[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


                 NORTH KOREA'S PERPETUAL PROVOCATIONS:
                     ANOTHER DANGEROUS, ESCALATORY 
                              NUCLEAR TEST

=======================================================================


                                 HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 14, 2016

                               __________

                           Serial No. 114-230

                               __________

        Printed for the use of the Committee on Foreign Affairs
        
        
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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         BRAD SHERMAN, California
DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       BRIAN HIGGINS, New York
MATT SALMON, Arizona                 KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina          ALAN GRAYSON, Florida
MO BROOKS, Alabama                   AMI BERA, California
PAUL COOK, California                ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas            GRACE MENG, New York
SCOTT PERRY, Pennsylvania            LOIS FRANKEL, Florida
RON DeSANTIS, Florida                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida                 ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
DANIEL DONOVAN, New York

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                                 ------                                

                  Subcommittee on Asia and the Pacific

                     MATT SALMON, Arizona Chairman
DANA ROHRABACHER, California         BRAD SHERMAN, California
STEVE CHABOT, Ohio                   AMI BERA, California
TOM MARINO, Pennsylvania             TULSI GABBARD, Hawaii
JEFF DUNCAN, South Carolina          ALAN S. LOWENTHAL, California
MO BROOKS, Alabama                   GERALD E. CONNOLLY, Virginia
SCOTT PERRY, Pennsylvania            GRACE MENG, New York
SCOTT DesJARLAIS, Tennessee
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Victor Cha, Ph.D., senior adviser and Korea chair, Center for 
  Strategic and International Studies............................     5
Mr. Bruce Klingner, senior research fellow for Northeast Asia, 
  The Heritage Foundation........................................    13
Sue Mi Terry, Ph.D., managing director, Bower Group Asia.........    27
Mr. David Albright, president and founder, Institute for Science 
  and International Security.....................................    38

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Victor Cha, Ph.D.: Prepared statement............................     7
Mr. Bruce Klingner: Prepared statement...........................    15
Sue Mi Terry, Ph.D.: Prepared statement..........................    29
Mr. David Albright: Prepared statement...........................    40

                                APPENDIX

Hearing notice...................................................    60
Hearing minutes..................................................    61
The Honorable Matt Salmon, a Representative in Congress from the 
  State of Arizona, and chairman, Subcommittee on Asia and the 
  Pacific: Material submitted for the record.....................    62
The Honorable Grace Meng, a Representative in Congress from the 
  State of New York: Prepared statement..........................    67

 
                 NORTH KOREA'S PERPETUAL PROVOCATIONS:
                     ANOTHER DANGEROUS, ESCALATORY
                              NUCLEAR TEST

                              ----------                              


                     WEDNESDAY, SEPTEMBER 14, 2016

                       House of Representatives,

                 Subcommittee on Asia and the Pacific,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The subcommittee met, pursuant to notice, at 3:27 p.m., in 
room 2255, Rayburn House Office Building, Hon. Matt Salmon 
(chairman of the subcommittee) presiding.
    Mr. Salmon. I apologize for both of us being a little bit 
tardy. We had the Foreign Minister from Burma, who was here to 
meet with the chairman of the full committee, and we were asked 
to attend. So, thanks for being so patient. I really appreciate 
you not leaving.
    The subcommittee will come to order. Members present will 
be permitted to submit written statements to be included in the 
official hearing record.
    Without objection, the hearing record will remain open for 
5 calendar days to allow statements, questions and extraneous 
materials for the record, subject to the length limitation in 
the rules.
    Last Friday, North Korea conducted its fifth and most 
powerful nuclear test to date. This latest provocation coming 
just weeks after they fired off three additional missiles 
during the G-20 summit in China. While U.S. and United Nations 
sanctions have undoubtedly hurt the North Korean economy, Kim 
Jong-un continues to willingly and belligerently defy U.N. 
Security Council resolutions as well as international norms. 
Clearly, he is not fazed by the administration's so-called plan 
of strategic patience, and so continues with his childlike 
behavior that endangers much of the world. The House Committee 
on Foreign Affairs, under the leadership of Chairman Royce, has 
taken the lead to address this intransigence. While we have 
already taken bold steps in increasing sanctions, clearly, more 
must be done. We are here today to identify and work toward 
proactive policy solutions that will put an end to the 
provocations of this rogue regime. Enough is enough.
    As good as the additional sanctions have been, without 
China's enforcement, it will never be enough. I would like to 
hear from our panel on how to best engage China on this issue. 
We have been talking about this for a very, very long time, and 
it doesn't seem like we have gotten them properly motivated. We 
have talked to some of our allies about the same issue. And, 
frankly, China's almost nonintervention in this issue is very, 
very frustrating. We would love to hear any thoughts you might 
have on how we can get them a little bit more excited about 
getting more involved.
    China prefers the status quo in North Korea rather than 
risk a flood of North Korean refugees and a shared border with 
the Korea-U.S. alliance. Some experts even worry that China may 
use its enforcement of U.N. Security Council resolutions and 
diplomatic assistance as a wedge, forcing South Korea to choose 
between China and the United States as its main partner on the 
peninsula. The international community at large is alarmed at 
China's indifference to date over North Korean provocations, 
especially with nuclear detonations so near its own border. 
Even North Korea's willingness to embarrass China by upstaging 
the G-20 ceremonies with a nuclear test has not yet led to real 
action by China.
    The administration has appeared to make some progress on 
our trilateral engagement with Korea and Japan, our two closest 
allies in East Asia. The House recently passed my legislation, 
which was cosponsored by Mr. Sherman, to encourage further 
dialogue and cooperation between our nations, with particular 
emphasis toward the North Korean threat. I will be very 
interested to hear from our panel on the potential for further 
cooperation from South Korea and Japan on how we might best 
work together to address North Korea's dangerous behavior.
    The United States recently convened its annual joint 
military exercises with South Korea. The U.S. flew two bombers 
over South Korea to provide some reassurance to our friends in 
Seoul, but I am not sure these messages resonate with 
Pyongyang. We all know that there are few options to instill 
real change from within North Korea, but waiting it out will 
not solve anything. We need a proactive approach.
    Most agree that getting information to the people of North 
Korea, unfiltered by the current regime, would greatly benefit 
the people of North Korea and aid efforts to diminish the 
stranglehold Kim has over the nation. I have legislation that 
passed through this subcommittee that would provide an overdue 
update and enhancement of those efforts. Boosting the 
information flow in North Korea would cripple Kim Jong-un where 
he is most vulnerable, and that is in the realm of reality.
    Again, sanctions efforts have been a huge focus in 
Congress, but due to China's lack of resolve, they seem to have 
little practical impact. I would like to determine what we can 
do to take it to the next level. What other chokepoints can we 
squeeze to shut off funding to North Korea's nuclear ambitions? 
Cutting off access to financial messaging systems, such as 
SWIFT, was a successful strategy to induce compliance with 
Iran, and we should pursue the same strategy toward North 
Korea, in my belief. The rogue regime should not have access to 
the international financial system.
    As if its other activities weren't reason enough to cut off 
its financial messaging access, North Korea has been identified 
as the likely culprit of a serious hack on SWIFT earlier this 
year, in which the culprits stole $81 million from Bangladesh's 
central bank. For that reason, I am working on legislation to 
end North Korea's access to interbank financial transfers to 
prevent further abuses and reduce funding to North Korea's 
nuclear program.
    Time and again, North Korea has proven that, so long as it 
is able, it will continue to advance its nuclear program, for 
both internal domestic strength as well as international 
bargaining power. While the United States has shown a 
willingness to negotiate with North Korea when it takes even 
modest steps toward denuclearization, North Korea has shown no 
interest--zero interest--in maintaining international norms. 
This cycle cannot continue, and we cannot strategically wait 
with a potential catastrophe looming.
    I look forward to a frank discussion with our witnesses on 
what to do next with this rogue regime.
    And I would like to recognize the ranking member for his 
opening statement, and then we will go to you, the witnesses. 
Thank you.
    Mr. Sherman. Mr. Chairman, thank you for holding these 
hearings. To amplify your reason why we were both late, we met 
with the Foreign Minister of Burma, also known as Myanmar, who 
happens to be Aung San Suu Kyi, one of the most inspirational 
women in the world. And, some would say, the de facto head of 
state of an important nation in Southeast Asia.
    I want to thank you for holding these hearings as we look 
at North Korea's fifth test overall. Its second test conducted 
just this year. The bomb's yield is estimated to be as much as 
20 kilotons or even more. And, if accurate, that would mean 
that the test involved a bomb with at least twice the yield of 
any other bomb tested by North Korea. We used to have the 
luxury of saying the North Koreans just want to get our 
attention; they just want some this or that concession. That is 
why they tested the missile; that is why they tested the 
nuclear explosive device. We can no longer just view North 
Korea as an annoying, petulant child. It is clear that North 
Korea is testing missiles and bombs for the purpose of 
developing warheads and ICBMs that can be put together and can 
reach our allies and, ultimately, the continental United 
States. The testing they are engaging in is necessary to 
achieve that goal. The fact that North Koreans have greatly 
increased the tempo of their testing is consistent with the 
view of an all-out effort to achieve these frightening 
capacities.
    We need to approach this problem with both a clenched fist 
and an open hand. As to the clenched fist, we can have 
sanctions on North Korea and its leaders, but these will be 
significant but not enough to change its policy unless we have 
the cooperation of China. China is North Korea's lifeline, 
whether it is food, whether it is oil, whether it is trade, 
whether it is money, whether it is hard currency. China is 
North Korea's window to the world and the provider of the 
financial services that they need. China needs to realize that 
there will be consequences well beyond our current targeted 
sanctions on this or that business entity if it continues to do 
business as usual with North Korea. China needs to understand 
that if North Korea uses its nuclear weapons, we will blame not 
only the regime in Pyongyang but also the regime in Beijing. 
China needs to know that it risks a serious change in 
relationship with the United States if it does not assist us in 
this effort. It cannot assume that it will always have access 
to the United States market the way it does now. And, there are 
those who say that it is unthinkable to link the trading 
relationship with the foreign policy relationship. I think it 
is time to think the unthinkable. But, what we are likely to do 
is just keep doing what we have been doing, which has been very 
ineffective in stopping North Korea's efforts.
    At the same time, we need an open hand. We should be 
discussing with North Korea a nonaggression pact, if they are 
still seeking one. We should be discussing with China that if 
there was a unification of the Korean Peninsula, something I 
don't think is going to happen anytime soon, but that if that 
were to happen, that the United States would not take military 
advantage of that, that, if anything, there would be a smaller 
American military presence on the Korean Peninsula and that it 
would not be north of the 38th parallel.
    And, we should explore whether some of our sanctions on 
North Korea could be reduced or eliminated, at least for a 
while, if there were very intrusive inspections to enforce a 
regime that froze its nuclear program. The idea of accepting, 
even for a while, that North Korea keeps what it has may sound 
like a departure from orthodoxy. But, every year, they have 
more, and it would be a good year if they did not increase 
their nuclear capabilities.
    I should point out that North Korean nuclear doctrine seems 
to call for having about 12 usable nuclear weapons to defend 
their country. They will soon have a 13th, and it may go on 
eBay. Not exactly on eBay, but once they get a certain number, 
they can think of selling the next one. If it is sold, it will 
not be for tens of millions of dollars; it will be for billions 
of dollars. Fortunately, there is no terrorist organization in 
the world that can provide that amount of money, but I can 
think of one or two states that would like to have nuclear 
weapons that could muster billions of dollars. And, I am going 
to continue my effort to convince the Chinese Government that 
they should not allow nonstop flights between Pyongyang and 
Tehran that don't stop for fuel in China. It is always good to 
get more fuel, and it is always good for the Chinese Government 
to be in a position to know what is on the plane.
    What is more likely is we are just going to keep doing what 
we are doing. We will talk at China, but we won't do anything 
that forces them to change their policy. And we will be back 
here, unfortunately, without our chairman in the years to 
come--unless you want to do a third iteration of your 
congressional career to hold hearings--and by then, we may be 
talking about testing an ICBM that has proven to go thousands 
of miles. I don't want to be here to do that, but I am not 
moving to Arizona, so if it does happen, I will be here to see 
it.
    And, I yield back.
    Mr. Salmon. I thank you.
    In the interest of time, we would like to move to the 
witnesses, and upon your conclusion, we will have questions by 
the members of the panel up here.
    You have all testified before Congress before, but let me 
just remind you that, with our lighting system, when it is 
green, you are good as gold; when it turns amber, you have got 
a minute left; when it is red, please finish. I know we have a 
lot of questions, a lot of interest. This is a very pressing 
issue and pressing time.
    First of all, we have Dr. Cha, senior adviser and Korea 
chair at the Center for Strategic and International Studies; 
Mr. Bruce Klingner, senior research fellow for Northeast Asia 
at the Heritage Foundation; we have Dr. Sue Mi Terry, managing 
director of Bower Group Asia; and Mr. David Albright, the 
president and founder of Institute for Science and 
International Security.
    We thank the panel for joining us today to share their 
experience and expertise.
    And, Dr. Cha, we will start with you.

STATEMENT OF VICTOR CHA, PH.D., SENIOR ADVISER AND KOREA CHAIR, 
         CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES

    Mr. Cha. Thank you, Chairman Salmon, Representative 
Sherman, and committee members.
    North Korea is shaping up to be the number one security 
threat for the next U.S. Presidency. Since 2009, there have 
been 62 ballistic missile and nuclear tests, versus 17 
ballistic missile and nuclear tests during the Clinton and Bush 
administrations. So, there has been a steep change, and neither 
of the candidates have really addressed this issue. This issue 
is going to hatch in the next administration.
    What the North Koreans want--as Representative Sherman 
said, we used to think they wanted attention and that is why 
they did these sorts of things. That is clearly not what we are 
talking about anymore. In my opinion, they are trying to 
demonstrate, to the best of their ability, a survivable nuclear 
capability. And, they are trying to do that, at least signal 
that, before the next U.S. President comes into office.
    And I think we have more provocations to come. The data 
that we are collecting at CSIS on our Beyond Parallel Web site, 
which we will be releasing soon, indicates that they like to do 
things in a specified window around U.S. Presidential 
elections. So, I expect that there is more to come.
    The threats are obvious, and I think both Chairman Salmon 
and Representative Sherman have spoken to these. And, I 
particularly want to emphasize the horizontal proliferation 
threat. I mean, their statements are talking about 
standardizing a weapons design. The suggestion is that the next 
step is production. And, if they do produce scores of missiles, 
nuclear-tipped missiles, there is only one thing that they can 
do with them, and that is to sell them. History has shown that 
they have sold every finished weapon system they have ever 
developed, whether it is missiles to Pakistan and Iran, whether 
it is a nuclear design for a 5-megawatt reactor to Syria, or 
even discussions with Saddam Hussein at one point, except 
Saddam was not ready to pay for anything yet.
    Unfortunately, we are going to go back to the usual 
playbook: Angry statements from the United Nations, perhaps 
another Security Council resolution.
    The sanctions are not doing the things that we want them to 
do. They are not retarding the program. They are not forcing 
the North Koreans back to the negotiation table. And they are 
not--even though this is an unspoken aspect of sanctions--they 
are not causing the regime to be unstable. So the current 
pattern is not working.
    So, what should we do? I mean, I will offer some ideas. I 
don't know if they are new ideas, but I will offer some ideas. 
The first, and I think foremost, is that we need to deploy 
THAAD on the Korean Peninsula. Both the South Korean people and 
U.S. forces on the peninsula are naked without it. And, I know 
this is shaping up to be a controversial issue in South Korea, 
but this is not a political issue, even though it is being 
played as political in South Korea. This is a national security 
issue.
    Second, I think we can do more in terms of sanctions. We 
can certainly boost or turbocharge the sanctions. We can close 
the loophole in 2270 when it comes to the sectoral measures, 
coal and these sorts of things. We can ban fuel exports to 
North Korea. We can ban the overseas labor exports. As Chairman 
Salmon said, we can do something with SWIFT. We can designate 
Air Koryo for violating the U.N. ban on importing luxury goods 
and bulk cash transportation. We can try to ban North Korean 
transactions in other foreign currencies, including the RMB. So 
there are a number of sanctions that we could do.
    I also want to draw attention to the importance of 
continuing to focus on trying to implement the U.N. Commission 
of Inquiry recommendations, including discussion in the U.N. 
Security Council about holding North Korean leaders responsible 
for human rights abuses.
    I do agree that we can't do all of this without leaving 
open some sort of diplomatic path. Otherwise, we are just 
headed on a path to war. And, so I think, in this regard, China 
should convene a five-party meeting. When we created the Six 
Party Talks, that was the purpose, was to have five-party 
meetings in which we could talk with the Chinese and others 
about more coordination on contingency planning.
    Finally, let me say that I think we do need to engage China 
more on sanctioning, but I think we also need to engage them on 
thinking about the overall direction of the leadership in North 
Korea and how we might be able to effect change there. This 
problem, as we can see, based on the number of tests they have 
been doing, really coincides with the assumption of power of 
this leadership, this new young leadership. And, as long as 
that is there, this is going to continue to be a problem. Thank 
you very much.
    [The prepared statement of Mr. Cha follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
     
                              ----------                              

    Mr. Salmon. Thank you.
    Mr. Klingner.

  STATEMENT OF MR. BRUCE KLINGNER, SENIOR RESEARCH FELLOW FOR 
            NORTHEAST ASIA, THE HERITAGE FOUNDATION

    Mr. Klingner. Thank you, Mr. Chairman, Ranking Member 
Sherman, and distinguished members of the panel. It is truly an 
honor to be asked to appear before you again on such an 
important issue to U.S. national security.
    North Korea's repeated violations of U.N. resolutions have 
led to a new international consensus on the need for stronger, 
more comprehensive sanctions. The enhanced punitive measures 
are welcome, if long overdue, but their utility is dependent on 
complete and forceful implementation.
    This year, Congress passed the North Korea Sanctions and 
Policy Enforcement Act, which had a major impact by inspiring 
or pressuring others to implement long overdue measures on 
North Korea. The act increased U.S. leverage at the U.N. 
Security Council. It led other nations to undertake similar 
actions or to wean themselves away from business dealings with 
Pyongyang. And it led the Obama administration to finally 
designate North Korea as a primary money laundering concern and 
target several North Korean entities, including Kim Jong-un, 
for human rights abuses. Yet, more can and needs to be done.
    Besides the Obama administration's policy of timid 
incrementalism of sanctions enforcement, another major problem, 
as you have identified, is China. In March, China agreed to 
U.N. Resolution 2270, which has been touted as the toughest to 
date. That is true, but as has been the case with every 
previous resolution, it was watered down due to the demands of 
Beijing. And Chinese banks and businesses seemed to be pulling 
back from North Korea early in 2016. However, China took 
similar action after every previous North Korean nuclear test, 
and each time, China temporarily tightened trade and bank 
transactions with Pyongyang only to subsequently reduce 
enforcement and resume normal economic trade within only a few 
months. For years, China has been an enabler of North Korean 
misbehavior at the U.N.
    China's reluctance to strongly pressure its ally provides 
Pyongyang a feeling of impunity, which encourages it only 
toward further belligerence. The effectiveness of international 
sanctions is hindered by China's weak implementation.
    The economic noose is now tightening on the North Korean 
regime, and it faces a perfect storm of conditions that make it 
more vulnerable to economic pressure. The regime is facing a 
reduced flow of hard currency due to the increased financial 
sanctions; the increasing pariah status of the regime that is 
scaring away business partners; decreased global prices for 
resource commodities, which is a major North Korean export; the 
slowing Chinese economy; and South Korea ending its involvement 
in the failed Kaesong joint economic venture, which had 
generated nearly a quarter of North Korea's foreign trade.
    Now, how to respond to North Korea? The international 
community should take all possible measures to cut off the flow 
of money into North Korea and substantially increase pressure 
on the regime. In my written testimony, I have provided a 
lengthy list of specific recommendations, and I will highlight 
a few here.
    There are additional measures we can take, but as important 
is fully implementing all the measures and the powers that we 
already have. But some of the steps, as you have already 
alluded to, are imposing secondary sanctions and penalizing 
entities, particularly Chinese financial institutions and 
businesses that trade with those on the sanctions list. 
Imposing secondary sanctions could have a chilling effect on 
Chinese economic engagement with North Korea. To date, the 
Obama administration has not sanctioned a single Chinese entity 
for facilitating North Korean prohibited behavior.
    Compel the removal of North Korea from the SWIFT financial 
transfer network, as you pointed out, Mr. Chairman. The Obama 
administration and the European Union pressured the Belgian-
based hub for electronic financial transactions to disconnect 
sanctioned Iranian banks in 2012. We should do the same with 
North Korea.
    We should also work to ban North Korean overseas workers 
exploited in highly abusive conditions. North Korea has an 
estimated 60,000 to 100,000 workers overseas, earning the 
regime an estimated $300 million to $400 million a year. We 
should also increase information operations, through overt and 
covert means, to promote greater North Korean exposure to the 
outside world to have a long-term corrosive effect on the 
regime.
    The U.S. and its allies must also implement measures to 
defend themselves against the spectrum of North Korea's 
military threat. As Mr. Cha has pointed out, we should deploy 
the THAAD ballistic missile defense system in South Korea. It 
is better than anything Korea has or will have for decades to 
defend against North Korean land-based missiles. We should also 
urge South Korea to deploy sea-based ballistic missile defense 
against the submarine missile threat from North Korea. 
Currently, Seoul has no systems to defend itself against an 
SLBM. We should also augment allied antisubmarine warfare 
capabilities. North Korea's apparent ability to evade allied 
submarine detection systems is worrisome.
    And, finally, we should fully fund U.S. defense 
requirements. The U.S. military is smaller today than it was on 
9/11.
    In conclusion, at present, any offer of economic 
inducements to entice North Korea to abandon its nuclear 
arsenal is an ill-conceived Wile E. Coyote plan with little 
chance of success. Sanctions and targeted financial measures 
may take time to have an impact on the regime's financial 
condition. In the near term, however, such measures enforce 
U.S. and international law, impose a penalty on violators, and 
constrain the inflow and export of prohibited items for the 
nuclear missile programs. The difficulty will be maintaining 
international resolve to stay the course.
    Thank you very much.
    [The prepared statement of Mr. Klingner follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
                              ----------                              

    Mr. Salmon. Thank you.
    Dr. Terry.

  STATEMENT OF SUE MI TERRY, PH.D., MANAGING DIRECTOR, BOWER 
                           GROUP ASIA

    Ms. Terry. Mr. Chairman, Ranking Member Sherman, and 
distinguished members of the committee, thank you for this 
opportunity to testify before you on this very difficult 
problem.
    North Korea is a very personal issue for me. My entire 
paternal side of the family came from the north, and I have 
personally witnessed the pain of divided families.
    In the aftermath of the fifth nuclear test, again, the 
community of Korea watchers is divided as to what the next 
steps should be. As a number of North Korea experts argue, 
sanction strategy as a policy of U.S. policy is no longer 
working, and it is time to return to negotiations with North 
Korea even without preconditions. Other experts call for 
ratcheting up more pressure against the Kim regime by 
enforcement of sanctions and other measures, such as 
information warfare, even if it means potentially risking 
escalation by the regime or even potentially risking 
instability.
    I actually believe that if there is any chance at all that 
North Korea would ever entertain the idea of ever giving up 
nuclear weapons program, it would be only because we have made 
it so that the Kim regime is facing a very stark choice between 
keeping its nuclear arsenal and regime survival.
    Victor and Bruce Klingner just laid out before you--as they 
laid out, I agree that this ratcheting up pressure must begin 
with tougher sanctions and, more importantly, better 
enforcement. As you have heard, we have just not done that yet. 
It is premature to argue that sanctions are not working, or it 
has failed. Until February of this year, we did not even have 
comprehensive sanctions against North Korea. We finally have 
stronger sanctions in place, but for sanctions to work, it 
needs to be enforced.
    Here again, the chief problem has been China. China is 
still reluctant to enforce--to implement the U.N. sanctions. 
There are many examples of China's noncompliance, and I point 
out some of this in my written testimony.
    President Obama has also yet to fully use the broad powers 
that the Congress has given him to penalize any Chinese 
companies or banks for continuing to do business with North 
Korea. Confronting Kim Jong-un credibly depends on getting 
bankers in China and other countries to comply with the 
sanctions, which means a credible threat of secondary sanctions 
is necessary.
    In addition to enforcement of sanctions, the next steps are 
to close existing loopholes and add even more individuals and 
entities to the list. You have heard what some of them could be 
both by Victor and Bruce. That includes banning labor and 
disconnecting North Korean banks from SWIFT system.
    Beyond sanctions, I think there are other actions that we 
can take to ratchet up pressure, including: Promoting human 
rights in North Korea, seeking ways to increase information 
dissemination into the north, and finding ways to give Internet 
access to North Korean citizens. North Korea should also be 
placed back on the State Sponsors of Terrorism list. I know you 
have discussed this with both speakers in the past.
    Now, even as we push for enforcement of sanctions and 
ratcheting up pressure on the Kim regime, I am very aware that 
these measures could also fail and no amount of pressure may 
change the regime's calculus. Nonetheless, after more than two 
decades of dealing with North Korea, I think we are left with 
very, very few options. And if we manage to enforce sanctions, 
including secondary sanctions, over a sustained period of time, 
I think this will be the first time we decisively raised the 
stakes, the cost for Kim Jong-un in pursuing the nuclear 
weapons program. And this might, just might, make him 
reconsider his policies. If it doesn't and the critics of 
sanctions policy are right, that even the strictest enforcement 
of sanctions will not make the Kim regime reconsider its 
nuclear program. Even so, I believe enforcement of sanctions 
and a containment policy are the right next steps, even as we 
leave the door open for engagement down the road. In addition 
to sending a message to other rogue regimes about the cost of 
flouting international law, I think these pressures could also 
weaken Kim Jon-un's grip on power. And while they might at some 
point precipitate instability, potential instability, I believe 
that this is an outcome that we should welcome, not fear, 
because over the longer term, we should really be pursuing a 
policy of unification of the two Koreas.
    Let me just conclude with this point. While Kim Jong-un's 
hold on power appears to be firm right now, I think there is a 
growing sign of discord among the elite class. We have recently 
seen an increasing rate of defection by very high-ranking 
elites. All these frequent purges and executions of high-level 
elites may help strengthen Kim Jon-un's rule in the short run, 
but all this heavy-handed rule is more likely to corrode long-
term elite support for Kim.
    This is, again, where the sanctions enforcement will help. 
The more we intensify economic pressure against the Kim regime, 
the more we shake the confidence of the elites, the more that 
Kim Jong-un will be left vulnerable, as he will have less 
foreign currency to underwrite the lifestyle of the elites, 
whose support is essential in maintaining his grip on power. 
And at the end of the day, it is when Kim Jong-un is facing 
really an abyss, he might finally choose to disarm, or, failing 
that, it may be that the North's policy will only change if a 
different leadership fundamentally emerged. Tightening the 
sanctions screws now, I think, will hasten that day. Thank you.
    [The prepared statement of Ms. Terry follows:]
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    Mr. Salmon. Thank you.
    Mr. Albright.

    STATEMENT OF MR. DAVID ALBRIGHT, PRESIDENT AND FOUNDER, 
        INSTITUTE FOR SCIENCE AND INTERNATIONAL SECURITY

    Mr. Albright. Thank you, Mr. Chairman, Ranking Member 
Sherman, and distinguished members of the subcommittee, for 
holding this hearing.
    North Korea's recent nuclear test, its second this year, 
demonstrates its resolve and commitment to developing a nuclear 
arsenal able to strike its enemies. Reversing that growing 
threat must be a greater U.S. priority. This test, its largest 
to date, combined with a number of recent ballistic missile 
tests, should lead the United States and its partners to accept 
that North Korea can strike its neighbors with nuclear weapons, 
and it is making progress on building a long-range nuclear-
capable force.
    Diplomatic efforts so far have proven inadequate to stop 
North Korea's progress. However, when agreements were reached, 
they improved transparency over North Korea's nuclear programs, 
slowed its progress, and led to fewer regional provocations by 
the regime. In short, negotiating with North Korea is a 
strategy that can yield both short- and long-term gains. The 
United States needs to reinvigorate its efforts to seek the 
dismantlement of North Korea's nuclear arsenal for sure.
    With regards to that endeavor, it has to be recognized that 
China is not going to deliver North Korea's denuclearization. 
Unless China dramatically changes its current policies, it is 
not going to institute sanctions or other measures that it 
views as risking the collapse of the North Korean regime. 
Although we at my institute support increasing pressure on 
China to apply more effective sanctions on North Korea, the 
United States cannot rely on China to press hard enough to get 
North Korea to make significant nuclear concessions. The United 
States needs to find additional ways to influence North Korea, 
including direct negotiations.
    At my institute, we are still assessing the recent test, 
but based on North Korea's statements and the yield of the 
test, we preliminarily assessed that North Korea may have a 
family of relatively reliable miniaturized fission weapons with 
a destructive force rivaling the size of the Hiroshima blast 
that can use plutonium or weapons-grade uranium and fit on a 
number of ballistic missiles. North Korea's statement after the 
test implies that North Korea could have learned to use 
weapons-grade uranium in what it has called the standardization 
of the nuclear warhead. This opens the path to building a large 
number of miniaturized nuclear weapons using weapons-grade 
uranium. North Korea is likely to be able to produce 
considerably more weapons-grade uranium than plutonium and in 
ways that largely escape our current detection.
    Taking account of the recent tests, my institute estimates 
that North Korea has about 12 to over 20 nuclear weapons. We 
believe, over the next 5 to 10 years, it can significantly 
increase the number of weapons.
    There remains plenty of room to improve and strengthen the 
sanctions on North Korea. To my institute, the immediate 
priority is the United States sanctioning Chinese companies 
involved in providing controlled or sensitive goods to North 
Korea. The U.S. Government should use its authority to sanction 
illicit actors in China that supply North Korea's nuclear 
missile and other nuclear programs. In addition, in order to 
prevent the further expansion of North Korea's nuclear 
programs, more coordination is needed among allies to thwart 
North Korea's overseas purchases for its nuclear and missile 
programs. It is also useful to step up sanctioning of banks and 
financial institutions involved in business with North Korean 
nuclear missile and military programs.
    Reestablishing meaningful negotiations with North Korea 
will not be easy, but it should be a major U.S. priority. How 
to achieve meaningful denuclearization negotiations, and what 
they should cover requires much deeper study, but any 
negotiation should be premised on a firm commitment to achieve 
North Korean denuclearization and avoid in any way legitimizing 
North Korean nuclear weapons. These negotiations should include 
broader initial declarations of its uranium and plutonium 
pathways to the bomb and provide access to nuclear sites 
outside of the Yongbyon complex.
    Moreover, the negotiations cannot focus only on the nuclear 
program. They will need to ratchet back North Korea's ballistic 
missile programs and resolve regional security issues. Finally, 
North Korea must commit to not proliferate abroad and not to 
engage in nuclear and missile cooperation with Iran or other 
countries.
    Congress has an important role in establishing U.S. 
sanctions and sanctions policy on North Korea, and it should 
encourage the administration to use its authorities given in 
the North Korea Sanctions and Policy Enhancement Act of 2016. 
It should also explore more ways to encourage China to apply 
sanctions on North Korea. However, as I have said, the United 
States should not depend solely on China. It also needs to 
develop other ways to influence North Korea to denuclearize. 
Engaging North Korea has historically shown that it yields 
limitations and more transparency into North Korea's nuclear 
activities compared to a policy of ignoring the threat while it 
grows. Combined with greater efforts to rein in its illicit 
activities and addressing regional security concerns, changing 
the status quo of North Korea's ongoing dangerous provocations 
is possible. New thinking is needed to reengage this dangerous 
regime and start the process of achieving denuclearization. 
Thank you.
    [The prepared statement of Mr. Albright follows:]
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                              ----------                              

    Mr. Salmon. Thank you. I appreciate the witnesses' 
comments.
    The United States has engaged in negotiations with North 
Korea in the past from time to time during the Bush 
administration. We agreed to certain lifting of sanctions at 
the commitment that Korea would do certain things. We lifted 
the sanctions, started the flow back into North Korea, and 
quickly found out that it was a ruse. They went back to doing 
exactly what they did before.
    While, Mr. Albright, I don't discount the importance of 
diplomacy and negotiations, I don't think most of us are very 
trustful that Kim Jong-un is an honest broker and that he is 
somebody that we can count on to keep his word once he gives 
it. I think that the sanctions that we have employed 
heretofore, both by the United States and the international 
community at large, have been largely unsuccessful in getting 
any kind of change or desired change from North Korea. And, I 
am increasingly believing that China's intransigence on the 
issue is becoming more and more frustrating. On one hand, they 
loudly proclaim that they are just as committed to stopping the 
proliferation of nuclear weapons in North Korea as the rest of 
us are, but yet they are really not doing that which they can 
to make change.
    The chief reason is, as I have talked with some of our 
Chinese diplomats, they say it is their concern that there will 
be a flood of refugees over the China border if they impose the 
kind of sanctions, economic and otherwise, that would really 
motivate North Korea that it could implode their economy. So, 
there is a fear of that.
    I am not sure that I buy that. In fact, I kind of almost 
feel like, on one side, they are saying, ``Don't do it''; on 
the other side, you know, they are allowing many of their 
companies to provide the wherewithal to increase that nuclear 
program.
    I would really like to explore more ideas. I mean, we have 
talked about the deployment of THAAD on the Korean Peninsula, 
which I strongly support. In fact, we just passed a bill that I 
and Brad Sherman authored dealing with trilateral relationship 
between us, Japan, and South Korea, but also strong language in 
there about the deployment of THAAD on the Korean Peninsula. 
So, on one hand, that, you know, is a step in the right 
direction, but China is also using all their political 
influences to pressure China--or, excuse me, pressure Seoul not 
to do that. In fact, that is probably one of the biggest 
sources of political blowback that they are getting to getting 
it done, because South Korea counts on China very heavily in 
their economic projections and economic strength. So that kind 
of pressure from China is very inordinate.
    What are some of the other things that we can do to get 
China to the table? I agree with targeted sanctions against 
Chinese companies that are in the mix, you know, with this 
Chinese--or excuse me, this North Korean proliferation. But Mr. 
Sherman has suggested at times past--I think it is kind of 
provocative--maybe we should be looking at other potential 
economic sanctions against China because of their lack of 
interest in getting this done. And I am asking, you know, what 
are your thoughts on that? Are those possible motivators?
    The other thing that I am wondering is--I know when it was 
said during the campaign, a lot of people got real excited, but 
what is the likelihood that China and South Korea at some point 
in time, if North Korea develops a really robust nuclear 
program and it is proven to be reliable, what is the likelihood 
that South Korea and Japan, those two entities, might start 
looking at their own nuclear programs in a defensive realm? 
Those are my thoughts.
    And, Dr. Cha, would you maybe start off your response?
    Mr. Cha. Thank you, Chairman. I will try to address a 
couple of these. I think they are all very important points, 
and I think you have framed the policy problem quite well.
    Let me just say, on negotiations, as someone who 
participated in the last set of negotiations, the 2005-2007 Six 
Party Agreed Framework, I know what that rabbit hole looks 
like. And it will start out with--in terms of what we could 
get. It will start out with a ban on--they will self-declare a 
testing ban as long as we are in talks with them. And then, if 
we are lucky, we might get a freeze on operations at the 5-
megawatt reactor at Yongbyon. I think that will be about as far 
as we can get during the course of negotiations.
    That freeze won't be verifiable in the sense that they 
won't let the IAEA in, I don't think. And, of course, it won't 
include anything outside of Yongbyon, even the one facility 
that they have said is a uranium facility at Yongbyon. So I 
think it is going to be--so we have been down that rabbit hole. 
And it will do something, but, at best, it is a holding 
position and a suboptimal holding position. So I am also one 
for negotiations, but it is going to be very difficult.
    On what we should do, I mean, I think there are two areas 
of vulnerability that we should press on. With regard to China, 
China doesn't respond to what North Korea does. China responds 
to what the United States does in response to North Korea. And 
whether it is secondary sanctioning or even something that is a 
little bit more radical, including possibly altering the 
disposition of our forces on the peninsula in a way that makes 
our overall capabilities more robust but makes our forces less 
vulnerable. That would be something China would take notice of.
    And, with regard to North Korea, you have already hit on 
it. Both of you have hit on it, and that is the information 
issue. That is what they see as a vulnerability. But, the thing 
is, either of these things entails more risk on the part of the 
United States and our policies on this issue. What we see thus 
far, what we all find so distasteful, the current position, is 
because we have generally been quite risk-averse when it comes 
to dealing with this problem. But, it has grown so out of 
control that some of these other measures we might consider 
that press on vulnerabilities of both China and North Korea are 
there, but it requires us being willing to take on more risk.
    Mr. Salmon. I am going to yield to the next question, but 
the risk of the status quo is far worse than anything that you 
are talking about as far as what those risks entail, I believe. 
The risk of just allowing it to go as it is going right now is 
a very frightening venture, and I think that if we are doing 
risk assessment, you got to take that into account as well.
    Mr. Lowenthal.
    Mr. Lowenthal. Thank you, Mr. Chair.
    I would like to follow up on your questioning now. After 
listening, I find this fascinating.
    I have heard a lot about, you know, China and China's 
intransigence and lack of compliance to really helping, 
especially in terms of--and then the response of, what kinds of 
pressure can we put on?
    What about other kinds of alternatives? I am not really 
understanding very well the role of China in the sense that, is 
there a way that we can enlist China as a partner, not as an 
adversary in this relationship, but as a partner in terms of 
what does China fear about North Korea's weakness? Does China 
need North Korea strong, or would they like to see something 
different, and what are they frightened of? And what does China 
want in all of this? I am not hearing, what would China want in 
something like this? Because I am just hearing one side, what 
we want, what we do. And I agree with that. But what does China 
want in this relationship, and are they frightened of 
something? I would like to kind of understand more if we are 
really talking about other kinds of alternatives. Anybody?
    Ms. Terry. Yes. I would like to just discuss some of the 
points that the chairman and you have just made. And China, 
just briefly to go over your point, I think economic sanctions, 
trade, it is all good, but there is no political will in the 
Obama administration. So I think we really need to still focus 
on the secondary sanctions and target Bank of China, Bank of 
Daedong, Chinpo Shipping, and so on.
    Regarding your point about what does China fear, I think 
part of what we can discuss with China is that China fears 
instability in the Korean Peninsula. China fears unification 
ultimately, because it does not want a pro-U.S. unified Korea 
with potential U.S. forces on the----
    Mr. Lowenthal. Is that an obstacle, or could that be a 
potential for us to have discussions with them?
    Ms. Terry. This is somewhat controversial, but I would like 
to argue that--in terms of trying to help come up with creative 
thinking is, say, if you can engage and try to have a candid 
discussion with China. It would be very difficult to do so, 
but--not only about the nuclear program, but the potential 
instability and potential unification scenarios. And, we might 
have to make that kind of grand bargain where we do sort of 
promise to reduce U.S. troop presence or even it has to be, 
post-unification, pulling U.S. forces out. But, that is 
something that we could consider in addition to just sort of 
trying to pressure China.
    I just want to get back to your point about South Korea and 
Japan arms race. I think that is a very big concern, that if we 
let nuclear North Korea happen, ultimately, I think there will 
be an instability in the region. Because South Korea is already 
talking about bringing tactical nuclear--some South Koreans 
are--bringing tactical nuclears back to South Korea, and they 
will cause arms race both by South Korea and Japan.
    Mr. Klingner. I would just add, Mr. Albright pointed out 
the exponentially growing North Korean threat. We have had what 
to some were sudden unexpected revelations that ``gambling was 
going on in the casino,'' in that missiles that had been under 
development for years had success, and that shocked people. So 
now you have this new fear that the threat is real. It would be 
humorous if it weren't disturbing.
    So we have a submarine-launched ballistic missile which had 
a breakthrough. The intermediate-range missile had a 
breakthrough. Guam is now under direct threat. So it is a 
question of, are we serious or not? There are things we can do 
at the U.N. We should push for eliminating what is called the 
``livelihood purposes'' loophole on the ban on North Korea's 
export of resources. The loophole is bigger than the ban.
    With regard to China, I think they don't want a crisis on 
their border, but their behavior is only creating the 
conditions that will bring about that crisis. The Obama 
administration and the Bush administration have had 
conversations with China, trying to explain that their 
reluctance to pressure their ally is only bringing about the 
crisis they don't want, and it is only going to cause the U.S. 
and its allies to take responsive measures that they won't 
like.
    So we can try to induce their cooperation, but when we talk 
about secondary sanctions on China, we can almost sort of toss 
that off, but it is actually very, very important, because what 
it can do is actually induce Chinese banks and businesses to do 
things that the government doesn't want them to do.
    We saw that back in the mid-2000s with Banco Delta Asia. 
The Chinese Government didn't want Bank of China to cut off 
North Korea. The Bank of China knew it could be susceptible 
under U.S. law to being precluded from access to the U.S. 
financial system. So the Bank of China, in essence, told the 
government: Well, we hear you, but we have to disagree. We have 
to cut off North Korea. Otherwise, the Bank of China could face 
sanctions. So if we were to sanction even one Chinese entity, 
it would send a very strong signal to the others.
    Mr. Albright. Could I add to that? Is there still time? 
Because I think it is very important that the enforcement of 
the existing sanctions be done rather than--I mean, it is 
important to look for new ones. I mean, maybe there is a silver 
bullet out there and maybe SWIFT is potentially that.
    But at the same time, it is critical to send a message to 
China, because another issue with China is that on a lot of 
these exports to North Korea, it claims it is just a big large 
developing country that can't manage its own system. And, I 
think, there is some truth to that. There are hundreds of 
thousands of companies licensed for export in China. And even 
if you take a European country, some of the smaller ones, you 
are talking about hundreds or 1,000 companies that can do that. 
So the control issues are profound.
    But I think that that also creates an opportunity, that 
China doesn't support these exports, but it is not going to do 
anything. And I think the U.S. can play a very important role 
in sending a signal into China that it needs to do it. And I 
think it is critically important at this time to enforce the 
sanctions that this Congress has passed. And there are 
companies in China that are known to deal with North Korea, and 
strong cases can be made that they are violating the sanctions 
and the U.S. should actually sanction them.
    Mr. Salmon. Thank you.
    General Perry. 
    Mr. Sherman. I would ask for 1 minute.
    I want to address this issue what I think China would want. 
I mean, they would prefer if North Korea didn't have a nuclear 
program, but that is not high on their list. They would like to 
continue trade. That is not the highest thing on their list. 
The purpose of sanctions is to force the regime to change its 
policy by creating regime-threatening sanctions, and China does 
not want this regime threatened.
    And the one thing that they don't want----
    Mr. Lowenthal. Because of----
    Mr. Sherman. Because they could see, if this regime 
implodes, two very bad things happen for China: Millions of 
very poor North Koreans move north as refugees. And then you 
might see a unification under the South Korean Government. And 
unless we promise otherwise and unless they can believe the 
promise, an American military, not on the 37th, 38th parallel, 
but right up on their border. So, they don't want an American 
Army on their border. They don't want the implosion of the 
regime.
    Mr. Lowenthal. I agree with all those things that you are 
saying, but could that be the basis of a discussion?
    Mr. Sherman. It ought to be, but I will yield back.
    Mr. Salmon. Thanks. Congressman Perry.
    Mr. Perry. Thank you, Mr. Chairman.
    Dr. Cha, you suggested a new posture or profile for the 
United States military in South Korea. Can you be specific?
    Mr. Cha. Well, I think there is more that we can do in 
terms of missile defense, not just one THAAD battery, but more 
than one. My colleague Bruce referenced sea-based platforms in 
terms of missile defense. SM3, I think that is another name. 
And these sorts of things will both create better defense of 
the peninsula and get China's attention.
    Mr. Perry. What about land-based force?
    Mr. Cha. So that is the next piece.
    Mr. Perry. And other than missile defense, seagoing missile 
defense, what about seagoing?
    Mr. Cha. Seagoing missile defense----
    Mr. Perry. No, other than missile defense. But I am talking 
about more robust naval posture. Is that----
    Mr. Cha. Yes. I think that, both in Japan and in Hawaii and 
in Guam, and then the land-based forces on the Korean 
Peninsula. I mean, there is an argument--I am not necessarily 
advocating this argument, but there is an argument that could 
be made in the sense that those forces traditionally have been 
a tripwire for a second conventional ground invasion. That is 
not going to happen again. And in that sense, the tripwire 
concept may not be relevant anymore. There are other ways to 
defend and maintain the strength of the U.S. extended 
deterrence on the peninsula that don't require a tripwire and 
that also don't leave forces vulnerable to chem, bio, or a 
nuclear attack from the north.
    Now, you know, this is not the forum in which to get into 
details on things of that nature. But, all I am saying is that 
we should be willing to discuss new things, as the chairman 
said, new ideas, that make sense in terms of our defense 
against a nuclear North Korea, but also that are things that 
can create enough concern in the case of China that they might 
be willing to change their own risk assessment of pressuring 
North Korea.
    Mr. Perry. What is South Korea's--how would they view or 
how would they be interested in increasing those postures, 
ground forces, sea-based----
    Mr. Cha. I think there would be a great deal of interest in 
things that augment the capabilities, both U.S. and combined 
capabilities. The ground troops would be a very controversial 
issue for them, just because there is a legacy issue there.
    Mr. Perry. Right.
    Mr. Cha. And that would be very controversial.
    Mr. Perry. Okay. And then one final question from a 
messaging standpoint or information operations, like the Voice 
of America, et cetera, how robust is our capability now? Is it 
used to the fullest extent? What can be done to increase that, 
or should that be increased? And, does it have any effect at 
all?
    Mr. Cha. It definitely has an effect. Defector testimony 
shows, not--well, 100 percent of defectors, but defector 
testimony suggests close to 80 or 90 percent of people inside 
North Korea have had exposure to a foreign radio broadcast.
    This is really a question of resources, I think. The more 
resources that can be put to this, the more you can enhance 
that capability. I mean, there is a hardware issue there too, 
in terms of, you know, where can you bounce these things off? 
So, I guess you could say that the tube is kind of small, but 
there is still a lot more that can go into that tube that would 
have an impact.
    Mr. Perry. What would be North Korea's response to 
increasing the volume on that? No pun intended.
    Mr. Cha. I think the regime would be very sensitive to it. 
And this is a bigger vulnerability I think for them than THAAD, 
for example.
    Mr. Perry. When you say ``very sensitive,'' I mean, I am 
sure they don't want any of it. They don't like what there is 
now, and they are going to like it less if we do more, but what 
is our risk in doing more?
    Mr. Cha. There is a risk.
    Mr. Perry. What is that risk?
    Mr. Cha. Well, in the past, when the South Koreans 
increased information coming across the border, the North 
Koreans have threatened to take out the speakers. So there is 
that risk. There is the risk that they could respond in anger 
and shell an island. There is definitely a risk to it.
    But my point is that these sorts of strategies will 
necessarily entail more risk. Otherwise, we remain stuck in the 
current cycle that we are in.
    Mr. Perry. Thanks. Mr. Chairman, I yield.
    Ms. Terry. Can I add a quick comment to that? I spent a lot 
of time debriefing North Korean defectors. I think information 
dissemination is one of the keys we have that we can use 
against the North Korean regime. The risk is that they are 
going to get angry, but so what? I mean, we are looking for 
ways to work here. Monopoly on information is one of the 
pillars of the regime's stability. This is how they were able 
to survive for this long. So I think finding ways to try and 
disseminate information into the north is critical for us.
    And we have got to find ways to open the Internet to the 
people of North Korea--I know we have been sort of working on 
that--so they can have access to information, they can 
communicate freely with their South Korean brethren and so on. 
I think there are ways to maybe work with Google and Facebook 
to pilot their global initiative in North Korea. I think we 
need to increase the range and power of TVs and AM broadcasting 
to North Korean audiences and so on. We can work on covert 
ways. We can work with the intelligence community to find 
covert ways. Whatever we can to get information into North 
Korea, I think, is one of the things that we can actually 
pursue.
    Mr. Perry. Dr. Terry, doesn't that all have to be covert? I 
mean, we can broadcast as much as we want. We can facilitate 
some way for them to see the Internet. But if you don't have 
the hardware and if it is punishable by death to be caught 
viewing these things----
    Ms. Terry. Sure. Even in overt ways. I think overt ways, 
covert ways. I am just emphasizing the importance of trying to 
get information into North Korea.
    Mr. Perry. Thank you.
    Mr. Salmon. Thank you. Ms. Gabbard.
    Ms. Gabbard. Thank you, Mr. Chairman.
    We have seen how hard currency sanctions were more 
successful than other sanctions in the past. Can you comment on 
whether or not you think those types of sanctions would be as 
effective or more effective today, and, if so, why or why not?
    Mr. Klingner. I think it is first important to point out 
the multiple objectives that sanctions and targeted financial 
measures have. Some have said people are already impatient: 
``Well, it has been 4 months. Sanctions haven't worked. Let's 
go back to diplomacy,'' which had 20 years of failure.
    But even before it changes North Korea's behavior, it is 
enforcing U.S. Law. It is imposing a penalty or pain on those 
that violate our law and U.N. resolutions. It constrains or 
puts in place measures to constrain the inflow of items for 
their prohibited nuclear missile programs, including money from 
illicit activities. It puts into place measures to reduce the 
risk of proliferation. And then, five, the most difficult in 
conjunction with all your instruments of national power, it is 
trying to alter their behavior.
    So I would say on four of the five, the sanctions have 
already been successful to some degree. The fifth is the most 
difficult. But when we have a very small country with very few 
avenues of access to the outside world--and that is mainly 
China--it is I think a better target than Iran.
    Some would say: ``Well, you can't sanction Iran, because it 
is so big, it is so connected with the world, it has got oil, 
et cetera; go after North Korea.''
    Well, now that we had pressure on Iran, which brought about 
the negotiations, now people are saying: ``Well, that worked 
because it was so big and so well-connected; it won't work with 
North Korea.''
    I would argue the opposite.
    Ms. Gabbard. Interesting.
    Mr. Cha. May I add?
    Ms. Gabbard. Dr. Cha.
    Mr. Cha. So I would agree with what Bruce said. I think 
there are two issues when we are talking about these currency 
sanctions. I don't know, Representative Gabbard, if your 
question is suggesting this. But one of them is--however it 
is--is to reduce the North Koreans to having to carry suitcases 
of cash if they want to do any sort of transaction. So that is 
one. And that is the proliferation findings.
    The other part--and this is the part that I am not sure if 
your question is--is the freezing of their assets and accounts 
overseas because that is a different--that is directly linked 
to the leadership, right. And that could have a very big impact 
on how this leadership thinks and addresses and behaves. And 
so, whatever sanctions the committee is working, whatever 
legislation, I think these are the two objectives. We want to 
reduce them to having to carry suitcases of cash, and then we 
also want to be able to target those assets that we think are 
connected to the leadership wherever they are. So----
    Ms. Gabbard. Thank you.
    Mr. Albright.
    Mr. Albright. Yeah. I think one of the problems, though, is 
that China resists these kinds of sanctions. I mean, their view 
is, if you close off the financial system to North Korea, and 
it is concentrated in certain Chinese banks, it will collapse 
the state. So you immediately run into this problem where they 
just don't cooperate.
    But at the same time, we don't really know what is going to 
happen. And I think it is, again, an argument why we need to 
get the administration to enforce the existing sanctions and 
target some of these banks, target some of these entities, and 
then let's see what happens.
    One thing--I don't know, I don't want to take your time, 
but I think, on the engagement, I don't think that we have to 
accept crumby conditions of engagement, shutting down 5-
megawatt reactor--I forget the other condition you gave. I 
mean, we simply say: No, it is not enough.
    And even I was engaged in the discussions on the--before 
the Leap Day Deal, and North Koreans were willing to shut down 
and stop the centrifuges at the Pyongyang centrifuge plant. Who 
knows if they would have followed through. But even that is not 
enough today. We need to have more than that if there is going 
to be a negotiation. So I think it is up to us to sculpt the 
engagement, not to accept kind of the pitiful things that North 
Korea may offer initially.
    Ms. Gabbard. I think that is the remaining question. I 
don't have time for it now, but, you know, people have raised 
getting back to the negotiating table, setting the conditions 
to be able to make that possible, but then addressing the 
chairman's point about the lack of trust in actually being able 
to execute knowing that there has to be truly enforceable 
consequences to noncompliance in that situation.
    So thank you all for being here.
    Mr. Salmon. Thank you.
    Mr. Sherman.
    Mr. Sherman. Well, if we are going to achieve our political 
objectives for the foreign policy establishment, et cetera, 
here in this country, we need to do two things: First, don't 
make compromises, and don't admit how weak our position is. 
And, second, cling to the idea that we are somehow going to 
completely disarm North Korea of all nuclear weapons. And then, 
third, when we fail to achieve our objectives, which has been 
true this entire century, just shrug it off, and as long as you 
don't propose any radical change in policy, the foreign policy 
establishment will say you know what you are talking about. And 
the fact that we have totally failed to slow down this program 
doesn't mean that we haven't achieved the political objectives 
of all telling each other that we know what we are talking 
about.
    If I gather from your testimony, China is loath to accept 
regime-threatening sanctions on this regime, and this regime is 
not going to eliminate its nuclear program unless it faces 
regime-threatening sanctions. The question here is, is this a 
regime willing to settle for 10 to 15 nuclear weapons and a lot 
of monitoring? Because we know that they won't give up all of 
their nuclear weapons unless they face regime change and regime 
endangerment.
    Will they, just to avoid pressure and get along with China, 
accept a world in which they are a limited nuclear state? I am 
not saying that we would make this concession, but how would 
that look from their standpoint?
    Mr. Albright.
    Mr. Albright. I think they would be interested. I mean, I 
would be scared to make that kind of concession. It could be 
very damaging in the region, but I take your point. And I would 
say that----
    Mr. Sherman. Are you predicting that, I mean, when you 
close your eyes and think of the world 15 years from now, do 
you think that North Korea will have a greater or lesser 
nuclear capacity than they have today?
    Mr. Albright. Well, I feel that they are going to have a 
greater, but we have to be guided by denuclearization in order 
to ensure----
    Mr. Sherman. It would be nice to cling to denuclearization, 
but as I think you predict, I think as most of us would 
predict, if we keep doing what we have been doing, we are going 
to get a very similar result, but I want to----
    Mr. Albright. I am just afraid we are going to get that 
result if we do accept 15 deliverable nuclear weapons.
    Mr. Sherman. Okay, keep in mind, unless the regime is truly 
threatened and close to falling, they are not going to give up 
their 10 to 15 weapons because they feel they need those to 
defend themselves from us. And keep in mind, when they asked 
for a nonaggression treaty, the response from Vice President 
Cheney was no because we contemplate aggression.
    So it is not like I would expect them to completely. But I 
want to go to a much smaller issue, not that it is a small 
issue, and that is state sponsor of terrorism designation. The 
first issue is, is this legally justified? One could argue 
that, you know, long ago, North Korea kidnapped people. They 
kidnapped people to make movies. They kidnapped people to get 
advice on Japanese etiquette. They kidnapped people, and some 
would say, well, that happened a long time ago so you can't 
call them a state sponsor of terrorism. But they haven't 
released them. So it is a continuing act of terrorism. They 
haven't returned their bodies if they died of natural or 
unnatural causes. So maybe that is a continuing act of 
terrorism.
    But I will ask Dr. Cha, what is the most recent act of 
terrorism other than continuing to hold these hostages 
committed by the North Korean regime?
    Mr. Cha. I would focus on cyber. The attack against Sony 
Pictures Entertainment.
    Mr. Sherman. Yeah. I haven't studied the statute, but is 
that something that justifies designating a state as a state 
sponsor of terrorism?
    Mr. Cha. I think it does. I mean, the administration 
defined it as cyber vandalism, I think, or cybercrime, but 
there was the destruction of hardware. There was a taking of 
information.
    Mr. Sherman. Okay. So it is a strong legal argument whether 
you look at kidnapping movie actors and directors, or 
vandalizing movie software.
    But now let's look at the policy. Is it good policy to 
designate North Korea as a state sponsor of terrorism? Does 
that move us in the direction of limiting this regime?
    Mr. Albright.
    Mr. Albright. I think it is useful to consider. I mean, it 
was a big goal of theirs to be taken off the list. So it 
certainly argues to threaten to put them back on. I mean, 
again, I don't know the legal aspect of this and whether cyber 
attack is terrorism.
    Mr. Sherman. Mr. Klingner and Dr. Terry.
    Mr. Klingner. I think if you look at 18 U.S. Code section 
2331 and the definitions there of what constitutes 
international terrorism, I think the Sony hack and the threats 
of ``9/11-style attacks'' against a population, and these 
threats were to intimidate and coerce a population, influence a 
policy of government, et cetera; I think that in and of itself 
fulfills it.
    In my testimony in January, I included a list of other acts 
that they have done, including attempts against----
    Mr. Sherman. Good. So that is in our record. And, Dr. 
Terry, would designating them be good foreign policy. I will 
ask for a quick answer.
    Ms. Terry. Yes. I absolutely agree. I think it would be 
largely symbolic, to be honest, but North Korea was very keen 
on getting off that list, as Victor knows. They tried very 
hard. It truly bothered them, so I think it is useful. I think 
it is a leverage that we can use against North Korea, and I do 
think they have done a lot of things, including repeated 
assassination attempts and kidnapping attempts on humans. So 
there is a whole list of reasons why they can be put back on 
the list.
    Mr. Sherman. Just to conclude, I think we need to bring a 
lot more effort and settle for a much smaller objective. We 
have been trying to see a completely nonnuclear North Korea and 
somehow achieve that without doing anything that ruffled 
anybody's feathers, here or Beijing. What we ought to be is 
settling for less and being willing to ruffle some feathers to 
get even that limited objective. We should be willing to tax 
Chinese exports to the United States. We should be willing to 
build the Voice of America towers. We should be willing to list 
them as a state sponsor of terrorism. They need a hell of a lot 
more carrots and a hell of a lot more sticks if we are even 
going to get them to something that most of you would say would 
be an unacceptable solution.
    It is just much better than what is likely to happen if we 
do nothing. I yield back.
    Mr. Salmon. Thank you.
    Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman, and thank you all 
for being here. I come here as a member of this committee and 
subcommittee and also as the co-chair of the Congressional 
Caucus on Korea.
    Let me begin by expressing my skepticism about the efficacy 
of sanctions. Up here, when we want to condemn, cite, punish 
bad behavior, almost always we invoke sanctions as if, well, 
that will deter the behavior. And I don't know--a former 
colleague of yours, Dr. Cha, Gary Hufbauer, wrote a very 
thoughtful book years ago on the history of sanctions and how 
effective they are and raised a lot of questions. You know, in 
some cases, they seemed to have had the desired effect, but 
usually, it is combined with some other external thing so that 
at the margins, whoops, the sanctions really made it hurt--oil 
prices plummeting or whatever it may be.
    In and of themselves, it is very difficult to create a 
regime that really can squeeze to the point where we get the 
desired outcome and the intended target--you know, it renounces 
its undesirable behavior.
    And I am just concerned here that, with respect to North 
Korea, I don't think we have--I mean, it is not apparent to me 
that we have a lot of options. I have noticed, for example, in 
the printed media now we are talking now about, well, maybe we 
can try to get countries to send back North Korean workers to 
deny North Korea that capital, that foreign exchange.
    You mentioned, Dr. Cha, well, maybe we could target 
leadership through certain sanctions. So Kim Jong-un can't, you 
know, access Courvoisier. His father seemed to like 
Courvoisier, as I recall. But if we are reduced to that, just 
how effective, I mean, shouldn't we be realistic about what 
sanctions can and cannot do? And it just seems to me that we 
are, remember, the goal here is to give up that nuclear 
ambition and destroy those existing 15 nuclear weapons or 
whatever number. I mean, that is our goal. It may or may not be 
achievable, but what sanction provides that tradeoff, from the 
North Korean point of view?
    Mr. Cha. Well, I have no disagreement with you, 
Congressman, about the inefficacy of sanctions thus far. I 
think where the policy debate really is, is that lack of 
efficacy because sanctions in general don't work or because we 
haven't done enough? And for many in the policy community, and 
I think for this administration, the answer right now is we 
haven't done enough because when we compare the sanctions on 
DPRK versus those on Iran, the Iran sanctions were much more 
comprehensive than what we are seeing on DPRK. So I think that 
is where the administration is now and that is where they have 
been pushing.
    Having said that, I would agree with you. I mean, I think 
the sanctions are meant to do one of three things, and none of 
them are happening. They are supposed to either bring the North 
back to the table, which they haven't done. They are supposed 
to retard the growth of the program, which it hasn't done. Or, 
it is supposed to destabilize the regime. And it hasn't done 
any of these three things.
    Mr. Connolly. I will just say, when I commended Gary 
Hufbauer's book, that was pre-North Korea sanctions, I think, 
and he really raised a broader question, not about these 
sanctions with this regime, but sanctions in general. What kind 
of foreign policy really are sanctions? And they are of dubious 
value. I mean, sometimes they seem to have helped, but it is 
not clear you can single them out and say: That was 
dispositive. Rhodesia comes to mind.
    Mr. Albright. Can I add one?
    Mr. Connolly. Yes, and then we have got to go because we 
have got votes.
    Mr. Klingner. There is a difference between sanctions and 
targeted financial measures. And the smart sanctions that have 
been done in the last 10 years are very different from what 
traditional trade sanctions have been. And a book I would 
commend would be ``Treasury's War,'' by Juan Zarate, a former 
Treasury Department official, which articulates the very strong 
differences.
    You know, it is only this year that we actually have as 
many North Korean entities being sanctioned as Zimbabwe 
entities. So it took a number of years just to get to the level 
of Zimbabwe. And then, on the efficacy of diplomacy, some would 
say, well, North Korea builds nuclear weapons when we are not 
talking to them. That is true. They also build nuclear weapons 
when we are talking to them, and they also build nuclear 
weapons when they sign agreements never to build nuclear 
weapons and when they promise to give up the weapons that they 
promised never to build in the first place. We have had four 
agreements where they would never build weapons and four to 
give up those weapons, including the Leap Day agreement, which 
was a very low bar, and they broke that one.
    Mr. Albright. You know, I would just add, in the nuclear 
area, sanctions have----
    Mr. Salmon. We have 4 minutes before we have to vote.
    Mr. Albright. Okay. I would just say, I think sanctions can 
work in the nuclear area better. But you can't do it alone. And 
I would agree with you. You have to have more.
    Mr. Salmon. I thank the panel. I thank the committee 
members and appreciate all of the insight.
    This meeting is adjourned, thank you.
    [Whereupon, at 4:44 p.m., the subcommittee was adjourned.]

                                   
                                   

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