[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]




 
          MAKING SANCTIONS EFFECTIVE: THE CASE OF NORTH KOREA

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

                                HEARING

                               BEFORE THE

         SUBCOMMITTEE ON ASIA, THE PACIFIC AND NONPROLIFERATION

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 27, 2019

                               __________

                           Serial No. 116-21

                               __________

        Printed for the use of the Committee on Foreign Affairs
        
        
        
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              U.S. GOVERNMENT PUBLISHING OFFICE 
 35-787PDF              WASHINGTON : 2019
                       
                       
                       
                       
                      COMMITTEE ON FOREIGN AFFAIRS

                   ELIOT L. ENGEL, New York, Chairman

BRAD SHERMAN, California             MICHAEL T. McCAUL, Texas, Ranking 
GREGORY W. MEEKS, New York               Member
ALBIO SIRES, New Jersey              CHRISTOPHER H. SMITH, New Jersey
GERALD E. CONNOLLY, Virginia         STEVE CHABOT, Ohio
THEODORE E. DEUTCH, Florida          JOE WILSON, South Carolina
KAREN BASS, California               SCOTT PERRY, Pennsylvania
WILLIAM KEATING, Massachusetts       TED S. YOHO, Florida
DAVID CICILLINE, Rhode Island        ADAM KINZINGER, Illinois
AMI BERA, California                 LEE ZELDIN, New York
JOAQUIN CASTRO, Texas                JIM SENSENBRENNER, Wisconsin
DINA TITUS, Nevada                   ANN WAGNER, Missouri
ADRIANO ESPAILLAT, New York          BRIAN MAST, Florida
TED LIEU, California                 FRANCIS ROONEY, Florida
SUSAN WILD, Pennsylvania             BRIAN FITZPATRICK, Pennsylvania
DEAN PHILLIPS, Minnesota             JOHN CURTIS, Utah
ILHAN OMAR, Minnesota                KEN BUCK, Colorado
COLIN ALLRED, Texas                  RON WRIGHT, Texas
ANDY LEVIN, Michigan                 GUY RESCHENTHALER, Pennsylvania
ABIGAIL SPANBERGER, Virginia         TIM BURCHETT, Tennessee
CHRISSY HOULAHAN, Pennsylvania       GREG PENCE, Indiana
TOM MALINOWSKI, New Jersey           STEVE WATKINS, Kansas
DAVID TRONE, Maryland                MIKE GUEST, Mississippi
JIM COSTA, California
JUAN VARGAS, California
VICENTE GONZALEZ, Texas

                                     

                    Jason Steinbaum, Staff Director

               Brendan Shields, Republican Staff Director
                                 ------                                

         Subcommittee on Asia, the Pacific and Nonproliferation

                   BRAD SHERMAN, Chairman, California

DINA TITUS, Nevada                   TED YOHO, Florida, Ranking Member
CHRISSY HOULAHAN, Pennsylvania       SCOTT PERRY, Pennsylvania
GERALD CONNOLLY, Virginia            ANN WAGNER, Missouri
AMI BERA, California                 BRIAN MAST, Florida
ANDY LEVIN. Michigan                 JOHN CURTIS, Utah
ABIGAIL SPANBERGER, Virginia

 

                     Don MacDonald, Staff Director
                     
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Griffiths, Hugh, Coordinator of the United Nations Panel of 
  Experts on North Korea.........................................     9

                  INFORMATION SUBMITTED FOR THE RECORD

Information submitted for the record from Representative Yoho....    22
Information submitted for the record from Representative Sherman.    43
Information submitted for the record from Representative Sherman.    45

                                APPENDIX

Hearing Notice...................................................    55
Hearing Minutes..................................................    56
Hearin Attendence................................................    57


          MAKING SANCTIONS EFFECTIVE: THE CASE OF NORTH KOREA

                       Wednesday, March 27, 2019

                       House of Representatives,

                 Subcommittee on Asia, the Pacific and

                           Nonproliferation,

                     Committee on Foreign Affairs,

                                     Washington, DC

    The subcommittee met, pursuant to notice, at 9:38 a.m., in 
Room 2172, Rayburn House Office Building, Hon. Brad Sherman 
(chairman of the subcommittee) presiding.
    Mr. Sherman [presiding]. Thank you all for coming today.
    We have a distinguished witness. Hugh Griffiths is the 
outgoing Coordinator of the U.N. Panel of Experts on North 
Korea, which just released its biennial report on the impact of 
sanctions against North Korea.
    Before discussing the U.N. report, we ought to review where 
we stand with North Korea. The Trump administration expressed 
optimism going into the Hanoi summit, but Kim Jong-un demanded 
the lifting of the all-important U.N. Security Council economic 
sanctions. In return, he did not offer complete, verifiable 
denuclearization. He did not even offer a termination of the 
creation of new fissile material and new nuclear bombs. He 
offered only to dismantle the facilities at Yongbyon. North 
Korea has other known, and perhaps unknown, facilities to 
create fissile material, not to mention facilities where 
warheads are constructed and missiles are developed.
    After hearing this proposal, President Trump rejected it, 
and for perhaps the first time in my career, I made the 
statement, ``Donald Trump is right.'' Where President Trump and 
I, where we apparently disagree is where we go from here. I 
believe that North Korea has conclusively demonstrated that it 
is not under enough pressure to agree to a deal acceptable to 
the United States.
    Now just about everyone in and around government in the 
United States say that we should be demanding complete, 
verifiable, irreversible denuclearization. That would leave 
North Korea with no nuclear weapons of any sort, and that is a 
regime that is paranoid, and given some discussions in 
Washington from time to time, perhaps justifiably paranoid.
    I think that we should be willing to accept a highly 
intrusive verification system that would assure us that North 
Korea was not making any more weapons, had a limited number of 
weapons, and was not selling any fissile material. But whether 
your objective is a highly monitored and very limited nuclear 
North Korea or whether it is complete denuclearization, neither 
was available to us in Hanoi.
    I need think that, if you want a better outcome, you need 
better sanctions. The Trump administration announced some 
additional sanctions. Then, we learned the President had 
withdrawn them. Now it appears that the President has withdrawn 
his withdrawal. There was discussion that his withdrawal was 
not of the new sanctions, but of additional sanctions that had 
not been announced. I do not know if our distinguished witness 
can shed some light on this. But the fact is that even the new 
sanctions, if allowed to go in effect, will not be significant 
enough to get Chairman Kim to change his bargaining position.
    I am hopeful our witness today can help us understand what 
more intense sanctions against North Korea would look like, and 
it may be the case that new sanctions are needed. It may be the 
case that we need more effective implementation of existing 
sanctions.
    The latest report of the U.N. Panel of Experts on North 
Korea has said that existing U.N. Security Council sanctions 
against the Kim regime are ineffective. The report specifically 
singled out the financial sanctions, writing, ``Financial 
sanctions remain some of most poorly implemented and actively 
evaded measures of the sanctions regime.'' It is noted that 
North Korea continues to have access to international financial 
system through five countries, the most notably of those, of 
course, is China. We know about 90 percent of North Korea's 
trade is with China. So, getting Beijing to implement sanctions 
against Kim Jong-un remains key to our efforts.
    Now focusing on both financial sanctions and China, the 
Trump administration did impose sanctions on one small Chinese 
bank in July 2017. If it was not already clear, the latest 
report confirms that sanctioning this small bank did not deter 
China from continuing to serve as North Korea's financial 
lifeline.
    Both in 2017 and again in 2018, then-Chairman Yoho and 
then-Ranking Member Sherman wrote the administration demanding 
that it impose sanctions on one of the four large Chinese banks 
that continue to do business with North Korea. And I think that 
events have shown that this action is increasingly needed.
    So, with that, I will turn it over to our ranking member, 
Mr. Yoho.
    Mr. Yoho. Thank you, Mr. Chairman, and I appreciate your 
words.
    Mr. Griffiths, thank you for being here to educate us on 
this process and on the summary of the report.
    I would like to welcome Mr. Hugh Griffiths, Coordinator for 
the United Nations Panel of Experts on North Korea. Mr. 
Griffiths has had firsthand experience monitoring the 
implementation of the North Korean sanctions resolutions passed 
by the United Nations Security Council, 15 members. As a body 
that plays a leading role in crafting the U.S. sanctions 
regime, his insight is invaluable to this committee.
    The United Nations has imposed 10 sanctions resolutions 
that require its member States to restrict trade and engagement 
with North Korea in response to North Korea's relentless 
development of nuclear weapons and ballistic missiles. However, 
the Panel of Experts' last report, released this month, shows 
that North Korea continues to defy these sanctions. Possibly 
the most egregious violation revealed in the report is the 
massive increase in ship-to-ship transfer of petroleum and 
coal. This type of industrial-scale activity can significantly 
undercut international sanctions programs, as was reported out 
by the report.
    But the report also reaffirms that North Korea is up to its 
old tricks as well. North Korea sanctions evasions are made 
possible through weak enforcement by individual States and 
insufficient oversight measures. But there is also the usual 
rogue galleries of pariah States that blatantly ignore U.N. 
sanctions. They are glad to pursue to trade and defense 
relations with North Korea.
    As the United States continues to navigate our diplomacy 
with North Korea and address the growing threat North Korea 
poses globally, it is imperative that the multilateral 
sanctions program overseen by the Panel of Experts remains 
strong. You know, look, this problem has been going on since 
the end of the Korean conflict. This is something that we have 
seen an escalation of the development of nuclear weapons. And 
as you can tell here, the size of this room, the importance of 
this discussion. How long are we going to let this go on?
    And I said that the U.N. Security Council voted 
unanimously--there were 15 members in that beyond the five 
permanent members--they voted unanimously to put sanctions on 
North Korea. And I see things pretty black and white. If we 
vote to do that, well, by God, we ought to follow through and 
make sure everybody on the Security Council that voted this way 
adheres to that.
    So, I am especially interested today to hear an update on 
the status of the U.N. sanction enforcement, how we can improve 
implementation, and where the international community may be 
falling short, especially regarding longstanding sanction 
violators, including China and Russia, who have long provided 
life support to North Korea's WMD programs and their weapons 
programs, or I mean their chemical weapons in addition to 
nuclear.
    Ninety to 94 percent of the trade with North Korea goes 
through China. China has a significant role to play in this. 
And if they voted to uphold these sanctions, and yet, they are 
one of the biggest cheaters, it raises the question, why bother 
having U.N. Security Council resolutions? Or why bother having 
members that are on a permanent committee for the United 
Nations Security Council vote to put in sanctions, and then, 
they pull away and they do not enforce these sanctions? So, I 
guess the question is, why do we bother even doing this if we 
are not going to adhere to it?
    But, since we are here, what do we do with these nation 
States that vote to put sanctions on, and then, they break 
their commitment? Should we censor them, so that they cannot 
vote for a period of time, maybe a year or 2 years? Or should 
we look at removing them permanently because their actions do 
not define the reason that they are on the Security Council in 
the first place?
    And I look forward to your testimony and the questions that 
follow.
    Thank you.
    Mr. Sherman. It is our usual practice to welcome opening 
statements from other members of the subcommittee of 1 minute, 
but Mr. Connolly has asked for a longer period of time. I yield 
3 minutes to the gentleman from Virginia.
    Mr. Connolly. I thank the distinguished chairman and I 
thank the ranking member for holding this important hearing 
today.
    I serve as the chairman of the Korea Caucus and also head 
of the congressional delegation to the NATO Parliamentary 
Assembly.
    Following the Hanoi summit between President Trump and Mr. 
Kim, we are not even close to the goal of a denuclearized North 
Korea. On the contrary, the DPRK reportedly continues to 
produce fissile material for weapons and to work on more 
advanced long-range missiles. According to the 2019 Worldwide 
Threat Assessment, the U.S. intelligence community finds that 
North Korea will seek to retain its weapons of mass destruction 
capability and is unlikely to completely give up its nuclear 
weapons and production capability. The latest POE report stated 
that North Korea's nuclear missile programs remain intact and 
found that North Korea has been using civilian facilities and 
infrastructure to assembly and test missiles.
    In November of last year, I presented a white paper to the 
NATO Parliamentary Assembly on North Korea's challenge to 
international security and the implications for NATO itself. My 
report noted the extensive sanctions evasion carried out by 
North Korea and documented by the POE. It also made several 
recommendations regarding actions NATO and NATO member States 
could take to combat sanctions evasion, including the adoption 
of comprehensive restrictions on maritime insurance for DPRK 
vessels and vessels engaged in trade with the DPRK. I think 
maritime insurance is something that has been overlooked and 
could be a very potent tool in enforcing the sanctions Mr. Yoho 
just talked about.
    The world must remain clear-eyed about the DPRK's record of 
violating previous nuclear agreements and stand ready to 
continue the campaign to isolate Pyongyang in the absence of 
verifiable progress toward denuclearization and the ceasing of 
other destabilizing behavior. The United States should lead the 
international community through the enforcement and expansion 
of the DPRK sanctions regime, as well as increased maritime 
interdiction efforts to counter the regime's sanctions evasion 
efforts.
    I look forward to hearing Mr. Griffiths' testimony this 
morning. I think this remains a front-burner issue, and as I 
said, I think we need to be very clear-eyed about the 
intentions of the North Korean regime.
    Thank you, Mr. Chairman, for your consideration.
    Mr. Sherman. Thank you.
    Are there other members seeking to make an opening 
statement?
    Let's hear from our witness, Mr. Griffiths.

STATEMENT OF HUGH GRIFFITHS, COORDINATOR OF THE UNITED NATIONS 
                PANEL OF EXPERTS ON NORTH KOREA

    Mr. Griffiths. Thank you very much, Mr. Chairman, Ranking 
Member, members of the committee. Thank you for the invitation 
to testify today.
    I have been asked to present on the U.N. Panel of Experts 
2019 final report that was published earlier this month. I 
believe that this document serves as a useful basis for any 
discussion entitled ``How to Make U.N. Sanctions More 
Effective: the Case of North Korea''.
    Before this discussion, I would like to pay tribute to the 
hard-working and dedicated U.N. experts and U.N. Secretariat 
staff who work on the other panels, groups, and monitoring 
teams in New York, but also those working in or from Africa, 
Europe, and the Middle East. My colleagues deploy to, or are 
based in, difficult and dangerous parts of the world. These 
include Afghanistan; the Central African Republic; the 
Democratic Republic of the Congo, DRC; Mali; Somalia; South 
Sudan; the Sudan; Libya, and Yemen, as well as visits to 
neighboring member States.
    The experts come from a variety of backgrounds, law 
enforcement, customs, humanitarian aid, former diplomats, 
former members of the armed forces, defense, and intelligence 
services. They also include field researchers, academics, 
journalists, and former U.N. staff. Their reports provide the 
gold standard for national and international policymakers 
working on complex conflicts that include a U.N. sanctions 
regime.
    My colleagues investigate the groups, individuals, and 
sometimes member States that are responsible for violating the 
various Security Council resolutions. Their mandates include 
investigating arms embargo violations, monitoring and reporting 
on armed groups, transnational criminal organizations, various 
al-Qaeda or ISIL affiliates, the Taliban, as well as other 
individuals or entities that engage in the smuggling of arms 
and other conflict-sensitive commodities such as diamonds. My 
colleagues seek to identify those to be recommended for assets 
freezes and travel bans to the U.N. Security Council.
    As such, the U.N. panels and groups of experts have been 
deliberately targeted by their adversaries in the past, and 
sometimes this goes beyond surveillance and threats. I, 
therefore, dedicate this testimony to the memory of Michael 
Sharp and Zaida Catalan of the U.N. group of experts monitoring 
the sanctions in the Democratic Republic of Congo who were 
murdered in the Kasai region in March 2017.
    Michael was from the United States of America. Zaida was 
from Sweden and Chile. More than 2 years have passed, and no 
one has yet been convicted for these serious crimes. Their 
sacrifice is a reminder of the dangers my friends and 
colleagues face in the field, and we honor their memory.
    Turning to the sanctions on North Korea, or the Democratic 
People's Republic of Korea, DPRK as it is known in U.N. 
documents, I should stress that these sanctions are amongst the 
most comprehensive, but also targeted measures applied as part 
of any U.N. sanctions regime. The situation now is very 
different to that of my last testimony before Congress in 2013. 
The U.N. sanctions regime has been transformed by the five U.N. 
Security Council resolutions adopted in response to the DPRK's 
three illegal nuclear tests in 2016 and 2017, as well as an 
unprecedented number of prohibited ballistic missile tests 
during the same period.
    The U.N. sanctions regime underwent a fundamental step 
change beginning with Resolution 2270, 2016, adopted by the 
Security Council on 2d March 2016. This was in response to the 
DPRK's fourth nuclear test in January 2016 and a prohibited 
rocket launch of February 2017 that used ballistic missile 
technology. Until the 2d of March, 2016, the U.N. sanctions 
regime on the DPRK had been a classic nonproliferation regime 
prohibiting the acquisition by the DPRK of nuclear and 
ballistic missile technology that would enable it to further 
develop its illegal nuclear and ballistic weapons program. 
There was also an arms embargo prohibiting the DPRK from 
exporting or importing conventional arms and related military 
equipment.
    The fourth nuclear test in January and the rocket launch of 
February 2016 led the Security Council to widen the sanctions 
regime to include the inspection by member States of all cargo 
on their territory originating from, transiting, or destined 
for the DPRK. Key DPRK export commodities, such as coal, iron, 
and iron ore, were prohibited for the first time, unless these 
exports were determined to be solely for livelihood purposes 
and unrelated to generating foreign currency revenue for the 
DPRK's nuclear or ballistic missile programs or other 
activities prohibited by the resolutions. These commodities 
were mainly transported by ship, and Resolution 2270 contained 
other new and important maritime prohibitions, including a ban 
on approximately 13 North Korean ships that would preclude 
these vessels from entering any foreign port.
    North Korea ignored the Security Council's decisions 
regarding its ballistic missile programs and continued tests of 
various types during the remainder of 2016, as well as a 
nuclear test in September of that year. In response to these 
prohibited activities, the Security Council adopted Resolution 
2321 on the 30th of November. This included additional or 
expanded maritime and commodity sanctions, including a cap on 
coal exports and a ban on the export by the DPRK of copper, 
nickel, silver, and zinc, among other measures.
    However, during the first half of 2017, the DPRK continued 
its illegal ballistic missile tests. The Security Council then 
adopted another resolution, 2356, that designated 14 North 
Korean individuals. But North Korea continued to disobey the 
Security Council by conducting its first successful test of an 
intercontinental ballistic missile on the 4th of July. In 
response, the Security Council adopted Resolution 2371 on 5th 
September which completely prohibited the export of coal, iron, 
iron ore, lead, and lead ore, and seafood. It expanded the 
financial sanctions on the DPRK and banned the chartering of 
North Korean ships by foreign companies.
    North Korea had already disobeyed that resolution and its 
predecessors by exploding its largest nuclear device to date on 
3d September. In response, the Security Council adopted 
Resolution 2375. This resolution introduced an annual cap on 
petroleum imported to the DPRK annually of 2 million barrels. 
It also set a cap on crude oil. A ban was placed on 
condensates, natural gas imports, and textile exports from the 
DPRK. Joint ventures and cooperative entities with DPRK 
nationals and entities were also prohibited. Maritime 
interdiction measures on DPRK-related vessels were introduced. 
Further, work authorizations for DPRK nationals on the 
territory of member States were also prohibited, with a number 
of limited exemptions.
    On 15th September, the DPRK launched another ICBM, and on 
the 28th November, the DPRK launched yet another ICBM, its 
largest to date, the Hwasong-15. In response to these launches, 
the Security Council adopted Resolution 2397. This resolution 
increased by fourfold the annual cap on petroleum products, 
reducing to 500,000 barrels per year that might be legally 
imported. In that resolution, the Security Council also decided 
that, should the DPRK conduct any further nuclear or ballistic 
missile tests, imports would be further reduced.
    The resolution also explicitly acknowledged that, quote, 
``The proceeds of the DPRK's trade in sectoral goods, including 
but not limited to coal, iron, iron ore, lead, lead ore, 
textiles, seafood, gold, silver, rare earth minerals, and other 
prohibited metals, as well as the revenue generated from DPRK 
workers overseas, among others, contribute to the DPRK's 
nuclear weapons and ballistic missile programs.'' Resolution 
2397 expanded sectoral sanctions by introducing a ban on the 
DPRK's export of food and agricultural products, machinery, 
electrical equipment, earth and stone, including magnesite, 
magnesia, wood, and vessels.
    The resolution also prohibited the DPRK from selling or 
transferring fishing rights. The resolution also introduced the 
ban on some very important imports, including the supply, sale, 
or transfer to the DPRK of all industrial machinery, 
transportation vehicles, iron, steel, and other metals, with 
the exception of spare parts to maintain North Korean 
commercial/civilian aircraft. 2397 also strengthened the ban on 
providing work authorizations for DPRK nationals by requiring 
member States to repatriate all such nationals earning income 
abroad within their jurisdiction within 24 months from 22d 
December 2017.
    The above is a summarized version of events. However, the 
pattern is clear. An illegal nuclear test or serious ballistic 
missile launch is met with a response from the Security Council 
in the form of additional sanctions.
    I stress again, by Resolution 2397, adopted on 22d December 
2017, the Security Council decided that further such illegal 
tests or launches would result in further caps on North Korea's 
petroleum imports. Since 22d December 2017, there have been no 
further nuclear tests or serious ballistic missile launches.
    Now turning to the issue of how North Korea is evading the 
current sanctions regime, I would like to focus on the 
executive summary of the panel's final report which provides 
information on this subject. The nuclear and ballistic missiles 
programs of the Democratic People's Republic of Korea remain 
intact, and the country continues to defy Security Council 
resolutions through a massive increase in illegal ship-to-ship 
transfers of petroleum products and coal. These violations 
render the latest U.N. security sanctions ineffective by 
flouting the caps on the import of petroleum products and crude 
oil by the DPRK, as well as the coal ban imposed in 2017 by the 
Security Council in response----
    Mr. Sherman. Mr. Griffiths, how much longer is your opening 
statement? Our usual practice is 5 minutes as an opening 
statement. I am told that we arranged for your opening 
statement to be 10 minutes. About how much longer do you have?
    Mr. Griffiths. Well, sir, I am guessing another 6-7 
minutes.
    Mr. Sherman. There are many panels where the opening 
statements are that long. I wonder if you could summarize your 
remarks, and then, respond to questions. And, of course, your 
entire statement will be made part of the record. I realize you 
have come a way to make this presentation, but the traditions 
of the Foreign Affairs Committee are for 5-minute opening 
statements.
    Mr. Griffiths. Well, sir, since it is your venue, I will 
bow to your traditions. But I will just stress that the report 
is quite long and the subject is complex. So, I am happy to 
stop here and take your questions.
    Mr. Sherman. If there is a way for you to give us the high 
points in another 2 minutes or so, that would be fine.
    Mr. Griffiths. Well, I tell you what. I will just conclude 
by--in conclusion, I should stress that the report also noted 
the DPRK's use of civilian infrastructure for ballistic missile 
assembly and testing. From previous panel reports, one may 
observe that the DPRK has made widespread use of ostensibly 
civilian, commercial, diplomatic, and trade entities and 
personnel for past ballistic missile and nuclear-related 
procurement from other member States. There are also many 
examples of the use of the DPRK's merchant freighter vessels, 
DPRK diplomats, trade representatives, and embassies, for arm 
sales, illegal financial transactions, and other activities 
prohibited under the resolutions.
    I believe the Security Council imposed so many measures on 
North Korea through U.N. sanctions, at least 26 measures 
compared to the average of 3.5 for a U.N. sanctions regime, on 
the DPRK for the above reasons: for the use of civilian 
infrastructure, for the use of diplomats, for the use of 
embassies. These comprehensive and targeted measures, 
particularly beginning in March 2016, were in response to the 
DPRK's single-minded pursuit of its nuclear weapons and 
ballistic missile programs for which all the resources of the 
State, civilian, diplomatic, and military, were deployed as 
necessary.
    I would like to conclude this written testimony by 
recognizing the hard work and dedication of my panel 
colleagues, past, present, and future. I would also like to 
thank U.N. Secretariat colleagues, without whom our 
investigations and reports would not have been possible.
    My former and current panel members and U.N. staff 
colleagues have made our reporting something to be rightly 
proud of, and I would like to thank them for their service.
    Thank you.
    [The prepared statement of Mr. Griffiths follows:]
    
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    Mr. Sherman. Thank you, Mr. Griffiths. I know that you did 
not have a chance to deliver your entire opening statement. And 
that is why I will give you time at the end of these hearings 
to give us a concluding statement, to include any of the 
material that was not elicited by questions.
    At this point, I need to leave for just a few minutes. I am 
going to recognize Mr. Connolly for 5 minutes, and then, he 
will recognize Mr. Yoho for 5 minutes.
    Mr. Connolly [presiding]. I thank the chair.
    Before I begin, Mr. Griffiths, on behalf of all of us, we 
want to honor your two lost colleagues in the service of 
international peace, and we are so sorry for that loss. We, 
like you, hope that the perpetrators of those grisly murders 
will be brought to justice.
    Thank you for your testimony this morning.
    You know, one of the concerns I always have about raising 
expectations too high is that results are often disappointing. 
And maybe with the best of intentions, President Trump agreed, 
in an unprecedented move, to meet with the leader of North 
Korea, the first President ever to do that. He not only met 
with him in Singapore, he met with him again in Hanoi.
    Expectations were high. The South Korean President was 
overjoyed at the prospect of perhaps reconciliation measures in 
the peninsula and the dismantlement of the nuclear program in 
North Korea.
    Since those two summits, however, the status of the nuclear 
development program, as your testimony indicates, and as the 
report of the POE indicates, seems not to have changed at all. 
Overt testing of missiles has ceased, but in terms of 
proceeding with the nuclear development program, the evidence 
would suggest we are going in the wrong direction.
    Have I got that wrong? I mean, have we had concrete steps 
toward denuclearization in your expert opinion?
    Mr. Griffiths. So, the resolutions remain in force, and my 
expertise is investigating North Korean evasion of the 
sanctions measures.
    Mr. Connolly. Yes, but, Mr. Griffiths, the purpose of the 
sanctions is to deter the nuclear development program in North 
Korea, is it not?
    Mr. Griffiths. The resolutions talk about the need for 
dialog within the six-party talks, and within that framework, 
the resolutions talk about verifiable denuclearization.
    Mr. Connolly. Right, and have you seen progress since the 
two summits or since the adoption of those resolutions in terms 
of verifiable measures toward denuclearization?
    Mr. Griffiths. No, sir, I have not.
    Mr. Connolly. We talked about sanction evasion, and you 
talked about 26 measures imposed by the United Nations at 
least. And you described those 26 as being comprehensive. I 
mentioned in my testimony, and you shook your head yes I think, 
but what about maritime insurance? Is there a way we can use 
maritime insurance to deter offshore offloading of illegal 
goods that evade sanctions? Can we do a better job of that 
among both U.N. members and, as I advocated, NATO members?
    Mr. Griffiths. Yes, sir, I think addressing maritime 
insurance as part of a comprehensive approach that looks at 
flag States, in particular, but also vessel owners, vessel 
operators, commodity traders, the oil companies that contract 
with vessels whose product is sometimes diverted to North 
Korean tankers for these illegal ship-to-ship transfers--if you 
look at the whole maritime ecosystem in that part of the world 
and target every international actor involved, you will see 
good results.
    Mr. Connolly. How satisfied are you in terms of cooperation 
among U.N. members with POE and with what you are trying to do 
and the enforcement of sanctions? Is it widespread, the 
evasion, or is it kind of limited to a select number?
    Mr. Griffiths. It is difficult question to give a short 
answer to. If we focus on the North Koreans because the North 
Koreans have approached sanctions evasion in a very, very 
intelligent manner, and they look at the global system, the 
global financial system, how the maritime ecosystem works in 
practice, and they look for the gaps. They look for the gaps in 
banking security. That is how they conduct these massive 
heists, $81 million in the case of Bank of Bangladesh. So, they 
are so sophisticated.
    And you only have to look at the cartels, the narco 
traffickers, to see how they evade law enforcement mechanisms 
to conduct their trade so successfully. And I would say that 
the North Korean masterminds behind their illegal activities 
approach it in the same way. They bank with respectable banks 
one way or another. They use loopholes, particularly in the 
offshore economy and international financial centers, to get 
around security measures that are in place. So, that is where I 
would start from.
    Mr. Connolly. Thank you.
    My time is up. I am going to give you a copy of the paper I 
referenced that was presented to the annual meeting of the NATO 
Parliamentary Assembly, which is the latest, sort of the 
legislative arm of NATO. And the reason I am giving it to you 
is, even though North Korea is not sort of an issue directly 
related to European collective security or North Atlantic 
collective security, we decided that it is an issue we have to 
address. And this paper was adopted unanimously.
    A lot of the work in this paper relied on the work you did 
at POE. So, thank you for your work, and it continues to 
reverberate in lots of other forms.
    The chair now recognizes my friend, the distinguished 
ranking member, Mr. Yoho of Florida.
    Mr. Yoho. Thank you, Mr. Connolly.
    I appreciate your testimony.
    First, I want to just reiterate what Mr. Connolly said 
about your colleagues, Michael Sharp and Zaida Catalan. Giving 
up their life for monitoring sanctions, you know, they are out 
there doing that inspection of what the U.N. and the people 
that vote that way task them to do. And so, they have given up 
their life, and I know that was an emotional time for you. And 
I appreciate you dedicating this to them.
    I think we need to keep that in mind as we move forward. 
Sanctions are in place. So, the U.N.--and we just met with the 
Secretary General, I think it was a week or 2 weeks ago. We 
talked about when sanctions are put in place and member nations 
or member States, they do not adhere to them, what can we do to 
those. Because this is a serious issue in North Korea. It has 
been going on. It has been escalating. They have perfected from 
intermediate to long-range missiles, God knows what else, and 
we know they have nuclear weapons. Left unchecked another 5 or 
10 years, I am sure we would all agree it would be a worse 
situation and it would be that much stronger.
    When I look at North Korea, I see the epitome of the black 
market, the epitome of the underground market, or the dark web. 
They have learned how to navigate in a 21st century world 
without being present. They can funnel money through different 
shell corporations, whether it is in Hong Kong, Singapore, even 
the United States, and they have become very astute at doing 
that, as you brought up the $81 million.
    I do not think we can ever block all of that, but when I 
have a country, i.e., China, that does over 90 percent of the 
trade with North Korea, that is a member of the permanent 
Security Council, and Russia, that are evading the sanctions, 
you know, we can go after the $81 million, but I think we need 
to go after the bigger players.
    In your recommendation--I know it has got to be 
frustrating. The U.N. votes on it, on the sanctions. You guys 
have to monitor it. Then, you have to report back. And 
countries like Russia, or all of the 15 countries that were on 
that unanimous decision, they can weigh in on this, on your 
report, right? And they can kind of redact things, is that 
true?
    Mr. Griffiths. No, sir.
    Mr. Yoho. They cannot redact it?
    Mr. Griffiths. No, sir.
    Mr. Yoho. They can challenge stuff in there, right?
    Mr. Griffiths. There was one occasion where a member State 
made public some form of displeasure. I mean, people have 
conversations with me all the time, but no member State has 
ever redacted a panel final report.
    Mr. Yoho. Thank you for clarifying that.
    Mr. Griffiths. I mean, annexes have been routinely in the 
past made confidential, but everything has been published that 
the panel has wanted to publish.
    Mr. Yoho. So, your 378-page report is pure information?
    Mr. Griffiths. Peer-reviewed.
    Mr. Yoho. Well, it is pure information that your panel, the 
POE, has come out with, right?
    Mr. Griffiths. Yes, sir.
    Mr. Yoho. OK. That is good to know, because I was told 
earlier that it gets redacted by certain nation States. So, I 
need to review that.
    Mr. Griffiths. Well, the only people who have talked to me 
about redaction is the panel members.
    Mr. Yoho. OK.
    Mr. Griffiths. And we certainly have not agreed to any 
redactions of the report by member States. That would be wrong.
    Mr. Yoho. I look forward to going through that.
    What would be your recommendation on countries that do not 
adhere--well, let's just focus on the 15 or the five permanent 
member States on the NSC, the National Security Council. What 
would be a recommendation for countries that vote to put 
sanctions and, then, do not adhere to them? Do you have any 
recommendations?
    Mr. Griffiths. Well, sir, I mean, to be frank with you, on 
the subjects that we have tackled within our 2019 final report, 
it is more a case of individuals and companies seeking to make 
money from sanctions evasion----
    Mr. Yoho. Sure.
    Mr. Griffiths [continuing]. By cooperating with the North 
Koreans. In absolute honesty, there are only a few sanctions 
violations by the North Koreans in certain African and Middle 
Eastern States which were providing either ballistic missile or 
conventional arms technology or services, whereby the senior 
leadership of the ministry of defense of that country, and 
thereby the office of the President or State security, would 
have been aware of what these North Koreans were doing there.
    Mr. Yoho. Well, let me ask you about the ship-to-ship 
transfers that happen with China, because China, you know, the 
controlling, ultimate entity there is the Chinese Communist 
Party. So, I cannot imagine shipping entities under so-called 
private registration are allowed to do ship-to-ship transfers 
without the Chinese Communist Party. So, therefore, it would 
indicate a nation State being complicit. Am I wrong on that?
    Mr. Griffiths. Well, here is the technical thing, sir, and 
it is actually a really important point. I mean, you might have 
access to different and high levels of intelligence I am not 
read into; I do not have U.S. security clearance.
    Mr. Yoho. Right.
    Mr. Griffiths. But if you look at even the U.S. document, 
and it is a very useful document, it was issued on March 21st. 
And it is from the U.S. Department of Treasury, together with 
their colleagues in the State Department and the Coast Guard, 
and it is called ``Updated Guidance on Addressing North Korea's 
Illicit Shipping Practices''.
    And that is a really important document that has become 
kind of lost in all this, I suppose, media focus on the recent 
sanctions cases, your country's sanctions cases, the two 
companies. But if you look at this document, the Treasury 
guidance, at the back you will see which vessels that the U.S. 
Treasury, the U.S. Government, believe have engaged in ship-to-
ship transfers with North Korean tankers.
    And while many of the flag States--and it is important 
because the flag States have the jurisdiction over the vessels, 
no matter who is crewing them, no matter where the companies 
are. I will read you them. This is a U.S. document.
    Mr. Yoho. You know, for brevity of time here and to get to 
the other members----
    Mr. Griffiths. Togo, Sierra Leone, Panama, Panama, Togo, 
Republic of Korea, unknown, Panama, unknown, unknown, unknown, 
Singapore, unknown, Togo, Russia, Sierra Leone, Russia, 
unknown. I mean, the list goes on. This is just U.S. 
information. It is not U.N.-approved information.
    Mr. Yoho. What I would like to do is, with the chairman's 
permission, have that entered into the record.
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    Mr. Yoho. And we are going to get a copy of that, and we 
will look at that. And then, we will follow through on the 
recommendations we have already heard. I thought Mr. Connolly's 
idea of looking at the insurance companies is a great way to do 
this. And we look forward to working together in a bipartisan 
manner.
    Mr. Sherman [presiding]. Thank you.
    Mr. Yoho. And with that, I yield back, and thank you.
    Mr. Sherman. We now have the most comprehensive sanctions 
on North Korea that we have ever had, but the ones we used to 
have were not effective and the ones we have now are not 
effective enough to get the North Koreans to take a good, a 
fair bargaining position. Sanctions are hard because those 
governments that deserve to be sanctioned are the very 
governments that do not care if you reduce their GDP by 5 
percentage points. Any administration that hurt our economy for 
anything but the best possible reasons would be voted out of 
office. That is not a risk that Chairman Kim faces.
    This body has--and I mean the Foreign Affairs Committee 
has--been troubled by the administration's lack of transparency 
to Congress in withholding information on the diplomatic 
negotiation process with Pyongyang and intelligence related to 
North Korea's weapons systems.
    Have you and the panel encountered challenges in working 
with the State Department in getting information for your 
report draft?
    Mr. Griffiths. The main thing for the panel is we operate 
to a very high standard of evidence, and you will see that in 
the report. We try to make everything court-admissible. 
Everybody on the panel knows who our sources are, even if we do 
not say publicly.
    So, we would be very appreciative of more imaging on ship-
to-ship transfers from everyone. And you can see in the report 
that we have not had imagery for quite a long time on ship-to-
ship transfers, or it has been quite limited. The imagery is 
the most important thing. Ships are big. If you get the images, 
then you can drill down. Then, you can find out the brokers 
involved, their bank accounts, trace back to the North Korean 
brokers.
    So, it is critical to get the ship-to-ship imagery as the 
starting point, and then, you can take that to the flag States, 
all of these flags of convenience who do not monitor the very 
ships that sail under their jurisdiction, and hold them to 
account. Unfortunately, the panel does not have the kind of 
assets that allow us to get close-up imagery of these ships.
    Mr. Sherman. Has the United States and the State Department 
given you many images over the last year or two?
    Mr. Griffiths. Well, I am an investigator, so I would 
always like more. We could certainly do with more. There are a 
whole range of----
    Mr. Sherman. We will do whatever we can to hold the State 
Department accountable----
    Mr. Griffiths. Thank you.
    Mr. Sherman [continuing]. For its decision not to give you 
more, since this report, the whole purpose is sanctions 
implementation, and the United Nations is critical to that.
    There are a number or at least one African State that has 
North Korean security personnel. That seems to be one of the 
things that the North Korean government exports, is cadres of 
thugs, armed men, whatever. Which States are those operating in 
now?
    Mr. Griffiths. Well, in our latest report, the panel noted 
issues arising from Angola, not Angola. My apologies. Angola 
are in the clear right now. Uganda.
    Mr. Sherman. Yes, I believe that was featured in The Wall 
Street Journal.
    Mr. Griffiths. Yes, sir. Some troubling things going on 
there.
    On finance, we have real concerns about Libya. There were 
attempted sales to Libya through a Syrian intermediary named 
Hussein al-Ali who was working on behalf of the North Koreans. 
We have had no answers back from the Libyan authorities on 
this, either.
    We hear troubling rumors about Namibia once again. We have 
had no response from Tanzania on a variety of military 
activities, military services, that North Korea certainly was 
providing.
    Mr. Sherman. If you could bring to the attention of the 
committee those countries where you have asked a specific 
question and not gotten an answer, we can amplify your request 
and inquire of their Ambassador here as to why this U.N. 
request for information has not been granted. And so, I would 
ask you to furnish for the record a list of specific unanswered 
questions and who you asked them to. And I cannot guarantee 
anything, but we can certainly push people to answer those 
questions that are still relevant. So, please, just provide 
those questions that you have asked that are relevant to your 
operation and have not been answered.
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    Mr. Sherman. China has four of the largest banks in the 
world by assets, the Industrial and Commercial Bank of China, 
the China Construction Bank, the Agricultural Bank of China, 
and simply the Bank of China. So, those are the big four in 
China.
    Have any of these four, directly or indirectly, through 
front companies or directly, helped facilitate North Korea's 
access to the international financial system?
    Mr. Griffiths. Well, in our report we talk about global 
banks, and that is big banks, but it does not matter their 
nationality. Actually, if you drill down----
    Mr. Sherman. Do you name the particular global banks that 
are assisting North Korea?
    Mr. Griffiths. Well, it is more complicated than that 
because we find that they are unwitting. I mean, we do not have 
the kind of----
    Mr. Sherman. Unwitting, but negligent? Or unwitting and 
deceived by such brilliant deception that we cannot blame them 
for being deceived?
    Mr. Griffiths. In one case, I was dealing with--I think 
they can put measures that we recommend in our recommendations, 
which are in my testimony, at least for ship-to-ship transfers, 
that global banks can easily insert a clause, which is 
basically a box tick, that will force all the oil companies, 
all the global commodity trading companies who are leveraged 
with loans and financial credit instruments to buy and sell the 
fuel--the banks can introduce something to force their clients 
to undertake more measures. So, that is a suggested measure.
    Mr. Sherman. Do you have the proposed language that should 
be in the contract?
    Mr. Griffiths. We do not go that far because the----
    Mr. Sherman. Well, I would ask you to supplement the 
record. Say, when we say we want this, this is what we want. 
Because this Congress could pass a law saying no bank can do 
business in the United States unless they put this in all their 
contracts. That would be an effective way to get it in all the 
contracts.
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    Mr. Sherman. And let's see. There have been changes--it is 
one thing to announce sanctions. They are documents on a piece 
of paper and lawyers can read the fine print. But business 
people respond not only to the fine print, but the 
atmospherics. That is the fine print; is it going to be 
enforced or are they just joking? Is it going to be enforced 
and tomorrow there is going to be even stricter sanctions? So, 
why plan a business deal today that is even legal because 
tomorrow it will be illegal versus, well, that is the sanction 
that exists today; it is time to plan a business deal because 
they will be waving that sanction tomorrow.
    Has the Donald Trump rapprochement with Kim Jong-un as an 
individual, going from ``Rocket Man'' or ``Little Rocket Man'' 
to I think the word ``love'' was used or ``love letter,'' or 
something--has that change in atmospherics changed the attitude 
of China, Russia, and the big shipping companies to whether 
they really have to abide by the sanctions?
    Mr. Griffiths. So, love letters are not subject to 
sanctions, and therefore, the panel does not investigate that.
    Mr. Sherman. No, what I am saying is, you are a company in 
China. You are a shipping company. You are a bank. And in 2017, 
you say, these are the written sanctions----
    Mr. Griffiths. Yes.
    Mr. Sherman [continuing]. And, by God, America is really 
serious about it. They are angry at North Korea. They will be 
angry at anybody who violates the sanctions.
    Mr. Griffiths. OK. So, I can----
    Mr. Sherman. And now, by late 2018, it is, gee whiz, a 
bromance here going. So, has the change in atmosphere between 
the two leaders changed the seriousness by which companies 
enforce the sanctions?
    And I have gone over time.
    Mr. Griffiths. What I would point to is, in terms of our 
investigations, that is what I can speak to. During the 
Singapore and Hanoi summits and meetings elsewhere, I noticed 
that these armored Mercedes-Benz that the panel has been 
investigating for a long time were being driven around the 
streets of Singapore without car license plates, driven around 
the streets of Hanoi.
    These are serious sanctions violations. I saw Chairman Kim 
showing off his new Rolls-Royce Phantom to Secretary of State 
Pompeo when Secretary of State Pompeo was in Pyongyang for 
negotiations. It is these kinds of activities by the North 
Koreans--and these Mercedes-Benz are actually important because 
they were illegally and clandestinely exported from the United 
States, from New Jersey, from Long Beach, by a Chinese 
businessman called George Ma, whose company Seajet was involved 
in illegal military equipment deliveries to the Republic of 
Congo.
    Mr. Sherman. I am going to cut you off here.
    Mr. Griffiths. Yes.
    Mr. Sherman. My colleagues have been very patient.
    Mr. Griffiths. My apologies.
    Mr. Sherman. Well, one of them has been very patient; one 
of them has left the room. I am sure his patience will cause 
him to come back.
    And my colleague is recognized.
    Ms. Spanberger. Thank you, Mr. Chairman.
    And thank you very much for being here today, sir. I would 
like to start by thanking you for acknowledging the sacrifice 
of your colleagues Michael and Zaida, and I hope that we will 
keep them in mind as we continue our conversations, and the 
incredible work of the U.N. individuals across the world.
    My question refers to cyberattacks. The U.N. Panel of 
Experts' latest report outlines North Korea's use of 
cyberattacks against financial institutions and the 
exploitation of Bitcoin and other cryptocurrencies to illegally 
access and transfer funds. According to your report, this 
included cyberattacks not just against small banks or in 
countries with limited financial infrastructure, but also 
against commercial and financial entities here in the United 
States, in South Korea, Europe, and in other key U.S. partners, 
as well as against the SWIFT messaging system that most of the 
international banking community relies on to transfer money 
from one bank to another.
    My concerns are twofold. First, how sophisticated are North 
Korea's offensive cyberattack capabilities, and what more can 
the U.S., the United Nations, member States as well, do to 
guard against these types of intrusions? And second, do you see 
any indications that North Korea might use these cyberattack 
capabilities to put international banking, the entire system 
itself or any of its components, at risk?
    Mr. Griffiths. Yes, I do, and the nearly 5 years I have 
worked on the panel causes me great concern regarding the 
security of the international banking system and the level of 
due diligence and various banks' genuine anti-money-laundering 
capacity. Thirteen point five million dollars were transferred 
from the Cosmos Bank via 28 countries in 14,000 simultaneous 
ATM withdrawals, 10,000 separate transactions over a weekend. 
So, the North Korean hacking of banks is not only sophisticated 
in terms of how they are breaching banking security software 
and systems, but they are also organizing small armies of 
people around the world to withdraw very quickly from ATM 
machines. This is extremely well organized.
    Follow the money. With Chairman Kim at every level, if you 
follow the money, you will be able to address this problem more 
effectively.
    Ms. Spanberger. And, sir, you mentioned that there were the 
simultaneous withdrawals coordinated across the world. Do you 
have an understanding of how it is that they find individuals 
or find the infrastructure to be able to create that type of 
offensive engagement of those simultaneous withdrawals?
    Mr. Griffiths. No, ma'am, I do not, but I think it is a 
very important area to pursue rapidly investigating that.
    Ms. Spanberger. And do you have any indication of whether 
there might be other actors involved in those sorts of large-
scale attacks and where those actors may be coming from? And 
when I say ``actors,'' I mean non-North Korean individuals. Who 
else might be coordinating on behalf of these efforts?
    Mr. Griffiths. No, I do not. I will only note that the 
panel itself has been subject to multiple systemic hacking 
attempts, and we have put that in our report.
    Ms. Spanberger. Excellent. Thank you very much.
    My second question relates to human rights. According to 
the United Nations, 11 million people in North Korea are not 
getting enough nutritious food, clean drinking water, or access 
to basic services like health and sanitation. Given the concern 
over the drop in domestic North Korean food production last 
year about 10 percent, it seems that the humanitarian aid is 
more important than ever to prevent widespread suffering.
    My question for you is, how can we balance enforcing U.N. 
and U.S. sanctions with a humanitarian imperative to ensure 
that the people in North Korea do not suffer due to the 
misguided policies of their government? And do you have any 
recommendations for ensuring humanitarian assistance actually 
reaches the North Korean people?
    Mr. Griffiths. Yes, we do have recommendations for the 
humanitarian sector, and we have put them in our report, too, a 
bit of housekeeping on the U.N. exemption system which is now 
in effect. All I will say is this: that the humanitarian 
agencies, by coming to the Security Council, play the game. 
They ask for exemptions. The smugglers, they do not, and 
somehow they are able to import into North Korea very large 
Rolls-Royce Phantoms in shipping containers. And if they can 
bring in the Phantoms and Mercedes in shipping containers, that 
means they can import the smaller items for the nuclear and 
ballistic missile programs.
    Ms. Spanberger. Yes.
    Mr. Griffiths. The humanitarian agencies are playing the 
game. But I would caution we should be careful with 
humanitarian discourse on North Korea because we see what the 
elite there is prioritizing in terms of imports, and it is not 
necessarily for the benefit of all these hungry people you are 
talking about.
    Ms. Spanberger. Thank you, sir, for your time.
    And I yield back.
    Mr. Sherman. The gentleman from Michigan is recognized.
    Mr. Levin. Thank you, Mr. Chairman.
    And thanks so much, Mr. Griffiths, for coming in and 
testifying before us.
    I wanted to explore a little bit further the humanitarian 
organizations and the situation there. In January, The Atlantic 
magazine reported that the State Department would relax certain 
restrictions on humanitarian assistance to North Korea in 
response to feedback that such constraints were hindering the 
delivery of lifesaving aid. Would you talk a little bit about 
what kind of humanitarian assistance is typically provided to 
the North Korean people? For example, I know that, globally, 
North Korean has among the highest rates of tuberculosis, which 
kills more people than any other infectious disease on the 
planet. Besides TB relief, would you describe the kind of aid 
that is typically delivered in North Korea?
    Mr. Griffiths. Well, I cannot really talk about the 
exemption notices themselves because they are submitted to the 
committee and confidential. But, broadly speaking, where the 
problems have been is with equipment rather than, say, food aid 
for hungry people. It is because the sanctions are quite 
comprehensive and the commodity codes are not always in 
alignment. So, you have had problems with things like importing 
nail clippers, items made of metal, things like that.
    Yes, TB is a big issue in terms of what the humanitarian 
agencies want to do. And that is why the panel has recommended 
the introduction of a so-called white list of goods that would 
be automatically subject to exemption to help facilitate this 
process.
    Mr. Levin. Thank you.
    So, The Atlantic also reported that the Trump 
administration's move to facilitate humanitarian aid, and I am 
quoting, ``does not appear to apply to steps taken last year by 
the Treasury and Commerce Departments to tighten financial 
sanctions on North Korea, according to diplomatic sources. 
Those efforts, which include restrictions on banking 
transactions, have also impeded deliveries of humanitarian 
goods.''
    Is further U.S. action needed to ensure that these 
particular sanctions do not impede humanitarian assistance for 
the North Korean people? How do you strike that balance?
    Mr. Griffiths. Well, I think that is more a question for 
somebody from the member State, in this case the United States. 
I really focus on North Korean sanctions, sanctions evasion, 
and the policies of individual member States are really, where 
humanitarian aid is concerned, that is their business. It is 
not for me to say.
    Mr. Levin. Right. Well, but you are here representing the 
Panel of Experts, right?
    Mr. Griffiths. Yes, sir, I am.
    Mr. Levin. And the Panel of Experts' report made numerous 
recommendations to remove some of the roadblocks to 
humanitarian assistance. So, I was wondering if you could 
explain how you came up with those recommendations. Did you 
consult with humanitarian aid organizations working with North 
Korea? That was really what I was wondering.
    Mr. Griffiths. Yes, sir, we did. A couple of my colleagues 
did that.
    Mr. Levin. And so, how would you prioritize what we could 
do to reduce those roadblocks without taking the heat off of 
North Korea, which we very much do not want to do?
    Mr. Griffiths. Well, I think, if it is possible, the idea 
of--so, it is the U.N. Security Council 1718 Committee that is 
making, that is agreeing to these exemptions, and that is 
sometimes where the delay may occur. So, if I was to point to 
anything at all, it would be perhaps the creation of a white 
list. I am told such a thing is possible to do. That would give 
you a simplified list of goods, which could be automatically 
subject to some form of exemption, thus speeding up the process 
within the Security Council's 1718 Committee to clear the 
items.
    And our other recommendation was that the U.N. more 
generally should look into this problem.
    Mr. Levin. So, in other sanctions situations, white lists 
have existed, and in this situation there is no white list at 
all? Is that the situation right now?
    Mr. Griffiths. Well, most sanctions regimes are not nearly 
as comprehensive or complex. So, it is much easier in terms of 
an arms embargo to spell out, you know, flak jackets and 
bulletproof vehicles for civilians, for humanitarian aid use, 
for example, can be imported into, say, Libya or Yemen. It is 
much easier in those cases.
    Here it is more difficult. Within the space of a year, a 
little more, you have had this absolute block on certain types 
of machinery being imported, including trucks. All trucks are 
now prohibited from import to North Korea. Why? Because we have 
consistently seen the import of trucks for civilian purposes, 
such as forestry, and then, they convert these trucks, these 
eight-axle vehicles, into ballistic missile launchers. You will 
find it in the panel's report.
    So, one does have to be careful of what is imported. And 
you bring down all these measures, and then, there is a 
consequence because the humanitarian aid agencies, instead of 
paying bribes or trying to circumvent the measures like the 
North Koreans do, approach the U.N. in good faith to go about 
it the proper way. And that is why my colleagues came up with 
this white list idea, after consulting very thoroughly with the 
humanitarian aid, the U.N. agencies, and the NGO's, who are 
trying to do a good job in difficult circumstances.
    Mr. Levin. Thank you very much. I yield back, Mr. Chairman.
    Mr. Sherman. I will now recognize the ranking member.
    Mr. Yoho. Thank you, Mr. Chairman.
    And again, thank you for your diligence.
    The report States that a member State informed the panel 
that the Islamic Republic of Iran was one of the two most 
lucrative markets for the DPRK military-related cooperation. 
What can you tell us about illicit activities between North 
Korea and Iran, especially trade in arms?
    Mr. Griffiths. Well, not much more than what we wrote right 
now. In the past, if you read past panel reports, you will see 
that United Nations Security Council designated individuals 
from KOMID, North Korea's principal ballistic missile and 
conventional military equipment trading and sales company, were 
based at the North Korean Embassy in Tehran. And so, I wrote 
Tehran many letters about this, 2015, 2016. And after 
Resolution 2270, when these North Koreans were designated, 
these North Korean diplomats were designated by the Security 
Council, Iran eventually expelled them.
    Unfortunately, what we were told by a member State that 
provides very reliable information to the panel, and often 
shows us documentation, is that, since 2016, both Green Pine, 
another major North Korean conventional arms military 
supplier--sells submarines, military patrol boats, small arms, 
light weapons, across the Middle East--both Green Pine and 
KOMID were back in North Korea--sorry--were back in Iran and 
were providing North Korean, Iran was providing North Korea 
with one of its two most lucrative markets, the other being 
Syria.
    Mr. Yoho. I was going to ask you about Syria. What are the 
most concerning types of defense cooperations and arms trade 
between North Korea and Syria? Is it small arms? Is it 
ballistics or?
    Mr. Griffiths. In 2017-2018, it seemed to be ballistic 
missiles. We had had reports from member States. We went to 
visit interdicted goods, container shipments, around the 
Mediterranean that had been stopped from going to Syria. The 
bills of lading clearly said Syria Scientific, the SSRC, the 
Scientific Studies and Research Center, which is responsible 
for Syria's ballistic missile and chemical weapons development 
program. And these sites were later bombed by other member 
States after our report had been submitted.
    Mr. Yoho. Well, I was going to ask you about that. Has the 
panel uncovered any evidence indicating North Korean 
involvement in Syria's chemical weapons program?
    Mr. Griffiths. We have not got direct evidence of their 
involvement in Syria's chemical weapons program, but, as we 
highlight in our reports, there were things like acid-resistant 
tiles, huge quantities of them----
    Mr. Yoho. Wow.
    Mr. Griffiths [continuing]. That were intersected by 
various member States. We inspected them. These acid-resistant 
tiles, you could build a laboratory from them or you could use 
them for a facility for ballistic missiles, because ballistic 
fuel is also highly corrosive.
    But the level and intensity of North Korean military 
technicians and ballistic missile technicians and surface-to-
air missile technicians visiting Damascus over the past few 
years, you will see it in our reports. We list their names, 
their passport numbers, who they met with, and where they 
stayed. And it is interesting reading. It takes me a long time 
to explain it, but it is all there in black and white in the 
report.
    Mr. Yoho. I believe we are going to read that report and 
follow through on it.
    I am out of questions. Mr. Griffiths, I appreciate your 
diligence, your service, and I look forward to, hopefully, 
bringing these sanctions to where they really bring an end to 
this problem.
    Thank you, Mr. Chairman. I yield back.
    Mr. Sherman. I will have a question or two, and then, I 
will have you make the concluding part of your opening 
statement.
    North Korea exports coal. It gets hard currency. But at 
least the coal does not do any extreme damage. Obviously, it is 
a greenhouse gas-producing fossil fuel. But when it exports 
weapons of mass destruction or relevant technologies, that is a 
bigger problem.
    In September 2007, the Israelis bombed Al Kibar, a nuclear 
weapons development site in Syria that appears to be almost 
entirely North Korean technology. What are the examples of 
North Korea exporting over the last 10 years weapons of mass 
destruction and technologies relevant to creation of weapons of 
mass destruction, especially nuclear, but also bio and 
chemical?
    Mr. Griffiths. Well, on bio, I have to say that the most 
recent thing the panel has been looking at is this 
assassination at Kuala Lumpur Airport----
    Mr. Sherman. Oh, yes.
    Mr. Griffiths [continuing]. Involving VX and the half-
brother of Chairman Kim.
    Mr. Sherman. That is well-known and I guess only 
technically constitutes an export. But the potency of that 
chemical has been demonstrated. Are they exporting that 
chemical for cash anywhere around the world?
    Mr. Griffiths. We have no knowledge of that, sir. It is not 
in our report.
    Mr. Sherman. And what about the export of either fissile 
material or the technology to create fissile material?
    Mr. Griffiths. We have nothing in our reports on that. What 
we have is evidence of North Korean procurement of technology 
for fissile development and evidence of North Korea exporting 
dual-use goods to other States in the region, but nothing 
relating to a nascent nuclear program. We have no evidence of 
that, but, then, the panel does not get so much from member----
    Mr. Sherman. When it comes to material useful for creating 
fissile material, North Korea is an importer, but not an 
exporter?
    Mr. Griffiths. That is what we----
    Mr. Sherman. As far as we know?
    Mr. Griffiths. As far as the panel knows, that is correct, 
sir, yes.
    Mr. Sherman. Thank you.
    Well, at this point, I would like to hear whatever portions 
of your opening statement we have not elicited through 
questioning.
    Mr. Griffiths. Well, I will try not to send you to sleep 
and I will keep it short.
    But the main area is the sea, international waters, where 
nothing is really being monitored except when there are 
surveillance aircraft or satellites or other aerial assets in 
place. And that is because these flag-of-convenience States, 
they do not monitor the vessels that sail under their 
jurisdiction. Many of the petroleum companies that are 
transferring the product, they do not monitor, either. Neither 
do the insurers; neither do the operators of the vessel, the 
charterers, the owners.
    And if you take the time to read the----
    Mr. Sherman. If I can interrupt you?
    Mr. Griffiths. Yes.
    Mr. Sherman. What if we provided that, if you had insurance 
for your ship, but you deliberately turned off the AIS, the 
automatic identification system, the insurance was void?
    Mr. Griffiths. That, sir, sounds like an eminently sensible 
suggestion.
    Mr. Sherman. And another contract provision that we could 
require be included, obviously, only if it was done 
intentionally for the purpose of evading sanctions. But what 
that would mean is, you pay money for insurance, and then, the 
captain of your ship turns this off, and there is some evidence 
that it is to evade sanctions. And you happen to be located 
only a few hundred miles off the shores of North Korea. Now you 
do not have insurance. That is another thing that we would want 
to explore.
    Why do not you continue?
    Mr. Griffiths. Yes, and the other issue is that North Korea 
is really systemically violating the U.N. Convention on the 
Laws of the Sea and IMO regulations. And neither the IMO 
regulations, the Safety of Life at Sea, SOLAS, all the UNCLOS, 
were ever devised with this kind of situation in mind where 
vessels could be hijacked and, then, provided with the North 
Korean flag and safe harbor, and just operate between North 
Korea and international waters to transfer fuel.
    So, North Korean ships often carry North Korean papers, but 
also Sierra Leone, or another flag-of-convenience papers. You 
see this in the case of the Wise Honest. That is a very 
interesting case in our report where a North Korean ship 
delivering coal sails to Indonesia with its AIS switched off. 
Coal is worth $3 million, according to the contract. The idea 
is to transship it, call it ``Russian coal'' or something, and 
then, sell it to a company in South Korea.
    Mr. Sherman. So, the coal has to be transported all the way 
to Indonesia, and then, comes back to South Korea----
    Mr. Griffiths. Yes, sir.
    Mr. Sherman [continuing]. Labeled ``Russian coal''? And the 
dead giveaway in this is, if you have a ship transporting, 
quote, ``Russian coal'' to South Korea from Indonesia--oh, I 
guess if that was produced, shipped out of European Russia, 
that would make sense. But if it shipped out of the Russian 
Pacific--and I do not know where this coal is purportedly 
coming from--the fact that it is coming from Indonesia shows 
that something is fishy.
    I mean, when they purport that this is Russian coal, are 
they basically claiming that this is coal being shipped out of 
Russian ports on the Atlantic or on the Pacific?
    Mr. Griffiths. So, there was no documentation provided to 
us. What we can tell you, and it is worth noting, is that the 
whole deal was organized by, facilitated by North Korean 
diplomats in Indonesia, and there are all these North Korean 
bankers who are traveling around Indonesia, Vietnam, and China 
trying to facilitate these deals in a clandestine fashion by 
providing false paperwork.
    The Wise Honest is currently seized and it is in Indonesian 
waters right now. But, somewhat shockingly, if you look in the 
panel's final report in the annexes, you will see that a U.S. 
bank was, I am sure unwittingly, involved in the payment 
system. And it happens to be the bank I use in New York.
    So, it is a very good case study. The Wise Honest, it is a 
fantastic name for a vessel involved in prohibited and illegal 
activities. But you will really get a sense of how the North 
Koreans are doing this and the relatively simple measures that 
could be taken to stop them earning this illegal income.
    Mr. Sherman. I am going to ask for a whole annex of--
because I know you have not created a wish list. But what 
clause--and, you know, we can get lawyers to finetune this 
stuff--but what clause there should be in maritime insurance; 
what clause there should be in bank financing of ships; what 
else we can require of substantial companies that usually do 
business in the United States include in their documents.
    I know I interrupted you. I do not know if you have a 
further portion of your concluding statement.
    Mr. Griffiths. Why is this problem with the Law of the Sea 
important? Why is it necessary to monitor vessels? Because it 
is not happening in so many different regions, and it is not 
just about North Korean sanctions. This is about narcotics 
trafficking. The same flags of convenience are used. Illegal 
and undocumented fishing. Also, transnational criminal groups 
use such vessels which are not being monitored by the flag 
States, to sail all these poor, economic migrants from African 
and Middle Eastern shores to Europe and other places. And these 
vessels are typically unsafe as well.
    So, really it is a global issue. I think it is high time 
that there is more maritime governance on the high seas. 
Otherwise, Chairman Kim is going to have room for maneuver for 
some time to come. And it is just very important to follow the 
money. Maritime transport is what makes a lot of it possible 
right now, that and the cyber issues.
    Mr. Sherman. I want to thank you for delivering both an 
opening and closing statement, and, more importantly, answers 
to all of the subcommittee's questions. Thank you for your 
report, and thank you for reminding us of the perils and 
difficulties that you and observers and investigators face 
around the world. Thank you very much.
    Mr. Griffiths. Thank you, sir.
    [Whereupon, at 11 a.m., the subcommittee was adjourned.]
    
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