 And it's a great pleasure to welcome all of you here this morning, and a special pleasure to welcome my friend and former colleague, the Secretary of the Treasury, Jack Lew. With the opening bell of the market's looming, I promise to make my introduction very brief. All of you are familiar with the Secretary's distinguished career, and all of you know what an enormous mark is made on our country, and I'm not even referring to his idiosyncratic signature on the dollar bill. Secretary Lew was one of a handful of people who served in the Obama administration without interruption, including a series of important jobs at the Department of State, the Office of Management and Budget, the White House, and now Treasury. It is a feat of perseverance, only a person of extraordinary conviction, integrity, and faith can pull off, and it is a feat only Secretary Lew can pull off without pulling out any of his hair. During our time together at the State Department, I grew to admire enormously Jack's skill, creativity, and equanimity. His was a magnetic force, the brilliance that attracted the toughest problems and solved them with the precision and steady hand of a surgeon. He embodied Tip O'Neill's charge to take your job seriously, but not yourself, and he truly embodied everything one could ever want in a colleague. Secretary Lew's experience on the Hill in the private sector and across the executive branch makes him uniquely suited to talk about the past and future of U.S. sanctions policy. Over my own 33 years at diplomatic service, I've seen sanctions become smarter, sharper, and more strategic. I've seen them used effectively and to little avail. I've heard concerns from our own business community about the effects of sanctions on our competitiveness and from our closest friends about the risk to the health of the global economy. I've heard criticisms about the weaponization of finance, and I've heard words of praise and thanks from activists who've seen their leaderships change course at least in part due to the pain of sanctions. Like all policy tools, sanctions have great potential and real limits. As the rise of new powers and new economic actors reshapes the international political and economic landscapes, it's only appropriate to pause and reflect about how we might use this tool in the future to best effect. We could not ask for a better person to help us think through this important question. So I hope you'll join me in giving a very warm welcome to the Secretary of the Treasury, Jack Lew. Thanks so much, Bill, for that very kind introduction. As you know, Ambassador Burns and I were close colleagues at the State Department. Bill's an American treasure. He's one of the great diplomats of our day, and he's a good friend. It's a pleasure to be here with him and with all of you today, and I'd like to thank the Carnegie Endowment for International Peace for hosting me this morning. Carnegie has done so much to strengthen our understanding of international affairs and to help our nation think through difficult national security issues. As we continue to confront complex global challenges in the months and years ahead, your work will remain vital to our efforts. Seventy-five years ago, one day after Nazi Germany invaded Norway and Denmark, President Roosevelt established an office within the Treasury Department to freeze the assets of the governments of Norway and Denmark and eventually the assets of many other U.S. allies. The executive order he signed on that spring day in 1940 prevented the Nazis from seizing those assets as terror spread across Europe. Since that time, the threats have changed and the international economy has evolved and we've refined our capacity to apply sanctions effectively. Not that long ago, conventional wisdom dismissed sanctions as blunt and effective instruments. The old model was a country-wide embargo which provided little flexibility to mitigate disproportionate costs on innocent civilians, both in the targeted countries and here at home. At the same time, early efforts to ensure humanitarian relief sometimes fell short of the intended goal. The sanctions we employ today are different. They're informed by financial intelligence, strategically designed and implemented with our public and private partners to focus pressure on bad actors and create clear incentives to end malign behavior while limiting collateral impact. Recent sanctions programs have exposed and disrupted the operations of illicit groups, including terrorists and narcotics traffickers, as well as sovereigns, shuttering front companies and stopping facilitators from traveling. Sanctions put concentrated and meaningful pressure on governments abusing their own populations in places like Sudan, Burma and Libya. They formed the centerpiece of the international response to Russia's aggressive actions in Ukraine and most dramatically, together with the international community, we put in place sanctions that imposed massive costs on Iran, helping to bring it to the negotiating table and culminating in a comprehensive understanding that rolled back Iran's nuclear program and ensures that it is and will remain exclusively peaceful. Economic sanctions have become a powerful force in service of clear and coordinated foreign policy objectives. Smart power for situations where diplomacy alone is insufficient, but military force is not the right response. They must remain a powerful option for decades to come, and that's why the lessons we've learned from our experience need to guide our approach to sanctions in the future. And we must be strategic and judicious in how we apply sanctions to challenging situations around the world. The power of our sanctions is inextricably linked to our leadership role in the world. Sanctions were forged in the context of our position as the world's largest economy and the predominant role that the U.S. financial system plays in global commerce. We must guard against the impulse to reach for sanctions too lightly or in situations where they will have negligible impact. And we must be conscious of the risk that overuse of sanctions could undermine our leadership position within the global economy and the effectiveness of our sanctions themselves. While every situation will require a tailored approach, the underlying goal of all sanctions is an effort to change behavior. Sanctions are not meant to dole out punishment for past actions. They're forward-looking, intended to keep illicit or dangerous conduct out of our system and create pressure to change future behavior. This foundational principle is very different from civil penalties and forfeiture, which are meant as punitive and meant to address past behavior. Building on this principle, three broad lessons apply across a wide spectrum of programs. First, we've learned that sanctions are most effective at changing behavior when we work closely with our partners to build support for a common objective. The more international support there is for sanctions and for their underlying objective, the more effective they will be. We learned this lesson over the five decades of our unilateral trade embargo on Cuba. Not only did we fail to win international support, we saw some of our closest partners, like Canada and the European Union, enact legislation forbidding domestic companies from following sanctions. As a result, some foreign subsidiaries of U.S. companies were subjected to an untenable conflict of laws, and we were at odds with many neighbors in Latin America. The outcome has been an effective sanctions program. We have the best chance of success when governments and international bodies align their sanctions. In some cases, UN Security Council resolutions are the best way to reach consensus, as we achieved in December against ISIL and again this month, or last month, against North Korea. In others, the best approach may involve sanctions by the G7 or an informal group of allied countries. While we must always reserve the right to act alone to protect our national security, unilateral actions should be the exception, not the rules. Our sanctions against Iran's nuclear program are the most powerful example of how a broad-based effort coupled with serious diplomacy can succeed. As Iran's nuclear ambitions came into focus and it repeatedly defied calls to abide by international accords, successive administrations saw as imperative trying to change Iran's calculations through various tools of foreign policy, including sanctions. The United States began by imposing its own sanctions on complicit Iranian banks and businesses, but it quickly became clear that we needed to work with partners around the world to shut down safe havens and increase pressure on Iran's economy. We traveled the world to explain the threat posed by Iran's nuclear ambitions and win support for common action in the UN Security Council. Allies such as the European Union, Canada, and Australia came on board, as did countries with traditionally close ties to Iran, including China, Russia, and India. By 2010, four UN Security Council resolutions, sanctions resolutions, raised pressure on Iran economically, and the world's banks were increasingly wary of participating in Iranian transactions. The US Congress and the administration worked together to amplify the pressure, implementing powerful measures, including secondary sanctions, to threaten foreign companies with serious penalties for offshore transactions, even if no US persons were involved. These new measures targeted Iran's crude oil sales, its financial system, and other key sectors providing support to the Iranian economy and its nuclear program. Working with governments and banks around the world, secondary sanctions on Iran had a powerful effect. They damaged Iran's few remaining ties to the legitimate financial system. The next step was to slow down Iran's oil revenue in immediate halt to all Iranian oil exports on the surface would have looked much tougher than an incremental approach. But this would have imposed an intolerable burden on the energy supply of important allies like China, Japan, and South Korea, and would have likely failed from the start. So the sanctions instead pressed our international partners to ratchet down their imports every six months over two years. These efforts resulted in a 60% drop in Iran's most important export, putting massive pressure on Iranian government revenues while preserving the option to further ramp up pressure. By building pressure over time, we maintained broad international support, maximized our impact, and effectively restricted or blocked nearly all of the central bank of Iran's foreign reserves. Ultimately, Iran saw a choice, pursue an illicit nuclear program, or rejoin the global economy. In 2012, we opened a narrow window to see if a diplomatic solution was possible. Back when Bill Burns was deputy secretary of state and I served as White House chief of staff, we worked with a small group to see if engagement could work. This process, which was sped up by the Iranian people's election of Iranian president Rouhani, led to a preliminary arrangement in 2013, the Joint Plan of Action, which froze nuclear activity and laid a foundation for a broader negotiation. After two years of tremendous diplomatic efforts led by secretaries Kerry and Moniz, as well as former undersecretary Wendy Sherman, with the support of teams from the departments of state, treasury, and energy, and our international partners, we secured a comprehensive arrangement to cut off all of Iran's pathways to a nuclear weapon, removing a serious threat from a region that cannot afford further destabilization. Another lesson we have learned is that since the goal of sanctions is to pressure bad actors to change their policy, we must be prepared to provide relief from sanctions when we succeed. If we fail to follow through, we undermine our own credibility and damage our ability to use sanctions to drive policy change. The experience with Iran demonstrates how difficult this can be, essential as it is. To achieve its goal of lifting sanctions, Iran had to accept a comprehensive nuclear deal. Lifting nuclear sanctions was an incentive we established to help achieve this profound change in Iran's calculations, and that incentive coupled with tough principal diplomacy worked. Since Iran has kept its end of the deal, it's our responsibility to uphold ours in both letter and spirit. For this reason, it was vitally important that on implementation day, we lifted the sanctions we promised to lift and provided guidance to make clear where commerce can resume. Since implementation day, we have engaged in widespread global outreach to help governments and businesses understand the sanctions relief provided and, critically, the non-nuclear sanctions that remain in place. And while we have lifted the nuclear sanctions, we continue to enforce sanctions directed at support for terrorism and regional destabilization and missile and human rights violations. Iran's nuclear program posed a special threat to many countries individually and globally and for countries like Israel a potentially existential threat. There's no question that removing this nuclear threat has made the region and the world safer. As Lieutenant General Gaddi Isamkat, who commands the Israeli Defense Forces put it, and I quote, without a doubt the nuclear deal between Iran and the West is a historic turning point. It's a big change in terms of the direction that Iran was headed and in the way that we saw things. By following through on our commitments to provide sanctions relief, we sustain the powerful incentive for other malign actors to respond to sanctions by changing their behavior. Two years ago, when Russia launched aggressive and destabilizing actions in eastern Ukraine and occupied and attempted to annex Crimea, it was clear that the world needed to respond. It was also quickly apparent that economic and financial sanctions would be the most appropriate response. While its veto at the UN Security Council made a response from the UN Security Council impossible, working with the G7 and other like-minded partners, we developed an international plan to respond to Russia with the goal of changing Russia's policy choices. Russia's economic prominence in global financial links meant that powerful sanctions would need to be carefully designed to avoid serious unintended consequences and spillovers for a still fragile global economy. While some called for the United States to respond with everything in our sanctions arsenal, President Obama directed us to develop a coordinated response in concert with our allies that would deliver strong but measured pressure in which could preserve our options and be ratcheted up or down over time, depending on Russia's behavior. We moved quickly to impose sanctions on key officials and entities linked to the crisis in Ukraine, with a particular focus on the inner circle of Russia's leadership and associated companies. And in readying broader measures, we sought out asymmetries, particular areas where the Russian government relied upon European and U.S. technology and financing, but where sanctions would have the smallest possible spillover effect on us, our allies, and the Russian people. The impact has been significant. Sanctions have contributed to tighter financial conditions, weaker confidence, and lower investment in Russia. While Russia's very deep economic decline was amplified greatly by the dramatic drop in oil prices, our targeted sanctions have worked as intended, imposing great costs on Russia with only a limited macroeconomic effect on the U.S. and European economies. The path forward will depend on Russia's conduct. Russia has made commitments under the Minsk process, and if it keeps those commitments, sanctions will be lifted. If not, the sanctions will continue, along with the pressure they impose over time. A third lesson we've learned is that our experience has shown that to be effective, sanctions programs require an investment in infrastructure to support and implement our efforts. Powerful sanctions require investigators and analysts to track how key actors move and store their money and to build detailed cases drawing on intelligence analysis. And they rely on enforcement officers to investigate violations and levy penalties for significant wrongdoing. Implementation of targeted sanctions means a commitment to due process. Freezing assets and severing financial access is a powerful step and requires decisions that can be appropriately reviewed and reversed when appropriate. This requires a careful review of evidence and a rigorous legal process. Finally, using licenses, we can protect against unintended effects on the innocent. For example, to authorize exports of food, medicine and medical devices, as we did in the aftermath of the Bam Earthquake in Iran and Cyclone Nargis in Burma. Here at home, we've spent decades building a system to implement sanctions and to help private companies and foreign governments understand how sanctions apply to a complex range of industries and transactions. We work closely to maintain two-way communications with companies that are well positioned to observe the effects of our sanctions and often to assess where they can be approved. This behind-the-scenes work is what makes an effective program. We need more partners internationally to help with this effort, which is why we're working to build capacity in countries around the world. At the outset, this work ensures that sanctions are narrowly and accurately targeted. It continues through designations, especially when targets, inevitably, seek to evade sanctions. Internationally, we must work closely with the UN Security Council and expert monitoring teams that support its efforts and the financial action task force, which upholds standards and best practices and with the International Monetary Fund to help countries build capacity to deal with illicit financial flows. The United States has the most developed capabilities in this area, combining intelligence, policy, regulatory and enforcement capabilities under one roof. But we need to enhance them further and we'll work with our counterparts and other governments to build their own capabilities. We must take these lessons learned and apply them to the critical threats of today and tomorrow, like North Korea. And no lesson is more important when it comes to North Korea than the need for international support. The United States work closely with China and other members of the UN Security Council this month to unanimously adopt a resolution that significantly ratchets up the sanctions on Pyongyang and underlines for the North Korean regime the resolve of the international community to stop its nuclear and missile programs. The president then issued an executive order to implement this resolution and the strong legislation passed by Congress this February. Taken together, these new domestic and multilateral sanctions will increase the pressure on North Korea in several key economic sectors, including banking, transportation, mining and metals and labor. We're mindful though that North Korea's leadership has prioritized the pursuit of nuclear weapons over just about anything else, including economic growth or the day-to-day lives of its own people. But it's precisely because of this that we must work closely with China and others in the region to ensure strong implementation of the new sanctions. Only with robust international cooperation can we convince Pyongyang to change its calculus and to stop its activities. We've also put these sanctions lessons learned to use over the past two years in our campaign against the so-called Islamic State, conscious of the fact that sanctions will never be a silver bullet to use against every threat. As a group that derives most of its revenues from within, ISIL is not as susceptible to the donor and facilitator-focused approach we use with other terrorist organizations such as Al Qaeda or Hezbollah. But ISIL has vulnerabilities, which we've attacked step-by-step using sanctions as just one part of a much broader effort to cut it off from the international financial system and curtail its renewable sources of funding. ISIL started out seizing territory and money from banks. We worked closely with the central bank of Iraq to cut off the 90 bank branches within ISIL-controlled territory in Iraq from the international financial system and exchange houses. But much of ISIL's financial strength comes from its ability to generate funding internally through extortion of the local population and oil revenue. Over the past year, the government of Iraq has taken important steps to curtail ISIL's access to public sector salary payments, helping to ensure that ISIL cannot extort those funds. And in recent months, the coalition led by the U.S. has targeted ISIL's entire oil supply line, going after oil fields, refineries, and the tanker trucks that transport that oil across the country and to the border. These actions have had an impact. Late last year, ISIL leaders in the Raqqa province of Syria cut in half the salaries of all its fighters there, citing in a letter, quote, exceptional circumstances. To ensure broad international support and cooperation, in December, I chaired the first ever UN Security Council meeting of finance ministers where we adopted a resolution to expand the long-standing sanctions regime against al-Qaeda to increase focus towards ISIL. This resolution will keep ISIL cut off from the international financial system and impose sanctions on anyone caught doing business with it, even middlemen. And just last week, military actions took one of ISIL's top financial leaders off the battlefield. We're clear-eyed about the challenge we face in going after ISIL's finances. Successful implementation will take sustained determination by local partners and other countries facing an ISIL threat and broad international cooperation to make sure ISIL has denied the resources it needs to grow and to create ongoing pressure to shrink its operations. Through a targeted and multilateral effort built upon years of international coordination, we've accomplished a great deal, but we still have much more to do. Just as with the other ways that the United States projects power, imposing sanctions also involves costs and risks. Sanctions should not be used lightly. They constrain diplomatic relationships, introduce instability into the global economy, and impose real costs on companies here and abroad. And of course, they carry a risk of retaliation. Actions that trigger U.S. sanctions must constitute a significant threat to our national security, foreign policy, or economy. And even then, we should impose sanctions only when we have a reasonable confidence that they will achieve their intended policy goal and only when the balance of costs and benefits is in our favor. It's important to make sure these tools remain available and effective, and there's a risk that overuse could ultimately reduce our capability to use sanctions effectively. While sanctions are a valuable alternative to more severe measures, including the lawful use of force, it's a mistake to think that they are low-cost. And if they make the business environment too complicated or unpredictable, or if they excessively interfere with the flow of funds worldwide, financial transactions may begin to move outside of the United States entirely, which could threaten the central role of the U.S. financial system globally, not to mention the effectiveness of our sanctions in the future. We need to be cautious of rising expectations in this arena. We must be on guard that the ultimate and extreme steps in our Iran nuclear sanctions, taken after eight years of building international support for tougher action, do not become a starting point when we confront each new crisis. We know that foreign policy and security threats will always exist, and it's critical that we have scalable options at our disposal. Secondary sanctions prompt particular concerns. Unlike primary sanctions, which focus on activities of U.S. individuals and companies, secondary sanctions generally are directed towards foreign persons. These measures threaten to cut off foreign individuals or companies from the U.S. financial system if they engage in certain conduct with a sanctioned entity, even if none of that activity touches the United States directly. As a result, they're viewed even by some of our closest allies as extraterritorial attempts to apply U.S. foreign policy to the rest of the world. The risk that sanctions overreach will ultimately drive business activity from the U.S. financial system could become more acute if alternatives to the United States is a center of financial activity and to the U.S. dollar as the world's preeminent reserve currency assume a larger role in the global financial system. Global norms are hard to reshape. Existing alternatives are not well positioned to fully fill the role of U.S. markets and the U.S. dollar. And there are many factors that will continue to make the United States the most attractive financial system in the world. But our central role must not be taken for granted. If foreign jurisdictions and companies feel that we will deploy sanctions without sufficient justification or for inappropriate reasons, secondary sanctions in particular, we should not be surprised if they look for ways to avoid doing business in the United States or in U.S. dollars. And the more we condition use of the dollar and our financial system on adherence to U.S. foreign policy, the more the risk of migration to other currencies and other financial systems in the medium term grows. Such outcomes would not be in the best interests of the United States for a host of reasons. And we should be careful to avoid them. Since World War II, the centrality of our financial system has been a source of tremendous strength for our economy, a benefit for U.S. companies and a driver of U.S. global leadership. And given the volume of trade in the U.S. dollar, even our ordinary or primary sanctions carry enormous weight and influence beyond our borders. Sanctions have become a powerful way to protect U.S. national security interests. We must remain vigilant to maintain a high bar for imposing sanctions so they're used only to address significant threats to our national security, foreign policy or economy and only when the costs and benefits have been carefully evaluated. And secondary sanctions should be used only in the most exceptional circumstances, whereas with Iran, the threat is severe, where we have international consensus and when ordinary sanctions have fallen short of their market. Today's economic tools are sophisticated and potent, but they're not the answer to every threat we face. When used thoughtfully and in concert with other tools of national power, they can protect our financial system and apply substantial pressure against our most troubling national security threats. They are a powerful alternative to military engagement, which should remain the option of last resort, not the first. To preserve the effectiveness of sanctions over the long term, we must use them wisely. We must clearly articulate our goals and we must provide relief when those goals are met. Future presidents will need these sophisticated tools to deal with urgent national security objectives. We must continue to build the diplomatic relationships and the operations needed for implementation and private sector coordination. If we adhere to our principles and continue to learn from what's worked and from what has not worked, I believe that we will be able to use these tools to protect our citizens and our values for many, many years to come. Thank you again for hosting me here this morning and I look forward to the conversation. Jack, thank you very much for a really thoughtful set of remarks. I know we have to wrap up by 9.30, so there's not a lot of time for questions and conversation, but let me just start by re-emphasizing the obvious, which is I think you have a unique perspective on this issue going back to the 1990s in very senior positions at OMB and the White House, the Treasury and the state. So I wanted to ask just drawing on those personal experiences over that stretch of time, how you've seen the kind of evolving roles of executive branch players, especially Treasury over that time, the evolving attitudes of key policy makers and members of Congress towards sanctions and their effectiveness. Thanks, Bill. Look, I've seen, as I said in my remarks, the increasing development of knowledge and sophistication in the nature of the tools we have. In the 1990s with Iraq, there was an oil for food program that wasn't very effective. It ended up being circumvented and instead of providing the relief on a humanitarian basis, it ended up enriching many of Saddam's cronies. You compare that to the experience with Russia where we went in with targeted sanctions that went right to the inner circle and at the first stage had very little impact on the general public. We've learned a great deal. I'm very proud of the resources we have at Treasury. It's a unit which in so many ways punches beyond its weight. It's a few hundred people in a world where most organizations they interact with have thousands of people. And it's the kind of work that just requires a lawyerly approach to building a case to apply it. It's not just something where you throw it out there and it implements itself. The relationship between the administration and Congress has also evolved. It's not new that Congress is interested in these issues, whether it was issues like South Africa decades ago or Iran in more recent years or North Korea in recent months. I think there has to be a healthy interaction between Congress and the administration. But I think there also has to be an understanding that the kind of incremental approach, the kind of scalable approach that I described is the way to be most effective. And there has to be caution not to measure toughness just by whether you use everything that you can possibly do, but whether you're doing it in a way that is surgically designed to be effective and giving you the ability to ratchet up and down to achieve your results. Now, thanks very much. Why don't we go open it up in the time we have for a meeting? And all I'd ask is that after you raise your hand, the microphone will come to you. Just identify yourself and please remember to end with a question mark. Yes, sir. It, hold on for the microphone is right behind you. Thanks. Hello, I'm David Payman, Global Lead for Sanctions at BlackRock. Secretary Lew, how would you address the concern of the business community who wants to take advantage of the sanctions relief against Iran, but yet is thinking about a possible snapback of sanctions? Will there be sufficient government mourning and an opportunity to wind down business without the concern of a potential asset freeze on investment activity in Iran? The situation in Iran is complicated because one has to make one's own calculation as a business person of whether you want to do business or not. What we have done is we've lifted the nuclear sanctions. We can't warrant Iran's future behavior. I think that the agreement is one that should stick and we are going to do everything we can to make it stick. So the environment that one plans for should reflect one's own judgment of confidence in that. And it's also a complicated landscape because while we lifted the nuclear sanctions, the non-nuclear sanctions remain in effect. They're not the same. We've been very clear indicating which sanctions are gone and which sanctions remain. We respond to questions when we get them. If there's any need for clarification. I mean, ultimately the business judgment is one that individual firms have to make on their own. What we have done and should do is make clear what isn't is not in place. And we've tried to do that with precision. We've done it with the formal lifting of the nuclear sanctions. We've done it by posting a great deal of information with questions and answers and additional elaboration. And by being available to respond. I think that the challenge of doing business with Iran is more complicated than just the sanctions environment. And obviously I can't tell companies what they should do as a matter of business judgment. But what I can do is be clear about what sanctions do and do not apply. Thanks. The end back. Yes, ma'am. Hi, I'm June Torbati with Reuters. In the past few weeks, a few Iranian leaders have complained about the fact that they haven't been getting the sanctions relief they've been promised. In particular, it seems that international banks are fairly reluctant to go back in. Are you concerned about what that might mean for the longevity of the nuclear deal and what is Treasury doing, if anything, to make clear to these banks what they are and are not allowed to do when it comes to Iran? We have tried to be very clear about what sanctions have been lifted and what commercial activity that was prohibited is now permitted. I think that Iran is encountering challenges in the business environment that are partially related to the history of sanctions and partially related to the history of Iran's business relations. That's something that they're going to have to work through over time. I think, as I said in my remarks, it's critical that we be clear that once the nuclear sanctions are lifted, there's not a legal bar to certain activities, including certain banking activities that were barred in the past. Now, that it won't affect all, some banks were sanctioned for issues related to terrorism. Banks that were sanctioned because of the nuclear activities, we've been clear those sanctions are lifted. Now, I've heard a lot of the comments coming out of Iran, and we have tried to be very clear about what our actions have been. And I think that we're doing what we need to do to comply, as I said, with the letter and the spirit of the agreement. Notwithstanding the fact that it is not the case that we embrace Iran's other activities. So we're in a world where we just last week had additional actions where Iran sanctions were implemented on activities related to missile launches and air activities that support regional destabilization and terrorism. So we're going to continue on those matters, but we'll be very clear what is and is not sanctioned. I think that it will take some time, but we are sticking to the agreement and I believe we need to. Thanks. Yes, ma'am. Hi, Kelsey Ross. I'm a master's student at American University. You touched on this a little bit in your speech, but I was wondering if you could expand on how you make sure that sanctions aren't hurting the people in the country who maybe need trade with the US. I'm thinking specifically of the criticism of sanctions in Myanmar that they mostly hurt the citizens who were suffering already from economic sanctions. So if you go back to early sanctions programs, it was pretty much on or off. You cut a country off and it had broad impact on the general public. You fast forward to the Russia sanctions after Ukraine, very highly engineered and targeted. The first round of sanctions didn't target major financial institutions that affect consumers where a disruption would be felt by kind of average citizens. It went to a bank where the leaders tended to bank and where those who were part of the policy that was being targeted would be affected. The industries that were sanctioned in Russia were not the food industries. It was actually Russia's retaliation where they cut off food imports from Europe which didn't hurt their own people. We were very careful to design the sanctions in a way that would have maximum pressure with minimum spillover even within Russia. There are different sanction regimes. The closer you come to a full embargo, the harder it is to avoid. I think that what we've learned is that we have a variety of tools for a variety of purposes and we know how to do things now that we didn't know how to do 10 or 20 or 30 years ago. That's one of the reasons I think it's so important that we use sanctions judiciously, scale them up. You look at the ability in Europe to maintain unity, keeping sanctions on Russia. If we were kind of heavy handed at the beginning, I don't think we would have had the unity in the beginning. I think the reason that they're still effective and the reason that Russia is still paying attention to them is that we've maintained that unity notwithstanding the fact that Europe has more of an exposure to spillover effects than the United States does just because of the amount of commerce between Russia and Europe. So it is, I think, an area where we have learned how to be much more engineered in the way we apply pressure. Thanks, and unfortunately, I think we have time for just one last question, just way in the back there, sir. Hi, Secretary Lou Andrew Maider from Bloomberg. I'm wondering if you can elaborate on your position on the Russia sanctions you mentioned. Under what circumstances would you be failing back or perhaps offering sanctions? We have tried to be very clear that we think implementing Minsk would be the right outcome in terms of restoring a geopolitical situation that's acceptable, and it would be a pathway towards relieving sanctions. That's an agreement that Russia negotiated with Ukraine. There are actions that need to be taken on both sides, but Russia has not complied with all of its commitments under Minsk. If they do, we would not reluctantly, but we would be anxious to see the sanctions lifted because the sanctions would have accomplished their purpose, and that's a message that we have tried to deliver clearly, and it's why I think, as I said in my remarks, it's so important that we not hesitate when we achieve our goals with sanctions to then respond by lifting the sanctions themselves. It's just not a tenable to have a sanctions regime that works if you suffer the same price if you comply or if you don't comply. So if Russia implements Minsk, complies with its international obligations, that will be a pathway towards lifting the sanctions. Majek, thank you very much. I promise to get you out by 9.30, but thanks so much for coming today. Thanks for a really thoughtful set of remarks on a very important subject, and thanks for your extraordinary service. So I hope you'll all join me in thanking you. Thanks so much, Bill.