said, we have to continue to consult with those who truly are Friends of the Syrian People, which of course, includes the United States and the many governments and organizations that gathered in Tunis on Friday. We are doing everything we can to facilitate humanitarian aid. It was distressing to hear that the Syrian Red Crescent and the ICRC, after many hours of negotiation just yesterday, were not permitted to go back into Homs. We are looking to set up and stage areas for getting humanitarian aid in. Secondly, we continue to ratchet up the pressure. It is an increasingly isolated regime. And third, we push for a democratic transition by working with and trying to build up the opposition so they can be an alternative.

QUESTION: But activists say you need, really, humanitarian corridors. You need to get aid in and people out. How do you do that without some sort of outside intervention?

SECRETARY CLINTON: Well, as you know, Michele, many of the people in the Syrian opposition have been quite vocal in their objection to any outside interference. And many of the countries that gathered on Friday are also quite vocal. What we tried to do in the Security Council was to get international support and legitimacy for the Arab League peace plan in order to have some leverage with the Assad regime. And unfortunately, Russia and China vetoed it.
So it’s a distressing and difficult situation. It’s not the first that the world has seen, unfortunately, but we remain engaged at every possible opening to accomplish our three objectives.

QUESTION: But there’s – there was a lot of talk about – and controversy about whether you arm the opposition, help them get arms. Is there anything the U.S. can do short of that, I mean, logistical support for the Free Syrian Army, satellite images to help them set up these humanitarian corridors?

SECRETARY CLINTON: Well, they don’t have tanks and they don’t have artillery. So I know there’s a lot of frustration, and I share it. This is a deeply, deeply distressing set of events. But you have one of the most highly militarized, best-defended countries on earth, because, of course, they spent an enormous amount of money with their Iranian and Russian friends so equipping themselves. And even if you were to somehow smuggle in automatic weapons of some kind, you’re not going to be very successful against tanks. And so the dilemma is how do we try to help people defend themselves? How do we push the Russians, Chinese, and others, who are, in effect, defending and deflecting for the Assad regime, to realize that this is undermining not only Assad’s legitimacy but theirs as well?

QUESTION: You, in fact, called the Russians despicable on this trip.

SECRETARY CLINTON: Well, not personally, but in terms of actions, I think continuing to arm a government that is turning its heavy weapons against their own citizens – I mean, there are a lot of words to describe that.

QUESTION: I want you to take a step back a bit and just to look at this political earthquake in the Arab world, as your Turkish counterpart likes to call it. How have you been adjusting to this new environment, and particularly the rise of political Islam, Islamist groups?

SECRETARY CLINTON: Well, look, I believe in freedom, and I believe in democracy, and I believe in self-determination, and I also believe in human rights and freedom and speech and freedom of religion. And so what we are supporting are – in countries that have every right to have self-determination and to set up their own democracies – the path that they’re on, and at the same time reminding Egyptians and Libyans and Tunisians and others that democracy is not one election one time. It is building institutions. It is carefully nurturing and tending the attitudes, what we call the habits of the heart, from our own early experience, a phrase of de Tocqueville.

And that’s difficult. It’s difficult for any political party or leadership. Everybody wants to believe that they’re best for their country and their people. But it’s important that the United States, which supports the aspirations of all people everywhere, also stand up for the values and principles that make democracy workable over the long term.

QUESTION: You spoke in Tunisia and Algeria about the need for moderate voices. And I wonder if you worry – if you’re worried that they’re being drowned out, that this – these changes across the region are becoming particularly violent. And what does that mean for U.S. interests?

SECRETARY CLINTON: Actually, I am not worried about where we are speaking today, here in the Maghreb. I mean, we’re in Morocco, which has had a very good election that led to new leadership taking place. I’m looking forward to working with them. I was just in Algeria, where they are planning for elections in May. And of course, you were with me in Tunis, where an Islamic-based party was elected but is in government in a coalition with parties representing other parts of view. That’s the way it should be in a democracy, because no matter who you are or where you live, there’s not unanimity of thought or feeling or political philosophy.

So I’m not expressing concern so much as speaking out about what we hope to see, because we’re judging these new governments no only what they say but what they do. And certainly in Tunisia, they are saying all the rights things. They are saying that they will protect women’s rights, that – they are saying that they will protect human rights. And now we want to see that actually take place.

But there is one element, which I am concerned about, and that is how people who were oppressed for so long – and particularly those who are of Islamic persuasion – are so well organized, because they had to be, it was a matter of survival, whereas many other voices in the society, the voices of business leaders, the voices of academia, the voices of young people are not politically organized. So wherever I go, I encourage those who are also hoping to reap the benefits of freedom and democracy to get involved in politics. I mean, politics is no easy game, as I know as well as anyone. But if you’re not at the table, then how can you blame people for pursuing certain programs that you may not agree with?

QUESTION: And you said you’re getting off the high wire of American politics after this job – (laughter) – so is there one thing that you really want to get done in this region before you leave office? You have a few months left. (Laughter.) Or is it just going to be putting out fires?

SECRETARY CLINTON: Well, I’ve always said from the very beginning that we do the emergencies, which are the responding to the fires right now; we do the important, which are trying to make sure that the fires don’t get out of control; and then we are looking at the long term. So it’s a constant panoply of all of these challenges.

But in particular, with respect to the Arab Spring, the coming of democracy of the Arab world, I want to see it take root. And, of course, I want to see it understand that elections are not the end, they’re the beginning, that you have to build institutions, you have to have an independent judiciary, you have to have a free press, you have to protect the rights of all minorities, religious, ethnic, you have to certainly empower and protect the rights of women. And this is at the beginning. We’re watching something unfold that is probably a generational enterprise.

So I’m encouraged in many regards by what I’ve seen in Tunisia, what I see in Morocco. The jury is out on Egypt. We’re waiting to see how that will actually be implemented. But the United States will help those who are truly invested in democracy that is not based on elevating some voices over others, imposing philosophical or religious beliefs on others, but truly having the free flow of ideas within a political culture that takes hold in these countries.

QUESTION: Madam Secretary, thank you very much for your time.
SECRETARY CLINTON: Thank you, Michele.”

PRESIDENT AND FIRST LADY PAY TRIBUTE TO IRAQI WAR VETERANS AND THEIR FAMILIES

The following excerpt is from the Department of Defense American Forces Press Service:

White House Pays Tribute to Iraq War Veterans, Families

By Army Sgt. 1st Class Tyrone C. Marshall Jr.
American Forces Press Service

"WASHINGTON, March 1, 2012 - President Barack Obama and First Lady Michelle Obama hosted a White House tribute to Iraq War veterans and their families last night to honor them for their service, sacrifice and commitment to nation.

Vice President Joe Biden and his wife, Dr. Jill Biden, and Defense Secretary Leon E. Panetta, Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, along with senior officials from all branches of service joined the president and the first lady at an event dubbed "A Nation's Gratitude: Honoring Those Who Served in Operation Iraqi Freedom and Operation New Dawn."

"In one of our nation's longest wars, you wrote one of the most extraordinary chapters in American military history," Obama told the more than five dozen Iraq veterans and their guests. "Now, the Iraqi people have a chance to forge their own destiny, and every one of you who served there can take pride in knowing you gave the Iraqis that opportunity -- that you succeeded in your mission."

The vice president lauded service members for their ability to adapt to challenges, the capture of former Iraqi dictator Saddam Hussein and the opportunity they gave the people of Iraq to have a self-governing, self-sufficient nation.

"You're incredible. You adapted, you succeeded and you defeated," Biden said. "You defeated a tyrant, [and] you beat back violent extremists. And the most remarkable thing you did, because of the breadth of your capability, you enabled a country that had not been governed in any reasonable way for over four decades, you actually helped them set up institutions and train a military and a civilian corps that gives them a real fighting chance."

Panetta expressed his gratitude to all in attendance as well as the million-plus service members they represented for fulfilling their duties, for their dedication and for their service to the nation.

"To all who fought in Iraq, we thank you for your service," he said. "You've earned our nation's everlasting gratitude. We are indebted to you for your willingness to fight [and] your willingness to sacrifice for your country.

"We are [also] indebted to your families and your loved ones for the sacrifices that they made so that their loved ones could help defend this nation," Panetta said.

The chairman, who was first to speak, thanked the president and first lady for paying tribute to veterans and families of the Iraq War.

"Mr. President, Mrs. Obama, thank you for recognizing the service and sacrifice of the military family in this very special way," he said. "We really appreciate the support that you, the vice president and Dr. Biden, and those that they bound together in the 'Joining Forces' initiative and the nation provide us."

The first lady and Dr. Biden have championed the Joining Forces effort, which seeks to mobilize tangible support for service members and their families in all sectors of American society.

Just before dinner began, the president emphasized how proud he is of the U.S. military for working together to achieve success in Iraq.

"As your commander in chief, I could not be more proud of you," Obama said. "As an American, as a husband and father of two daughters, I could not be more grateful for your example [of] the kind of country we can be, [and] for what we can achieve when we stick together."

Obama paid tribute to "courageous" troops who served despite the likelihood of being sent into harm's way and to fallen service members and their families.

"You taught us about sacrifice -- a love of country so deep, so profound, you're willing to give your life for it," he said. "Tonight, we pay solemn tribute to all who did."

Obama recalled five service members who were the first casualties of the Iraq War, and the last U.S. casualty there, who was killed Nov. 14.

"Separated by nearly nine years, they are bound for all time among the nearly 4,500 American patriots who gave all that they had to give," the president said. "To their families, including the Gold Star families here tonight, know that we will never forget their sacrifice, and that your loved ones live on in the soul of our nation, now and forever."
 

NORTH KOREA AGREES TO HALT ACTIVITIES AT MAIN NUCLEAR PRODUCTION AND TESTING PLANT

The following excerpt is from the Department of Defense American Forces Press Service:

"North Korea Takes 'Positive First Step' on Nukes, Official Says

By Lisa Daniel
American Forces Press Service

WASHINGTON, Feb. 29, 2012 - The North Korean government has agreed to stop all nuclear activities at its main production and testing plant and to allow the return of inspectors, in a move a Defense Department official described as a positive step toward denuclearization of the communist state.

The North Korean leadership's decision "is a positive first step toward complete and verifiable denuclearization of the Korean Peninsula in a peaceful manner, which remains our core goal," Pentagon spokeswoman Navy Cmdr. Leslie Hull-Ryde said in a written statement. "The only way to achieve that goal is through a deliberate process that requires engagement."

The State Department made the announcement today as a U.S. delegation returned from bilateral talks with North Korean officials in Beijing. It was the third such round of talks between the two nations.

"To improve the atmosphere for dialogue and demonstrate its commitment to denuclearization, [North Korea] has agreed to implement a moratorium on long-range missile launches, nuclear tests and nuclear activities at Yongbyon, including uranium enrichment activities," according to a State Department statement.

The North Korean delegation also agreed to the return of International Atomic Energy Agency inspectors to verify and monitor the moratorium on uranium enrichment activities at Yongbyon, and to confirm the disablement of the 5-MW reactor and associated facilities, the statement says.

State Department officials said U.S. officials "still have profound concerns regarding North Korean behavior across a wide range of areas, but today's announcement reflects important, if limited, progress in addressing some of these."

They went on to say that U.S. officials agreed to meet with the North Koreans to finalize administrative details for delivery of 240,000 metric tons of food aid, "along with the intensive monitoring required" for the delivery of such assistance.

Navy Adm. Robert F. Willard, commander of U.S. Pacific Command, told the Senate Armed Services Committee yesterday that he would be skeptical of any overtures from North Korea, and that he would not expect major changes in North Korea under the leadership of Kim Jong Un, who came to power in the fall after the death of his father, Kim Jong Il.

In a call with reporters today, a senior administration official who spoke on background said President Barack Obama "has been consistent in signaling that we will respond positively if North Korea chooses the path of negotiation, cooperation and denuclearization."

North Korea's agreement this week "begins the process of walking back" provocations that led to the breakdown of six-party talks, the official said. "This agreement opens the door to serious negotiations to achieve irreversible steps" toward denuclearization, she said.

U.S. officials will continue to emphasize the need for North Korea to pursue reconciliation with South Korea, the official said. About 30,000 U.S. troops are based in South Korea, a legacy of the 1950-53 war between the North and South.

As part of the bilateral talks, State Department officials said, U.S. officials:

-- Reaffirmed that the United States "does not have hostile intent toward [North Korea] and is prepared to take steps to improve our bilateral relationship in the spirit of mutual respect for sovereignty and equality";

-- Said the United States recognizes the 1953 armistice agreement as the "cornerstone of peace and stability" on the Korean peninsula;

-- Said the United States is prepared to take steps to increase people-to-people exchanges, including in the areas of culture, education, and sports; and

-- Said U.S. sanctions are not targeted against the livelihood of the North Korean people."
 

SECRETARY OF DEFENSE PANETTA MET WITH PORTUGUESE DEFENSE MINISTER

The following excerpt is from a Department of Defense American Forces Press Service e-mail:

"Panetta, Portuguese Defense Minister Discuss Common Challenges

American Forces Press Service

WASHINGTON, Feb. 27, 2012 - Defense Secretary Leon E. Panetta met with Portuguese Defense Minister Jose Pedro Aguiar-Branco here today to discuss a range of common challenges, Pentagon Press Secretary George Little said.

"Secretary Panetta thanked Minister Aguiar-Branco for Portugal's steadfast support in Afghanistan and other NATO missions," Little added. "He also stressed Portugal's indispensible role as a strategic ally."

The military leaders discussed enhancing and deepening the U.S.-Portuguese defense relationship, and Panetta confirmed that the United States will remain at Lajes Field in the Azores. The secretary said the United States will consult with Portugal on the modalities of the continued U.S. force posture at Lajes, the Little said.

"Secretary Panetta thanked Minister Aguiar-Branco for the warm hospitality U.S. troops have enjoyed and will continue to enjoy on Portuguese soil," he added.

Looking forward, he said, Panetta and Aguiar-Branco will work together with other alliance defense leaders to prepare for the NATO Chicago summit in May, building on what was accomplished at the 2010 summit in the Portuguese capital of Lisbon.

Panetta and Aguiar-Branco directed their staffs to develop options for enhancing the U.S.-Portuguese defense relationship, Little said, and will follow up in April at a NATO meeting in Brussels. The defense leaders also agreed to have their staffs meet at bilateral political-military talks scheduled here for June, he said."

SENIOR ADMINISTRATION OFFICIAL HAS BRIEFING ON PEOPLES REPUBLIC OF KOREA

The following excerpt is from a U.S. State Department e-mail

"Background Briefing on the Democratic People's Republic of Korea

Special Briefing

Senior Administration Official, Office of the Spokesperson

Washington, DC

February 29, 2012

---

MODERATOR: Well, thank you all for joining us today. I hope you all have a copy of the statement that we released at about 9:15 this morning on the recent U.S.-DPRK bilateral discussions. Here to give you a little bit more background on where we are in those conversations and on the statement that we released, and also on the statement that was released by the North Koreans at about the same time, we have two senior Administration officials. For your records, the Senior Administration Official Number One is [Senior Administration Official One], who is [position withheld]. Senior Administration Official Number Two is [Senior Administration Official Two] who is [position withheld].

[Senior Administration Official One], our Senior Official Number One, is going to make a relatively full opening statement, and then we’ll go to your questions, and both officials will be available to answer the questions.
Why don’t we go ahead to Senior Official Number One?

SENIOR ADMINISTRATION OFFICIAL ONE: Thank you very much, [Moderator], and hello to everybody. I want to go a little long initially, not least because this topic is a bit complex, but also I think I can get at and anticipate some of your questions. But then I’m happy to take on whatever you want to throw at us.
And it’s a bit scripted, but I want to get this right, so let me just launch into it by saying that since taking office, the President has been consistent in signaling that we will respond positively if North Korea chooses the path of negotiation, cooperation, and denuclearization. After the really tough sanctions that were put in place by the UN Security Council and the North Koreans announced that they wanted to return to Six-Party Talks, talks that they had previously abandoned, we and our allies made clear that North Korea needed to take a number of steps that would demonstrate their seriousness of purpose. We were firm that we were only interested in credible negotiations leading to the denuclearization of the Korean Peninsula. The North couldn’t be allowed to walk away from their Six-Party commitments, to launch missiles, to further their ICBM program, to conduct a nuclear test, roll out a uranium enrichment program, to attack the ROK, and then simply expect us to come back to Six-Party Talks on their terms.
The pre-steps, as we’ve called them, that we insisted on and to which they have now agreed in their unilateral statement begin the process of walking back these provocative actions. This agreement opens the door to serious negotiations to achieve irreversible steps by North Korea toward denuclearization and to meeting their other commitments and international obligations.
Now, the President and the Secretary of State also have long made clear America’s clear concern for the welfare of the North Korean people. Following an assessment last summer of humanitarian needs in North Korea, the U.S. put forward a proposal designed to feed babies, to feed mothers, to feed the elderly - which is to say the most at-risk marginalized population of North Koreans. These are people whom the regime either cannot or has chosen not to feed. And the plan to provide nutritional assistance included monitoring requirements designed to ensure that the right type of food gets to the right people.
Until our meeting last week in Beijing, the North Koreans had declined to allow the program to go forward. They demanded large quantities of rice and grain that could be, in our view, diverted to elites or to the military. They’ve now dropped those demands and agreed to allow our program to move forward as proposed, with an understanding, as always would be the case, that further assistance would be based on verified need. This progress today is a direct result of close coordination with our key partners. Close coordination with the Republic of Korea deprived the North of the chance to drive a wedge between us or to weaken our strong alliance. As we move forward with the DPRK, we will continue to place great emphasis on the need for the North to pursue rapprochement and reconciliation with the South through sustained and substantive inter-Korean contacts.
The same is true of Japan. We have – which, of course, is North Korea’s other neighbor – we have stayed in very close touch with the Government of Japan and, as always, have forcefully raised with the North Koreans, and we did so in Beijing, the abductions issue with the North Koreans.
Now finally, kind of a note of caution about all this stuff because I really don’t want to oversell this. As positive as these very modest steps are, what they do is they merely unlock the door to the resumption, eventually, of Six-Party talks. We’ve consistently said - we’ve made clear - that we’re not interested in talks just for the sake and for the forum of talks. The next step on this process going forward from today is to work with each and every one of our Six-Party partners in order to set the stage for real and lasting progress in the multilateral phase. We have – we believe that it’s important to translate this initial sign of Pyongyang’s seriousness of purpose into substantive and meaningful negotiations on denuclearization that get at the entirety of the North’s nuclear program and secures steady progress toward complete and verifiable dismantlement of the North’s entire program. And that’s my paid political announcement at the top.
I do want to just add one quick word on a couple of topics to anticipate, and that is that I haven’t mentioned the Chinese and Russians. They’re vital here. We have now twice - in just the couple of months that the Special Representative for North Korea Policy has been in this job - been to Beijing to consult with Wu Dawei, Ambassador Wu Dawei, who is the longstanding chairman of the Six-Party process, and others including the foreign minister of the PRC, on how best to deal with the challenges we face. And Special Representative for North Korea Policy also been to Moscow to discuss these matters with Deputy Foreign Minister Morgulov and indeed have spoken with him just in recent hours.
Secondly, quickly, on the IAEA and next steps, it will be up to the North Koreans – and we were quite explicit in our understandings at Beijing – up to the North Koreans to get in touch with the IAEA to discuss next steps. We will see how long that process takes. We hope it happens relatively quickly. We’ve already alerted Director General Yukiya Amano and his staff to the steps that we are taking. And we look forward – and I think this is a very important part of the announcements made today in particular by the North – a very important part of how we will ensure that going forward North Korea abides by the unilateral undertakings that they’ve made.
Anyway, I apologize for being longwinded, but there are a lot of moving parts here. I wanted to get it all out there. I know you’ve got a lot of questions. So, [Moderator], back to you.

MODERATOR: Thank you, [Senior Administration Official One]. Operator, let’s go to the first question, please.

OPERATOR: Thank you. To ask your question over the phone, please press * then 1. You will be announced prior to asking your question. To withdraw any question, press *2. Also, please limit to one follow-up question. Again, please press * then 1 for your question.
Our first question is from Elise Labott with CNN. Your line is open.

QUESTION: Hi, [Senior Administration Official One]. Thanks for doing this. I was wondering if you can talk about the kind of sequencing of this. Like, is it – are they going to get all the food assistance at once? Do they have to take – let some inspectors in first, stop a certain amount of uranium enrichment? Is it going to be a step-by-step thing?

And then also maybe your colleague from USAID can talk about the monitoring and how you make sure it gets to the right people, how much food do they get, where it is shipped, those type of – is it going to be warehoused anywhere? How do you – the monitoring and all that. Thank you.

SENIOR ADMINISTRATION OFFICIAL ONE: Okay, sure. Thanks, Elise. On sequencing, there are details that remain to be worked out. You can see that these are fairly spare unilateral statements that we’ve put forward, and the main overall point going forward is that we will be, as I think the Secretary said on the Hill today, sort of watching very carefully and measuring how North Korea comports itself in carrying forward its commitments.
On the specific issue, we, of course, would like to see IAEA monitors get back in country to Yongbyon to get eyes on both the uranium and plutonium aspects of the program at Yongbyon as soon as possible. It’s up to the North to do the first reach-out to Director General Amano and the safeguards folks in Vienna. I have no doubt that there will be some tough negotiations going forward in terms of precise sequencing. No doubt there will likely be an insistence on the North Koreans’ part on a certain amount of – let’s call it simultaneity in some of this.
So I wouldn’t look for people to be in motion right away here. I think it’s going to take a little bit of time to get straight on these modalities for the IAEA to work out with the North some of these issues of which – whether it’s the right foot or the left foot that goes forward first. But again, the broader point, we’ll be watching and we’ll be measuring and we’ll be, of course, working with the North Koreans and working with the IAEA to make sure that that’s all set up properly and that that goes forward as soon as possible.
Let me turn it over to Senior Official Number Two to address the nutritional assistance bit.

SENIOR ADMINISTRATION OFFICIAL TWO: Thanks. Elise, the plan that we’ve put in front of the North Koreans is – I can just outline as follows. What we’ve proposed is the regular delivery of about 20,000 tons a month over the course of 12 months. And we’re talking about foods that would be appropriate for young children, in particular those under five or six years old, pregnant woman as well because we want to make sure we address the sort of the first 1,000 days as the Administration has wanted to focus on.

QUESTION: This is the Plumpy – this is that Nut’Plumpy stuff, right, in the bars and stuff?

SENIOR ADMINISTRATION OFFICIAL TWO: We’re going to have things like corn-soy blend, we will have vegetable oil, some pulses, and then there will be probably a modest amount of the ready-to-use therapeutic foods depending upon the number of children that we see with acute malnutrition. So that will be there is necessary or be available if necessary.
But you had asked whether monitoring would come first. And in the case of the nutrition program, we have said that our partner organizations will have to be fully operational – meaning fully in place on the ground with their offices functioning – before the food will begin to arrive and will begin to be distributed, because it’s very important that we maintain – or that we can demonstrate that the program is well managed because that’s critical to maintaining the support for the program.
But if – just to be clear, if we are successful in finalizing the details that I’ve just laid out, this will be the most comprehensively monitored and managed program since the U.S. began assistance to the DPRK in the mid 1990s.

QUESTION: Thank you.

MODERATOR: Operator, let’s go to the next question, please.

OPERATOR: Thank you. The next question is from Matthew Pennington with Associated Press
.
QUESTION: Hello, [Senior Administration Officials One and Two]. Thanks a lot for doing this. My first question
was: In the North Korean statement, they specify that they’ve agreed to a moratorium on the uranium enrichment, but they don’t seem to allude to the plutonium program at all, which you say will also be open to monitoring. I’m just wondering why there’s – why there is that difference, and if there is any doubt at all in your mind that they’ve agreed to both aspects of that.
And also, what further hurdles need to be sort of breached before the Six-Party Talks can resume now, because it appears that they’ve met the pre-steps. So what further needs to be done? Thanks.
SENIOR ADMINISTRATION OFFICIAL ONE: Thanks a lot, Matt. But anyway, two quick things: One is, on the – on their omission in their own unilateral statement of what we’ve said about the – their undertaking to confirm the disablement of the 5 megawatt reactor and the associated facilities, that is our understanding. The negotiating record’s clear on that. We did talk about that. We expect that the IAEA will also confirm the disablement of that reactor and associated facilities. I can’t speak to why they didn’t include it; these were, after all, unilateral statements that each side made, and that is an issue that we will clearly have to come back on. But there’s no doubt in our mind that they’ve agreed to that, and we will expect that that will be addressed, though I have to say that job one here is this new uranium enrichment facility that’s been revealed to the world. So that, first and foremost, is what we want to get at.

In terms of hurdles going forward to Six-Party, or why can’t we just rush right back to Beijing and sit down together and lights, cameras, action on Six-Party - look, a couple of things. One is we need to see how this goes forward. We’re going to be watching, we’re going to be measuring, we’re going to be working with the North Koreans, but it’s going to take some time for these particular unilateral undertakings – let’s call it the Leap Day Deal here – to play out and to pan out. And I think that’s important. And measuring how they implement this will be important, I think, to helping us gauge whether they and we are ready to go back to Six-Party, number one.
Number two, the truth is we’ve been around the Six-Party block before. It has a history of ups and downs, sometimes more downs than ups. You all – many of you know the history of it. We’re determined to properly prepare any Six-Party round. We’ve made no commitment, at this stage, to going back to Six-Party. And that’s because we will need any number of consultations with the other parties in the Six-Party geometry. Why? Because we need to make sure that we have a winning strategy for not simply sitting down at the table at the Diaoyutai Guesthouse in Beijing, but being able to stand up from the table with something meaningful and something lasting, a process that can deal with the concerns that all of us have with regard to North Korea. That’s going to take some time.

A final thing is we will need to be able to signal to the North Koreans in a solid fashion, an undivided fashion, what will be on the table at Six-Party, and what can’t be on the table at Six-Party. We can’t allow the same patterns of the past repeat themselves. We can’t allow wasting arguments on topics that are irrelevant to the main challenges we face. And that’s simply going to take a long time to work out.

QUESTION: Okay, thanks.
MODERATOR: Okay, operator, let’s go to the next question.

OPERATOR: Thank you. Our next question is from Ai Awaji with Jiji Press. Your line is open.

QUESTION: Hi. Thanks for doing this. North Koreans said in their own statement that they would implement moratorium as long as the talks continue. Is that your understanding, and if not, is that acceptable?

SENIOR ADMINISTRATION OFFICIAL ONE: Yes. Another good question. The – listen, I think that that particular statement that’s included in their unilateral statement out of Pyongyang is simply a recognition of a fact. These steps – this gives me a chance to say something important about what these steps are and aren’t. These are reversible steps that they’ve committed to. There shouldn’t be any kind of doubt about that or debate about that. And the point of these steps is to show – is for the North Koreans to show that they’re serious in making good on their undertakings.

So that’s what’s – so I think when we say that – when they say that the moratorium will only be in place as long as we’re engaged in these meaningful talks, I think that that’s true of how North Korea acts and behaves under any circumstances anyway. Because these are reversible steps, they can always come around to side – to sort of, let’s say, flip a switch and go in a different direction. And that would be a missed opportunity for them, and that would obviously make it impossible to go back to Six-Party. And that would be too bad because there is a different future available to the North Koreans. We’ve made it clear to them, if they go down that path of peace, engagement, and meeting the concerns of the international community, they can have a very different future. They can be lashed up with the international community in a positive way that can be of benefit to them. And so I think that language is simply a somewhat explicit statement of what would be the case under any circumstances.
MODERATOR: Good. Operator, let’s go to the next one. Thank you.

OPERATOR: Thank you. Our next question is from Kaho Iguminiti with NHK.

QUESTION: Hi, [Senior Administration Official One], thanks for doing this. Two questions. You mentioned that the North Koreans dropped their demands to want rice and grains. Can you confirm when this happened? Was this after the meeting in Beijing or during the meeting? And my second question is something about your schedule to meet with the North about the nutritional aid.

SENIOR ADMINISTRATION OFFICIAL ONE: Sure.

QUESTION: Do you have any dates? Yeah, thank you.

SENIOR ADMINISTRATION OFFICIAL ONE: Sure, sure, sure. Yeah, Kaho, I’m glad you’re on the call. Look, here’s what I’m not going to do, and I hope you all will give me a little slack here. I don’t want to get into the tick-tock of these negotiations and when particular sides said certain things, when particular sides fell off of certain things or dropped particular demands. I don’t think that’s useful. I think – I want to look forward. Rather than dissect what happened in Beijing or before, and talk about who faced down whom here, that’s sort of not the issue.
The point is we have this modest but important, as I call it, Leap Day Deal, and we now need to go forward with it. And frankly, one must give the North some credit for, so soon after the transition, reaching out to do this. So I apologize for not giving you some of that color about the negotiations and when they dropped their demands, but I’m just going to kind of steer clear of that.
Now, in terms of the schedule for the next little bit of this, which will be when Senior Official Number Two reengages with the North Koreans to finalize the nutritional assistance agreement, maybe – I guess maybe the best thing is if I could buck it over to Senior Official Number Two, and you want to say a word about that?

SENIOR ADMINISTRATION OFFICIAL TWO: Yeah. Thanks, [Senior Administration Official One]. We’re ready to meet as soon as we can iron out the timing and the location for that next meeting. And that is not finalized at this moment, but there are no plans to delay. We’re ready to go.

MODERATOR: Good. Operator, let’s go to the next question. Thank you.

OPERATOR: Thank you. Our next question from Shaun Tandon with AFP.

QUESTION: Yeah, thanks for doing this call. A bit of a broader question: This obviously comes just a couple of months after the death of Kim Jong-il. Just wanted to see what sign, if any, you saw on continuity on the North Korean side, what this – what if anything this says about the transition and how it’s going in Pyongyang.

SENIOR ADMINISTRATION OFFICIAL ONE: Sure. We spoke to this a little bit, actually, on the days we were discussing this in Beijing. I think this – well, a couple of things. One is we were sitting across from essentially the same North Korean negotiators who have been at this in some cases, for – well, for decades. In particular, First Vice Foreign Minister Kim Kye Gwan, who is a veteran North Korean negotiator and has seen lots of guys like us come and go, and many of his team are familiar faces. So the people were the same.

The way that they presented the issues was quite familiar to us. The basic arguments they used, the requests they were making of us, the rationale that they were employing – and here is the point. I think that’s important because I think it shows that the new, call it, administration in Pyongyang is picking up where the previous one left off. And that’s great; that’s good. And they’re doing it within the 100-day mourning period that’s self-declared in North Korea. So it shows that they’re interested with some alacrity to reach out, to get back to the table, and begin to try to make diplomatic progress, and I think that’s a positive sign.

So I think overall, you – what we are seeing is a sign of continuity. I think overall, the early stages of this transition have been relatively uneventful as soon as near as we can divine what’s happening inside North Korea. So that’s about as far as we could go, not being in Pyongyang, but rather being in Beijing and talking to, as I say, a fairly familiar cast of North Korean negotiators.

QUESTION: Thanks.

MODERATOR: Good. Operator, we’ll take two more. Can you cue up the next one, please?

OPERATOR: Certainly. Our next question is from William Wan with Washington Post.

QUESTION: Hi. Thanks so much for doing this, [Senior Administration Official One]. Shaun actually asked my main question just a – Un. I don’t know if you have anything to add in terms of what the – if you – if there was any talk of Un or if you got any sense of how much of the decision was made by him and how much was of this collective leadership.

And then the other question I had was just how much of this was a surprise. It seemed like there was a lot of waiting for a while, knowing you – how long it would take to get back to the table. How much of this move is a surprise in the nine weeks since the death of Kim Jong-il?

SENIOR ADMINISTRATION OFFICIAL ONE: Right. Yeah. Was it a surprise? Well, in terms of to what extent was Kim Kye Gwan improvising, that’s not typically the way North Korean negotiators operate. I mean, they’re a disciplined bunch. He’s an experienced guy. He would have come with a set of redlines and instructions, actually not so much unlike us, I have to say. So our kind of working assumption is that what he brought to the table with us and where we ended up were all very much sanctioned by the center in Pyongyang.
I mean, I think they regard this – they take this stuff seriously, and at senior levels these decisions are made. I can’t tell you what their intramural decision-making process is. I don’t think anybody knows. But I would imagine that the leadership, whether collective or a regency or Kim Jong-un acting alone, not sure was very much informed, involved, engaged, and calling the shots, though Kim, I’m sure, had some tactical running room.
And remember that we went into extra innings. The thing was – we thought it would probably take just a day, the Thursday, and then…

And remember that we went into extra innings. The thing was – we thought it would probably take just a day, the Thursday, and then followed by a very substantive dinner, so sort of three sessions on the Thursday of something on the order of six and a half hours. It went over – it bled over into the Friday. We – for a couple of hours, so they had time to go back to Pyongyang and to seek further guidance, and I’m certain they would have done that.
Now, give me again your second question, the surprise question?

QUESTION: Oh, just whether – how – just that it seemed like everyone was waiting for a while, not knowing how long it would be.

SENIOR ADMINISTRATION OFFICIAL ONE: (Inaudible) yeah, yeah, yeah. Well, I don’t – I wouldn’t call it a surprise, and I’ll tell you why. Because we have been in touch with the North through – episodically through the New York channel since, quite literally, 24 hours after the announcement of the death of King Jong-il back in mid-December, and we were beginning to pick up signals from them in these fairly frequent communications that there was a continuity in their approach.

Obviously, there was a bit of a dramatic moment for those of us working this for the United States Government where we were signaling to them that we were available and we’ll need to get back and hoping that – and that our positions hadn’t changed, hoping we could find a way to do that. And as is always the case, one moment it was something that seemed absolutely impossible and out of the question, and then literally a day or two later, a switch had been flicked, and they were ready to go, and that was some weeks ago. So – and some were surprised, because it’s a guessing game with North Korea. Some were thinking that their transition would last a long time as the last one did 17-some years ago and that it would take a while. But as it happened, they were quite quick to make a decision to get back to the table with us.

MODERATOR: Great. Operator.

OPERATOR: Thank you. We have time for one final question from Andrew Quinn with Reuters.

QUESTION: Hi, [Senior Administration Official One]. It’s Andy Quinn here. I have one for you and then a quick one for [Senior Administration Official Two], if I may. For you, I’m just wondering if you could talk a little bit about the South Korean side of this equation. One of the preconditions that seems to have dropped off is the notion of a North Korean apology for the corvette and the island. Is that no longer a requirement, or do you feel that they’ve sort of, by their actions, made clear that they are not going to do that sort of thing anymore?
And for [Senior Administration Official Two], I was wondering, your – the needs assessment mission was almost about nine months ago, and we’ve never seen the results of what they found there. Can you tell us what their assessment was of North Korea’s food needs then and what’s the possibility or probability that those needs had changed in the intervening time since that mission went? Thank you.

SENIOR ADMINISTRATION OFFICIAL ONE: Okie doke. Let me, Andy, take your question on South Korea, and I just do want to take the occasion to reiterate how knit up we have been. The South Koreans were co-architects of this whole pre-steps approach and plan. And I think I’ve said it already, but that we went directly from Beijing to Seoul to report, and I would point you in the direction of their statement welcoming this result as indications of how closely coordinated we are with South Korea. I think, to be totally fair to them, it’s – that’s the sort of question that you need to put to them, but I would – about the – I guess the preconditions, as you put it, though I don’t think I would accept the premise that that – it was necessarily always a precondition. But the point is South Korea has been steady, solid, and sure on the point that job one is denuclearization overall, getting at that existential threat on the peninsula, starting a process toward denuclearization, and we hope eventually a complete and irreversible dismantlement, disablement of the North Korean nuclear program. And they’ve been with us, and we’ve been joined together on that. And as far as the – your question on the sinking of the Cheonan and the shelling of Yongpyong and so forth, I really do think that’s a question that you need to put to them.
We – the final thing I’ll say is we’ve told the North – we said it more than once in Beijing, that it’s vital, it’s essential that the North takes steps to improve North-South relations. That’s got to happen before there’s any fundamental change in certainly the U.S.-DPRK relationship, and we fully expect that those steps will be taken in a context of any return to Six-Party talks.

MODERATOR: That concludes this background briefing. I’m sorry, Andy, did you have a follow-up?

QUESTION: There was the second half.

MODERATOR: I’m sorry. [Senior Administration Official Two], I apologize. I’m jumping right in on you.

SENIOR ADMINISTRATION OFFICIAL TWO: That’s not a problem. Andy, you’re right. The original assessments that were done by the UN and by the NGOs and then by the U.S. Government were done last year, and so there is an issue of whether or not the information is old. But let me just say when we – when our team looked at the situation in the summer of last year, early summer of last year, we concluded that our focus should be on chronic malnutrition that’s contributing to sort of widespread stunting among the population, in particular the young children. And so that makes up the sort of the foundation of our new program. It’s a distinctly new program in that we’re looking at a nutritional focus on those populations – kids and pregnant women – who benefit the most by having an appropriate diet. So that’s where we settled on the need to do a 240,000-ton program. We felt that was the right size.

In the meantime, we’ve had the WFP/FAO crop assessment in November that’s continued to talk about chronic malnutrition, extensive chronic malnutrition among those populations I just described. And in January of this year, UNICEF did a survey along four of the provinces in North Korea and identified that over 80 percent of the children were malnourished. So I’m not saying those are definitive, but to us they are consistent with what we see as a chronic problem that we’re going to be trying to address with this nutrition program, and so we’ll continue to validate that if and when we get the program started. But we think that the foundation for our plan is pretty strong.

SENIOR ADMINISTRATION OFFICIAL ONE: Thanks very much, [Senior Administration Official Two]. Can I just jump on that while we’re still on food? Because I just want to hammer home sort of one point here. Whenever I see these headlines that this is a food-for-nukes deal, I wince, because it’s really important to be clear that the United States doesn’t link the provision of humanitarian assistance, in this case nutritional assistance, to essentially political questions, this issue of, in this case, these nuclear pre-steps. What we have – we haven’t done it, but the North has, because they, I think, take a very transactional approach to this stuff. And the one and only statement that they issued after the death of Kim Jong-Il on the U.S.-North Korea relationship, made pretty crystal clear that they saw this as a transaction and that for that for their own reasons, their own purposes, they needed to have this linkage to be able to say, I think, that they had received something for taking the steps that they’re taking. But our position on this remains clear that we don’t link the two at all.
And I don’t know, [Senior Administration Official Two], do you want to say anything else finally about that? Because that seems to be a subject that is on many minds, and I know – I just want us to be clear on it.

SENIOR ADMINISTRATION OFFICIAL TWO: Yeah, [Senior Administration Official One]. All I think I would say is that I’ve been working on the program, humanitarian assistance to North Korea, for basically the 15 years that we’ve – the U.S. has been engaged in this. And in this case, we have – we’ve made a very concerted effort to keep the negotiations very separate. Bob King and I have always engaged independently of any other discussions, and we’ve always focused on what terms we need to ensure that the program addresses the needs of the targeted groups and is something that we can justify and defend here in the United States.

MODERATOR: Very good. I think that concludes this background briefing."