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

                      THE U.S. RESPONSE TO NORTH KOREA'S
                              NUCLEAR PROVOCATIONS

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

                                    HEARING

                                   BEFORE THE

                      SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                     OF THE

                          COMMITTEE ON FOREIGN AFFAIRS
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                JANUARY 13, 2016

                                   __________

                               Serial No. 114-148

                                   __________

            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............................     7
    Mr. Bruce Klingner, senior research fellow for Northeast Asia,
      The Heritage Foundation........................................    19
    Ms. Bonnie Glaser, senior adviser for Asia, Director of China
      Power Project, Center for Strategic and International Studies..    38

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    Victor Cha, Ph.D.: Prepared statement............................    10
    Mr. Bruce Klingner: Prepared statement...........................    21
    Ms. Bonnie Glaser: Prepared statement............................    40

                                    APPENDIX

    Hearing notice...................................................    70
    Hearing minutes..................................................    71
    The Honorable Gerald E. Connolly, a Representative in Congress
      from the Commonwealth of Virginia: Prepared statement..........    72

            THE U.S. RESPONSE TO NORTH KOREA'S NUCLEAR PROVOCATIONS

                                  ----------

                          WEDNESDAY, JANUARY 13, 2016

                           House of Representatives,

                     Subcommittee on Asia and the Pacific,

                         Committee on Foreign Affairs,

                                Washington, DC.

        The subcommittee met, pursuant to notice, at 9 o'clock
    a.m., in room 2172 Rayburn House Office Building, Hon. Matt
    Salmon (chairman of the subcommittee) presiding.
        Mr. Salmon. On the evening of January 6, North Korea likely
    conducted its fourth nuclear weapons test. North Korean leader
    Kim Jong Un claimed that the test was a fusion reactive
    hydrogen bomb. Most experts are skeptical, given seismic
    evidence and North Korea's penchant for overstatement. But it
    is, nonetheless, incredibly concerning.
        We convene this hearing today not only to join the
    international community in condemning the test, but to work to
    find a feasible lasting solution to address the North Korean
    nuclear threat.
        For many in the United States, if we think of North Korea
    it is usually the butt of a joke, reference to either The
    Interview or Team America movies. Despite repeated calls from
    both respectable civilian thinkers and top military leadership
    citing North Korea as a top threat in the Pacific theater,
    North Korea seems to have been off the Obama administration's
    radar.
        Instead, they have dismissed the imminent threat by
    employing its so-called ``strategy of patience''--or, excuse
    me, ``strategic patience.'' For our allies in the region, North
    Korean provocations mean so much more, and it should for the
    United States as well.
        History has proven that North Korea has every intention to
    continue advancing its nuclear program. In an effort to
    strengthen both domestic and international positions, the
    United States has shown a willingness to negotiate with North
    Korea if it is simply willing to first take steps toward
    denuclearization. North Korea has shown no interest in doing
    so, but it has successfully extracted food assistance and other
    foreign assistance from us by threatening nuclear activity.
    This is an unacceptable cycle that cannot continue.
        Due to North Korea's nuclear threat and proximity to our
    allies, South Korea, and Japan, our response options are
    limited, but they largely fall into two categories--sanctions
    and information flow. Some argue for United Nations sanctions,
    but others say that would exert little pressure on North Korea,
    largely due to China's lack of enforcement. Some speak of North
    Korea as the most heavily sanctioned state in the world, but
    that is simply not the case.
        For example, Iran is subject to sanctions under 18 U.S.
    executive orders, and North Korea is subject to six. I applaud
    Chairman Royce for his work on the North Korea sanctions
    legislation which passed the House yesterday. I am proud to
    vote for that, and I think it is a good start. But I think much
    more to be done, and that is why we are here today.
        China's relationships with North Korea continues to be a
    problem. China favors North Korea's status quo over the demise
    of the Kim regime, which it fears could mean a unified United
    States allied Korea as a neighbor and a sizeable flood of
    refugees crossing their border.
        These vested interests are why China continues to prop up
    this pariah state with food, oil, and assistance. I am deeply
    disappointed that China continues to allow North Korea to
    destabilize the region in this manner. China must tighten
    sanctions and really enforce the sanctions that are in place
    and apply the unique pressure that only it--North Korea's
    patron--can provide.
        While a nuclear test quickly draws the world's attention
    toward North Korean leadership, we must remember that there are
    24 million people living in this closed-off state, starved of
    basic necessities. Furthermore, citizens are brainwashed into
    believing that their leadership is actually helping them.
        The North Korean Human Rights Act of 2004 initiated radio
    broadcasting to provide basic knowledge of the outside world to
    the people of North Korea. Twelve years have since passed and
    technological advances have been made, and our policies should
    reflect that reality. I intend to introduce legislation that
    would update this program this provide greater, more useful
    information to inform and empower their citizens.
        In 2006, North Korea was removed from the State Sponsor of
    Terrorism List in an attempt to bring it to the negotiation
    table and ultimately halt its nuclear program. Congress has
    debated this issue, and many members believe it should be put
    back on the list. Count me in that category.
        Given the Sony cyberattacks, the shelling of South Korean
    ships, North Korea's alleged ties to Hamas, Hezbollah, and
    Iran, and now this fourth nuclear test, perhaps--maybe perhaps
    nuclear should be placed back on the list.
        The leaders of North Korea, as well as China, should
    understand that every Pyongyang provocation will induce a
    congressional response in an attempt to alter North Korea's
    ways. There is calamity across the globe blurring our focus,
    but the Obama administration's employment of ``strategic
    patience'' comes, I believe, at our peril. Let's be done with
    ``strategic patience.'' It is time for strategic clarity. We
    must be proactive in our efforts, and I look forward to this
    important discussion of any recommendations this distinguished
    panel can offer.
        Members present will be permitted to submit written
    statements to be included in the official hearing record. And
    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.
        And I would like to turn the time over to the ranking
    member for any comments that he might make.
        Mr. Sherman. Thank you. North Korea probably tested a
    hydrogen-boosted device, one that made use of hydrogen isotopes
    but did not get its power from the fusion of hydrogen atoms.
    That being said, it is perhaps half a decade or a decade before
    North Korea tests a genuine thermonuclear weapon. I am sure our
    witnesses will be able to clarify and give us a more precise
    estimate.
        We have throughout this century, which is now in its 16th
    year, had a policy which has completely failed us as foreign
    policy, but has achieved what some would argue is the guiding
    force behind foreign policy, which is meeting domestic
    political concerns. We have not--neither the last
    administration nor this administration--slowed down North
    Korea's nuclear program for any significant time, and
    continuing this policy, or repeating what we have done but only
    in a louder voice, is not going to yield a different result.
        But our policy has allowed us at times--for various times--
    to seem tough, and we have avoided offending Wall Street. These
    are important domestic political objectives which have been
    fully achieved. So if viewed from the standpoint of being
    popular domestically, our policy is a success. If we want to
    protect the world from North Korean nuclear weapons, it has
    been a complete failure.
        In terms of what we could do if sounding tough wasn't
    important, we could make it clear to China that, if there was a
    unified Korea, American forces would not be north of the 38th
    parallel and might even be further south. There would be less
    reason for them to be there.
        We do not have any military forces defending any other
    China neighbor from China. Our troops in South Korea are there
    to defend South Korea from North Korea. We could offer North
    Korea a package of aid--that has been done before--but a non-
    aggression pact that they asked for and we refused to provide,
    because Dick Cheney imagined invasion, or at least didn't want
    to give up that opportunity sometime in the future.
        But the most important thing we need to do, and the thing
    we are least likely to do, is to make it clear to China that
    their access to U.S. markets depends upon them getting tough
    with North Korea. Wall Street would be aghast if we actually
    did it, so we won't. So we are likely to continue the current
    circumstance. China is indeed miffed by what North Korea has
    done, but is unwilling to change its policy, and, of course,
    China has been miffed by North Korea many times in the past.
        China will not change its policy unless the reality
    changes, and the current reality is they have free access to
    U.S. markets and that won't be changed if they choose to
    continue the policy that they have continued throughout this
    century, which is to subsidize North Korea.
        So if we want a policy that doesn't meet domestic political
    objectives, but simply maximizes the carrots and sticks on
    North Korea, it would be a matter of a non-aggression pact on
    the 38th parallel, and the threat of tariffs on Chinese goods
    if China continues--while always questioning--it but continues
    a policy of subsidizing North Korea.
        So my guess is that we will simply continue to pull our
    hair out--obviously, I have done more of that than most of the
    witnesses--in worry about North Korea, and talk tough, and do
    nothing that offends Wall Street. And if you keep doing the
    same thing for now a 16-year-old century, and expect a
    different result, that is the definition of insanity.
        And a final thing I will ask our witnesses to comment on is
    whether we would actually get somewhere if we consent--if we
    agreed that North Korea could have a very limited number of
    atomic but not thermonuclear weapons, or is there a real
    prospect of getting them to be a nuclear-free state.
        I yield back.
        Mr. Salmon. I just wanted to comment for the ranking
    member, I think that many of the issues that you raised are
    thought-provoking and reasonable, and I would like to extend a
    hand across the partisan divide to work with you in any way,
    shape, or form to not just pull our hair out but actually get
    some results.
        And if that offends some folks, some special interests,
    then so be it. I think the more important goal is to have
    success. I think all of the world expects success. And so I
    just want to say that I think you have raised some legitimate
    issues that need to be explored, and I intend to work with you
    to do that. Look forward to it.
        Mr. Rohrabacher.
        Mr. Rohrabacher. Thank you very much, Mr. Chairman, and
    thank you for holding this hearing at a very significant
    moment.
        Our relations with both Koreas go back a long way, and I
    have a long memory. I still remember sitting right here in this
    room when the Clinton administration was proposing to us that
    we have--that we cut a deal, basically, with North Korea, that
    we would be providing them food and fuel for an agreement not
    to do what they apparently have been doing, which is--I don't
    care if you want to call it a hydrogen booster device or a
    hydrogen nuclear weapon; the fact is they obviously have been
    spending their money on developing ways of mass murdering other
    people while we have been providing them the money for their
    food and fuel.
        To say that that is absolutely unacceptable is to put it
    mildly. And, at that time, I indicated, and several other
    Republicans, I might add, and a couple of other Democrats as
    well, I might add, pointed out that that is what would happen,
    and here it has. Surprise, surprise. They have used their
    resources to develop weapons of mass destruction. We have
    subsidized them in using our money to provide them food and
    fuel, which should be coming out of their, how do you say,
    hydrogen boosting device development budget.
        Let me suggest that this nuclear explosion, and the
    continued--the obvious continued work that North Korea is doing
    on nuclear military devices, that should at least put us into a
    mindset that we have to do something different than what we
    have been doing.
        And let me note that President Abe of Japan has made it
    very, very clear that there are threats to the Pacific, and I
    would applaud President Abe for reaching out to South Korea at
    this moment. President Abe of Japan has gone the extra mile to
    address sensitivities in South Korea that are left over way
    from World War II.
        And he needs to be applauded for that, and he needs to also
    be encouraged to rebuild Japan's military strength, so that he
    can work with the United States of America in preserving the
    peace in that part of the world, instead of having the United
    States having to carry the entire load on our own.
        So with that said, I would finish by saying the other
    factor is, which the chairman mentioned, China. Just as it was
    obvious that the North Korea regime, as corrupt and belligerent
    and as repressive as it is, would be using their money to
    develop weapons while we provided them food and fuel, it is
    just as evident that they have a relationship with Beijing that
    puts Beijing into a position of influence in North Korea, if
    not dominance of North Korea.
        So let us, again, to the point that we applaud President
    Abe for reaching out and policies that are going to ultimately
    bring more stability to that part of the world, let us condemn
    Beijing for not using its influence in a way that would bring
    more stability and peace to that region.
        So we need to work together on this, and, Mr. Chairman,
    thank you for calling this hearing. Looking forward to hearing
    for specifics and information from the witnesses that will help
    us develop our policy now as we start into this new era.
        Thank you.
        Mr. Salmon. I thank the gentleman from California.
        Mr. Bera.
        Mr. Bera. Thank you, Mr. Chairman, and thank you for the
    timeliness of this hearing. A few weeks ago I had a chance to
    visit the Republic of Korea, visit with our troops, and spend a
    few days around Christmas with our troops, also visiting with
    the Korean foreign secretaries, national security folks, et
    cetera.
        I also had a chance to go up to the demilitarized zone and,
    you know, chat with our troops, see the Republic of Korea
    troops. The demilitarized zone is an oxymoron. This is one of
    the most heavily militarized zones in the world, and it is a
    constant reminder that we are in a cease fire. we are not in a
    state of peace.
        You know, listening to the remarks of my colleagues, I
    think it is important for us to learn from what we have tried
    in the past, and so forth. But the conundrum is North Korea is
    not easy, and it will require a partnership with the countries
    in that region.
        And, in many cases, we all land at the same place, that
    China really does have to take a leadership role here. China is
    the one country that does have some leverage with North Korea,
    but it will take a partnership between, you know, the Chinese
    Government, the Russians, Japan, our Korean allies, along with
    U.S. leadership, in order to address this.
        It is in all of our interest to deescalate tensions, to try
    to bring North Korea into the 21st century. And the other goal
    that I think many Koreans have of seeing reunification, you
    know, it is not going to be easy. It will take world
    leadership. It will take the nations, along with the United
    States, in that region working together, but it can be done if
    we put our minds to it. And we have to; there is an urgency
    now, as indicated by the recent North Korean nuclear tests.
        It is complicated, and, you know, the President talked
    about the threats that, you know, we face in the Middle East.
    But those are not threats to our very existence as a nation,
    and North Korea, with the hydrogen bomb, with ballistic missile
    and ICBM capabilities, are a threat to world stability, and we
    have got to direct this. There is the urgency of now.
        And, Mr. Chairman, I look forward to working with you to
    kind of navigate this path forward, and it is incredibly
    important.
        Mr. Salmon. Thank you.
        Mr. Chabot.
        Mr. Chabot. Thank you very much, and thank you, Mr.
    Chairman, for holding this important hearing. I mean, there is
    no question that the world has had a problem for a long time
    with respect to North Korea, particularly their leadership.
    Whether the grandfather or the father or the son now, they are
    all equally as crazy, I am afraid, particularly the newest one.
        But their own people continue to suffer and to starve. They
    are the most politically isolated country on the globe. Despite
    that, they continue--they have absolute contempt for most of
    the rest of the world, including their neighbors. And with this
    fourth now in the last number of years nuclear tests, and we
    have reason to believe it is hydrogen, although that hasn't
    been confirmed necessarily yet, but, nonetheless, it is
    terribly disturbing.
        I think every administration, from the Clinton
    administration to the Bush administration to the Obama
    administration has failed with respect to North Korea, and that
    is most unfortunate. And now with the increasing sophistication
    of their missile systems, the United States is at risk as well.
    But two countries that are even more at risk at, obviously,
    South Korea and Japan.
        And as my colleague, Mr. Rohrabacher from California
    indicated, China is the key here. China is the only country
    that has any real influence over North Korea. And the only
    thing that is going to get China's attention is if those two
    countries, Japan and South Korea, seriously consider nuclear
    programs of their own. That is the only thing that is going to
    get China's attention. It is the last thing China wants.
        And so I would urge those two countries to think seriously
    about this. I am not encouraging them to do it, but even
    thinking about it and discussing it I think will get China's
    attention. And maybe China will finally act to put the pressure
    on North Korea necessary to get them to back off this insanity
    of one of the poorest countries in the world spending all their
    money on nuclear weaponry to threaten the rest of the world.
        I yield back, Mr. Chairman.
        Mr. Salmon. I thank the gentleman. Is there anybody else
    that seeks recognition on the panel before--yes, Mr. Lowenthal.
        Mr. Lowenthal. Thank you, Mr. Chair, for holding this
    hearing. I find this very interesting. I think the focus of
    what you have heard a lot is China, what are we going to do to
    deal with China in terms of the pressure that China has. To me,
    there are a couple of questions I would like to understand
    before we get into what we have to do to press China, or to do
    anything else; that is, what does China want? Where is China at
    this--not because of our pressure.
        Two, I have seen over the past year or so some articles,
    especially in the New York Times, about Chinese officials,
    former military officials, retired, talking about the
    unsustainability of the Kim regime, and that there is a real
    concern in China about instability in North Korea. I would like
    to hear that discussion, that there is going to be pressure
    from the bottom up. People cannot live under those conditions,
    and the Chinese know this. The Chinese know, and there are real
    worries about the Chinese, about what that instability is going
    to lead to in terms of them.
        So that leads us to the third point; that is, when we talk
    about China, knowing that China--it is not getting China
    involved. China is very involved with what are the
    consequences. It may have its own agenda about what it wants to
    do with this. The question is, besides pressure on China--and
    we have heard a lot, and I am not saying that that is not a
    potential--what are the ways of partnership with China? What do
    you see as the opportunities at this moment to be dealing with?
        Thank you very much, and I yield back.
        Mr. Salmon. I thank Mr. Lowenthal. Very insightful thoughts
    and questions.
        If there are no other opening statements, then I am going
    to move to the panel, first of all introducing three great
    experts on this dicey issue. First is Dr. Victor Cha, senior
    adviser and Korea chair at the Center for Strategic and
    International Studies. It is good to see you again, Dr. Cha.
    Mr. Bruce Klingner, senior research fellow for Northeast Asia
    at The Heritage Foundation. And Ms. Bonnie Glaser, who is the
    senior adviser for Asia and director of the China Power Project
    at the Center for Strategic and International Studies.
        We are thrilled to have all of you here today, and thank
    you for making the time available. First, I will introduce Dr.
    Cha.

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

        Mr. Cha. Thank you, Mr. Chairman, Representative Sherman,
    and members of the committee. It really is an honor to speak to
    you today about a very difficult topic, and that is North
    Korea.
        You mentioned--both the chairman and Congressman Bera
    mentioned urgency, and I think there is a great deal of
    urgency. There are elements of deterrence and crisis
    instability that derive from North Korea's nuclear weapons
    status that I don't think the North Koreans fully comprehend.
    And it can also be the case that the North Korean leader, this
    young North Korean leader, views nuclear weapons as usable
    weapons rather than as strategic elements of deterrence,
    valuable only in their non-use.
        So the urgency is that the result could be a disaster at
    the cost of tens of thousands of lives, at which point the
    world is going to wonder why the United States did nothing to
    stop this before it was too late.
        So what have we done? In the administration's own words,
    strategic patience, the policy of strategic patience, had two
    objectives. The first was to break the cycle of provocations
    for negotiations that was the flaw of past administration's
    policies.
        Second, the concept was that this idea of pressure and non-
    dialogue would eventually cause the North Koreans to feel
    compelled to come back to negotiations genuinely willing to cut
    a deal. When this did not work, the administration did try to
    reach out and engage, but all of these offers had been spurned
    by the regime.
        So we are in the worst of all worlds right now. There is no
    diplomacy. There are more tests, a growing program, a new cycle
    of provocations. We have had four nuclear tests, three of them
    during the Obama administration, two of them before the
    President's State of the Union speech. And at the rate we are
    going, this issue is just going to get punted to the next
    administration, and it is going to be an exponentially worse
    problem.
        So a new approach to North Korea has to focus on what Bob
    Gallucci and I described in the New York Times last week as
    asymmetric pressure points. In my experience, being involved in
    the negotiations in the previous administration, there were
    only two times where I felt like the North Koreans were truly
    caught off guard, uncertain of how to respond.
        The first of these was in September 2005 when the Treasury
    Department took actions that led to the freezing of North
    Korean assets at a bank in China. And the second was in
    February 2014 in the aftermath of the United Nations Commission
    of Inquiry report of which the major recommendation was
    referral of the North Korean leadership to the ICC for crimes
    against humanity.
        These were the only two times that I really felt the North
    Koreans were frazzled, and I think a new strategy has to build
    on these pressure points. Let me just highlight a couple of
    these.
        First is sanctions, and I know Bruce will talk about this
    as well. As the chairman said, it is a policy myth that North
    Korea is the most sanctioned country in the world, and the
    chairman cited some of the statistics for how the sanctioning
    against Iran is much higher than that against North Korea. So
    there is plenty more space to operate there.
        Secondary sanctioning should also be given positive
    consideration. I know that this has been talked about within
    policy circles as a significant escalation, and this will
    certainly complicate our relationships with China, the European
    Union, Southeast Asia, South America, and Africa. But it is
    also certain that many of these entities will comply when given
    the choice of dealing with North Korea or losing access to the
    U.S. financial system.
        We should also give serious consideration, as the chairman
    said, to putting North Korea back on the State Sponsor of
    Terrorism List. I know that there will be lawyers who will
    dispute the legal criteria for putting North Korea back on the
    list, and here I would only urge that particular attention be
    given to North Korea's cyber capabilities. We did research at
    CSIS that shows that the activities, these cyber activities,
    are instigated by the same agencies, entities within the North
    Korean Government that have been responsible in the past for
    terrorist acts.
        Human rights has to complement sanctions as part of an
    asymmetric strategy. One of the potential targets would be
    North Korean slave labor. There are over 50,000 workers in
    Africa, the Middle East, Europe, Russia, and China, that are
    operating in sub-human conditions that are being paid nothing.
    Their revenues all are going back to the North Korean
    Government. There are different estimates, between $250 million
    to over $2 billion of hard currency. So this is certainly
    something that should be targeted.
        Another useful asymmetric pressure point is the Kaesong
    Industrial Complex. This project now provides $90 million in
    hard currency to North Korean authorities, with little wages
    actually going back to the factory workers. The South Korean
    Government will probably be opposed to something like this,
    because even conservative governments have grown attached to
    the Kaesong industrial complex, but difficult times call for
    difficult measures.
        Lastly, on information, North Korea under Kim has proven to
    be hypersensitive to external criticism with renewal of the
    North Korean Human Rights Act, and I entirely agree with the
    chairman on the idea of trying to increase funding and
    basically think about new ways of bringing information into the
    country.
        As some of the work that we have done with the Bush
    Institute has shown, the United States and South Korea can come
    up with a comprehensive strategy for breaking down North Korean
    information barriers, because in the end we need to improve the
    human condition of the people in North Korea.
        Thank you very much.
        [The prepared statement of Mr. Cha follows:]

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                                  ----------

        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 other distinguished members of the panel. It truly
    is an honor to be asked to appear before you on such an
    important issue to our national security.
        North Korea's recent nuclear test has again triggered
    widespread calls to do something tougher on North Korea. But we
    have been here many times before, and each time administration
    claims of tough action were taken at face value, pledges to be
    even tougher the next time were issued, and interest was
    eventually diverted elsewhere.
        More effective action was also hindered by several widely
    accepted myths about North Korean sanctions. The first myth is
    that sanctions can't affect an isolated country like North
    Korea. Targeted financial measures, which are a law enforcement
    mechanism, are directed against specific entities that violate
    U.S. laws. Even the most isolated regime, criminal
    organization, or terrorist group is tied into the global
    financial order.
        The vast majority of all international financial
    transactions, including those of North Korea, are denominated
    in dollars, which means they must go through a U.S. Treasury
    Department regulated bank in the United States. That gives the
    United States tremendous power and leverage to freeze and seize
    assets, to impose fines such as a $9-billion fine imposed on a
    French bank for improper financial transactions with Cuba,
    Iran, and Sudan, and also to deny access to the U.S. financial
    system.
        As you already pointed out, Mr. Chairman, a second myth is
    that North Korea is the most heavily sanctioned country in the
    world. President Obama claims North Korea is the most isolated,
    the most sanctioned, the most cutoff nation on Earth. That is
    simply not true. The U.S., the European Union, and the U.N.
    imposed far more pervasive and compelling measures against Iran
    than North Korea.
        Also, unilaterally, the United States has targeted far
    fewer North Korean entities than those of the Balkans, Burma,
    Cuba, Iran, and Zimbabwe. The U.S. has sanctioned more than
    twice as many Zimbabwean entities as North Korean entities. We
    have also designated Iran and Burma as primary money laundering
    concerns, but not North Korea, which is counterfeiting our
    currency.
        The U.S. has sanctioned officials from Burma, Burundi,
    Congo, Iran, Syria, Sudan, and Zimbabwe, for human rights
    violations, and sanctioned by name the Presidents of Belarus
    and Zimbabwe, but not yet sanctioned a single North Korean
    entity for human rights violations nearly 2 years after a U.N.
    Commission of Inquiry report concluded the regime was
    conducting such egregious human rights violations as to
    constitute crimes against humanity.
        The U.S. has also frozen the assets of Sudan, Iranian, and
    Syrian, but not North Korean, officials and entities for
    censorship. The list goes on and on, and I have included other
    examples in my written testimony.
        A third myth is there is nothing more the U.S. can impose
    on North Korea. After he left office, former Assistant
    Secretary of State Kurt Campbell commented, ``It would be
    possible for us to put more financial pressure on North Korea.
    We can make life much more difficult through financial
    sanctions on North Korea.'' And he also pointed out he was
    surprised when he was in government to find out that there were
    about 10 times as many sanctions on Burma as there were on
    North Korea.
        President Obama, Secretary of State John Kerry, and other
    officials have made similar statements indicating that there
    are other measures that the U.S. could impose but hasn't.
        A fourth myth is that sanctions don't work. As Dr. Cha
    already pointed out, tougher measures were effective when
    applied. In 2005, the U.S. designated the Macao-based bank
    Banco Delta Asia as a money laundering concern for facilitating
    North Korean illicit activities. As a result of Washington
    belatedly enforcing its laws, as well as a series of sub rosa
    meetings by U.S. officials throughout Asia, two dozen financial
    institutions voluntarily cut back or terminated their business
    with North Korea.
        And a North Korea negotiator admitted to a senior White
    House official, ``You finally found a way to hurt us.''
    Instead, what the U.S. should be doing is implementing the Iran
    model against North Korea. Just as strong international
    measures induced Tehran back to the negotiating table, more
    robust measures are needed to leverage North Korea.
        While implementing new sanctions measures is important,
    fully implementing and enforcing already existing, far-reaching
    measures is also critical. The U.S. has the tools; we have just
    lacked the resolve to fully use them.
        For years the Obama administration has been hitting the
    snooze bar on sanctions. It has pursued a policy of timid
    incrementalism by holding some sanctions in abeyance to be
    rolled out after the next North Korean violation or
    provocation. The U.S. instead needs to sharpen the choices for
    North Korea by raising the risk and cost for those violating
    laws and U.N. resolutions, not only North Korea but also those
    that facilitate its actions.
        In my written testimony, I provided a lengthy list of very
    specific recommendations for U.S. and South Korean actions that
    should be implemented against North Korea. Neither sanctions
    nor diplomacy alone is a panacea. Both are essential and, along
    with fully funding U.S. defense requirements, should be
    mutually reinforcing elements of a comprehensive integrated
    strategy.
        I will conclude my presentation with the same question I
    posed to this committee 2 years ago. Why has the United States
    hesitated to impose the same legal measures against North Korea
    that it has already used against other countries for far less
    egregious violations of U.S. and international law?
        Thank you again for the privilege of appearing before you.
        [The prepared statement of Mr. Klingner follows:]

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                                  ----------

        Mr. Salmon. Thank you.
        Ms. Glaser.

       STATEMENT OF MS. BONNIE GLASER, SENIOR ADVISER FOR ASIA,
       DIRECTOR OF CHINA POWER PROJECT, CENTER FOR STRATEGIC AND
                         INTERNATIONAL STUDIES

        Ms. Glaser. Chairman Salmon, Ranking Member Sherman, and
    distinguished members of the subcommittee, I am honored to have
    the opportunity to testify today on this very important issue.
        As so many of you have already pointed out, cooperation
    from China, North Korea's main benefactor, is essential to
    achieving a nuclear-free peninsula. China is North Korea's
    biggest trading partner. It accounts for 90 percent of North
    Korea's global trade, provides at least 70 percent of North
    Korea's crude oil requirements, some 80 percent of its consumer
    goods, approximately 45 percent of its food, and Chinese
    investment accounts for almost 95 percent of foreign direct
    investment in North Korea.
        The U.S. should not expect Beijing to completely abandon
    its ally and forge a common strategy with Washington to squeeze
    North Korea until it gives up its nuclear weapons or collapses.
    But it may be possible to persuade China to strictly comply
    with its existing international commitments to further tighten
    sanctions on North Korea and to reduce its support or make
    continued support contingent on specific actions by Pyongyang
    to return to its denuclearization pledges.
        To elicit greater cooperation, the U.S. must attach high
    priority to North Korea on the U.S.-China agenda, especially in
    summit meetings between our Presidents, U.S. and Chinese
    leaders. Cooperation on North Korea should be identified as a
    litmus test of the proposition that the United States and China
    can work together where their interests overlap, and the U.S.
    should then take the following steps.
        First, the U.S. should call out China for its failure to
    enforce existing U.N. sanctions. North Korea has deep networks
    with Chinese companies and uses these relationships to procure
    prohibited items from all over the world, routing them through
    China before onward shipment to North Korea. Designated North
    Korean entities continue to do business with Chinese companies
    and visit Chinese ports. North Koreans are reportedly still
    able to conduct banking transactions in small banks operating
    in Northeast China along the border. China does not enforce the
    ban on luxury goods.
        Second, the U.S. should press Beijing to agree to the
    designation of more North Korean individuals and entities in
    new U.N. Security Council resolution.
        Third, the U.S. should encourage Beijing to use its
    leverage over North Korea in targeted ways to pressure for
    change in its behavior. China could refuse to engage in new
    economic projects with North Korea until the government returns
    to negotiations in good faith. Beijing could reduce the flow of
    Chinese tourists to North Korea, which has become a significant
    source of foreign exchange.
        Fourth, the United States should encourage China to
    leverage its assistance to North Korea to influence its
    behavior. So to deter North Korean long-range missile launches
    and nuclear tests, China could agree to warn Pyongyang that
    future provocations would be followed by a cutback in Chinese
    aid. Beijing could also insist that Pyongyang return to its
    commitments under the Six Party talks or face substantial
    reductions in deliveries of crude oil, kerosene, diesel, and
    gasoline.
        And, fifth, the U.S. should press China to not obstruct
    discussion in U.N. bodies on human rights abuses in North
    Korea. And my colleague, Victor Cha, has already underscored
    North Korea's sensitivity to this issue.
        Securing cooperation from China to increase pressure on
    North Korea may be more feasible than in the past. Xi Jinping
    is a decisive and bold leader who has a clear vision of what is
    needed to achieve what he calls the ``Chinese dream,'' the
    great rejuvenation of the Chinese nation. And under Xi's
    leadership, China has embarked on an effort to end the special
    relationship of the past between Beijing and Pyongyang and
    replace it with a normal state-to- state relationship.
        Widely viewed as the most powerful leader China has had
    since Deng Xiaoping, Xi Jinping has sufficient clout to
    overrule opposition from potent constituencies in China that
    would resist a tougher stance toward North Korea, especially in
    the party and the military.
        Beijing is not prepared to assume sole responsibility for
    addressing the North Korean nuclear threat, but China might be
    willing to do more along the lines that I have outlined if it
    believes that the U.S. has an effective strategy, is
    prioritizing the goal of creating a non-nuclear Korean
    peninsula, and does not seek to use the Korean peninsula to
    harm Chinese interests.
        What does China want? A balance of power in Northeast Asia
    that is favorable to Chinese interests, and certainly does not
    threaten Chinese interests.
        I believe China does not adamantly oppose Korean
    unification, but the known burdens and dangers of the status
    quo today are less risky for China than the uncertainty that
    unification may bring for Chinese interests.
        And I look forward to the discussion. Thank you again.
        [The prepared statement of Ms. Glaser follows:]

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                                  ----------

        Mr. Salmon. Thank you. I would like to thank the
    distinguished panel members very much for making the time to be
    here today. You know, it is kind of unnerving when Seth Rogen
    gets more reaction out of the North Koreans than our American
    policies do. He certainly hit a nerve, you know, when he put
    that movie out, a lot more than any of the blustering that has
    been coming out of Washington, DC.
        It has been a conundrum, as pointed out by my colleague,
    Dana Rohrabacher, that is not new. It is not an issue that was
    resolved at one time and has degraded. It has never been
    resolved. And every time I have spoken with any expert about
    how to get North Korea to start living with accepted
    international norms, especially when it comes to proliferation,
    every one of those conversations always involves China, because
    they are the 800-pound gorilla when it comes to dealing with
    North Korea, because of North Korea's dependence on them for
    food and energy.
        And, Ms. Glaser, you have made some very I think astute
    observations on what China could do. But how do we motivate
    them properly to get that done? There have been a lot of things
    talked about--maybe targeted sanctions that involve Chinese
    banks that fund North Korea. Maybe that is something we can
    look at. I spoke to Mr. Sherman about that, maybe looking at
    that in a bipartisan way.
        Mr. Klingner, you have said that in your submitted speech,
    your written speech, you are going to be talking about several
    of the sanctions that maybe could and should be on the table. I
    would like us to really look at entertaining those. I think
    that the bill that was passed yesterday on the House floor was
    a good move. I think it moves the ball up the field. But I
    think there is even more to be done.
        You have pointed out, rightly so, Mr. Klingner, that we
    haven't even considered or done similar things that we have
    done to far less egregious offenders in the world today. And I
    think that is abominable. I think we should put all things on
    the table.
        I would like to ask you, Mr. Klingner, why do you think
    that there has been such restraint on dealing with North Korea
    in the same way that we have dealt with far less offenders?
    What is the rationale? It doesn't make any sense to me. Why
    have we been so reticent to do so?
        Mr. Klingner. That is an excellent question, sir, which I
    really don't have an answer to. It really is counterintuitive.
    You know, if you just compare Iran and North Korea, Iran
    remains in the Non-Proliferation Treaty. North Korea is out.
    Iran claims that its nuclear program is for civilian purposes.
    North Korea quite clearly says it is to incinerate the U.S. and
    its allies. Iran, you know, has not exploded a nuclear device.
    North Korean has done four.
        And Iran has oil. One would think that we would have more
    pressure on North Korea than Iran, but we haven't. There are
    perhaps the concerns as to how North Korea will respond if we
    impose additional measures. I don't think we should be hesitant
    to enforce our laws because of the concerns of what the
    criminal will do if we enforce them.
        Similarly, as has already been talked about, is how will
    China respond? When I advocated additional measures against
    North Korea, I have said, ``Let the law enforcement people go
    where the evidence takes them.'' And someone once commented to
    me that, ``Oh, so you want to sacrifice the all-important U.S.-
    China relationship over North Korea?''
        I said, ``Well, no. What I am saying is I don't want to
    give China immunity from U.S. law simply because they are
    China.'' So we should go where the evidence takes us. We should
    sanction whatever entities are violating U.S. and international
    law and U.N. resolutions, not because they are Chinese but
    because they are violating our laws and the resolutions.
        Mr. Salmon. I think that your answer kind of dovetails with
    the opening statement of the ranking member, and I think that
    these comments really have a lot of bearing on going forward. I
    think that there really shouldn't be any sacred cows when it
    comes to enforcing our laws. And protection of special
    interests or, you know, ongoing concerns over a bilateral
    relationship with China, these are serious issues. And China
    has not stood up for its obligations, I believe, in this realm.
        One thing that has been mentioned that might get China's
    attention, and I think it is also just good policy, is what
    about the U.S. bolstering our support for a missile defense
    system for South Korea at the least, and maybe Japan? What do
    you think about that, Dr. Cha and Mr. Klingner?
        Mr. Cha. So I think that is a great idea. On the China
    piece of it, first, as Bruce said, when there was a Section 311
    against a Chinese bank in Macao in 2005, that was a law
    enforcement action. It was a Chinese bank. And, in the end, the
    U.S.-China relationship survived. So, and it was an effective--
    it was a very effective measure. And it actually may take
    things like that to actually motivate China. We are almost
    self-deterring in that sense, supposed equities in the
    relationship.
        With regard to measures with other countries in the region,
    I think absolutely this--all of North Korea's activities speak
    to the need for a much more robust and networked missile
    defense system in Asia, including the United States, Japan, and
    South Korea. As was mentioned, the relationship between Japan
    and Korea has gone through some rough periods, but it is on the
    mend, and there are I think opportunities here, particularly in
    South Korea, to talk about more missile defense as well as
    better intelligence and information-sharing among the three
    countries.
        These have been on our agenda with our allies for quite
    some time, and we haven't been able to push them forward. And
    unfortunate as it is, you know, when we were working on the
    policy every time North Korea did something bad, the motto in
    the office was, ``Well, let's make lemonade out of this
    lemon.'' And one of the ways to make lemonade out of this lemon
    is to really consolidate our defense alliances, and that also
    complicates the environment for China and may motivate them to
    do more.
        Mr. Salmon. Mr. Klingner.
        Mr. Klingner. Yes. Last year I wrote a detailed research
    paper that South Korea should allow the U.S. to deploy THAAD,
    the Terminal High Altitude Air Defense System. To date, the
    South Korean administration has not even wanted to publicly
    discuss it. And, as I pointed out in the paper, THAAD is better
    than anything the South Koreans have or will have for decades
    to come. It is more much capable.
        Also, I point out that the Chinese claims that it will
    impair their ability to assault the United States or our allies
    with missiles, they are red herrings. The THAAD is very
    effective against North Korean missiles, but it will have no
    constrainment on Chinese missiles. Therefore, China's
    objections are politically based.
        So I think the U.S., in consultation with our allies,
    should deploy THAAD. It will improve the defense of not only
    our forces there, but of South Korea, and also, as Dr. Cha
    said, to have South Korea integrate its system into the more
    comprehensive, effective allied system with Japan, because we
    are all in this together. You know, the same North Korean
    missile could be aimed on the same trajectory toward South
    Korea, U.S. Forces in Korea, or U.S. Forces in Japan, which are
    critical for the defense of the Republic of Korea.
        Mr. Salmon. It is no secret that the relationship between
    China and South Korea has blossomed over the last several
    years, and they have tried to do everything they can to improve
    trade, and all aspects of that bilateral relationship. It is
    also no secret that China has lobbied, and I think that is the
    understatement of the universe, South Korea against THAAD.
        And I think it is time for us, as leaders in the region, to
    step up our voices and our commitment to security in the region
    by support for things like that and try to reignite some
    support for those things, because maybe, just maybe, besides
    being good policy, from our strategic interests, self-strategic
    interests, it might be a really good motivation factor for
    China to finally get off its duff and do something about this
    serious global problem.
        The Chair recognizes Mr. Sherman.
        Mr. Sherman. Usually it is the witnesses that answer
    questions. But one question has come up, and that is, why did
    we do it in Iran and not North Korea? So I think I will answer
    the question. When Congress passed the sanctions laws, they
    provided secondary sanctions, which is the only way you go
    after these regimes. If the law had been enforced it would have
    made Iran's trading partners very angry.
        Administrations refused to enforce those laws, gave Iran a
    lot more time to get very close to a nuclear weapon, but they
    began to persuade Iran's trading partners that they should go
    along with this pressure. And only to the extent that we could
    carry out the sanctions regime without angering Iran's major
    trading partners did we carry it out.
        And we used persuasion. And who were we persuading? Europe.
    So we had sanctions on Iran only to the extent that we could
    get Europe not to be terribly angry if we forced them to go
    along.
        As to China, persuading them will be considerably more
    difficult. And so the chairman and I are talking about, for
    example, sanctions on Chinese banks. That will make China
    angry. In dealing with Iran, the administration got as far as
    it did without making anybody really angry, any of Iran's
    trading partners. I think this North Korean nuclear program is
    significant enough that we should be willing to make China
    angry.
        Now, I might talk about a tariff on their goods that would
    make them angrier than I could persuade my colleagues in
    Congress to go along with. But they will be pretty angry with
    the banking sanctions.
        Dr. Cha, you say there are some who doubt that North Korea
    is legally a terrorist state. One act of terrorism is when you
    see civilian hostages, and that act of terrorism continues at
    least until you release the hostages. And if you seize Japanese
    homemakers and hold them hostage for decades because you want
    somebody to teach you how to pour tea, that is an act of
    terrorism.
        Dr. Cha, is there any doubt that North Korea is engaged in
    terrorism until they release the hostages they have seized? Or
    their bodies, for those who have died?
        Mr. Cha. You have no disagreement from me there.
        Mr. Sherman. Okay.
        Mr. Cha. Congressman, I think that there have been many
    actions in that vein, almost a regular state practice of
    detaining innocent individuals, Americans and other
    nationalities, in the country for no apparent reason, and that
    is just unacceptable.
        My only point was that I think that the other area that we
    could investigate in terms of criteria for putting them back on
    the list is the cyber area. The----
        Mr. Salmon. The cyber terrorism is bad enough. But when you
    seize people and hold them for decades because you want
    somebody to teach you a tea ceremony, I have one comment and
    that is North Korea is very status conscious.
        And, of course, the biggest boost to your ego is to have a
    nuclear-tipped ICBM. The cheesy way to deliver a nuclear weapon
    is to smuggle one. But I will point out that you can smuggle a
    nuclear weapon inside a bale of marijuana, and a missile
    defense program isn't going to stop that.
        And, in fact, you have the additional advantage of having
    plausible deniability or a delay. So retaliation doesn't occur
    in cold blood. It doesn't occur after a 90-day investigatory
    process.
        I want to go to one more line of questioning. Al-Kibar in
    Syria, North Korean technology. Just a quick question, does any
    of our witnesses have any guess as to how much money North
    Korea was given for cooperating with al-Kibar? I am not seeing
    any witnesses. But we do--the estimates have been in the
    hundreds of millions of dollars.
        We know two things. Iran wants a nuclear weapon. Iran is
    about to get its hands on $130 billion. Would North Korea be
    willing to sell not--they have already proven they are willing
    to sell nuclear weapons kits, if you will, or equipment and
    plans. Does North Korea have enough atomic weapons that they
    would be willing to sell one or two of them? And is this a
    multi-billion dollar cost for whoever wants to buy them? Do we
    have--Mr. Klingner.
        Mr. Klingner. I was going to address your comment about
    North Korea as a terrorist nation, if I could. In my written
    testimony, I have a long list of actions that North Korea has
    taken which I think fulfill the legal obligation for relisting
    them as a terrorist nation. There are a number of U.S.
    statutes. Perhaps the most relevant is 18 U.S. Code 2331, which
    defines international terrorism as ``involving violent acts
    that would be a violation of criminal laws of the U.S., and
    that appear to be intended to intimidate or coerce a civilian
    population.''
        I think the threats of a ``9/11-type attack'' for citizens
    of the U.S., or inhabitants of the U.S. to go to theaters to
    watch that movie, you know, is considered trying to coerce the
    population. And there have been a number of items that I have
    listed of North Korean attempts at assassination and kidnapping
    and that have been recognized by South Korean courts. So I
    think any one of those should have put North Korea back on the
    U.S. list, and certainly cumulatively.
        As for whether North Korea would sell a nuclear weapon, as
    you correctly point out, they have shared and sold nuclear and
    missile technology with a list of rogue nations. I question
    whether they would sell a completed weapon, though. I think it
    might go beyond what they would be willing to do, but I
    certainly could be very wrong on that. Certainly, as they
    develop a larger arsenal, they might be more willing to do
    something.
        Mr. Sherman. What I have said in this room is they need
    their first 12 atomic weapons to defend themselves from us. The
    13th doesn't go on eBay, but could be available for sale.
        Dr. Cha.
        Mr. Cha. Well, there is certainly a history there. I mean,
    every major weapon system the North Koreans have ever developed
    they have sold. And I am----
        Mr. Sherman. And they haven't drawn the line at nuclear. I
    mean, had things gone as planned, Syria or Iran operating in
    combination at al-Kibar would have a plutonium nuclear device.
    And it is not that North Korea says, ``Oh, that is so immoral;
    we couldn't participate in that.''
        Mr. Cha. So it is definitely a concern in the case of--as
    you know well, their missile sales, that has certainly been the
    case. And, you know, I think part of their effort at trying to
    develop longer range and more accurate missiles aren't to sell
    them. So you can't put it past them in terms of the nuclear
    site.
        But even aside from the sort of overt proliferation, just
    by virtue of the fact that they have a nuclear arsenal that is
    growing, creates all sort of very serious crisis and stability
    problems for the United States. I mean, the notion that they
    can keep a dozen or two dozen bombs, and as long as we deter
    them we are safe, is completely wrong, because should any
    crisis develop on the peninsula, North Korea is developing
    these nuclear capabilities at the expense of massive degrading
    of their conventional capabilities.
        And so what that means is if we are ever in a military
    crisis, we immediately have to shoot up the escalation ladder,
    and that immediately forces us to consider preemption. So it is
    a highly unstable situation that I think gets lost among the
    general public, because as the chairman said----
        Mr. Sherman. Doctor, I have gone way over time. I yield
    back.
        Mr. Salmon. I did, too, so I was looking the other way.
        The Chair recognizes Mr. Rohrabacher.
        Mr. Rohrabacher. I will try not to go over time. First of
    all, let me thank the witnesses. Your testimony has been of
    great value to me and to this committee, and the points that
    you have made, all of you, I mean, you have made some very
    serious points and given us information that we will utilize in
    this coming year as we try to come up with a policy that can
    deal with this threat.
        It is ironic that we seem--I believe the United States and
    the world is entering a new era. The Cold War is being left
    behind, a long way, and even the post-Cold War era is being
    left behind now. And what the new era will be, what is the
    parameters of how we operate in the world, is going to be
    different.
        And, ironically, the country that may be and the government
    that may be forcing us into a new definition of what our
    responsibilities are and what we are going to do is one of the
    most anachronistic regimes in the world. I mean, they don't
    even fit into the Cold War, I mean, the way they handle
    themselves.
        I really appreciate the information also about the
    specifics that the North Korean Government is doing, and the
    actual people who are running the North Korean Government put
    up with in terms of the idea of slavery, that they are actually
    engaged in slavery, which I think there is an important--you
    have made an important point today. I mean, this is what--that
    type of activity is intolerable, and those thousands of North
    Korean workers that are being sent overseas, and all of their
    salary being given to the government, that is, I believe,
    virtual slavery.
        And thank you for drawing our attention to that. That is
    something we should be able to deal with, and something we
    should be able to work with and with international
    organizations. Let me note that I agree with--and am very
    pleased that the ranking member, Mr. Sherman, has pointed out
    that the North Koreans are still holding Japanese hostages
    after decades. And I agree with him, that should not just be
    overlooked as if that is a past issue.
        The fact that the North Koreans are holding--kidnapped and
    are holding Japanese civilians in North Korea is something that
    should be a matter that is not relegated to the past, as long
    as they are holding these people. And that should be part of
    what we are looking at.
        Whatever we know, whatever era we are entering, we know it
    is going to be different. And I think that what may come of all
    of this is that we may find that reunification of Korea becomes
    a reality after all of these decades, and that reunification
    will itself create a new world that we have to deal with. We
    are talking about historic moments in the world. That is where
    we are at, and it is being brought about by this crazy regime
    up in North Korea, is forcing these changes upon us.
        I would also like to mention that we are now entering an
    era also where our technology is not just being utilized for
    offensive weapon systems. And thanks to Ronald Reagan, we
    started down a path of building and focusing on defensive
    systems, which make a lot more sense to me, even especially in
    cases like this where--and let me note there are several new
    technologies being developed that will give us even a greater
    ability to defend ourselves against a missile attack. And we
    certainly should make that available to South Korea and to
    Japan, and that would certainly be a message there.
        Let me ask again for some more information from you folks.
    Somewhere in the back of my mind is an action that we took, and
    I believe--and I don't know if it was a covert action, maybe I
    am just disclosing something--to prevent a transfer of money
    that was going to specific individuals in the North Korean
    Government.
        We know that North Korea, with all of its poverty and the
    lack of food, hasn't prevented luxury cars and booze and very
    expensive consumer items to going to their very elite. And I
    seem to remember that there were banking transactions that we
    challenged in some way that had an impact on North Korean
    policy.
        Could you refresh my memory on that? And is that a
    methodology that we should try to look at now to reestablish
    that policy toward the new challenge that we face? Dr. Cha.
        Mr. Cha. Yes. I think what you are referring to,
    Congressman, is the Section 311 by the Treasury Department in
    2005 that advised U.S. financial institutions not to deal with
    a particular bank in Macao----
        Mr. Rohrabacher. Macao.
        Mr. Cha [continuing]. Because of money laundering concerns.
    And in the press it is always talked about how we sanctioned
    North Korea financially. What we did was we advised U.S.
    financial institutions to be wary of business with a particular
    bank, and that then created a ripple effect that you described
    where many other banks that had North Korean accounts decided,
    well, we are going to freeze these, or we are going to
    investigate them.
        Bank presidents, regulators all started to target these
    accounts, and it had the effect of completely shutting North
    Korea off from the international financial system. They could
    not do a wire transfer. They could not access bank accounts
    through ATMs. It was really quite a powerful and forceful
    thing.
        And in answer to your question, yes, I think that we can do
    that again. North Korea has since tried to adjust, but at the
    same time they still are able to operate in the financial
    system, and there are things that we can do to make that much
    more difficult.
        Mr. Rohrabacher. Are we talking about bank accounts that
    are being controlled and who operate for the benefit of the
    leadership of--specific leaders of North Korea and
    decisionmakers there?
        Mr. Cha. I can't give you the answer to that question here.
    What I can say is that when that action happened, the North
    Korean negotiators, when they came back to the negotiation
    table, had only one demand, and that was to unfreeze the $25
    million that was sitting in that bank in Macao. They did not
    want to talk about anything else under the sun. They didn't
    want to talk about peace treaty. They didn't want to talk about
    anything else. All they wanted to talk about was that, which
    gives you a sense of how important it was to them.
        Mr. Rohrabacher. Do the other witnesses have any comment on
    that?
        Ms. Glaser. Congressman, I think that this also takes us
    back to the issue of China where there are so many of these
    small banks that exist along the border, and sometimes they
    shut down and they pop up someplace else, maybe even, you know,
    half a mile down the road.
        There are some journalists who have gotten into some of
    these banks and pretended to make transactions just to
    demonstrate how easy it is to transfer money to North Korea.
    So, again, this goes back to the issue you raised earlier of
    shutting down these banking transactions, putting sanctions on
    these banks.
        It is just essential to get the Chinese to comply with the
    sanctions that are already on the books that the Chinese have
    supported in the United Nations. And when it comes to things
    like luxury goods, just inspections along a border, they are
    episodic. There are times that the Chinese appear to want to
    signal the North Koreans that they are dissatisfied with
    something, and then they go back to business as usual.
        Mr. Klingner. If I could just add, we talk about Chinese
    resistance, the Chinese Government resistance to actions. But
    we can actually get Chinese banks to work in our interests.
    With the Banco Delta Asia issue, as I mentioned before, the
    U.S. sent officials throughout Asia, including to the Bank of
    China, to talk and point out that under Section 311 they could
    face seizure of their assets in the United States and be
    precluded from accessing the U.S. financial system, which
    really is the kiss of death for any financial institution.
        Even though the Chinese Government was urging the Chinese
    banks to resist any pressure, the banks themselves had to worry
    about their own reputational risk, their own access to the
    international system. So they complied. They severed--Bank of
    China, for example, severed its relationship with North Korea,
    even if the Chinese Government didn't want it, but they had to
    take those actions themselves to maintain, you know, the Bank
    of China as an entity.
        Mr. Rohrabacher. Thank you.
        Thank you, Mr. Chairman.
        Mr. Salmon. Thank you very much.
        Mr. Connolly.
        Mr. Connolly. Thank you, Mr. Chairman, and welcome to our
    panel. I begin by taking issue with the ranking member's
    narrative with respect to Iran in comparing it to North Korea.
    My narrative would be that this administration took up from the
    neglect and fecklessness of the previous administration with
    respect to Iran. And, whether you like it or not, the
    agreement, the nuclear agreement, is working. They are
    complying.
        And if you want to remove an existential threat to Israel,
    that is the way we did it, and it is--you know, in my view, it
    has the best probability of working of any solution offered on
    the table. Maybe one doesn't like that. Maybe one would have
    preferred a different alternative. But this is the one the
    United States Government pursued. I am glad they did. And I
    think in the long run it will be the best alternative for peace
    in the region and for taking the nuclear option with respect to
    Iran off the table.
        Now, one of the pieces of leverage we had, in addition to
    sanctions, was choking off Iran's ability to sell the one
    product it really has, and that is oil. When it comes to North
    Korea, we don't have an analogous situation other than weapons.
    I am not quite sure what it is the North Koreans really have to
    sell that we can choke off.
        Would that be a fair statement, Ms. Glaser?
        Ms. Glaser. Yes. Yes, I would agree with you, Congressman.
    I don't know what North Korea has to sell that we can choke
    off, but----
        Mr. Connolly. But that is a real big difference between--I
    mean, to analogize North Korea and Iran, I just think is apples
    and oranges, because start with the fact that Iran has got oil;
    North Korea doesn't have anything, other than maybe weapons.
        Ms. Glaser. There are some very important differences, of
    course, between North Korea and Iran, beginning with the fact
    that North Korea has nuclear weapons and has tested them and
    Iran has not. But, at the same time, I would agree with the
    points that have been made by Bruce Klingner and Victor Cha
    that there are mechanisms that we have used, sanctions that we
    have used, executive authorities we have used, against Iran
    that exist that we have not used against North Korea.
        So there are many more ways that we could pressure North
    Korea, that we have applied to Iran I believe fairly
    successfully, but have not applied to North Korea.
        Mr. Connolly. Well, let me ask that question, and I welcome
    Dr. Cha and Mr. Klingner, but it is a devil's advocate
    question. I am not promoting it, but is that the best way to
    try to restrain and shape North Korean behavior, tighten
    sanctions, tighten economic consequences, because they will
    have to scream ``uncle'' at some point? Is that really what
    history tells us about North Korea? Ms. Glaser? And then, the
    other--both of the other panelists are free to comment as well.
        Ms. Glaser. My view is that it must be part of any
    strategy. In itself, if we are not offering North Korea some
    positive vision of the future, then pressure/sanctions are
    unlikely to work.
        Mr. Connolly. Alone.
        Ms. Glaser. Alone.
        Mr. Connolly. Yes.
        Ms. Glaser. But I believe that the United States, under
    this administration and prior administrations, had made it
    quite clear to North Korea that there are many things that we
    can put on the table, security assurances, assistance,
    diplomatic relations. There is such thing as a--if you want to
    call it a grand bargain.
        The North Koreans are aware that there would be benefits
    for them if they give up their nuclear weapons. So pressure, by
    itself, of course will not work, but pressure/sanctions must be
    part of any strategy.
        Mr. Connolly. Dr. Cha? Mr. Klingner?
        Mr. Klingner. Yes, I agree. And even though my comments
    today have focused on sanctions, when I have talked about these
    in other fora in the past, I have always emphasized the context
    that it is one instrument.
        Mr. Connolly. And not always an effective one.
        Mr. Klingner. Right. Just as diplomacy has not been
    effective.
        Mr. Connolly. Right.
        Mr. Klingner. So, we often get into a binary debate of
    sanctions versus engagement, and we need both. I mean, it is
    part of a comprehensive integrated strategy. So we need
    continued offers of conditional engagement based on
    conditionality, reciprocity, transparency.
        Unfortunately, we have had many agreements, four
    agreements, for them never to pursue nuclear weapons, and then
    four agreements to give up the weapons they promised never to
    build in the first place. Additional pressure, and then also
    those two tracks we hope will convince North Korea to alter its
    behavior, and then you also need the third track of having to
    ensure that you have sufficient defenses for yourself and your
    allies.
        But when people say sanctions don't work because North
    Korea hasn't cut up its weapons, well, diplomacy was equally
    unable to do that. But sanctions have a number of other
    purposes. One is to enforce U.S. law. Two is to impose a
    penalty, a cost or pain when someone violates our law or
    international law or U.N. resolutions, and hopefully a
    deterrent to other would-be violators.
        Three is to put into place mechanisms to impede the inflow
    of prohibited items, components for their nuclear missile
    programs, and the money from illicit activities. Four, to
    prevent or at least constrain proliferation. And, five, the
    most difficult, is to alter their behavior.
        I would argue on four of the five that they have had some
    success.
        Mr. Connolly. Thoughtful. Thank you.
        Dr. Cha.
        Mr. Cha. Okay. Very quickly, Congressman, on the question
    about, what do they export that is of value? I mean, truly,
    what is of value to them? And so a couple of things come to
    mind in addition to the things that Bruce has already talked
    about.
        One, as I mentioned before, is this issue of slave labor.
    That is providing income to them. It is something that is
    clearly in violation of ILO standards, even though they are not
    a signatory to the ILO, and that is certainly one area where it
    is not Iranian oil, but it is something that certainly is of
    value to them.
        The other is there are a lot of raw materials actually in
    North Korea, and China since 2008 has extracted a lot of that
    for their two inland provinces. And when people are in
    Pyongyang, the capital city of North Korea, they say things
    look pretty good there now. That is all because of Chinese
    money from these contracts, and that is another area.
        On the diplomacy side, I don't think anybody on this panel
    is against diplomacy. I think we all believe diplomacy is
    important, but I have to say that having been--having
    participated in negotiations for the last agreements with North
    Korea, the nuclear agreements, and knowing a lot about the
    Clinton administration agreements and President Obama's, we
    have put--I mean, as Bonnie said, they know what they get. We
    put everything on the table.
        And the issue right now is that this young leader is not
    interested, and he is looking to build his programs because he
    wants to confront the next administration here.
        Mr. Connolly. Yes. If the chair would allow me one more
    question, and I will try to ask Ms. Glaser to be brief. But
    talk a little bit more about--it seems to me the one sort of
    inflection point we have got, if we have got leverage on North
    Korea, it is through China. It is in our relationship with
    China and their relationship with Pyongyang.
        How much leverage do the Chinese really have? Because from
    a distance it looks like the Chinese are in a conundrum
    themselves. They have got relationships they don't want to walk
    away from. They don't want to even unwittingly destabilize the
    peninsula and have to deal with that mess. I mean, if you gave
    them truth serum, they would probably love a peaceful
    reunification organized by the south. But that is so far away,
    you know, they can't really effectuate that.
        So how much leverage do the Chinese have, and how well are
    we pressuring them to try to effectuate better behavior from
    the North Koreans?
        Ms. Glaser. Well, the Chinese, as I said in my earlier
    remarks, have enormous potential leverage. They are unwilling
    to use it. And because the Chinese are fearful of instability
    in North Korea, the leverage they have in essence becomes North
    Korea's leverage over them. Kim Jong Un and even his father I
    think have done quite a good job of playing a very weak hand,
    not only with the United States and other countries but
    particularly with China.
        And so the North Koreans I think occasionally cause trouble
    for China in a variety of ways along the border, and in terms
    of the threats that they make toward South Korea. The Chinese
    need I think to be motivated to use the pressure that they
    have, and I don't think we have done a very good job of doing
    that.
        I agree that we should not be self-deterred in putting
    pressure on China. We should not be worried that if we put
    pressure on China on this issue that they will somehow not
    cooperate with us on climate change, or Iran, for example. We
    can use pressure, if properly applied and well-timed, I think
    can have an impact on Chinese behavior.
        And I would cite the example of when Xi Jinping was
    preparing to come to the United States last September, and the
    administration considered imposing cyber sanctions and had the
    executive authorities to do so. And the Chinese got very
    motivated to set up a new mechanism to send a standing member
    of the Politburo to discuss this issue.
        Now, this may not in the end solve the problem of the cyber
    hacking and cyber-enabled theft, and I think we certainly have
    to keep their feet to the fire on that issue. But the point is
    that when you threaten sanctions, when you have the executive
    authorities to do so, and the Chinese take you seriously, that,
    yes, you can motivate their behavior.
        There was also the discussion earlier about bolstering
    missile defense in the region, and I do think that taking steps
    that defend American interests and the interests of our allies,
    and if they happen to create a more negative security
    environment for China in the region, that may motivate the
    Chinese to do more as well. This is not something that they
    want to see. It doesn't benefit their interest.
        Mr. Connolly. I thank you very much.
        Mr. Chairman, thank you for your indulgence.
        Mr. Salmon. Mr. Connolly raised the issue that they don't
    really have much to export. Possibly they could export some
    cyber hacking training seminars.
        The Chair recognizes Mr. DesJarlais.
        Mr. DesJarlais. Thank you, Mr. Chairman, and thank you to
    our panel of witnesses for your thoughtful insight today. Dr.
    Cha, I wanted to ask you, do you believe that North Korea would
    use their nuclear weapons for aggressive actions?
        Mr. Cha. I don't think it is the intent of any nuclear
    weapon state, including North Korea, to use them purposely for
    aggressive purposes. Having said that, there are easily
    contingencies one can imagine where a country, especially North
    Korea, can miscalculate. And I can draw out some of those
    scenarios for you in which they have no intent to use nuclear
    weapons, but because of military calculations they are then
    compelled to. And that is what is so inherently destabilizing
    about the current situation.
        Mr. DesJarlais. I just want to talk a little bit about
    perception. I have not been to South Korea. I have not been to
    Japan. Do South Koreans and Japanese feel the same threat from
    North Korea that, say, Israel does with Iran?
        Mr. Cha. I certainly think that Japan feels mortally
    threatened by the developments in North Korea, their missile
    program as well as their nuclear program. It is the clearest
    existential threat to Japan today.
        With regard to South Korea, they have always been under the
    fear of artillery attack from North Korea. Artillery tubes are
    only seconds away from the capital city of Seoul. And I think
    there is now a growing concern about the broader nuclear
    question.
        Again, if you have been under conventional military threat,
    biochemical, artillery shells, all your life, you can get a
    little jaded. But I think that there is a growing concern about
    the broader strategic implications of North Korea's nuclear
    program.
        Mr. DesJarlais. Okay. And I am going somewhere with this.
    My sense is that, you know, here in this country we have a
    country, the only one in this century, testing nuclear weapons,
    detonate a nuclear weapon a week ago. But after the news comes
    out, it is like, oh, well, it wasn't a thermonuclear weapon; it
    was just a fission weapon, and, therefore, we don't need to
    worry about it.
        We are having a hearing today, but I will tell you that
    every Member of Congress understands the threat Israel feels
    from Iran. It is something that Israel has done to raise that
    perception, and I think that everyone has learned to respect
    that threat. And I am not sure that is the same with North
    Korea.
        And, you know, maybe our problem is that we need to raise
    that perception. Every Member of Congress, Democrat or
    Republican, generally takes a trip to Israel when they first go
    to Congress, and they see and they feel that threat. You know,
    maybe that is something Japan and something South Korea and
    other nations that feel threatened in the region should do to
    help increase that perception here in Congress, because
    honestly right now, I mean, you hear the news about Syria, you
    hear the news about ISIS, you hear about the Iran deal. It is
    sucking up all the oxygen, and that is what people are paying
    attention to.
        So you all have a lot of great ideas of what to do, but how
    do we get action? And that is, you know, why we are here today.
    So, in your opinion, what do we do to elevate the reality that
    this is a real threat? Because it just--I have been sitting
    here with my colleague, Mr. Perry, talking about, you know,
    this problem should just be solved, but yet it is not
    happening.
        And it doesn't seem that hard, but apparently it is. So
    what would you suggest? And I will give each of the panelists a
    chance to respond, 30 seconds each.
        Mr. Cha. So I would entirely agree with you, Congressman,
    that I think outside of this chamber, more broadly in the
    American public, there is a tendency to downgrade, discount,
    dismiss North Korean activities as basically a crazy regime
    that blows up bombs in a cave somewhere near China, and that we
    don't have to worry about that, and I think that is completely
    the wrong attitude.
        In part, it has been because there was a feeling that the
    United States sometimes overreacted in the past to North Korean
    actions and played into their hand. I think we are now in a
    period in which we are underreacting, and I think that is very
    dangerous.
        Mr. DesJarlais. Thank you.
        Mr. Klingner.
        Mr. Klingner. North Korea is easy to ridicule, and it is
    easy to make the butt of jokes, as members of the panel have
    pointed out. It is a very real threat, a nuclear threat, a
    biological/chemical threat, that conventional forces, cyber
    threat, human rights threat, it runs the gamut, and it is not
    only against our allies, but increasingly to the United States.
        Last year three U.S. four-star commanders said that North
    Korea has a nuclear weapon that could hit the United States
    today. They must know something. A year or so ago, South Korean
    press had a lot of articles from defectors about Kim Jong Un
    had directed a new war plan be implemented after--or created
    after he came into office, so that North Korea could take over
    the peninsula in 7 days before the U.S. could flow
    reinforcements there. That would require, as directed in that
    war plan, the use of nuclear weapons. It is a real threat.
        Mr. DesJarlais. Thank you.
        Ms. Glaser.
        Ms. Glaser. It is also disheartening to me that there is an
    underappreciation for how much of a threat North Korea's
    nuclear weapons poses, and of course Israel does such a
    terrific job in Congress and in the American public at large, I
    think more can be done in the area of public education, and
    certainly hearings such as this and on North Korea's human
    rights record I think would be very important in highlighting
    this issue.
        More actions up at the United Nations as well to get more
    people involved in this discussion. Help people to understand
    that we need to really--to dissect what the threat is, see that
    it is increasingly an existential threat, and not just put this
    on the back burner. So I completely agree with--I share your
    concern.
        Mr. DesJarlais. I thank the panel, and thank you, Chairman.
        Mr. Salmon. Thank you.
        Ms. Gabbard.
        Ms. Gabbard. Thank you, Mr. Chairman. I appreciate Mr.
    DesJarlais bringing up this issue and each of you expressing
    your shared concerns about this underappreciation and really a
    lack of understanding about the threat. I represent Hawaii's
    2nd District here. And as you can imagine, being out there in
    the middle of the Pacific, every time North Korea starts making
    threats, launching these tests, this is something knowing, as
    you said, Mr. Klingner, Hawaii and the west coast, at a
    minimum, already are within range of North Korea's
    capabilities, both of an ICBM as well as a nuclear weapon.
        So this is something that really rings true and is deeply
    understood by folks in my state who recognize the need for
    stronger missile defense, who recognize the need for taking
    this threat with the seriousness that it deserves.
        I have got a few questions. The sanctions bill that we
    passed yesterday, particularly as it relates to hard currency,
    do you believe that it will have the same effect as in 2005
    when it was first put in place? For whomever would like to
    answer.
        Mr. Cha. I think the bill is great, and I think that the
    mechanism is still there to carry out the same sorts of
    targeted financial sanctioning. North Korea, since 2005, has
    tried to circumvent this. But, again, a lot of it depends on
    what entities we choose to sanction, what individuals we choose
    to target, and Chinese compliance with that.
        Having said that, I can easily imagine things that we can
    do that would not collapse the U.S.-China relationship or, as
    Mr. Sherman said earlier, not have a major effect on Wall
    Street. So there is plenty of room to operate.
        Ms. Gabbard. That will directly impact their pocketbooks.
        Mr. Cha. Yes.
        Ms. Gabbard. So along those lines, I mean, look back to
    what happened in 2005 and what led to their agreement in 2007
    when those sanctions were lifted.
        I would just like to hear your thoughts on what you see is
    a viable path forward should that end be reached, should these
    sanctions be so effective that we get to a point where we have
    got an opportunity there, understanding, really, that North
    Korea sees their nuclear program as an insurance policy against
    regime change, seeing what they learned from what happened in
    Libya with Gaddafi, and really what caused their--I think that
    window, frankly, to close, where they wouldn't trust--that if
    there was an agreement to denuclearize that the United States
    wouldn't go after them to try to implement the regime change.
        So I would just like to hear your thoughts on engagement
    with North Korea and how understanding this climate there is a
    path forward.
        Mr. Klingner. Just commenting on yesterday's bill, it
    closes a number of loopholes. It elevates a number of existing
    executive orders or regulations to legislation giving it
    additional power. It makes a number of implementations
    mandatory rather than discretionary. So I think it has--will
    provide a number of benefits to the U.S. effort.
        But the bill, as well as existing measures, it is dependent
    on the implementation and our willingness to use the powers we
    already have. Last year the executive order that was released
    in January allows the U.S. to sanction North Korean officials
    simply for being North Korean officials. We don't even have to
    provide evidence that they have conducted illegal activity.
    That gives us tremendous power. The U.S. sanctioned 16 Russian
    officials for being Russian officials after the Crimea
    incursion. We haven't used that power as much as we could.
        The target has changed. Banco Delta Asia was very effective
    because it was a very large conduit. North Korea has adapted
    since then. But it is sort of like the cockroach theory of law
    enforcement. You go into a kitchen, you turn on the light, you
    see where the cockroaches are, and where they run off to. If
    you take out the first node, the Plan A of North Korea, you
    then alert your intelligence and law enforcement authorities,
    so they watch where the money gets redirected, where the
    cockroaches go.
        Ms. Gabbard. Right.
        Mr. Klingner. It is then you go after the Plan B.
        Ms. Gabbard. Right.
        Ms. Glaser. On the issue of engagement, Congressman, as we
    talked about earlier, we have to have a strategy that deals
    with--that is composed of engagement as well as coercive steps.
    As far as I understand, the United States engages with North
    Korea. We have the channel in New York. We do talk to the North
    Koreans.
        But I think we have to be careful about agreeing to revive,
    you know, the Six Party talks mechanism, as the Chinese often
    encourage us to do, in the absence of some return to the
    commitments that the North Koreans made under the 2005 and
    other agreements.
        Now, the North Koreans want to engage in dialogue so that
    they can get a peace treaty and be recognized as a nuclear
    weapon state. I think that is a bad outcome for the United
    States and our interests and our allies.
        So we have to engage North Korea in a way that they
    understand that there are steps that they have to take. They
    have to go back to these commitments of giving up nuclear
    weapons. And if they are willing to go ahead with a freeze as a
    first step toward--with the understanding that the goal is that
    they eventually give them up, then I think the United States
    has always been willing to work with that.
        I don't think there are signs that under Kim Jong Un that
    the North Koreans are willing to engage in serious negotiations
    with the end goal of denuclearizing the peninsula. So I think
    that engagement, yes, but we have to be careful about how we
    use it.
        Ms. Gabbard. Thank you.
        Thank you, Mr. Chairman, for holding this hearing and for
    continuing to help increase awareness on North Korea's threat.
        Mr. Salmon. Thank you very much.
        The Chair recognizes Brigadier General Perry.
        Mr. Perry. Congressman Perry will be fine. Thank you.
    Thanks to the chairman. Thanks to the panel.
        A list of questions here, maybe just all at once, and if
    you would comment, you know. I understand that we are
    reportedly in talks with South Korea regarding the
    reintroduction of nuclear weapons, United States' nuclear
    weapons onto the peninsula. What is the status of that, if you
    know? Why wouldn't South Korea be interested?
        Regarding the introduction of THAAD, the missile defense
    interceptor system, why not? Is South Korea concerned that it
    would be too provocative? Why wouldn't they want that?
        Regarding curtailing conventional arms sales, how would
    that be done? Again, you know, I have been listening, as
    everybody else has, the whole time saying, ``Why aren't we
    doing this?'' And you folks are the experts and you don't know,
    but maybe you can give me some insight into that.
        And regarding increasing the pressure on their human rights
    atrocities, which are just unimaginable to me, what is the best
    way? What is the best way to do that? And from my standpoint,
    I, like you folks, don't understand at all why we are not
    imposing these financial sanctions out of hand, like with your
    morning coffee. To me, the President should just sign that and
    on with--and move on to the next terrain feature, but that is
    my perception.
        What would be the response to some of these things from our
    allies and trading partners in the region? Thank you.
        Mr. Cha. I will take a piece of those, and then I will look
    to Bruce to take other pieces of it. In terms of the why, you
    know, why haven't we done more question, one aspect of this is
    China, and we have had a very full discussion on that. I think
    the other part of it is that it is priority and commitment.
        This has not been a priority, unfortunately, even though,
    as I said, it is a very dangerous situation. And there has to
    be a political commitment to make the North Korean regime feel
    like there are costs to their behavior. There has been a
    political commitment to create the machinery, but there hasn't
    been a political commitment to implement.
        I think part of the reason there hasn't been that is that
    there has always been some hope that there is a chance for
    diplomacy, like with Iran, like with Cuba, or like with
    Myanmar. But I am of the view that we are not going to see any
    diplomacy until the end of this administration.
        Mr. Perry. If I can interrupt you, is there a downside
    risk? Because I don't see a whole lot of downside risk. I
    understand that there is no commitment to going the upside, and
    you might expend some capital or whatever. I just don't see
    any--like what do we lose by doing this?
        Mr. Cha. Well, I think the primary downside has to do with
    China and the relationship with China. At least that is the
    perceived downside. And then there is a degree of inertia. I
    think there really is a degree of inertia, because this is an
    issue traditionally that administrations want to put on the
    shelf. They don't necessarily want to commit to solve it. They
    want to put it on the shelf.
        And so there is almost a pattern to this. They do a
    provocation, we issue a statement, we slap a sanction on them,
    and everybody goes back to dealing with other issues. And that
    is a rapidly deteriorating situation.
        Mr. Klingner. If I could address them in reverse order. On
    human rights atrocities, as I have included in my statement, a
    number of cases where we have imposed sanctions and measures on
    other countries for their human rights violations but not North
    Korea, we have the authority to do so, obviously. We have done
    it to other countries. And also, the executive order of last
    January, which gives us the authority to sanction someone for
    being a member of the government.
        You know, tomorrow with his morning coffee the President
    could add 50 North Korean entities, including Kim Jong Un by
    name, as well as every agency named in the U.N. Commission of
    Inquiry report, as well as the heads of all of those agencies.
    I don't know why we don't do that.
        Curtailing conventional arms sales--the U.N. resolutions
    not only cover the nuclear and missile programs, they also
    prevent trade on conventional arms. There have been at least
    three interceptions of conventional arms shipments from North
    Korea to other nations, but apparently in the resolution
    sanction-busting hierarchy, they are not worth enforcing
    because they didn't even convene U.N. meetings about those
    violations.
        So one thing we should be pushing for at the U.N. is
    Chapter 7, Clause 42 authority, which allows military
    enforcement of the U.N. resolutions. That doesn't mean attack,
    it doesn't mean invasion, but it provides the authority for,
    say, Coast Guard interception of ships.
        We have had cases where the U.S. warships have been
    trailing North Korean freights for hundreds of miles, because
    we didn't have the authority to board or inspect them. On
    THAAD, I can send you a copy of my report on THAAD, South Korea
    has been hesitant, I believe, because of Chinese pressure and
    economic blackmail.
        But last night during a major speech President Park Geun-
    hye, I think for the first time her administration said they
    want to discuss with the United States the possible deployment
    of THAAD to the peninsula.
        And reintroducing nuclear weapons, that is very
    contentious. Both the U.S. and South Korean Governments have
    said they don't see a military necessity of putting U.S.
    nuclear weapons on the ground in South Korea, because we have
    sea-based and air-based weapons which can do the job and
    wouldn't provide a sort of preemptive target in South Korea for
    North Korea.
        Ms. Glaser. If I could just add briefly, Congressman,
    President Park has attached a great deal of priority to China,
    hopes to gain China's support ultimately for reunification, but
    also in the near term for putting more pressure on China. And I
    agree with my colleagues that I think that is the main issue
    with THAAD. I don't think that President Park is unmovable on
    this issue, and with the growing threat she may agree.
        But the Chinese seek to weaken U.S. alliances, and this is
    a major problem in trying to deal with the North Korea problem.
    Unless we can have a bigger strategy with the Chinese, make
    this a priority, and perhaps give China some of the
    reassurances that Congressman Sherman was talking about
    earlier, if we really have a reunified peninsula and we don't
    need to necessarily have troops along China's border.
        The Chinese are very concerned, though, that the situation
    could be far more detrimental to them today than--in the future
    than it is today.
        I also think there is an issue with the United States
    giving China credit for very small steps it takes--for example,
    supporting a U.N. Security Council Resolution--that it has
    diluted, prevented the application, for example, of economic
    sanctions, banking sanctions, just because the United States
    wants to isolate North Korea, and that is a valuable goal.
        Yes, we should seek to isolate North Korea, but at the same
    time we should be putting far greater pressure on China to do
    more. And the Chinese believe that the United States is not
    prioritizing this issue. They see us as having put this on the
    back burner, and so little incentive for them to attach a
    priority to it either.
        Mr. Perry. Yes. I think we just continue to reward bad
    behavior. And as much as the Chinese are I think doing a
    delicate dance with their economy and their political system,
    at the end of the day I think that it serves their purpose to
    have North Korea remain communist or totalitarian. They are
    communists at their heart, and that is what they want to
    maintain.
        And with all due respect to South Korea and the President,
    I understand what she is trying to get to. But at their heart,
    they are communists, and that is who they are.
        But thank you, Mr. Chairman, for the hearing.
        Mr. Salmon. I would like to really thank the panel members.
    I think that this has been an incredibly productive hearing.
        Congressman Perry, you asked a lot of questions I think
    that a lot of us have been entertaining ourselves. You know, a
    lot of the whys, why--you know, is North Korea less of a threat
    than they were several years ago when there was tons of media
    attention and concern across America. And just 3 short years
    ago in the Presidential debates it was front and center, one of
    the most important issues of our time.
        And the only thing that kind of comes to mind is an old
    adage, if a tree falls in the forest and nobody hears it, did
    it make a sound? And we just haven't focused the attention--
    when I say ``we,'' I don't think it has been a priority for the
    last 3 years.
        Mr. Perry. The question I have is, what is it going to
    take?
        Mr. Salmon. Well----
        Mr. Perry. And that is scary.
        Mr. Salmon. And I think that is why we are here today,
    because in the absence of leadership on this issue I think that
    that realm falls to us, that we have a responsibility then to
    stand up and try to take matters into our hands, whether it is
    trying to influence South Korea on THAAD, or whether it is
    looking at potential new sanctions or, at the very least,
    redeclaring North Korea a terrorist state.
        There are lots of options I think that are on the table,
    and that is the reason that we did the hearing today, not just
    to shine light, not just to talk, but I think our goal is to
    try to put together legislation--a bill or several bills--that
    will try to move us in the right direction.
        And my intention is to work with the panelists to try to
    craft that legislation and mark it up for a full committee
    hearing, because while other parts of the globe are in
    jeopardy, that doesn't diminish the threat that this part of
    the globe holds. And just because we are not paying attention
    to it doesn't mean that it is not a serious threat.
        And I think that it is time that we focus our attentions on
    this serious, serious, serious issue that poses a threat to not
    just our national security, our allies in national security,
    but global national security. The threat of a nut job like Kim
    Jong Un having deployment capabilities with a nuclear weapon is
    incredibly frightening.
        I think one of the things we didn't talk about today, what
    about the possibility--even if it is remote, what about the
    possibility of a partnership between North Korea and Iran? With
    all the money that Iran now has, or will have, and nuclear
    capabilities in North Korea, what about the possibility of
    joining forces to become an uber threat to everything that we
    hold dear.
        So I think that this hearing is not an ending place. It is
    a beginning place for what needs to take our attention. I
    think, Mr. Chairman, you wanted to make a comment.
        Mr. Sherman. As to our attention, they say in journalism if
    it bleeds, it leads. The Middle East, therefore, gets the
    attention, and it deserves some attention. But this North
    Korean problem is a threat to Asia and the United States.
        And then as to the possible connection between North Korea
    and Iran, we need an agreement with China that there are no
    nonstop flights between North Korea and Iran. They would all go
    over Chinese airspace. We don't have to make a big political
    deal, just inform the planes that if they want to fly over your
    airspace, they have got to stop in a Chinese city for
    refueling. It would be unsafe for them to go that extra mile
    all the way without stopping for refueling. And if that
    happens, I am sure the Chinese will take a look at the plane.
    If we don't have that, the money is there on the one hand, the
    desire for nuclear weapons, and the 12th--the 13th nuclear
    weapon goes on eBay.
        I yield back.
        Mr. Salmon. I think what is really clear is that we have to
    break outside the existing paradigm, and the status quo is not
    working. And so we have to be creative and start coming up with
    some maybe old ideas with oomph or some new ideas, and I am
    open.
        And so thank you very much for the panelists. Thank you,
    Ranking Member, and the committee members as well.
        This meeting is now adjourned.
        [Whereupon, at 10:49 a.m., the subcommittee was adjourned.]

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