[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


                   OVERSIGHT OF U.S. SANCTIONS POLICY

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

                                 HEARING

                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 13, 2018

                               __________

                           Serial No. 115-172

                               __________

        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                       KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM R. KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID N. CICILLINE, Rhode Island
MO BROOKS, Alabama                   AMI BERA, California
PAUL COOK, California                LOIS FRANKEL, Florida
SCOTT PERRY, Pennsylvania   TULSI GABBARD, Hawaii
RON DeSANTIS, Florida [until 9/10/   JOAQUIN CASTRO, Texas
    18] deg.                         ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina         BRENDAN F. BOYLE, Pennsylvania
TED S. YOHO, Florida                 DINA TITUS, Nevada
ADAM KINZINGER, Illinois             NORMA J. TORRES, California
LEE M. ZELDIN, New York              BRADLEY SCOTT SCHNEIDER, Illinois
DANIEL M. DONOVAN, Jr., New York     THOMAS R. SUOZZI, New York
F. JAMES SENSENBRENNER, Jr.,         ADRIANO ESPAILLAT, New York
    Wisconsin                        TED LIEU, California
ANN WAGNER, Missouri
BRIAN J. MAST, Florida
FRANCIS ROONEY, Florida
BRIAN K. FITZPATRICK, Pennsylvania
THOMAS A. GARRETT, Jr., Virginia
JOHN R. CURTIS, Utah
VACANT

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

The Honorable Manisha Singh, Assistant Secretary, Bureau of 
  Economic and Business Affairs, U.S. Department of State........     3
The Honorable Marshall Billingslea, Assistant Secretary, Office 
  of Terrorist Financing and Financial Crimes, U.S. Department of 
  the Treasury...................................................    10

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Manisha Singh: Prepared statement..................     5
The Honorable Marshall Billingslea: Prepared statement...........    13

                                APPENDIX

Hearing notice...................................................    62
Hearing minutes..................................................    63
The Honorable Gerald E. Connolly, a Representative in Congress 
  from the Commonwealth of Virginia: Prepared statement..........    65
Questions submitted for the record by:
  The Honorable Eliot L. Engel, a Representative in Congress from 
    the State of New York........................................    67
  The Honorable Steve Chabot, a Representative in Congress from 
    the State of Ohio............................................    87
  The Honorable Brad Sherman, a Representative in Congress from 
    the State of California......................................    88
  The Honorable Michael T. McCaul, a Representative in Congress 
    from the State of Texas......................................    91
  The Honorable Paul Cook, a Representative in Congress from the 
    State of California..........................................    93
  The Honorable Adam Kinzinger, a Representative in Congress from 
    the State of Illinois........................................    95
  The Honorable F. James Sensenbrenner, Jr., a Representative in 
    Congress from the State of Wisconsin.........................    97

 
                   OVERSIGHT OF U.S. SANCTIONS POLICY

                              ----------                              


                      THURSDAY, SEPTEMBER 13, 2018

                       House of Representatives,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The committee met, pursuant to notice, at 10 o'clock a.m., 
in room 2172 Rayburn House Office Building, Hon. Edward Royce 
(chairman of the committee) presiding.
    Chairman Royce. If the witnesses and members would all take 
your seats at this time. This is a hearing on oversight of U.S. 
sanctions policy, and this morning the committee continues to 
examine the administration's use of sanctions authorized by 
Congress to address threats from hostile states including Iran, 
North Korea, and Russia.
    As I noted at our last hearing, no matter how tough the 
language of our sanctions bills, they are only as strong as 
their enforcement.
    That's why I am glad we are joined today by two 
administration officials directing our teams on the front lines 
of this fight.
    Assistant Secretaries Singh and Billingslea, your 
assessments and your leadership are critical here. I know I 
speak for all the members of this committee in saying that I 
appreciate the magnitude of the threats you deal with every day 
in your position.
    But the question is, are we doing enough? Congress has 
acted in a bipartisan way to provide the administration with 
new tools to combat and disrupt and deter those who would do 
America harm.
    The Countering America's Adversaries Through Sanctions Act, 
which was authored by myself and Mr. Eliot Engel, empowered the 
administration with some of the most potent weapons yet.
    And to its credit, the administration has acted. Since 
January 2017, more than 200 Russian individuals and entities 
have been designated for sanctions under CAATSA and other 
existing laws. Hundreds of millions of dollars in assets have 
been blocked.
    That said, we should be doing more--we should be doing more 
to hold Putin accountable for his aggressive acts, including 
attacks on our democracy.
    The administration should use authorities included in 
Section 228 of CAATSA to cast a wider net. Those still engaged 
in significant business with designated Russian individuals and 
entities need to pay a price, as the law prescribes.
    We cannot expect Vladimir Putin and his corrupt associates 
to change their behavior in Syria, in Ukraine, or anywhere else 
until we prove we will hold them to account.
    I can't understand why action has not been taken, for 
example, against the Russian entities that provide material 
support to Iran's Mahan Air.
    This sanctioned Iranian airline reportedly transports 
weapons and personnel to Syria and still maintains routes with 
St. Petersburg and with Moscow.
    We should be examining and designating the Russian 
individuals and companies that support Mahan with maintenance, 
with ticket services, with cargo sales, and with more, and this 
is low-hanging fruit.
    In the months ahead, the committee will continue to work 
with the administration on this and other sanctions policy, 
including implementation of the Executive order announced 
yesterday regarding election interference, and we'll be 
watching to see that another tranche of sanctions is imposed 
against Russia later this year for its use of a military-grade 
nerve agent on British soil in March.
    Putin will certainly be looking for any signs that the U.S. 
is wavering. And that goes for North Korea, too. I'm very 
concerned that our maximum pressure campaign is faltering.
    Kim appears to be using talks, as he has time and time 
again, to probe for weaknesses and to buy time. When our 
messages are confusing or contradictory, we shouldn't be 
surprised when others, like Beijing, reportedly resume 
importing North Korean coal.
    Sanctions are not a silver bullet. They don't work alone or 
instantly. They are best done with others. They can be 
overdone, harming the wrong people.
    But when deployed thoughtfully and deployed consistently, 
with maximum pressure on those entities, sanctions are powerful 
diplomatic tools.
    Our goal here is to leverage America's economic might to 
peacefully and effectively counter urgent threats to our 
national security. If we are going to succeed, the 
administration needs to fully utilize the tools that Congress 
has provided.
    With that said, I think we will go to an introduction of 
the witnesses, and I think Mr. Engel intended to make an 
opening statement but if you would like, Mr. Sherman, I will 
defer to you when he arrives. He's----
    Mr. Sherman. As long as he has his time to give an opening 
statement when he arrives that's----
    Chairman Royce. He certainly does. I've communicated that. 
He is stuck in traffic at this moment.
    So we will go now to an introduction of our witnesses. So I 
am pleased to welcome Ms. Manisha Singh, Assistant Secretary of 
State for Economic and Business Affairs, and Mr. Marshall 
Billingslea, Assistant Secretary of the Treasury for Terrorist 
Financing, to the committee here today.
    Manisha Singh has been serving in her post since November 
2017. Previously, she served as the Deputy Assistant Secretary 
in the Bureau of Economic, Energy, and Business Affairs and as 
deputy chief counsel to the Senate Committee on Foreign 
Relations.
    Marshall Billingslea has been serving in his post since 
June 2017 and prior to his current role, Mr. Billingslea was 
the managing director at Deloitte Financial Advisory Services. 
He has held multiple positions within the Department of Defense 
and Department of State, and we appreciate both of them being 
here with us today.
    Without objection, the witnesses' full prepared statement 
is going to be made part of the record. Members here are going 
to have 5 calendar days to submit any statements or any 
additional questions to you or any extraneous materials for the 
record.
    So, if you would, Ms. Singh, please summarize your remarks. 
We will begin with you.

STATEMENT OF THE HONORABLE MANISHA SINGH, ASSISTANT SECRETARY, 
  BUREAU OF ECONOMIC AND BUSINESS AFFAIRS, U.S. DEPARTMENT OF 
                             STATE

    Ms. Singh. Thank you.
    Chairman Royce, Ranking Member Engel, and members of the 
committee, thank you for the opportunity to speak with you 
today regarding the administration's sanctions policy.
    As the head of the Bureau of Economic and Business Affairs 
at the State Department, I will address from a foreign policy 
perspective how the Trump administration is employing sanctions 
as a critical component of our national security.
    The State Department works closely with our allies and 
partners to ensure that diplomatic pressure is applied with 
strength, unity, and consensus.
    President Trump's national security strategy declares that 
we will deploy economic pressure on security threats and that 
we will use existing and pursue new economic authorities and 
mobilize international actors to increase pressure on threats 
to peace and security in order to resolve confrontations short 
of military action.
    We appreciate the opportunity to work with Congress to 
shape and craft these authorities in a manner which will 
achieve American national security objectives.
    Russia poses a threat to our national security on many 
fronts. Our sanctions programs have imposed substantial costs 
on Vladimir Putin and serve to deter the nefarious activities 
under his regime.
    We have witnessed Russian aggression globally threatening 
our partners and allies, threatening our very own democratic 
process here at home.
    U.S. sanctions are intended to heighten the pressure and 
curb Russian destructive activities worldwide. Specifically, 
the Trump administration has sanctioned a total of 229 
individuals and entities for their involvement in Russia's 
dangerous behavior.
    Notably, 136 of these designations were imposed under 
sanctions authorities codified by CAATSA. These actions have 
sent a stark message that those who support election 
interference, human rights abuses, and other malign activity 
will suffer severe consequences.
    Another nefarious regime where economic penalties are a key 
tool to force behavioral change is Iran. Sanctions on the 
Iranian regime have crippled their government by preventing 
access to the global financial system and by deterring its 
capacity to destabilize.
    On May 8th, President Trump announced that the U.S. was 
ceasing its participation in the flawed Joint Comprehensive 
Plan of Action. Secretary Pompeo has formed an Iran action 
group and outlined 12 specific changes in Iranian behavior, 
which are detailed in my testimony for the record.
    Teams from the State Department and the Treasury Department 
have now visited over 30 countries around the world, engaging 
with our partners and allies on a new strategy for dealing with 
Iran.
    The Iranian regime has a choice to make--either come to the 
table to resolve these issues diplomatically or face 
unrelenting economic pressure.
    If we see the fundamental desired changes in behavior, only 
then will be consider easing the pressure of sanctions.
    Turning to North Korea, our severe economic pressure 
continues and has yielded the outcome of the first meeting 
between a North Korean leader and a U.S. President.
    The Trump administration is committed to working toward a 
complete verifiable irreversible denuclearized North Korea. 
Secretary Pompeo has an unwavering commitment to this result.
    The administration has a number of sanctions authorities 
that apply to the DPRK. These authorities limit its access to 
technology and equipment that could be used to support its WMD 
and missile programs and hold the regime accountable for its 
widespread human rights abuses.
    We have urged all United Nations members states to take 
firm action in applying pressure to the DPRK. International 
solidarity and continued pressure are imperative until the DPRK 
denuclearizes.
    Turning to the Western Hemisphere, in Venezuela we are 
using sanctions to address the Maduro regime's authoritarian 
rule. Our goal is to create the conditions for restoration of 
democracy in the interest of the Venezuelan people.
    Let me also note the administration's commitment to fully 
implement the Global Magnitsky Human Rights and Accountability 
Act, which advances the best of America's values abroad.
    I've listed a few examples from the many actions the Trump 
administration has taken to utilize sanctions pressure as an 
instrument of powerful diplomacy.
    We look forward to continuing to work with you to ensure 
that sanctions remain an effective tool which work in the 
interest of American national security.
    I'd be happy to answer any questions you might have.
    [The prepared statement of Ms. Singh follows:]
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    Chairman Royce. Thank you, Ms. Singh.
    We'll go now to Mr. Billingslea.

  STATEMENT OF THE HONORABLE MARSHALL BILLINGSLEA, ASSISTANT 
SECRETARY, OFFICE OF TERRORIST FINANCING AND FINANCIAL CRIMES, 
                U.S. DEPARTMENT OF THE TREASURY

    Mr. Billingslea. Thank you, Chairman, members of the 
committee. It's great to be back here with the committee today 
to discuss how the Treasury Department is using our authorities 
in support of our national security strategy and our foreign 
policy.
    It's a broad waterfront to cover. We are talking about 
Iran, North Korea, and Russia, among many other topics today, 
and so I will attempt to touch on each of these briefly.
    Each of these countries poses its own unique particular 
challenge to the United States and our allies in the 
international order but there are some common threads that link 
the three together.
    Iran is the world's leading sponsor of terrorism and they 
continue to fund groups such as Hezbollah and Hamas and they 
bankroll the Syrian regime's slaughter of its people while 
continuing to advance their own missile program and sow 
regional instability.
    Russia, on the other hand, is providing weaponry and 
defense material to Iran and extensive support to the Syrian 
regime that enables Assad's brutal targeting of his own 
citizens, and further, Russia continues its occupation of 
Ukraine and Crimea and subversion of Western democracies and it 
remains a very permissive environment for North Korean 
procurement efforts to circumvent the U.N. Security Council's 
resolutions and our own actions.
    And then, of course, North Korea continues to attempt to 
evade international sanctions and pressure and has not yet 
abandoned its weapons of mass destruction or missile programs.
    So on the one hand, all three of these countries use 
similar tactics to exploit the global financial system, 
particularly as they establish an employee front and shell 
companies they try to mask the origin of the beneficial 
ownership associated with illicit flows and to disguise the 
nature and the intent behind certain transactions.
    And, very importantly, all three collude with one another 
in an effort to blunt the effectiveness of our actions. But, on 
the other hand, these three countries are very dissimilar in 
terms of the size of their respective economies and the extent 
to which they have businesses intertwined with global supply 
chains and in the degree to which their financial sectors are 
connected to the global system.
    And for these various reasons, our sanctions programs have 
to be nuanced and have to be tailored to address each of these 
challenges.
    I am going touch briefly on all three countries. First, on 
Iran--as the Assistant Secretary of State mentioned, the 
President's decision on May 8 has now set in motion the 
reimposition of a wide range of sanctions, and this is 
occurring over a 180-day period that were structured in two 
phases, and the intent here was to give businesses--global 
businesses a chance to wind down their business operations with 
the Iranians prior to the full imposition of sanctions of 
November 4.
    On November 4, we will reimpose far-reaching sanctions on 
Iran's energy and shipping sectors and on foreign financial 
institutions that conduct business with the Central Bank of 
Iran and other designated Iranian banks, and we are going to 
very aggressively enforce these authorities.
    Mr. Chairman, you mentioned in your opening comments Mahan 
Air and I could not agree with you more. It's not just Mahan 
flying. Mahan is the airline of choice for the Quds Force. When 
they want to move weaponry, money, foreign fighters, Mahan Air 
is by and large the airline they select for these operations. 
It's their covered air asset program.
    We need to go after Mahan and we are going after general 
service providers and third parties, imposing secondary 
sanctions. You mentioned Section 228. Secondary sanctions are a 
very powerful tool and we have begun designating companies that 
foolishly remain intertwined with Mahan Air.
    We did so in the case of Malaysia. Other actions are 
imminent. I also find it objectionable that certain countries 
who are close partners of ours who are threatened by the 
Iranians continue to allow Mahan to fly into their cities in 
the Middle East, and so this is a matter we very much see eye 
to eye on and we will continue to target.
    Our efforts, together with Iranian economic mismanagement 
and corruption, are already generating results and I show for 
the committee here today I think one of the most important 
financial metrics to keep your eye on in the coming days and 
that is the value of the Iranian rial as compared to the U.S. 
dollar.
    We have never seen a precipitous drop like this in the 
history of our sanctions programs on Iran. The Iranian rial is 
now trading somewhere around 140,000 to the dollar. It's lost 
more than two-thirds of its value, and why this is important is 
that the Supreme Leader has got to make a choice.
    He can either take his scarce dollars and euros as hard 
currency to prop up his rial or he can continue to allow Qasem 
Soleimani and the Quds Force to loot the Central Bank, to 
divert money--$700 million a year they give to Hezbollah alone. 
But they can't have it both ways. He's got to make a choice and 
we intend to force him into that decision.
    Very briefly, turning to Russia, the Assistant Secretary 
has summarized our actions on Russia. We have sanctioned 212 
Russia-related individuals and entities and we have targeted 
key sectors of their economy.
    On April 6th, we designed seven of the big fish oligarchs. 
These are individuals that the previous administration was 
unwilling to touch. But we did reach out and touch them in a 
very clear fashion and our actions have undeniably been felt. 
When we took that action, the Russian stock market experienced 
its biggest plunge in 4 years and the ruble still has not 
recovered its value. Oleg Deripaska, one of the elites who 
serves as a major proxy for the malign activities of the 
Kremlin, has seen his estimated net worth cut in half. Others, 
like Viktor Vekselberg, have lost $3 billion as a result of our 
actions.
    On North Korea, I have to assure you, Mr. Chairman, we are 
not faltering on the economic pressure campaign. We are not 
stepping away from this one iota.
    The pressure is on and we continue to ramp up pressure to 
combat North Korean efforts to evade sanctions. We are very 
focused on deceptive shipping practices in particular and ship-
to-ship transfers of oil and coal to get around the U.N. 
Security Council's embargoes on those products, and we have--
you will have seen since August that nearly every single week 
we are targeting entities involved in helping the North Koreans 
evade these sanctions.
    In fact, today we are issuing designations just about now 
at this moment on a number of entities that are employing North 
Korean slave labor in the IT sector, and these companies are 
located in Russia and China but we have in recent days 
designated a Russian bank for facilitating trade with the North 
Koreans. We designated a port operator that was willingly 
helping circumvent the shipping sanctions, and so on.
    So we will continue this economic pressure campaign until 
denuclearization is achieved.
    Mr. Chairman, in conclusion, my written testimony contains 
a great deal of additional details. I am pleased that you 
incorporated that in the record and I look forward to answering 
all questions from the committee.
    [The prepared statement of Mr. Billingslea follows:]
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    Chairman Royce. We thank you, Mr. Billingslea.
    On August the 8th, because of this committee's persistence, 
the administration announced new sanctions on Russia for its 
poisoning of a British citizen and the poisoning of his 
daughter and, as you know, another British citizen lost their 
life as a result, and that poison was with a chemical nerve 
agent.
    This poisoning was an outrageous act that demands a strong 
response. Under the Chemical and Biological Weapons and Warfare 
Elimination Act of 1991, if Russia does not take certain steps 
by November, including allowing the U.N. or other international 
observers to conduct on-site inspections, the administration 
will have to impose additional, more severe sanctions on 
Moscow.
    Should Russia not take the steps necessary required under 
the Chemical and Biological Weapons Act, as we all suspect they 
will not, is the administration prepared to take the strongest 
necessary action, and that means, for example, things like an 
export ban or an import ban, air transportation ban, bank loan 
prohibitions?
    I would ask you, Ms. Singh, if you would give me your 
observations.
    Ms. Singh. Thank you, Mr. Chairman, and the answer to that 
is yes, absolutely. We are well aware of the impending deadline 
on the second tranche of sanctions to be issued against Russia 
the CBW. We are watching their actions.
    We have indicated to them that they can evade--they can 
make themselves not subject to these sanctions if they allow 
the onsite inspections, as you have indicated, if they give us 
a verifiable assurance that they will not use these nerve 
agents against their own people again. They have not done so so 
far.
    So to that extent, we are looking at this November deadline 
as absolutely we plan to impose a very severe second round of 
sanctions under the CBW.
    The global community will not tolerate behavior such as 
we've seen from Russia, especially in poisoning and killing its 
own citizens.
    Chairman Royce. Thank you.
    On North Korea, while we can be hopeful, so far there has 
been little progress toward North Korean denuclearization.
    We must keep up the pressure on the North Korean regime if 
we are to have a chance at getting a good deal, and to that 
end, Title 3 of the Countering America's Adversaries Through 
Sanctions Act requires that the administration designate the 
shipping registries of countries that deliberately do not 
comply with U.N. Security Resolutions barring trade with North 
Korea, and you addressed that, Mr. Billingslea. You mentioned 
actions the administration has taken, and let me also add I 
find effective the focus on North Korean slave labor, given the 
amount of hard currency, since those workers are fed but the 
money--the check--goes to the regime and ends up going toward 
their military programs. That is an effective program.
    But when will the administration begin implementing 
sanctions against not just the shipping registries of 
individual companies but the shipping registries of 
governments, and let me explain where I am going there.
    We are not talking here about shippers. We are talking 
about governments that knowingly violate these U.N. Security 
Council resolutions on North Korea and that is a two-fer in 
this case because it puts the pressure on Pyongyang but it also 
puts the pressure on Tehran, since Tehran is involved in that 
kind of work.
    I wanted to ask you if the administration will consider 
blacklisting Iran's shipping registry due to their deliberate 
violations of such resolutions that have been passed at the 
Security Council level.
    Mr. Billingslea. Chairman, thanks for that question.
    The short answer is that many countries have different ways 
that they maintain shipping registries. In some cases, it's 
even a commercial vendor that provides the registering process.
    I've been active with a number of the countries that are 
flags of convenience nations such as Panama and others to 
identify specific vessels that we know are in fact owned and 
operated by North Korean shell companies to get them to 
immediately de-register, de-flag, de-list these companies and I 
think we've had, together with the Department of State, a very 
high success rate when we have the facts at our disposal.
    Chairman Royce. Panama is complying with your request at 
this moment?
    Mr. Billingslea. Panama has done a great job on this. We 
see them pop up in Micronesia a fair amount now and we are 
working very closely with the Australians and the New 
Zealanders on that.
    We also are designated specific companies and their ships. 
We just went after a Russian company and six of its vessels for 
engaging again in this ship-to-ship transfer behavior, which is 
the primary method by which North Korea is undercutting the 
intent of the Security Council. We have got to clamp down on 
these ship-to-ship transfers in open waters.
    Chairman Royce. I will be in further discussions with you 
about the Iranian Government's shipping registry on this issue 
as we press this point.
    Mr. Billingslea. Thanks, Chairman. That's a good point, 
because on November 4, we are reimposing sanctions on the 
Iranian shipping lines--IRISL and some of the other associated 
companies.
    Chairman Royce. All right.
    Let's go to Mr. Eliot Engel of New York for his opening 
statement and then afterwards for his questions of the 
witnesses, and I thank you both for your testimony here today.
    Mr. Engel. Thank you very much, Mr. Chairman, and thank you 
for calling today's hearing, and Assistant Secretary Singh and 
Assistant Secretary Billingslea, welcome, and thank you for 
your service and your time this morning.
    We appreciate having administration witnesses here, but if 
I have to be honest I have to say it happens too rarely. Since 
coming into office, frankly, the administration has been 
increasingly reluctant to work with Congress. That's how it 
seems to us and it's very, very frustrating. But we are happy 
you're here.
    The latest example pertinent to our conversation this 
morning was the development of this week's Executive order on 
sanctions. There was no discussion of this effort with Congress 
whatsoever. We learned about it from Reuters, and from what I 
hear, your agencies were caught equally by surprise and, 
obviously, that's not the way it's supposed to work.
    So I want to use this time that we do have administration 
officials before our committee to tackle this important topic.
    Sanctions can be a very effective tool to achieve our 
foreign policy objectives. But I am concerned that this 
administration is turning reflexively to sanctions instead of 
taking the harder look at how they should fit into a broader 
strategy. Sanctions are a tool. They are not, by themselves, a 
strategy.
    I am also troubled by the administration's reliance on 
using unilateral sanctions without developing support among our 
friends and allies. It's a standard practice, apparently. I 
don't know why.
    We need to check in with other governments that share our 
priorities. The power of sanctions is, obviously, amplified 
when we build support among other countries.
    When we act alone without consulting our partners, we run 
the risk of them in turn acting in ways that undercut our 
goals.
    And, for example, Iran--we pulled out of the nuclear deal 
and sort of left our partners and allies sort of twisting in 
the wind.
    Now, I didn't vote for the Iran deal. I was not happy with 
it. But it became the law and we were pursuing it, and now, 
going against our allies and isolating us instead of isolating 
Iran I think is the wrong way to go.
    So facing the threat of U.S. sanctions it seems to me we've 
pushed foreign governments closer to Tehran rather than further 
away from Tehran. These are the same allies who stood beside us 
as we dialled up pressure on Iran.
    And so by embracing a unilateral sanctions approach without 
a clear objective, we created a situation, I believe, 
counterproductive to our own policy goals and I am concerned 
that we still don't have a clear long-term strategy for Iran.
    The administration uses loud rhetoric but there's little 
substance, I find, behind the tough talk. So if sanctions don't 
bring Iran to the table, what is the administration's Plan B?
    For sanctions to be effective policy tools, they must work 
in conjunction with a broader diplomatic effort and actually I 
think diplomacy seems to be sidelined as a foreign policy tool.
    We see it again when it comes to the approach to North 
Korea. Despite the President proudly boasting success after the 
June summit, there's been no progress on denuclearization.
    In fact, it now seems the so-called success has turned into 
a failure. We need to think about how sanctions play into our 
broader strategy if we have one. What are we doing to exert 
pressure on our international partners to keep up multilateral 
sanctions enforcement?
    Do we have any reason to believe that sanctions will be 
enough to convince Kim to give up his nuclear weapons without a 
broader diplomatic strategy to provide him a compelling reason 
to do so?
    What are we doing outside of sanctions to build trust and 
reassure the North Koreans that we are committed to peace?
    These are important questions that obviously we need to 
consider. Now, there is, of course, one glaring exception to 
the rule and that's the one in which the Trump administration 
has been remarkably restrained in its use of sanctions. Russia.
    To be fair, the administration has imposed new sanctions 
against the Russians. But the sanctions they have put forward, 
in my opinion, amounts to a Band-Aid on a bullet wound.
    In 2016, our country was attacked. Russia conducted cyber 
attacks to steal and disseminate information with the specific 
goal of helping Donald Trump win the presidency.
    They attacked our election institutions and flooded 
cyberspace with divisive propaganda and they haven't stopped 
the assault. Our elections are vulnerable to Russian influence 
at this very moment.
    Now, I am going to be just as outraged if they try to help 
Hillary Clinton. I want them out of American politics. They are 
not our friends. They are our adversaries, and I don't want 
them interfering with our American democracy.
    And we haven't done nearly enough to stop it. The President 
has many sanctions tools at his disposal to punish the Russians 
for their attack on our democracy, and instead of using the 
full force of U.S. sanctions power, he cozies up to Vladimir 
Putin, the very man who directed this assault--the former head 
of the KGB in the Soviet Union.
    And let me say the Executive order announced yesterday is 
not really an answer to this problem. It creates a complicated 
overly broad process that will not do much to deter the ongoing 
attack on American democracy. It reminds me of being too little 
too late.
    I want to note that we in Congress could be doing more as 
well. My bill with Mr. Connolly, the Secure Our Democracy Act, 
is a response with real teeth. We introduced it last January 
when we first got a clear picture of what the Russians did in 
2016.
    But it hasn't really moved, and here we are, less than 2 
months from an election and I don't think we've done nearly 
enough to tackle this threat. We are vulnerable to more 
attacks. It's imperative that we act now.
    We need to punish those who attacked our democracy and work 
to deter future attacks. We need to incorporate a stronger 
sanctions regime into a broader strategy to deal with Russia's 
aggression and utter disrespect for international rule of law.
    So I would like to know when you answer these questions 
what your agencies are doing to meet this challenge as well as 
the other range of issues I've mentioned.
    That's my statement. So let me take Iran and then Russia. 
Well, actually let me do Russia first and then Iran.
    Why is the administration not utilizing the full range of 
sanctions that Congress passed last year in CAATSA, notably, 
the sanctions on Russian energy projects and against Russian 
arms exports?
    Mr. Billingslea. Thank you, Ranking Member Engel. I think 
I'll take the Russia questions and Secretary Singh will----
    Mr. Engel. Could you put your microphone a little closer, 
please?
    Mr. Billingslea. Yes, sir.
    Mr. Engel. Thank you.
    Mr. Billingslea. So, again, appreciate the chance to be 
here. I've had the opportunity--every single time you have 
invited me to testify I've been pleased to accept and appear 
before your committee----
    Mr. Engel. And we appreciate it.
    Mr. Billingslea [continuing]. And it's great to be here. We 
look to your support on these issues.
    Look, on Russia the numbers speak for themselves. The Obama 
administration imposed 550 sanctions over its 8 years in 
office. In the time we've been in office, we've imposed 223 
sanctions. We've imposed three times as many sanctions on 
Russia for their cyber-related activities in our first 20 
months as compared to all 8 years of the previous 
administration, 50 percent more on blocking actions, the same 
number of banks that we've gone after that they went after, 14 
times as many Russian sanctions for North Korea-related 
behaviors, and on top of that, as I described in my opening 
remarks, the oligarchs that we have targeted are the big fish.
    They are the inner circle around Putin. The message has 
been sent very clearly by the Treasury Department that there 
will be consequences and costs including personal costs imposed 
for the intolerable and unacceptable continued efforts to 
manipulate our electoral processes. We will not tolerate this, 
we will not agree to it and there will continued consequences.
    Mr. Engel. What about the sanctions on Russia's energy 
projects and Russian arms exports? Those really--the full range 
of sanctions that Congress passed have not been implemented.
    Mr. Billingslea. So, Ranking Member, you're putting your 
finger on a very important issue. We have designated a few 
months ago Rosoboronexport which is the arms sale entity of the 
Russian Government. It's the group that arranges all of the big 
sales and we also designated their bank, the bank 
Rosoboronexport controls, which has made it very difficult for 
them to engage in a number of transactions.
    We are, together with the Department of State, following 
very closely Russian sales pitches regarding the S-400 systems 
and other weaponry systems and we've made incredibly clear to a 
number of countries around the world that purchasing those 
systems would expose their country under CAATSA to possible 
additional sanctions.
    Mr. Engel. Okay. Thank you.
    Let me ask a quick Iran question. If any of the major 
buyers of Iranian crude oil, which is China, India, Japan, 
South Korea, and Europe--if they refuse to sharply cut their 
purchases, are we really prepared to cut their banks off from 
the global banking system, which is the penalty under the U.S. 
sanctions?
    Are we really prepared for that? An ancillary question with 
that is how will that contribute to our goal of constraining 
Iran and how would it affect our relations with these countries 
who are, generally, some of whom are our friends?
    Ms. Singh. Thank you, Ranking Member Engel, for that 
question.
    In response, we are prepared to take the most serious 
actions possible on Iran. We need to demonstrate to the Iranian 
regime that we will not tolerate its development of a nuclear 
program for illicit purposes.
    As Assistant Secretary Billingslea has mentioned, the 
flawed Iran nuclear deal was determined not to be the right 
vehicle to address the range of Iran's maligned behavior. We 
are having conversations with our allies and our goal is to 
get--purchase of Iranian crude oil down to zero by November 
5th.
    That's a critical goal for us. We are talking with all of 
our allies including the countries that you mentioned, helping 
them to understand that the only way that we can achieve this 
global goal of Iran's nuclear program not commencing is through 
partnership and cooperation with our allies, as you have 
indicated.
    So we are working with them. We are trying to explain to 
them that the bigger picture here is we need to work together 
on putting this pressure onto Iran and the sales of oil are a 
critical way to do that.
    We are prepared to take the strongest actions possible on 
people who will not assist us in complying with this new range 
of sanctions that we are putting back into place.
    I also wanted to address your earlier question about 
cooperation with allies. Secretary Pompeo and Secretary Mnuchin 
have directed teams from the State Department and Treasury 
Department to travel together. We've visited over 30 countries 
so far and sat down with our Government counterparts and talked 
through with them our withdrawal from the JCPOA. We are trying 
to help them understand what it means for them.
    We are trying to engage in all kinds of diplomatic 
conversations to make sure that our allies don't feel like we 
are going at it alone. We are explaining to them that we need 
to work as a global community to address Iran's range of malign 
behavior.
    So I just want to assure you that it is a priority for 
Secretary Pompeo that we do this on a basis of engaging with 
our allies.
    Mr. Engel. Let me ask you one final question.
    China is Iran's top, top oil purchaser. Will they get to 
zero by November?
    Ms. Singh. We are working with all countries including 
China to get them to zero. We've made it clear that unless we 
act as a global community, Iran's behavior is not going to 
change.
    The JCPOA was not going to change Iran's behavior. We have 
a new strategy, a new list of behaviors that we are going to 
insist that they take and we need cooperation from the global 
community in order to achieve this goal.
    Mr. Engel. Thank you.
    Thank you, Mr. Chairman.
    Chairman Royce. Joe Wilson, South Carolina.
    Mr. Wilson. Thank you, Mr. Chairman, and thank you, 
Secretary Singh and Secretary Billingslea. Thank you for your 
service and it's so positive to hear your messages.
    And, in particular, Secretary Billingslea, you mentioned 
about the impact of the sanctions. The President was very 
courageous to pull out of the flawed Iranian nuclear deal.
    So, Secretary Singh, you are absolutely correct. They never 
stopped their policies of ``death to America'' and ``death to 
Israel.'' And so it is just refreshing that we have a President 
who has made promises--he's keeping his promises to protect 
American families.
    In line with that, I was really impressed, Secretary 
Billingslea, with your presentation of the effect on the 
Iranian economy. Just extraordinary, and we are hopeful for the 
people of Iran--that this great people of Persian heritage that 
they can re-establish a free and democratic society.
    I also was encouraged, Secretary Singh, by your pointing 
out that visiting with 30 different countries around the world 
to promote cooperation. It somehow is misreported by the 
negative media that nothing is being done. So thank you. I hope 
some who that might be picked up because it is really positive.
    And for Secretary Billingslea, what role do you see for 
Congress in the process of implementing the sanctions in line 
with the new policies? Are there any new tools that we could 
provide from Congress that would be bipartisan?
    Just as Ranking Member Eliot Engel did not approve of the 
Iranian nuclear deal, we have worked bipartisanly together, 
particularly on this committee.
    Mr. Billingslea. Thank you, Congressman, and your continued 
support--I think your support in the context of the Foreign 
Affairs Committee I have to tell you how crucial it is that we 
have fully staffed Embassies globally, particularly in the 
regions where we are dealing with Iranian aggression, Russian 
interference activities, and so on.
    It's not always the case that I am actually able to engage 
with a confirmed Ambassador in some of these key countries. So 
that would be an area for help.
    From a parliamentary engagement standpoint, as you work 
with other governments and other parliamentarians, reinforcing 
the need for countries to establish and enforce effective anti-
money laundering regimes is so crucial.
    I can't tell you how important that is. I mentioned Panama, 
where there's a lot of offshore shell company formation in 
Panama. But other countries like Latvia, Cyprus, they need help 
as well and they need encouragement.
    In terms of additional authorities, we'd be happy to work 
with the committee on that. I have testified in front of the 
House Financial Services Committee about the fact that I found 
in previous positions the ability to offer rewards information 
that leads to the identification of suspicious bank accounts or 
other things to be a valuable tool in the counterterrorism 
context. So measures such as that might also be very helpful.
    One key point on maintaining, and I think Ranking Member 
Engel makes a good point about the importance of doing things 
in a multilateral context as best we can. That's not always 
going to be the case. Sometimes we do have to act on our own to 
protect our own interest in equities.
    But in the case of Iran, it is absolutely the case that we 
enjoy broad support. We, in fact, received the support of all 
six of the Gulf countries to designate the leadership council 
of Hezbollah. That is something that has never happened before. 
That's a big deal, and we are appreciative for the Gulf nations 
that they are supporting us on the Iran portfolio.
    Mr. Wilson. Thank you, Mr. Secretary.
    And Secretary Singh, again, it was refreshing to hear your 
reports of working with other countries, how meaningful that 
can be.
    And particularly, back to Hezbollah, it remains as one of 
the most deadly terrorist organizations in the world, 
responsible for the deaths of hundreds of Americans.
    In addition to funding from Iran, Hezbollah runs a 
sophisticated network of criminal activities to fund its 
terrorist activities in Lebanon and throughout the world.
    Secretary Singh, what are the steps by the department to 
stop flow of resources to Hezbollah, particularly from Iran?
    Ms. Singh. Thank you, Congressman, for that question. You 
have hit on exactly the type of thing that we are trying to 
prevent. We have found that cutting off Iranian access from the 
global financial system cripples its ability to funnel money to 
organizations like Hezbollah.
    As Assistant Secretary Billingslea has detailed, the fall 
in the value of the Iranian currency has also had a huge impact 
on the Iranian Government's ability to fund illicit activities 
by terrorist organizations.
    One of our key goals is to prevent Iran from supporting an 
organization like Hezbollah.
    Mr. Wilson. Again, thank both of you for your service. It's 
extraordinary. Thank you very much.
    Chairman Royce. Mr. Brad Sherman, California.
    Mr. Sherman. I want to commend your work. Sometimes we just 
sanction an individual, and if that individual has no assets in 
the United States we are just basically saying we have a no war 
criminals at Disneyland policy. That is to say, the wrongdoing 
individual will never be able to be a tourist in the United 
States, and I hope we focus more on sanctioning countries where 
we can go after the economy, maybe multi-billionaires who would 
naturally have business in the United States. But sanctioning a 
few individuals in St. Petersburg just means they'll go to Euro 
Disney instead of Disneyland, in some cases.
    It's integral to build and important to build support for 
our sanctions. What worries me with regard to Iran is not only 
may the tool not work if you don't have support in Europe and 
Asia, but you may break the tool.
    If we inspire Europe to develop payments systems that avoid 
U-turn transactions at the New York Fed, then we won't have 
that tool to be effective in future sanctions regimes.
    In order to build support for sanctions on Iran, instead of 
focusing on the JCPOA, which Europe does not believe is a 
reason to sanction Iran, we need to focus on Syria, Yemen, and 
their terrible abuse of their own LGBT community.
    As to Mahan Air, it may not be enough to sanction the 
individual companies. They have to sanction the airports. I am 
told that Ukraine has finally stopped, given their dependence 
on the United States. That should never have happened--at least 
it stopped.
    I want to focus on Russia. Many reasons to sanction 
Russia--from the Ukraine to Salisbury, England--and I want to 
focus, though, on interference in our election.
    I am not just talking about influencing. Every country 
might issue a press release that would affect a U.S. election. 
We might conclude a deal with some country in October. That is 
natural and sometimes designed to affect a U.S. election.
    I am talking here about interference such as false flag 
advertising, cyber theft, and attempts at manipulation of the 
tabulation of our votes.
    Mr. Billingslea, is it the position of the administration 
that the Russian state illegally interfered in the 2016 
election?
    Mr. Billingslea. That's my understanding of the 
intelligence community's assessment. And from everything I've 
seen I think that's----
    Mr. Sherman. Have we imposed a sanction on the Russian 
state for their interference in our 2016 election?
    Mr. Billingslea. Yes. But let me explain. Let me explain 
how I am getting to that yes.
    Mr. Sherman. Well, there are 19 individuals who we--and, 
again, this may just be they're not allowed to visit the United 
States as tourists, but there are 19 individuals who are 
sanctioned for wrongdoing in the cyber world and that may or 
may not--if they had not--even if we hadn't had a 2016 election 
they might face the same sanctions for other cyber wrongdoing. 
Can you point to a--what's the strongest thing you can point to 
and say but for the interference in our election that sanction 
wouldn't exist?
    Mr. Billingslea. Well, I will give you some very clear 
examples. So Yevgeny Prigozhin and the Internet Research 
Agency, which is the troll farm they were using to try to spin 
up the hate on both sides of the political spectrum is a great 
example. But I've gotten many, many more if you'd like.
    Mr. Sherman. Okay. What have we done--so you're saying that 
that's a sanction against the Russian state or against a 
Russian----
    Mr. Billingslea. The thing with the Russians, and I mention 
in my testimony how each of these countries is different in the 
way they operate.
    Mr. Sherman. Right.
    Mr. Billingslea. The Russians are----
    Mr. Sherman. Okay. So they've interfered in our election 
and we tell them that one little entity won't be able to get 
some contracts. That seems like responding to Pearl Harbor with 
a strongly worded message.
    Mr. Billingslea. Taking their stock market down by 9 
percent in 1 day is not----
    Mr. Sherman. Well, do you support legislation that would 
prevent U.S. persons from buying Russian sovereign debt?
    Mr. Billingslea. I would have to get back with the other 
part of Treasury that does the international affairs work to 
make sure we understand what the knock-on consequences of that 
would be for our banks and for our citizens who are heavily 
leveraged into indexed mutual funds.
    Mr. Sherman. Well, we'd obviously give those funds a chance 
to divest themselves. But, obviously, no additional purchases 
could be made.
    Ms. Singh, China may be incarcerating as many as 1 million 
Uighurs right now. Are we going to apply Magnitsky Act 
sanctions?
    Oh, did I say Russia? I meant China. China is imprisoning 
perhaps 1 million. Are we going to use the Magnitsky Act 
against them?
    Ms. Singh. Thank you, Congressman, for that question.
    The State Department is very concerned about Chinese 
treatment of Uighurs. We are encouraging the Chinese Government 
through diplomatic channels to ensure that they allow the 
practice of freedom of religion, to respect human dignity.
    Mr. Sherman. But this is a hearing on sanctions. Are we 
going to sanction them?
    Ms. Singh. Yes, Congressman.
    When it comes to sanctions roll-outs, we are not able to 
preview what we might do. But I can tell you we are looking at 
the situation and Global Magnitsky is a tool that we use to 
curb human rights abuses around the world.
    Mr. Sherman. It's peculiar you can't talk to Congress about 
what you might do. But I yield back.
    Chairman Royce. We go to Mr. Ted Yoho of Florida.
    Mr. Yoho. Thank you, Mr. Chairman. I would like to thank 
both of you for being here today.
    And when you look around the world there's a lot of enemies 
that are not treating us real nice and they're going after a 
lot of different systems and our electoral system.
    And then you throw North Korea in there and what China is 
doing to march around the world and take over global dominance.
    What we have done is--this committee and I think this 
committee has been great at passing bipartisan legislation to 
give you guys tools, and we are separate branches of government 
but yet we can work coherently together to accomplish that 
goal.
    And as you know, this committee has for years, regardless 
of administration, led the way in pressing for increasing 
pressure on North Korea.
    As the chairman, along with others on the committee, has 
passed H.R. 1771, the KIMS Act, and other bills to tighten the 
screws on the Kim regime, the Trump administration deserves 
credit for sanctioning the Bank of Dandong and others, and I 
have little doubt that these measures are what drove Kim to the 
negotiating table. I think that's pretty self-evident that he 
came to the table.
    Without question, we are playing a winning hand with strong 
sanctions and we can't back off, and we are in a different 
situation now that I want to address.
    However, I am concerned that we are not taking full 
advantage of our strong position. In May, Ranking Member Mr. 
Sherman, on the Asia and the Pacific Subcommittee, and I wrote 
a letter to Secretary Mnuchin encouraging Treasury to target 
larger financial institutions that have been implicated in 
laundering North Korea's illicit funds with secondary 
sanctions.
    As you may recall, we specifically highlighted the 
Agricultural Bank of China and the China Construction Bank. 
Given evidence that customers have used accounts at these banks 
to launder money for North Korea, to date we have not received 
a response to our letter and these Chinese banks remain 
unsanctioned.
    Do you have any idea or comment on where we are at with 
that? Is that going to happen?
    Mr. Billingslea. Well, first of all, let me apologize if 
the letter has gone unanswered. That's----
    Mr. Yoho. It's all right. I get that same response from my 
constituents. [Laughter.] Occasionally.
    Mr. Billingslea. So we'll get on that and get you the 
response.
    You're correct, we have not sanctioned those two particular 
banks at this stage. We have very recently designated a Russian 
bank for continuing to facilitate trade with North Korea.
    Mr. Yoho. Are we going after the bigger ones? Because 
secondary sanctions are some of the most powerful tools that we 
can have. And we can give you the tools. We can give you the 
tools, but if you're not using them and it's at your 
discretion, are you looking at these banks as too big to fail 
or too big to sanction, I guess?
    Mr. Billingslea. Definitely you have to look at some of the 
Chinese banks and recognize that they have, under their 
management assets that really, in several cases, dwarf anything 
under the management of a U.S. bank--the largest U.S. bank.
    So we have to keep that in mind. But that's not going to 
deter us.
    Mr. Yoho. I would hope not.
    Mr. Billingslea. What I would say is with a big bank, 
though, where they've got a lot of diversified activities, what 
we are doing is engaging in very specific discussions with the 
banks, particularly through their New York operations, to drill 
down into the particular account holders that we believe are 
North Korean related to get them to expunge those people from 
their bank rolls, and we have made some pretty good progress 
along those lines, Congressman.
    Mr. Yoho. I know this committee is open to suggestions. If 
you need other tools let us know, because if we are going to 
bring the North Korea conflict to an end peacefully, we need 
all people at the table and we can't have China and Russia 
backing off and saying, you know what, we are not going to play 
anymore and we are going to supply North Korea with these 
products.
    And if we are not using those tools in our arsenal, this is 
going to go down in history, 5 years from now they'll say, 
well, President Trump did this and it was a failed attempt.
    We don't want to do that. We want this to come to an end. 
So what would it take for you guys to put more pressure on 
them, or do we need to put more pressure on the Treasury or the 
executive branch?
    Mr. Billingslea. I mean, we are going after entities on a 
weekly basis. Today's action that I mentioned on the slave 
labor in----
    Mr. Connolly. Could you please speak into the microphone? 
Thank you.
    Mr. Billingslea. Yes. So we are targeting companies and 
entities that are helping evade sanctions on a weekly basis. 
The drumbeat is persistent.
    Mr. Yoho. Okay.
    Mr. Billingslea. We are not easing up in any shape or 
fashion.
    Mr. Yoho. Okay. And I hope not, and I look forward to your 
response on that.
    And the last thing is we just passed, on the House floor, 
H.R. 5576, the Cybersecurity Deterrence and Response Act, that 
lays the groundwork for what an attack on our infrastructure 
is, or cyberspace, and this will go right after any country, 
i.e., Russia, that's hacked into our system and it lays out 
what can be done by the executive branch.
    I hope you look at that because that's something we think 
will be passed out of the Senate with this Congress and use 
that as another tool in your arsenal because we'll do the 
follow-up and ask why are these entities not being sanctioned.
    With that, I yield back, and thank you, Mr. Chairman.
    Chairman Royce. Thank you, Mr. Yoho.
    We go to Albio Sires of New Jersey.
    Mr. Sires. Thank you, Mr. Chairman, for having this hearing 
and thank you for being here with us today.
    I believe that sanctions are the way to go, and it seems 
like we pass sanctions and you're getting more and more work 
and more and more sanctions to look after.
    Currently, have you hired additional people at the Office 
of Foreign Asset Control to investigate individuals that we are 
sanctioning and all these sanctions that--yes?
    Mr. Billingslea. Congressman, yes, we have. But I would say 
we are tapped out. We are running as hot as we can.
    Mr. Sires. So, I mean, do you have an adequate amount of 
people to handle the kind of sanctions that we are passing 
here?
    Mr. Billingslea. We make do with what Congress appropriates 
for us.
    Mr. Sires. That tells me you don't have enough. Who do you 
make that request to? Can we help you in any way?
    Mr. Billingslea. It goes up through the Office of 
Management and Budget and they make the final----
    Mr. Sires. Can this committee help you in any way? Because, 
I mean, it's important that we track all these sanctions.
    Mr. Billingslea. A hundred percent agree and we welcome all 
the help we can get on these issues.
    Mr. Sires. Nicaragua is the latest country in the Western 
Hemisphere that has turned on its people.
    Are the sanctions that we have put on some of these 
individuals enough? What else can we do to deter this kind of 
behavior?
    Mr. Billingslea. Thank you.
    The situation in Nicaragua is an outrage. They have killed 
more than 300 people in the past few months with targeted 
assassinations.
    The attack on the church is a good example. We have 
designated the head of the national police and several of the 
other individuals. But we are digging into this because 
President Ortega and the Vice President, his wife--Murillo--
must be held to account for these outrageous atrocities.
    Mr. Sires. Not only them, but I think the whole country. We 
should put some pressure on the government because they're just 
squandering money, stealing money left and right.
    Mr. Billingslea. The problem is those two are the 
government. There isn't anything else.
    Mr. Sires. I know. Yes.
    Mr. Billingslea. That's the problem.
    Mr. Sires. And in terms of North Korea, it's very 
interesting that I hear that he's calling around different 
leaders of the world now to assist him. Is that going to help 
him get by some of the sanctions that we are implementing on 
him?
    All of a sudden he's become a very communicative guy in the 
world.
    Ms. Singh. Congressman, we remain in very close contact 
with our allies and partners about maintaining pressure on 
North Korea. In fact, we've had four sanctions roll-outs--
sanctions designation roll-outs since the Singapore summit.
    So our economic pressure from the United States Government 
side has not relented at all. We maintain the sanctions that we 
have and we are encouraging our allies and the United Nations 
to keep sanctions in place.
    The only time that the North Korean regime will see any 
relaxation of sanctions on their government is if we see a 
serious effort--a serious attempt--for them to comply with our 
demands of denuclearizing.
    We've made it very clear to Chairman Kim what we are 
looking for. President Trump is committed to this result. So we 
are in constant contact with our allies and want them to share 
our posture of completely maintaining the economic pressure 
until we see the changes we desire.
    Mr. Sires. And in terms of Russia, you mentioned a date 
before where the Russians have to conform to not using nerve 
gas on its people, otherwise you're going to put additional 
sanctions.
    Do you think that they're going to admit that they use 
nerve gas on their own people?
    Ms. Singh. Congressman, at this point, it's not even a 
matter of Russia admitting it. We know that they did this.
    Mr. Sires. Well, I know. But there's a date coming up that 
you mentioned before. What--I forgot the date.
    Ms. Singh. It's coming up in November, and what we are 
looking for is an ability to conduct inspections and a 
affirmation from them that they will not use nerve agents on 
their own people anymore, and if we don't see this, the second 
rounds of sanctions is mandatory. Those sanctions will be 
imposed.
    Mr. Sires. And what does that include?
    Ms. Singh. It's going to include banking sanctions, 
prohibitions on procurement of defense articles, any sort of 
foreign aid money. There's a long list of things.
    It's a laundry list of items which will penalize the 
Russian Government.
    Mr. Sires. You're going to have to--you're going to have to 
need more staff, because I don't think they're going to admit 
that they're not--if they admit that they're not going to use 
it against their people that means that they did it before. So 
I suggest you start getting ready.
    Ms. Singh. We are prepared. We are absolutely prepared to 
fully implement the second round of sanctions.
    Mr. Sires. Okay. Thank you very much.
    Thank you, Chairman.
    Chairman Royce. Will the gentleman yield?
    Mr. Sires. Sure.
    Chairman Royce. I just want to indicate that in raising the 
issue of what is going on right now in Nicaragua, I think that 
there is certainly cause for the international community to be 
very concerned.
    A constituent of mine recently raised the issue of an 
attack on the village where she previously lived--not by the 
army but these are private militia that come in and people are 
disappeared or they're subsequently found sometimes tortured, 
sometimes killed.
    And she was talking about the circumstances there, saying 
it's reminiscent of the way Joe Stalin kind of went off the 
rails. And you ended up with anybody, any student who was 
suspect in Nicaragua now or any worker who's suspect of not 
having fealty personally to Ortega just being brought in by 
this private militia force.
    And so I am glad you raised the issue today because, from a 
human rights perspective, push back is essential right now, I 
think, on the regime and I am sure there are many within the 
government who are concerned about the fact that this is done, 
not through the state but it's being done through private 
militia activity.
    Mr. Sires. Chairman, I just had in my office some of the 
victims of Nicaragua. They're using water boarding. They're 
using sharpshooters to shoot people who are demonstrating. 
Doctors who assist any of the victims of the demonstrations--
they're going after them also.
    So I think--I would love to work with you on something.
    Chairman Royce. Thanks for raising it today and I will work 
with you.
    Mr. Billingslea. Mr. Chairman--on that point, Congressman, 
you know, they actually--the health minister issued an edict 
that wounded victims of their attacks would not be treated. 
This is how outrageous it is.
    Very quickly--you asked another area where you could help--
one area I would just put a plea in is every time you're 
looking at legislation I understand that sometimes the 
compromise is, well, let's just get them to do a report for us.
    Obviously, that's fine--you need to have whatever 
information you need to have. But if you could just kind of 
keep in the back of your mind that some of these reporting 
obligations impose a huge workload on a very tiny staff.
    Mr. Sires. So you need more staff.
    Mr. Billingslea. Or if there are reports that aren't 
getting read anymore then we could----
    Mr. Sires. You can admit it. You know, you need more staff. 
Thank you.
    Chairman Royce. Lee Zeldin of New York.
    Mr. Zeldin. Thank you, Mr. Chair, and I appreciate our 
witnesses for being here.
    Whether it's the last administration, the current 
administration, or future administrations, I subscribe to the 
principle that it's important to always be pursuing a stronger, 
more consistent, more effective foreign policy from one month 
to the next.
    Sometimes we see an inconsistency from one country to the 
next, and this is something that's plagued American foreign 
policy for a long time.
    I believe that the President has surrounded himself with 
some great leaders who believe that we need to be strengthening 
our relationships with our friends, treating our adversaries as 
our adversaries.
    Secretary Pompeo, Secretary Mnuchin, Ambassador Bolton all 
understand, as this President does, that we have the largest 
economy in the world and we can effectively leverage that.
    We are hearing a lot of good news about our economy. So 
while we hear about our markets hitting historic highs, 
unemployment hitting historic lows, consumer confidence hitting 
historic highs, GDP--the fastest growth in 4 years.
    At the same time, we are hearing about China and Russia and 
North Korea and Iran--the state of their economy going in the 
opposite direction, and in many respects its effective use of 
sanctions.
    It's good work that's done at the United Nations with 
Ambassador Haley as well. Both of our witnesses, I thank you 
for your efforts.
    I believe that the President was correct in withdrawing 
from the Iran nuclear deal. It was here actually Secretary 
Kerry said that it was an unsigned political commitment. It was 
not submitted to Congress as a treaty.
    The reason that they decided not to do that was because 
they didn't believe it was going to get passed. That was the 
answer to the question of why is this not a treaty. The answer 
was that they would not have been able to get it passed. That 
was here in his room.
    I thank the administration for moving the Embassy in Israel 
to the capital of Jerusalem, for the implementation of the 
Taylor Force Act, which a lot of good work here at this 
committee on a bipartisan basis worked to implement.
    I support--Ambassador Bolton, a few days back, was talking 
about sanctions as it relates to the ICC. We have pro-
Palestinian anti-Israeli entities that are out there that want 
to bring the United States up on war crimes charges and the 
Israelis up on war crimes charges and effectively leveraging 
sanctions there is important, too.
    And also I would be remiss, and I don't want to steal 
Congressman Deutch's thunder--he's the one that--he always 
makes sure to bring it up because it's his constituent--but I 
think in our work with Iran leveraging our sanctions and our 
interactions with them to return Bob Levinson back to 
Congressman Deutch's district and to the Levinson family is 
very important and I thank Congressman Deutch for all of his 
work on that.
    But I want to ask you about--there were some news reports 
that came out that former Secretary of State John Kerry has 
been conducting shadow diplomacy with top Iranian officials to 
salvage the nuclear deal.
    This reportedly includes meeting three or four times with 
Iran's foreign minister. Is the administration aware of these 
meetings?
    Ms. Singh. Thank you, Congressman.
    We've seen reports of those meetings.
    Mr. Zeldin. Have the efforts by a former Secretary of 
State--John Kerry--or other former Obama administration 
officials to undermine the implementation of this 
administration's Iran policy using such shadow diplomacy, has 
it had any effect?
    Ms. Singh. Well, Congressman, we remain focused on our new 
Iran strategy. You know, as I've outlined, Secretary Pompeo at 
the State Department has formed a new Iran action group.
    We have specific steps that we've outlined. We have a team 
at the State Department, those working with the White House, 
with the Treasury Department, with the Interagency, to make 
sure that we are focused on sending a message to the Iranians 
that the only way that we will ease up on the economic pressure 
which is debilitating their economy and their leadership 
because our goal, of course, is to hit the government, not the 
Iranian people. We want to see these changes. They have to show 
us that they are not developing a nuclear program--that they 
will release political prisoners like Bob Levinson--that they 
will promote political freedoms--that they will allow onsite 
inspections--that they will stop their aggressive behavior in 
their neighborhoods--they will stop threatening Israel. They 
need to stop supporting the violent Assad regime--their 
terrorist activities in Yemen.
    We have a long list of things that we are focused on and 
it's unfortunate if people from a past administration would try 
to compromise the progress we are trying to make in this 
administration.
    Mr. Zeldin. Would that be improper for Secretary Kerry to 
be meeting with Iran's foreign minister with that shadow 
diplomacy?
    Ms. Singh. Well, Congressman, I don't have personal 
knowledge of those meetings. But if that is happening, again, I 
would find it very inappropriate.
    Mr. Zeldin. Thank you. I yield back.
    Chairman Royce. We go to Karen Bass of California.
    Ms. Bass. Thank you, Mr. Chair.
    It's actually the first I've heard of this shadow diplomacy 
taking place. But, frankly, I am not sure that it's such a bad 
thing that other people are trying to represent our country, 
considering the erratic nature of this administration.
    Anyway, I wanted to ask you a few questions about sanctions 
and wanting to start with Zimbabwe and wanting to know where we 
are with sanctions on Zimbabwe and if there's any plans to 
reassess Zimbabwe sanctions.
    I was just there for their election and, needless to say, 
there are numerous problems that happened after the election. 
But Zimbabwe is trying to reach out to us now and I want to 
know where we are with that.
    I also want to talk to you about sanctions against Iran and 
want to know if you are aware of the specific case of Noura 
Hussein. She is 19 years old. She's a Sudanese girl who was 
sentenced to death in May for fatally stabbing her 35-year-old 
husband that she was forced to marry when she was 15.
    There has been a lot of international pressure to stop her 
from being executed. She says she killed him in self-defense 
because she was being raped.
    And so I want to know, given that we have been considering 
changing our policy toward Sudan if that is a leverage point, 
number one, to save her life, but where we are with sanctions 
toward Iran.
    Then I have a few other questions especially for Mr. 
Billingslea. That was for Ms. Singh. Those are for Ms. Singh.
    Ms. Singh. Thank you, Congressman.
    When it comes to Zimbabwe, we still have a 141 individuals 
and entities including the President and the former President 
who are designated. So our pressure on Zimbabwe remains in 
place.
    We are trying to use this pressure to leverage political 
and economic reforms, human rights observations. And so the 
response to your question is, basically, it remains on our 
radar. This pressure remains. We want to see fundamental 
changes in Zimbabwe and only then will we resume normal 
relations with them.
    Ms. Bass. And considering they want to move forward in that 
direction, I think we certainly have a lot of leverage right 
now and we need to figure out how to step that up as well.
    Ms. Singh. Thank you, Congressman. As with every nation 
that is subject to U.S. sanctions, we are always open to 
conversations. We are open to a demonstration from the 
government that it is changing its ways, that it is observing 
human rights, that it is taking----
    Ms. Bass. Thank you. Before I run out of time, would you 
respond about Sudan and Noura Hussein?
    Ms. Singh. I don't have personal knowledge of this young 
woman. It sounds like a very unfortunate situation. The purpose 
of our sanctions, you know, again, is to get these governments 
to properly observe human rights and that would be in the case 
of both Iran and Sudan.
    I can look into the case of this individual woman and get 
back to you.
    Ms. Bass. I would appreciate that, because they still are a 
state sponsor of terrorism. They still have that designation 
and there are even forces within our Government that think that 
that designation is actually problematic.
    And so it might be in the context of us examining that, 
raising her case as well, since they're very anxious to have 
that designation removed.
    Ms. Singh. Okay. I will look in that and get back to you.
    Ms. Bass. Thank you. I appreciate that.
    And for Mr. Billingslea, specifically from the Treasury 
Department's perspective, there are many human rights abusers 
in Africa that have tremendous wealth here in the United 
States--real estate and other financial investments--and I was 
wondering if we are beginning to track those.
    Mr. Billingslea. We are, and we are working very closely 
with a number of nongovernmental organizations such as 
Century----
    Ms. Bass. Oh, good.
    Mr. Billingslea [continuing]. And others. In fact, I just 
was in New York with John Prendergast, who--he presented to the 
Security Council on this very topic and on the matter of 
corruption at the invitation of Ambassador Haley.
    We are using the Global Magnitsky sanctions authority that 
was developed under the administration to go after these human 
rights abusers.
    I think one of the most notorious ones that we've targeted 
very aggressively is a weapons trafficker named Dan Gertler, 
who is profiteering in the Congo, and we've had a fairly 
significant effect on his finances as a result of our actions, 
as an example.
    Ms. Bass. Well, I appreciate that. I would like to continue 
to work with you on that and raise some specific cases, because 
although we target individuals for sanctions I actually think 
looking at their assets here in the country would probably be a 
lot more effective than what we've done.
    Mr. Billingslea. A hundred percent agree. Also in Europe, 
too.
    Ms. Bass. Exactly.
    Mr. Billingslea. A hundred percent agree.
    Ms. Bass. Thank you.
    Mr. Chair, I yield back.
    Chairman Royce. We go to Ileana Ros-Lehtinen of Florida.
    Ms. Ros-Lehtinen. Thank you so very much, Mr. Chairman.
    If fully implemented and enforced, U.S. sanctions can be an 
effective foreign policy tool to pressure dangerous rogue 
regimes including those in Iran, in North Korea, in Russia, as 
well as those in our own hemisphere, like my native homeland of 
Cuba, Venezuela, Nicaragua.
    Regimes like these can both threaten our national security 
and the human rights of all those forced to suffer under their 
despotic rule and it undermines the stability of key regions 
with significant consequences for our national security and 
that's why I've worked in a bipartisan way alongside so many in 
this committee, especially under the leadership of Chairman 
Royce and Ranking Member Engel, to author sanctions laws 
including the strongest sanctions on Iran on the books, the 
Iran Threat Reduction and Syria Human Rights Act, as well as 
Iran, North Korea, and Syria Nonproliferation Act.
    I am also proud to have authored the Venezuelan Human 
Rights and Democracy Protection Act and have helped secure the 
passage of the Sergei Magnitsky Act.
    The Global Magnitsky Act, authored by our colleague, Chris 
Smith, has become a very important tool and I am pleased to see 
that the administration has made use of it, especially in 
Nicaragua.
    Following up on the excellent questions and observations of 
Mr. Sires and our chairman--what they were saying about 
Nicaragua--I would like to ask you if--as the human rights 
violations in Nicaragua, sadly, spiral out of control, how can 
we encourage responsible nations to implement similar 
sanctions?
    Then on Russia--while it's still not enough, I was very 
pleased that the administration just days ago--yesterday--
finally authorized additional sanctions for those interfering 
in our elections.
    I do, however, strongly urge the administration to take it 
a step further and signal support for our DETER Act, which I 
introduced alongside our colleague, Brad Schneider, earlier 
this year, and Marco Rubio and Senator Von Hollen have it in 
the Senate, and this bill would ensure, as you know, that key 
Russian officials and oligarchs are sanctioned if Putin 
interferes in our electoral system again.
    So I will ask you would such a law requiring automatic 
sanctions be an appropriate signal that there will be severe 
repercussions for any future interference in our democratic 
process?
    And, finally, on Cuba, it's been nearly a year since the 
State Department updated its list of restricted entities 
associated with the Cuban military.
    Is the administration looking at additional companies and 
entities to add to that list and what additional sanctions can 
we use to support the people of Cuba?
    Thank you to our witnesses, Mr. Chairman.
    Mr. Billingslea. Okay. On Global Magnitsky, again, we 
appreciate the authorities that were given.
    Ms. Ros-Lehtinen. Could you put the mic a little bit----
    Mr. Billingslea. Yes, Congresswoman.
    To date, we've designated 84 individuals and entities under 
Global Magnitsky, which I think signals our determination to 
combat human rights abuse and corruption wherever it occurs and 
Nicaragua is, clearly, an outrageous situation--a truly 
atrocious situation.
    Venezuela--but Venezuela takes the cake. I mean, what 
they're doing to the people of Venezuela with 2.3 million 
migrants, an economy that's in a death spiral--they've stolen 
everything there is to steal from the oil sector and now 
they're looting--they're stripping the forest and looting gold 
and whatever is left.
    Maduro and his cronies must be held to account. And to that 
end, Ambassador Haley held a session of the Security Council to 
put a spotlight on this matter, and please know that the 
Treasury Department is all over this matter.
    You asked a key question regarding ``automatic sanctions.'' 
I have to say automatic sanctions--mandatory sanctions--are 
really not the way to go, in our view, simply--it's not because 
we don't want to designate these individuals.
    I think we've proven with our track record that we will not 
hesitate to go after these people but we have to be able to 
synchronize the way we go after them together with the 
Department of State but also together with our own financial 
diplomacy efforts.
    A lot of what we do are things you never really hear about 
or see, as we are out preparing the battlefield for the 
imposition of the sanctions to ensure that we have maximum 
effect with partner nations. So I appreciate the chance to 
comment on that.
    Ms. Singh. Thank you, Congresswoman.
    I just wanted to make a quick statement on the elections 
because you mentioned the DETER Act. As you know, the President 
has signed an Executive order. We very much share Congress' 
concerns and I think the intent behind the Executive order is 
similar to the pieces of legislation that are out there.
    We are all serious about preventing any election 
interference, and if we find out that election interference has 
occurred, we are very serious about imposing mandatory 
penalties upon those who have interfered with our democratic 
process.
    When it comes to Cuba, as you know, the State Department 
was very concerned about the health and security of our 
employees in our Embassy there.
    We remain concerned. We are not convinced that the attacks 
on our Embassy have ceased entirely. So our security situation 
there remains precarious. We are always evaluating new means 
and methods to be able to achieve the desired changes in Cuba.
    We have a long history of being able to try to work through 
these issues with Cuba. In fact, I am a countryman. I am a 
native Floridian. I grew up in Winter Haven, Florida. I went to 
the University of Miami. So, for me, Cuba is a--go Hurricanes, 
yes--is a very--is a very personal issue and one that I think 
we need to use the most effective tools to straighten out.
    I don't know at this time if we are looking at new 
entities. But I can assure you that we are constantly 
evaluating the process and the tools we have to change the fate 
of the Cuban people, and I can get back to you on----
    Ms. Ros-Lehtinen. That would be lovely. Thank you.
    Ms. Singh [continuing]. Additional potential.
    Ms. Ros-Lehtinen. And when we said ``go 'Canes,'' we don't 
mean Florence.
    Ms. Singh. No. We mean Miami Hurricanes.
    Ms. Ros-Lehtinen. Thank you, Mr. Chairman.
    Chairman Royce. Thank you.
    We go to Bill Keating of Massachusetts.
    Mr. Keating. Thank you, Mr. Chairman.
    We've had many witnesses, officials, former officials, 
international experts talk about sanctions in front of this 
committee. So I wanted to get a real clear distinction here.
    Was it a legal determination that you had to withdraw from 
the JCPOA in order to pursue these new sanctions on Iran for 
their malign activities or was it a policy determination?
    I want to be clear, because we've had much testimony about 
this from some very credible people.
    Ms. Singh. Thank you, Congressman, for that question.
    One of the flaws in the JCPOA was that it was an agreement 
that was not approved by Congress, by the Senate. As you know, 
there has been much debate about that and as was observed 
earlier just by this committee it was----
    Mr. Keating. Well, excuse me. I want to interrupt.
    That's not what I am asking. Don't go back to that issue.
    I am saying for what was in place with the JCPOA was it a 
legal determination or was it a policy determination----
    Ms. Singh. Well, President----
    Mr. Keating [continuing]. Not what the JCPOA was.
    Ms. Singh. Okay. President Trump took a look at the JCPOA 
and determined that his policy would be to----
    Mr. Keating. So it's not a legal determination. It was a 
policy determination. Is that--are you clear on that?
    Ms. Singh. Well, Congressman, lawyers have looked at 
withdrawal from the JCPOA as well, but at the end of the day, 
the President determined that this was not the right course of 
action for----
    Mr. Keating. That's not answering my question. This is not 
a tough question. To respond to the malign activities of Iran 
on other areas, you did not have to legally leave the JCPOA. I 
don't understand.
    Everyone that's testified before us has said that.
    Ms. Singh. But there was no----
    Mr. Keating. So are you agreeing with them or disagreeing?
    Ms. Singh. Well, there was on compulsion to legally leave 
the JCPOA.
    Mr. Keating. Okay. So it wasn't a legal determination. It 
was all policy.
    Ms. Singh. Well, I guess I would say there was not--we were 
not compelled legally to leave it.
    Mr. Keating. To do other sanctions on malign activities. So 
here's--okay, so here's the issue. Why did you do it? Because 
one of the greatest strengths we have in dealing with Iran is 
our coalition. We pulled out of the JCPOA. We created a 
fracture with our Western allies. The strongest thing we have 
that the--no other country, frankly, that we compete with--
China or Russia--has and we didn't have to do it.
    Mr. Billingslea. Congressman, I am not sure the strength 
that referring to was there at all. Let me explain what I mean.
    When the--and this predates me, obviously--when the JCPOA 
was negotiated, ``the deal'' with our European allies was that 
Iranian terrorism and Iranian ballistic missile activities and 
all of that other stuff would not go unchallenged--that it was 
still very much on the table for everyone to work together. 
But----
    Mr. Keating. My time is running out. I am asking the 
questions.
    Mr. Billingslea. But you don't have any sanctions----
    Mr. Keating. May I ask you the question here?
    Mr. Billingslea. Sure. Sure.
    Mr. Keating. The question is simple. I mean, we have the 
power to do sanctions outside the JCPOA. The JCPOA is a 
discrete agreement about the nuclear program, not about these 
other activities.
    So it's clear that's one separate avenue. Don't confuse the 
two. Don't conflate the two, because that's what I've heard all 
morning. It's just not right.
    Mr. Billingslea. The two should not have been conflated but 
they were--no, you're not--you're not right.
    Mr. Keating. I am not right? Tell me why I am not right.
    Mr. Billingslea. The European Union imposed not a single 
sanction on the Iranians since the JCPOA was completed--not 
one--and I experienced this first hand when we were trying to 
go after Iranian terror organizations and the Europeans would 
refuse to do it----
    Mr. Keating. You're going right back to it. I am talking 
about the agreement that was discretely a nuclear agreement.
    Mr. Billingslea [continuing]. Every time we tried----
    Mr. Keating. And you're jumping back to something that we--
--
    Mr. Billingslea [continuing]. Every time we tried to act.
    Mr. Keating [continuing]. Have alternate sanctions for and 
every other set of experts we had in front of us since I've 
been here has said----
    Mr. Billingslea. Every time we----
    Mr. Keating [continuing]. The two things weren't exclusive.
    I am going to move on to Russia because I take umbrage to 
you saying I am wrong. I am not wrong, and every expert that's 
come in front of us, before us, then is not wrong.
    So let me talk about Russia. You place sanctions on certain 
defense companies and entities. We had--Mr. Sherman said 
clearly you're not doing it on the state of Russia. So you did 
it on some defense industries, but you didn't do it--it was 
patchwork. You didn't do it on all of them, and why isn't the 
administration not implementing sanctions on, you know, Sukhoi, 
which is--continues to enable Russian activities in Ukraine and 
Russian activities in Syria? Why are you making these 
determinations and leaving out companies that have constantly--
they're doing it right now.
    Mr. Billingslea. That's a great question. We are looking at 
Sukhoi. Obviously, we are very concerned that their aircraft 
may have been used in chemical weapons attacks on innocent 
people in Syria, for instance, and if that proves to be the 
case that's unacceptable.
    Mr. Keating. My time is up. But I would want to reiterate 
what the chairman and other people have about Nicaragua. The 
threats to people like Reverend Jose Alberto Idiaquez and other 
people specifically are a great threat and it's a continuing 
area we'd like to work with you on.
    I yield back.
    Chairman Royce. Thank you. We go to Chris Smith, New 
Jersey.
    Mr. Smith. Thank you very much, Mr. Chairman, and thank you 
to our two assistant secretaries. You answered many of my 
questions previously today so I will just cut to one final set 
of questions.
    As you know, an effective sanctions regime presupposes 
financial transactions denominated in dollars with the dollar 
functioning as the global reserve currency.
    China and its allies, however, have been attempting to 
attack the dollar, thus U.S. power, by supplanting it with the 
yuan. In Africa, for example, government officials from 14 
African nations from eastern and southern Africa met in 
Zimbabwe earlier this spring to discuss using the yuan as a 
reserve currency.
    China recently engaged in a $2 billion currency swap 
agreement with Nigeria and just a few weeks ago African leaders 
met in Beijing where they were offered $60 billion in Chinese 
financing which includes a focus on African countries doing 
bond issuances in Chinese currency.
    This move away from the U.S. dollar regime is exacerbated 
by U.S. dollar shortages which makes currency swap arrangements 
with China all the more attractive.
    China's interest in actually propping up corrupt rulers and 
helping them circumvent anti-corruption monitoring and 
eventually a sanctions regime countless African resources are 
being sold in yuan without any global accountability.
    In Congo Brazzaville, for example, the Congolese Government 
signed a yuan convertibility agreement that allows Chinese 
businesses to operate in the six-country central African states 
region unhampered by the U.S. dollar regime.
    China's gambit has even been abetted by sensible allies 
like German Foreign Minister Heiko Maas, who recently called 
for ``a global payment system free of the U.S. dollar.''
    It appears that the U.S. dollar regime on which our 
sanctions system is built is under threat. I wonder if you 
could tell us what Treasury and State are doing to address this 
concern.
    And, secondly, could the use of block chain technology 
among financial institutions help with compliance with a U.S. 
sanctions regime?
    And I yield to our distinguished assistant secretaries.
    Mr. Billingslea. Thank you, Congressman.
    On the currency swap issue, I mean, you're very much onto 
something of great concern to us as well.
    That said, there remains a great desire among most of the 
countries in Africa to maintain correspondent banking 
relationships with U.S. banks and at the end of the day they 
still, I think, are finding it necessary to ultimately clear 
trade in U.S. dollars.
    But it's the maintenance of those correspondent banking 
ties that is our best line of defense ensure that we maintain 
not just a degree of transparency and visibility into the 
transactions occurring in Africa but also for the effective 
insular sanctions regimes, as you pointed out but further to 
ensure that effective anti-money laundering standards are being 
applied and implemented.
    One of our big concerns in line with Chinese actions not 
just in Africa but around the world are very opaque debt-
focused infrastructure transactions that we are not clear that 
some of the countries involved really understand the financial 
risks downstream of what they're committing to. So transparency 
in lending is another big issue.
    Finally, on block chain, as with all innovative 
technologies there are going to potentially be a great force 
for good and also a potential complicating factor for some of 
the regimes that we have in place.
    Distributed ledger technology is going to revolutionize the 
financial services sector and we very much encourage that and 
look forward to that, and I think as it evolves it will 
actually improve anti-money laundering regimes.
    But the same technology also underpins virtual currencies 
and there is an urgent need for the world to really step up 
through the Financial Action Task Force and effectively 
regulate in a uniform way virtual currencies.
    Ms. Singh. Thank you, Congressman.
    I will just quickly second my colleague's comments on both 
China and block chain. We at the State Department remain very 
concerned about China's practices globally. We all know what 
happened with the port in Sri Lanka. It ended up being a very 
bad deal--a bad situation for the Sri Lankans.
    We've also seen recently that the country of Malaysia has 
not moved forward with certain transactions with China. We are 
encouraging our partners and allies to think twice before 
entering into transactions based on these simple examples.
    Mr. Smith. I thank you.
    You know, having just returned from Ethiopia, having met 
with the new prime minister, Abiy, there is a concern among 
members of that government as well and others in Africa that 
this debt that is piling up vis-a-vis China is enormous.
    So thank you for your answers. They were very, very 
incisive. I appreciate it.
    I yield back.
    Chairman Royce. Mr. Ted Deutch of Florida.
    Mr. Deutch. Thank you, Mr. Chairman. Thanks to both of our 
witnesses for being here.
    Mr. Chairman, thanks to you and the ranking member for, 
again, showing true bipartisan commitment to passing strategic 
sanctions that are aimed at achieving a targeted foreign policy 
goal since sanctions themselves aren't, obviously, foreign 
policy. They're a tool to help us accomplish intended results. 
The sanctions were never meant to end Iran's nuclear ambitions. 
We needed to bring them to the table and I just want to start 
with Iran and then ask a couple questions about Russia.
    You had said earlier that the goal is to get--Ms. Singh, I 
think you said the goal is to get the purchase of Iranian crude 
oil to zero by 11/5.
    So I would just like to know--we know about the biting 
sanctions that are set to snap back on November 4th. I've 
spoken to some of our European friends who said that they're 
trying to understand what the administration is trying to 
achieve, whether we want constraints to continue on Iran's 
nuclear program.
    So the goal is one thing. How we get there is another, and 
if--whatever the goal is, which we could talk about--if we are 
trying to get there by driving down the sale of Iranian oil and 
gas the question is what are we telling our allies--what are 
we--do we--I guess the simple question is do we expect that to 
happen?
    Do we think it's going to get to zero on November 5th? 
We've given time for this to ratchet down to zero. What's going 
to happen? And if it doesn't, then are we fully prepared to 
impose sanctions on our friends as well who don't comply?
    Ms. Singh. Well, Congressman, thank you for that question.
    That's the purpose of the wind down period.
    Mr. Deutch. Right.
    Ms. Singh. We've had the 90 days, the 180 days. November 
5th ends the wind down period. So it is a ratcheting down. It 
gives our partner countries a chance to seek alternate energy 
sources.
    But we are serious about penalizing the Iranian regime. 
This has been one of the methods that we've determined will 
impose the greatest cost on the Iranian regime.
    Mr. Deutch. I understand. Have we seen that wind down? Have 
we seen it from our allies? Have we seen China take steps to 
wind down and do we think we are going to get to zero on 
November 5th, and if we don't, then what?
    Ms. Singh. Well, we are seeing cooperation from our allies 
and if we don't get to--we are prepared to impose the second 
round of sanctions.
    I mean, we've made it clear that the wind down period is a 
time for countries to be able to comply with the sanctions that 
will be fully in place again.
    So we have seen some cooperation for--and since we've seen 
80 companies from the private sector----
    Mr. Deutch. I appreciate that. I am sorry. I don't have a 
lot of time.
    Are we prepared to sanction central banks in Europe if they 
maintain relationships with the central bank of Iran?
    Ms. Singh. We are prepared to do everything that the JCPOA 
withdrawal entails.
    Mr. Deutch. Should we expect it to happen on November 5th?
    Ms. Singh. Well, Congressman, again, we are prepared to 
fully reimplement sanctions.
    Mr. Deutch. On November 5th, if we are not at zero and if 
those relations continue.
    Let me just ask, since I don't have a lot of time--do we 
know--do either one of you know whether the President brought 
up either Iran sanctions and cooperation on Iran sanctions or 
our imposition of Russia sanctions in his meeting with Vladimir 
Putin?
    Mr. Billingslea. I am not sure that that topic was raised. 
All I can tell you is the guidance within the Treasury 
Department to continue to massive pressure campaigns has not 
changed.
    Mr. Deutch. Is it--and I ask this--I ask this honestly. I 
am not trying to make a political statement here. It just seems 
difficult that you're doing the important work that you're 
doing imposing sanctions and the message coming from the White 
House about policy--not sanctions but about policy--is 
seemingly--seemingly stands at some points in contrast to the 
important work you're doing.
    So, for example, when we are focused on Russia sanctions 
because of what Russia did to the United States in our last 
election and the President, on a stage with Vladimir Putin, 
says, I hold both countries responsible--I think the United 
States has been foolish--I think we have all been foolish--I 
think we are all--we are all to blame, it doesn't seem 
consistent with the work that you're doing.
    Is it hard for you to continue to focus on sanctions to get 
to a policy end when the language coming out of the White House 
and in particular from the President seemingly diverge from 
accomplishing that same policy goal?
    Ms. Singh. Congressman, our policy throughout the 
administration is consistent whether it's the Treasury 
Department, the State Department, or the White House.
    Our policy is that we will not tolerate and we will 
actively prevent anyone from attempting to interfere in our 
elections.
    The President has signed an Executive order just yesterday 
imposing penalties for anyone we find who has interfered. We 
are talking proactive measures with--throughout the inter 
agency.
    Mr. Deutch. I know that, Ms. Singh. I know. No. No. And I 
know that.
    Ms. Singh. But I just want to make sure you know that----
    Mr. Deutch. I do know.
    Ms. Singh [continuing]. The White House policy is 
consistent. We are all working together toward one common goal.
    Mr. Deutch. I do know. I am just--okay. Well, you, 
obviously, don't see any divergence. It just seems to me that 
that common goal is a lot harder for us to focus on when the 
President of the United States, when asked, do you hold Russia 
accountable, says, I think that both countries are 
responsible--that the United States has been foolish.
    The message from the President should be entirely 
consistent with the policy that you're trying to carry out and 
that you, Mr. Billingslea, are trying to carry out and too 
often, unfortunately, it is not.
    And I yield back.
    Ms. Singh. But the President's policy is reflected in the 
Executive order that he signed yesterday, Mr. Chairman.
    Chairman Royce. Mike McCaul of Texas.
    Mr. McCaul. Thank you, Mr. Chairman.
    Iran's Revolutionary Guard Corps--the IRGC--is a terror 
organization, a terror arm of Iran. At one point, I know the 
administration talked about designating it as a foreign 
terrorist organization.
    I introduced a bill to do that and also a bill to sanction 
the IRGC. Can you tell me where the administration is on this 
issue?
    Ms. Singh. Congressman McCaul, we remained very concerned 
about the IRGC, as you have indicated. I don't have an answer 
to that question. I can get back to you.
    Mr. Billingslea. The IRGC is an organization and the vast 
majority of its shell companies are already under Treasury 
sanctions, and we continue to target them very aggressively.
    The Quds Force within the IRGC--the Quds Force, of course, 
is the source of the truly evil behavior in support of these 
various terrorist organizations, Qasem Soleimani leading that 
group.
    The thing about the IRGC also that I think really needs to 
be highlighted is their role in the endemic corruption within 
the Iranian economy--the case study of how the IRGC alone 
looted $5 billion from the municipality of Tehran and left them 
in a complete bind is not getting told to the extent it needs 
to be.
    So it's not just the terrorism outside of the country and 
the fact that they're moving hundreds of millions of dollars 
for terror operations globally and trying to conduct 
assassinations in Europe and other things.
    It's also what they're doing domestically inside the 
Iranian economy that needs to be showcased.
    Mr. McCaul. Yes, I tend to agree, and yes, if you could get 
back to me on that question. They've taken all the sanction 
relief money and funnelled it into terror operations. Forty 
percent increase in military in Iraq and Syrian, Lebanon--
weapons--you know, rockets being manufactured, on and on.
    On the issue of China, they steal about $600 billion 
annually from the United States, mostly intellectual property 
theft, technology transfer theft. They have a 2025 plan to be 
militarily and economically dominating on the world stage.
    Has the administration looked at sanctioning China for its 
theft of intellectually property? Twenty million security 
clearances including mine and there were no consequences to 
that behavior.
    Yes, ma'am.
    Ms. Singh. Congressman, we are very concerned. As you know, 
this is the highest priority for the President is addressing 
the practices by China that steal our intellectual property--
that steal our innovation. The force technology transfer--of 
course, we know of reports of Chinese officials coming here, 
taking technology back, and reverse engineering them.
    As you may know, we've instituted a 301 initiative which 
heavily penalizes China on many different fronts. We are 
utilizing the World Trade Organization--the WTO--direct 
bilateral penalties, the tariffs, the serious significant 
historic tariffs imposed upon China.
    All of these are economic measures intended to demonstrate 
to China that they need to take us seriously when we have 
directed them to stop stealing our intellectual property. Our 
companies should not be forced to transfer their technology in 
order to do business in China.
    Chinese companies are able to come to business here freely. 
Our companies should be able to go there as well.
    And, of course, as you know, with the new FIRRMA bill the 
update of CFIUS--the Committee on Foreign Investments in the 
U.S.--we will be screening investment carefully through the 
mechanism as well, which will address some of the problems with 
emerging technologies and the China 2025 program that you had 
mentioned.
    Mr. McCaul. When I was a young Federal prosecutor at 
Justice, I prosecuted Johnny Chung, who led us to the director 
of Chinese intelligence putting money into the Clinton 
campaign.
    It's not the first time a foreign power has tried to 
influence our election and in that case it was about technology 
transfer. It was China aerospace, satellite technology, and 
weapons. And so I just highlight that as an illustration.
    Finally, I think your job, Ms. Singh, is very important 
because when I talk to a lot of African Ambassadors they talk 
about China--and you talked about Sri Lanka and they're in 
Djibouti and they over leverage these African nations and 
exploit their natural resources with their own workers, not the 
African workers, and then they can't pay these balloon type 
notes at the end of the day and then they take over ports and 
things like that.
    So I hope that you will encourage your Ambassadors to be 
aware of this, and when I asked the question, why do you deal 
with China, they said, because you're not there--Americans 
aren't here. And I think your Ambassadors have a role to play 
with respect to economic interests of the United States.
    Ms. Singh. Thank you, Congressman.
    We hear that message and, in fact, I am committed to trying 
to increase our economic engagement with Africa. So as you have 
indicated, they will have an alternative to China because that 
is simply the case in many instances where African nations 
don't know that they can deal with us rather than the 
alternative of China. I commit to you that we will make that a 
priority at the State Department.
    Mr. McCaul. Well, I applaud you for that. Thank you.
    I yield back.
    Chairman Royce. Brendan Boyle of Pennsylvania.
    Mr. Boyle. Thank you, Mr. Chairman. I hadn't planned on 
speaking about this but I just want to echo 100 percent what 
Congressman McCaul said--the last part anyway--as it regards to 
the dramatic investment China is making in Africa and the fact 
that we are asleep at the switch.
    I just had a constituent--a former head of the Philadelphia 
Black Clergy--come back and he actually wants to come and speak 
to Congress about this because he was so alarmed at the 
foothold that China is building in Africa while we are doing 
nothing.
    But in terms of what I wanted to ask about, one of the real 
successes of the Obama administration was getting our European 
allies on the same page as it relates to sanctions against 
Russia, which was a bit of a challenge because they end up 
bearing a little bit more of the cost financially than we do, 
especially those countries that are closer to Russia.
    Given the deterioration in relations that we've had with 
some of our EU and NATO allies, I want to know what this 
administration is doing right now to make sure that we keep the 
Europeans on the same page as it relates to the hard-hitting 
sanctions on Russia.
    Ms. Singh. Thank you, Congressman.
    We have very close relationships with the EU and our allies 
there. I think it's a myth that our relationships are 
deteriorating.
    We at the State Department----
    Mr. Boyle. Excuse me. Reclaiming my time.
    It is not at all a myth. You need only have an off-the-
record conversation with any one of the members of the 
ambassadorial corps and other officials, whether it's NATO or 
the European Union.
    I recently returned with a bipartisan validation from 
Sofia, Bulgaria, as part of the European Union-U.S.-NATO 
parliamentary exchange or dialogue--a group that has been going 
on for decades--and as one of their senior members has been 
involved within the '80s who was a member of a center right 
party in Germany expressed to me, he's never been more alarmed 
about the state of relations between the U.S. administration 
and NATO member countries.
    So anyway, what are we doing right now to make sure they 
keep the sanctions on Russia as they are an important part of 
their success?
    Ms. Singh. That's a very important question, and I can tell 
you Secretary Pompeo is committed to working with the EU and EU 
member states to make sure that we impose costs and pressure on 
Russia.
    We have continuing ongoing conversations with them about 
utilizing our sanctions authorities as well as United Nations 
sanctions authorities to work together to pressure the Russian 
regime to change its actions.
    Mr. Billingslea. I will give you a concrete example. I was 
just in Scandinavia together with one of Manisha's deputy 
assistant secretaries coordinating actually on this topic. We 
rely very heavily on a couple of key countries within the EU to 
maintain that pressure and to maintain those sanctions.
    In fact, one of the things we have to work through with 
Brexit is that we are losing our Five Eyes partner inside the 
EU. And so we are actively exploring alternative approaches to 
have countries very actively supporting continued pressure on 
Russia.
    Mr. Boyle. Let me, just in the minute and a half that I 
have remaining, shift gears toward Iran.
    One of the most encouraging developments that I've seen in 
Iran is what is happening on the street--these remarkably brave 
ordinary Iranians who are protesting their own regime.
    They offer, in my view, real hope for potential for change 
in this awful regime that has ruined their country since 1979.
    I want to know in what way is our sanctions policy working 
in coordination with that and hopefully not at cross purposes 
with what is going on in the street.
    Ms. Singh. Well, Congressman, thank you for that.
    One of the things that we try to do--one of the activities 
that is exempted under our sanctions regimes are coordination 
and communications. You know, we want----
    Mr. Boyle. That's right. Let me just clarify. I don't 
necessarily mean in campaign politics we would distinguish 
between hard dollars and soft dollars.
    I mean more in terms of an independent expenditure to draw 
the analogy more in terms of the ways--not in hard coordination 
but the ways that our policy complement the same goal that the 
protestors have on the street, not that we are necessarily in 
direct coordination with them.
    Ms. Singh. I understand that, and our goal is very much to 
return the governance of Iran to the Iranian people.
    Mr. Boyle. Right.
    Ms. Singh. The students that you mentioned--we believe that 
the students, the fresh voices in Iran, are the future of the 
country and that's the example I was going to give you is the 
communication that flows through them. So these ideas coming 
from the West that we support the people. We have a problem 
with the Iranian regime--the government. We support their 
voices. We support these students who want to take control of 
their own country.
    Mr. Billingslea. Two additional points on that. You know, 
they're protesting because Iran is----
    Mr. Connolly. Mr. Billingslea, you have got to move the mic 
closer so we can hear you. Thank you.
    Mr. Billingslea. I am sorry, Congressman Connolly.
    The ayatollah and his inner circle run the Iranian economy 
to their own benefit and the protests in many ways reflect the 
fact that the Iranian people are fed up with that.
    Mr. Boyle. Correct.
    Mr. Billingslea. And this currency peg where they actually 
favored regime insiders with preferential trading rates as the 
currency continues to weaken is a good example.
    So we are very focused on that and focused on calling out 
and also identifying the key economic players under the control 
of the ayatollah and the Supreme Leader and the IRGC for 
additional pressure and sanctions.
    Chairman Royce. We go to Mr. Ted Poe of Texas.
    Mr. Poe. Thank you, Mr. Chairman.
    I applaud the sanctions applied to Iran's Islamic 
Revolutionary Guard. My bill, H.R. 4238, the Iranian Proxies 
Terrorist Sanctions Act, would apply the same E.O. 13224 
terrorist sanctions on two of the most dangerous Iranian proxy 
militias in Iraq and Syria.
    Can you describe the effect of these Executive orders--the 
specific sanctions that have already had on the IRGC and do you 
support sanctions against As-Saib Ahl Al-Haq and Harakat 
Hizballah Al-Nujaba?
    Before you answer that question, I want to give you a 
little bit of background. Recently, congressional staff was in 
Baghdad, the fortress of the Baghdad Embassy, and the Embassy 
there scoffed at this legislation, saying they opposed the 
legislation. Soon after that comment was made, there were 
mortar attacks from As-Saib Ahl Al-Haq at the Embassy.
    So do you take the same position as the fortress Baghdad 
takes or what is your position on these two terrorist groups 
that already have blood on their hands?
    Mr. Billingslea. So, Congressman, I would, also as a former 
congressional staffer on the Foreign Relations Committee, I 
would never scoff at any piece of legislation.
    I am not familiar with the particulars here. I want to look 
at it and get back to you on the details. I will tell you, from 
the Treasury standpoint we are very concerned about what the 
Iranians are trying to do with these paramilitary groups in 
Iraq. They are attempting to replicate the play book that 
they've exercised with Hezbollah, the Houthis, and others by 
creating, basically, rival power sources in the form of these 
militias.
    We have been going after the different conduits in Iraq 
that the Iranians are using for terror operations for 
financing. We took down, together with the Iraqis who are 
actually really great partners on this--the central bank 
governor in particular--we took down one of the major banks 
that they were using to flow money through fairly recently.
    Mr. Poe. Excuse me. My question is not about what we've 
done. It's about what we are going to do in the future. Do 
specific terrorist groups with American blood on their hands--
do you think that they should be sanctioned or not? That's 
really just the question.
    Mr. Billingslea. Well, if they've got American blood on 
their hands, we need to go after them. I need to dig into the 
details of what you have in your legislation, though.
    Mr. Poe. Okay. That's a fair answer.
    Any other comment?
    Ms. Singh. I would just echo my colleague--Assistant 
Secretary Billingslea's comments. We would need to take a look 
at the legislation.
    But as far as these terrorist groups, we need to impose the 
most severe penalties as possible. We are very concerned about 
what's happened recently at our Embassy in Baghdad, and thank 
you, Congressman, for recognizing that.
    Mr. Poe. Well, I just want to reiterate it's a little 
disturbing to me that the State Department and Embassy people 
quickly scoff at going after terrorists and I want to know 
whether or not that's going to be the position of our 
Government or is our Government going to go after other 
terrorist groups that have caused mischief--blood on their 
hands? The Iranians will do anything necessary, I think, to 
retaliate and cause crimes against folks--Americans and 
Iraqis--in Iraq.
    So I would appreciate a thorough response or a thorough 
study and then a response from the both of you on this 
legislation, and thank you both for what you do.
    I yield back to the chairman the rest of my time. I know 
that's a shock to you, Mr. Chairman, but I yield a minute back 
to the chair. [Laughter.]
    Chairman Royce. Judge, thank you. You're a great example to 
the rest of us.
    Gerry Connolly of Virginia.
    Mr. Connolly. Thank you. My good friend from Texas could 
have given me that minute.
    No. Thank you, and thank you, Mr. Poe, and welcome, both of 
you, and I didn't realize, Mr. Billingslea, we have something 
in common. You were a staff member of the Senate Foreign 
Relations Committee, an honored revered title here, at least in 
this little corner of the world.
    I want to talk a little bit about the law and about 
cooperation, and----
    Mr. Billingslea. Congressman, Manisha too. She was general 
counsel over there.
    Mr. Connolly. Oh, my God. All right. Well, you--God bless 
you, both of you.
    So since you both helped write laws, when Congress passes a 
law and the President signs it, like he did CAATSA--and I will 
remind you the vote was overwhelming. Ninety-eight to two in 
the Senate and 419 to 3 here in the House. That's about as 
unanimous as you're going to get in the United States Congress 
at any time.
    So the President signed that into law. Would you agree that 
law is binding?
    Mr. Billingslea. Absolutely.
    Ms. Singh. We would.
    Mr. Connolly. Was that--I am sorry, Mr. Billingslea.
    Mr. Billingslea. I am sorry. Absolutely.
    Mr. Connolly. Ms. Singh?
    Ms. Singh. Yes, we would.
    Mr. Connolly. So it's mandatory. It's binding. So why then 
would the sanctions that are mandatory in that law--why are 
Sections 225, 226, 227, 228, 233, and 234 not yet invoked? Only 
one of the seven areas of sanctions has been invoked even 
though we all agree it's the law of the land and binding?
    Mr. Billingslea. So there are a couple of reasons for that. 
First of all, these sanctions that are contained in those 
provisions are prospective. They're forward looking, and it 
does take us time.
    There's lag between when I get the intelligence necessary 
for us to us to put the packages together. But we will be 
imposing sanctions under those sections as we go forward.
    Another key point here, though, is that it's not just 
CAATSA. There's a number of other pieces of legislation 
actually dating from our time and from your time as well that 
are sanctions authorities. We also have Executive orders that 
give us authorities and we want to get onto the target as 
quickly as we can with as minimal fuss as possible to have the 
effect we need to have.
    And so while we may not have invoked a particular section 
under CAATSA, the pertinent parallel Executive order that 
predated in many cases we have used those and you will find 
sanctions imposed in many, many cases that are consistent with 
the intentions of CAATSA even if not formally under those 
statutes.
    Mr. Connolly. Okay. That's good--that's heartening to hear. 
I think that's the first time we've heard that and that is 
heartening.
    Sometimes when one--going to efficacy, sometimes one 
wonders why we don't do certain things that are at our 
disposal, and let me give an example.
    North Korea, to break sanctions, to continue to trade with 
other countries, needs access to ports and that gets to marine 
insurance, and one of the tools at our disposal is to cut them 
off--that we simply will not allow marine insurance for their 
shipping or ships in a third country flag that do business with 
North Korea.
    We haven't done that. That's at our disposal but we haven't 
done it, and that would--that potentially could cripple their 
ability to cheat on sanctions.
    Are we looking at tools like that, even if Congress hasn't 
specified that? But they're clear and obvious tools that would 
significantly tighten the economic screws on North Korea.
    Ms. Singh. Congressman, that's a very good point about the 
shipping sanctions and we are considering all tools at our 
disposal.
    As you know, with sanctions, we look at everything very 
carefully, deliberately. A lot of times there's a pressure 
campaign. We start with certain sanctions and then we ratchet 
up.
    In the case of both Russia and North Korea we are 
determining how our sanctions will have the most bite and we 
progressively increased the pressure to have the maximum amount 
of effect.
    And, you know, we agree with you about the North Korea--the 
shipping sanctions. That is something that is fully under 
consideration. We want to use absolutely every tool and as you 
have very correctly observed, that would be a strong tool to 
seriously impact the North Korean regime.
    Mr. Connolly. Well, in my last 25 seconds, let me also just 
make a statement. I could not disagree with Mr. Zeldin of New 
York more. By ripping up a nuclear agreement with Iran, 
negotiated with our allies, that was working, and negotiated 
with our adversaries, China and Russia, it was actually 
working.
    It was verified as such. I think it makes it harder to get 
compliance with allies on sanctions when we rip up our own 
agreement--our own U.S.-led agreement. I think it makes us less 
reliable and I think, frankly, it dilutes the efficacy of 
sanctions we want to reimpose.
    So I think it was a very misguided and mistaken decision 
and I wish Mr. Zeldin were here to hear that. I thank you both 
for being here and thank you for your wonderful service on the 
Senate Foreign Relations Committee.
    Thank you, Mr. Chairman.
    Chairman Royce. Thank you.
    Mr. Ted Lieu of California.
    Mr. Lieu. Thank you, Mr. Chair.
    Russia continues to supply arms equipment to Syria as well 
as Iran and my question to you is how much as the U.S. 
sanctioned Russia for providing those sorts of assistance to 
countries like Iran?
    Mr. Billingslea. Assistance to Iran, not so much. But what 
they're doing with Assad we've targeted the main export engine 
of the Russian Government, which is Rosoboronexport and their 
bank.
    They control a bank, and by doing--and we sanctioned them 
for--in connection with the atrocities Assad has committed. 
That's actually complicated their ability to conclude a number 
of arms deals around the world.
    Mr. Lieu. So I've been told there is a Russian company, 
Sukhoi, that has provided support to Iran. What's the reason we 
haven't sanctioned that company?
    Mr. Billingslea. Well, so Sukhoi fighter jets are all over 
the place, not just with Iran. But also Sukhoi passenger jets 
are in service here in the United States and other places. So I 
think we need to kind of keep that in mind.
    As I had responded to a similar question earlier on Sukhoi, 
we are looking into that very carefully because we cannot agree 
that any Sukhoi support is given, particularly if chemical 
attacks are launched on citizens--innocent people in Syria.
    Mr. Lieu. Okay. Thank you.
    So I note that you're the Assistant Secretary for the 
Office of Terrorist Financing and Financial Crimes. So let me 
ask you a few questions on money laundering.
    The Russians and the Kremlin, they do engage in money 
laundering, correct?
    Mr. Billingslea. Correct.
    Mr. Lieu. And is one of the ways they do it by buying up 
real estate in the United States such as condos?
    Mr. Billingslea. That is a persistent suspicion we have. 
That is a really hard challenge for a variety of reasons.
    But in line with that thinking we have established a series 
of geographic targeting orders that are designed to have the 
real estate community conduct due diligence into who really is 
underneath these various real estate transactions and then they 
have to report that back to FinCEN.
    And very recently, my office made the policy recommendation 
to get more reporting by reducing the dollar threshold for that 
reporting obligation because it's not just in the case--it's 
money laundering in general where we see real estate is a 
favored vehicle for value transfer.
    Mr. Lieu. Does your office investigate these kinds of 
allegations?
    Mr. Billingslea. My office is the policy shop that also 
handles all the international engagement. But within the 
territory of the United States, the part of the Treasury 
responsible for the investigative functions would be the 
Financial Crimes Enforcement Network--FinCEN.
    Mr. Lieu. There has been some public reporting that a 
significant number of Russians purchased a lot of condos owned 
by the Trump organization. Are you aware of that?
    Mr. Billingslea. I've seen press reports on that but not--I 
mean, all over New York.
    Mr. Lieu. And do you know if that's true?
    Mr. Billingslea. I don't know if that's true.
    Mr. Lieu. Okay. I would like to move on to North Korea. The 
President has engaged in a trade war with China. Have you seen 
China lessen their sanctions against North Korea or China 
taking other actions to help North Korea in the wake of the 
current trade war with the U.S.?
    Ms. Singh. We remain committed to having conversations with 
China to instill upon them that we need their cooperation on 
North Korea including decreasing trade with North Korea.
    Mr. Lieu. So I've been at various briefings where some of 
the experts have said in fact China has been helping North 
Korea more than they used to. Is that true?
    Mr. Billingslea. I think the President has been very clear 
that he needs to see China step it up.
    Mr. Lieu. Has China engaged in more trade with North Korea 
in the last few months than they have before?
    Mr. Billingslea. I think we are watching the cross-border 
traffic very carefully and I think we are concerned about that. 
The big thing to focus on though is the ship-to-ship transfers 
in the China Sea and we need to see more policing to disrupt 
those transfers because that's how North Korea is getting 
around the U.N. Security Council oil sanctions.
    Mr. Lieu. Have more North Koreans been allowed to work in 
China in the last few months?
    Mr. Billingslea. I don't know about more working there but 
they continue to operate there, which is why this very morning 
we sanctioned an IT sweatshop--actually a couple, one of which 
was operating in China and another in Russia.
    Mr. Lieu. Has China ever said or implied that if this trade 
war gets worse or continues that they will take certain actions 
in North Korea that the U.S. may not like?
    Ms. Singh. Well, Congressman, I think I can address that. 
We are keeping those dialogues separate. We need cooperation 
with the Chinese on North Korea. It is just as much in their 
interest to have a denuclearized North Korea as it is in ours.
    Our trade conversation with the Chinese is separate. As you 
know, our trade issues with the Chinese have been going on for 
decades. We've been having conversations with them in the form 
of a strategic economic dialogue--a strategic and economic 
dialogue.
    So this President came in and decided that conversations 
with China were not working. He was going to have to take 
serious action on our intellectual property on the theft of our 
innovation from American industries, their state-owned 
enterprises--a litany of things that you're aware of.
    So our trade conversation is happening. We still expect 
full cooperation on North Korea. We've told the Chinese that it 
is very much in their interest to cooperate on North Korea as 
well.
    Mr. Lieu. Thank you.
    Chairman Royce. Thank you.
    We go to Tom Suozzi of New York.
    Mr. Suozzi. Thank you, Chairman Royce. Thank you, Ranking 
Member Engel, for holding this hearing. Thank you to our two 
witnesses today. You have got big portfolios--a lot of 
different things to focus on.
    I am really mainly focused today on Russia and its malign 
activities in Europe and Eastern Europe. Because of our focus 
in America on the partisan issues related to the 2016 
elections, I think we've lost focus on how much Russia is doing 
to undermine democracies in Europe and Eastern Europe and I 
think we need to call more attention to that.
    And I just want to use your language, Ms. Singh. Russia 
poses a threat to our national security on many fronts. We have 
witnessed Russian aggression globally threatening our partners 
and allies.
    Russia is just a grave a threat to our European allies and 
other partners from conducting targeted chemical weapons 
assassinations in the U.K. to using energy as a weapon.
    And Mr. Billingslea, I just want to quote from you the 
different remarks that you put in your testimony--Russia 
continues its occupation of Ukraine and Crimea and subversion 
of Western democracies, and for decades Russia has been 
developing complex and resilient networks to raise, transfer, 
hide, and obscure the origin and movement of proceeds generated 
through illicit financial activity including corruption, 
sanctions evasions, and arms sales. The scale and 
sophistication of Russia's malign activity is far more advanced 
than that of other states currently subject to broad U.S. 
sanctions.
    And so I got a report from the Congressional Research 
Services about the sanctions, which designations have been made 
in those that have not been used and you talked earlier before 
about the use of Executive orders versus CAATSA, and I want to 
ask you, first of all, do you think that we are doing 
everything that we can do?
    Because when I look at the sanctions that we've done, we've 
only done broad sanctions on nine out of 100 of the largest 
companies in Russia and we've only used more targeted sanctions 
in 23 out of the top 100 companies in Russia.
    And I want to suggest that we could be using some more 
sanctions related to Section 224 of CAATSA related to this 
specific area that I am talking about.
    So my question is do you think we are doing everything we 
can do, can we do more, and do you have enough resources and 
authority to do everything you think we should be doing?
    For both of you.
    Ms. Singh. Thank you, Congressman. I will start off very 
quickly.
    We do have the authorities and we are continually exploring 
what more we can do to ratchet up the pressure on Russia. I 
would say when it comes to actually imposing sanctions, just 
the fact that we have these authorities and our ability to 
implement them has given us significant leverage. We have seen 
that Russia has lost billions of dollars in transactions from 
the private sector because our companies know that they would 
be subject to our CAATSA sanctions, the primary----
    Mr. Suozzi. But they continue these malign activities. So 
the question is can we do more and should we be doing more, if 
only nine of the top 100 companies have the broad sanctions 
against them.
    Ms. Singh. I think, Congressman, we should be doing more. I 
think we should be increasing the pressure on Russia.
    Mr. Suozzi. And do you have the resources to do that?
    Ms. Singh. We do have the authorities that we need but we 
are always----
    Mr. Suozzi. Not the authorities. The resources. Do you have 
enough personnel in order to be implementing these sanctions 
against these large companies?
    Ms. Singh. Well, the State Department is known for using 
limited resources very wisely. We deploy our personnel very 
effectively.
    Mr. Suozzi. Okay. So you don't have enough resources.
    How about you, Mr. Billingslea?
    Mr. Billingslea. Thanks, Congressman.
    One key point, though, particularly in the cyber domain 
where you're focused on 224, the size of the company may not 
really be the right metric. It's sort of what they----
    Mr. Suozzi. I am only suggesting that as one thing that's 
got very broad applicability to this particular area. But you 
have got other authorities that have not been any designations 
under CAATSA that you could be using, I believe, to try and 
hold these companies accountable. But continue.
    Mr. Billingslea. Sure. I know. But 224 in particular has 
been a very valuable authority that you gave us. We've used it 
in nine cases so far against Russian cyber actors and then 
there have been a variety of other areas where an Executive 
order--some other legal authority got us onto the target faster 
so we used a different avenue.
    But in total, we've gone after 34 of these cyber players 
for various----
    Mr. Suozzi. Do you think you could be doing more?
    Mr. Billingslea. Absolutely.
    Mr. Suozzi. Do you have the resources necessary to do that? 
Do you have enough personnel dedicated to this function?
    Mr. Billingslea. I would love to work with you on that.
    Mr. Suozzi. Okay. Thank you very much, Mr. Chairman.
    Chairman Royce. Thank you.
    We go to Norma Torres of California.
    Ms. Torres. Thank you, Mr. Chairman.
    I do have a couple of questions that I hope both of you 
will comment on, and I am sorry to be jumping continents.
    Mr. Billingslea, I am very concerned about the current 
situation in Guatemala. As you may already know, the President 
of Guatemala, President Morales, has been working with a group 
of corrupt politicians to undermine the fight against 
corruption there, specifically, the work of CICIG.
    I worry that if we don't do more to deter this backsliding 
of the rule of law, Guatemala could break down into chaos and 
we could see the real crisis or an even bigger crisis at our 
southern border.
    So my question is what is the role of sanctions in our 
policy toward Guatemala and what kind of sanctions would be 
most effective in making clear that the U.S. will not stand 
idly while the Guatemalan President and his cronies allows 
years of progress to be turned back, utilizing our own 
equipment that was gifted to them?
    Mr. Billingslea. So, Congresswoman, you have put your 
finger on a really crucial issue. Ultimately, the Department of 
State is responsible for CICIG and the reformation process 
there.
    But we are watching the situation very closely. The tools 
we have would include, among other things, if we identify a 
financial institution that's being used to launder funds and 
it's touching the U.S. system, then the various provisions of 
the Patriot Act are available to us to go after.
    We do expect and demand that Guatemala implement anti-money 
laundering regimes and reforms, and then in the event that we 
see and can document and working with the prosecutor can 
document corruption actions, the Global Magnitsky Act in 
particular is the tool that we use to impose consequences on 
people for those kinds of actions.
    Ms. Torres. I certainly hope that your office is closely 
watching the actions. I am very alarmed at what is going on 
right now with the army mobilizing within the capital.
    Ms. Singh.
    Ms. Singh. Thank you, Congresswoman. We are very concerned 
about what is going on in Guatemala and we are looking at 
CICIG. The U.S. supports a reformed CICIG. We want to see more 
transparency, oversight, and accountability. It's an 
institution--it's an entity that should transfer more of its 
capacity back to the institutions. But we do share your 
concerns and we are monitoring the situation closely.
    Ms. Torres. I am not sure what you mean by transparency, 
and although I do agree that more of the work after 10 years 
should have been already transferred to the Guatemalan 
institutions.
    However, I do want to point to you, and I am sure you 
already know--I don't have to educate you on this--is that the 
Guatemalan congress has not been able to pass laws to address 
their own issues of corruption and transparency.
    So on what ground do we stand to say transfer the power or 
authority to an institution that has shown that they are 
willing to be on the record to find themselves or to refuse to 
allow themselves to be put before a court to investigate their 
own crimes?
    Ms. Singh. Congresswoman, you raised a very good point and 
that's exactly what we are looking at. We do want to find ways 
to increase the oversight and accountability for the entire 
situation.
    Ms. Torres. Please don't miss that mark. I think, you know, 
a lot of times we've done a great job but sometimes we have--
it's like head in the sand and when we don't send a very, very 
clear message then we end up with people coming to their own 
understanding on things.
    We do not want to empower the drug cartels. We don't want 
to empower what is happening there now. So I want to just be 
very clear with both of you that if we don't do anything now, 
if we continue to stand idle and allow them to move forward 
with their effort of intimidating reporters, of intimidating 
human rights people there, activists--then we are responsible 
for what ends up happening there and we will continue to be 
responsible for the number of children that are being held in 
ICE cages in our southern border, and that is what we need--
that is the bigger picture that we can't lose sight of.
    And, Mr. Chairman, I've ran out of time so----
    Chairman Royce. Thank you, Congresswoman Torres.
    Ms. Torres. Thank you for that.
    Chairman Royce. Thank you. And, again, we thank our panel 
and the committee stands adjourned. We'll see everyone at 12:30 
for our markup.
    [Whereupon, at 12:22 p.m., the committee was adjourned.]

                                   
                                 

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