[Congressional Record Volume 163, Number 171 (Tuesday, October 24, 2017)]
[House]
[Pages H8099-H8104]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
OTTO WARMBIER NORTH KOREA NUCLEAR SANCTIONS ACT
Mr. BARR. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 3898) to require the Secretary of the Treasury to place
conditions on certain accounts at United States financial institutions
with respect to North Korea, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 3898
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Otto Warmbier North Korea
Nuclear Sanctions Act''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) On June 1, 2016, the Department of the Treasury's
Financial Crimes Enforcement Network announced a Notice of
Finding that the Democratic People's Republic of Korea is a
jurisdiction of primary money laundering concern due to its
use of state-controlled financial institutions and front
companies to support the proliferation and development of
weapons of mass destruction (WMD) and ballistic missiles.
(2) The Financial Action Task Force (FATF) has expressed
serious concerns with the threat posed by North Korea's
proliferation and financing of WMD, and has called on FATF
members to apply effective counter-measures to protect their
financial sectors from North Korean money laundering, WMD
proliferation financing, and the financing of terrorism.
(3) In its February 2017 report, the U.N. Panel of Experts
concluded that--
(A) North Korea continued to access the international
financial system in support of illicit activities despite
sanctions imposed by U.N. Security Council Resolutions 2270
(2016) and 2321 (2016);
(B) during the reporting period, no member state had
reported taking actions to freeze North Korean assets; and
(C) sanctions evasion by North Korea, combined with
inadequate compliance by member states, had significantly
negated the impact of U.N. Security Council resolutions.
(4) In its September 2017 report, the U.N. Panel of Experts
found that--
(A) North Korea continued to violate financial sanctions by
using agents acting abroad on the country's behalf;
(B) foreign financial institutions provided correspondent
banking services to North Korean persons and front companies
for illicit purposes;
(C) foreign companies violated sanctions by maintaining
links with North Korean financial institutions; and
(D) North Korea generated at least $270 million during the
reporting period through the violation of sectoral sanctions.
(5) North Korean entities engage in significant financial
transactions through foreign bank accounts that are
maintained by non-North Korean nationals, thereby masking
account users' identity in order to access financial
services.
(6) North Korea's sixth nuclear test on September 3, 2017,
demonstrated an estimated explosive power more than 100 times
greater than that generated by its first nuclear test in
2006.
(7) North Korea has successfully tested submarine-launched
and intercontinental ballistic missiles, and is rapidly
progressing in its development of a nuclear-armed missile
that is capable of reaching United States territory.
SEC. 3. CONDITIONS WITH RESPECT TO CERTAIN ACCOUNTS AND
TRANSACTIONS AT UNITED STATES FINANCIAL
INSTITUTIONS.
(a) Correspondent and Payable-Through Accounts Held by
Foreign Financial Institutions.--
(1) In general.--Not later than 45 days after the date of
the enactment of this Act, the Secretary of the Treasury
shall prescribe regulations to prohibit, or impose strict
conditions on, the opening or maintaining in the United
States of a correspondent account or a payable-through
account by a foreign financial institution that the Secretary
finds knowingly facilitates a significant transaction or
transactions or provides significant financial services for a
covered person.
(2) Penalties.--
(A) Civil penalty.--A person who violates, attempts to
violate, conspires to violate, or causes a violation of
regulations prescribed under this subsection shall be subject
to a civil penalty in an amount not to exceed the greater
of--
(i) $250,000; or
(ii) an amount that is twice the amount of the transaction
that is the basis of the violation with respect to which the
penalty is imposed.
(B) Criminal penalty.--A person who willfully commits,
willfully attempts to commit, or willfully conspires to
commit, or aids or abets in the commission of, a violation of
regulations prescribed under this subsection shall, upon
conviction, be fined not more than $1,000,000, or if a
natural person, may be imprisoned for not more than 20 years,
or both.
(b) Restrictions on Certain Transactions by United States
Financial Institutions.--
(1) In general.--Not later than 45 days after the date of
the enactment of this Act, the Secretary of the Treasury
shall prescribe regulations to prohibit a United States
financial institution, and any person owned or controlled by
a United States financial institution, from knowingly
engaging in a significant transaction or transactions with or
benefitting any person that the Secretary finds to be a
covered person.
(2) Civil penalty.--A person who violates, attempts to
violate, conspires to violate, or causes a violation of
regulations prescribed under this subsection shall be subject
to a civil penalty in an amount not to exceed the greater
of--
(A) $250,000; or
(B) an amount that is twice the amount of the transaction
that is the basis of the violation with respect to which the
penalty is imposed.
SEC. 4. OPPOSITION TO ASSISTANCE BY THE INTERNATIONAL
FINANCIAL INSTITUTIONS AND THE EXPORT-IMPORT
BANK.
(a) International Financial Institutions.--The Bretton
Woods Agreements Act (22 U.S.C. 286 et seq.) is amended by
adding at the end the following:
``SEC. 73. OPPOSITION TO ASSISTANCE FOR ANY GOVERNMENT THAT
FAILS TO IMPLEMENT SANCTIONS ON NORTH KOREA.
``(a) In General.--The Secretary of the Treasury shall
instruct the United States Executive Director at the
international financial institutions (as defined under
section 1701(c) of the International Financial Institutions
Act) to use the voice and vote of the United States to oppose
the provision of financial assistance to a foreign
government, other than assistance to support basic human
needs, if the President determines that, in the year
preceding consideration of approval of such assistance, the
government has knowingly failed to prevent the provision of
financial services to, or freeze the funds, financial assets,
and economic resources of, a person described under
subparagraphs (A) through (E) of section 7(2) of the Otto
Warmbier North Korea Nuclear Sanctions Act.
``(b) Waiver.--The President may waive subsection (a) for
up to 180 days at a time with respect to a foreign government
if the President reports to Congress that--
``(1) the foreign government's failure described under (a)
is due exclusively to a lack of foreign government capacity;
``(2) the foreign government is taking effective steps to
prevent recurrence of such failure; or
``(3) such waiver is vital to the national security
interests of the United States.''.
(b) Export-Import Bank.--Section 2(b) of the Export-Import
Bank Act of 1945 (12 U.S.C. 635(b)) is amended by adding at
the end the following:
``(14) Prohibition on support involving persons connected
with north korea.--The Bank may not guarantee, insure, or
extend credit, or participate in the extension of credit in
connection with the export of a good or service to a covered
person (as defined under section 7 of the Otto Warmbier North
Korea Nuclear Sanctions Act).''.
SEC. 5. TREASURY REPORTS ON COMPLIANCE, PENALTIES, AND
TECHNICAL ASSISTANCE.
(a) Quarterly Report.--
(1) In general.--Not later than 120 days following the date
of the enactment of this Act, and every 90 days thereafter,
the Secretary of the Treasury shall submit a report to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate that includes--
(A) a list of financial institutions that, in the period
since the preceding report, knowingly facilitated a
significant transaction or transactions or provided
significant financial services for a covered person, or
failed to apply appropriate due diligence to prevent such
activities;
(B) a list of any penalties imposed under section 3 in the
period since the preceding report; and
(C) a description of efforts by the Department of the
Treasury in the period since the preceding report, through
consultations, technical assistance, or other appropriate
activities, to strengthen the capacity of financial
institutions and foreign governments to prevent the provision
of financial services benefitting any covered person.
(2) Form of report; public availability.--
(A) Form.--The report required under paragraph (1) shall be
submitted in unclassified form but may contain a classified
annex.
(B) Public availability.--The unclassified portion of such
report shall be made available to the public and posted on
the website of the Department of the Treasury.
(b) Testimony Required.--Upon request of the Committee on
Financial Services of the
[[Page H8100]]
House of Representatives or the Committee on Banking,
Housing, and Urban Affairs of the Senate, the Under Secretary
of the Treasury for Terrorism and Financial Intelligence
shall testify to explain the effects of this Act, and the
amendments made by this Act, on North Korea's access to
finance.
(c) International Monetary Fund.--Title XVI of the
International Financial Institutions Act (22 U.S.C. 262p et
seq.) is amended by adding at the end the following:
``SEC. 1629. SUPPORT FOR CAPACITY OF THE INTERNATIONAL
MONETARY FUND TO PREVENT MONEY LAUNDERING AND
FINANCING OF TERRORISM.
``The Secretary of the Treasury shall instruct the United
States Executive Director at the International Monetary Fund
to support the use of the administrative budget of the Fund
for technical assistance that strengthens the capacity of
Fund members to prevent money laundering and the financing of
terrorism.''.
(d) National Advisory Council Report to Congress.--The
Chairman of the National Advisory Council on International
Monetary and Financial Policies shall include in the report
required by section 1701 of the International Financial
Institutions Act (22 U.S.C. 262r) for the fiscal year
following the date of the enactment of this Act a description
of--
(1) the activities of the International Monetary Fund in
the most recently completed fiscal year to provide technical
assistance that strengthens the capacity of Fund members to
prevent money laundering and the financing of terrorism, and
the effectiveness of the assistance; and
(2) the efficacy of efforts by the United States to support
such technical assistance through the use of the Fund's
administrative budget.
SEC. 6. SUSPENSION AND TERMINATION OF PROHIBITIONS AND
PENALTIES.
(a) Suspension.--The President may suspend, on a case-by-
case basis, the application of any provision of this Act, or
provision in an amendment made by this Act, for a period of
not more than 180 days at a time if the President certifies
to Congress that--
(1) the Government of North Korea has--
(A) committed to the verifiable suspension of North Korea's
proliferation and testing of WMD, including systems designed
in whole or in part for the delivery of such weapons; and
(B) has agreed to multilateral talks including the
Government of the United States, with the goal of permanently
and verifiably limiting North Korea's WMD and ballistic
missile programs; or
(2) such suspension is vital to the national security
interests of the United States, with an explanation of the
reasons therefor.
(b) Termination.--
(1) In general.--On the date that is 30 days after the date
on which the President makes the certification described
under paragraph (2)--
(A) section 3, subsections (a) and (b) of section 5, and
section 6(a) of this Act shall cease to have any force or
effect;
(B) section 73 of the Bretton Woods Agreements Act, as
added by section 4(a), shall be repealed; and
(C) section 2(b)(14) of the Export-Import Bank Act of 1945,
as added by section 4(b), shall be repealed.
(2) Certification.--The certification described under this
paragraph is a certification by the President to the Congress
that--
(A) the Government of North Korea--
(i) has ceased to pose a significant threat to national
security, with an explanation of the reasons therefor; or
(ii) is committed to, and is taking effective steps to
achieving, the goal of permanently and verifiably limiting
North Korea's WMD and ballistic missile programs; or
(B) such termination is vital to the national security
interests of the United States, with an explanation of the
reasons therefor.
SEC. 7. DEFINITIONS.
For purposes of this Act:
(1) Terms related to north korea.--The terms ``applicable
Executive order'', ``Government of North Korea'', ``North
Korea'', ``North Korean person'', and ``significant
activities undermining cybersecurity'' have the meanings
given those terms, respectively, in section 3 of the North
Korea Sanctions and Policy Enhancement Act of 2016 (22 U.S.C.
9202).
(2) Covered person.--The term ``covered person'' means the
following:
(A) Any designated person under an applicable Executive
order.
(B) Any North Korean person that facilitates the transfer
of bulk cash or covered goods (as defined under section
1027.100 of title 31, Code of Federal Regulations).
(C) Any North Korean financial institution.
(D) Any North Korean person employed outside of North
Korea, except that the Secretary of the Treasury may waive
the application of this subparagraph for a North Korean
person that is not otherwise a covered person and--
(i) has been granted asylum or refugee status by the
country of employment; or
(ii) is employed as essential diplomatic personnel for the
Government of North Korea.
(E) Any person acting on behalf of, or at the direction of,
a person described under subparagraphs (A) through (D).
(F) Any person that knowingly employs a person described
under subparagraph (D).
(G) Any person that facilitates the import of goods,
services, technology, or natural resources, including energy
imports and minerals, or their derivatives, from North Korea.
(H) Any person that facilitates the export of goods,
services, technology, or natural resources, including energy
exports and minerals, or their derivatives, to North Korea,
except for food, medicine, or medical supplies required for
civilian humanitarian needs.
(I) Any person that invests in, or participates in a joint
venture with, an entity in which the Government of North
Korea participates or an entity that is created or organized
under North Korean law.
(J) Any person that provides financial services, including
through a subsidiary or joint venture, in North Korea.
(K) Any person that insures, registers, facilitates the
registration of, or maintains insurance or a registration
for, a vessel owned, controlled, commanded, or operated by a
North Korean person.
(L) Any person providing specialized teaching, training, or
information or providing material or technological support to
a North Korean person that--
(i) may contribute to North Korea's development and
proliferation of WMD, including systems designed in whole or
in part for the delivery of such weapons; or
(ii) may contribute to significant activities undermining
cybersecurity.
(3) Financial institution definitions.--
(A) Financial institution.--The term ``financial
institution'' means a United States financial institution or
a foreign financial institution.
(B) Foreign financial institution.--The term ``foreign
financial institution'' has the meaning given that term under
section 1010.605 of title 31, Code of Federal Regulations.
(C) North korean financial institution.--The term ``North
Korean financial institution'' includes--
(i) any North Korean financial institution, as defined in
section 3 of the North Korea Sanctions and Policy Enhancement
Act of 2016 (22 U.S.C. 9202);
(ii) any financial agency, as defined in section 5312 of
title 31, United States Code, that is owned or controlled by
the Government of North Korea;
(iii) any money transmitting business, as defined in
section 5330(d) of title 31, United States Code, that is
owned or controlled by the Government of North Korea;
(iv) any financial institution that is a joint venture
between any person and the Government of North Korea; and
(v) any joint venture involving a North Korean financial
institution.
(D) United states financial institution.--The term ``United
States financial institution'' has the meaning given the term
``U.S. financial institution'' under section 510.310 of title
31, Code of Federal Regulations.
(4) Knowingly.--The term ``knowingly'' with respect to
conduct, a circumstance, or a result, means that a person has
actual knowledge, or should have known, of the conduct, the
circumstance, or the result.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Kentucky (Mr. Barr) and the gentlewoman from California (Mrs. Maxine
Waters) each will control 20 minutes.
The Chair recognizes the gentleman from Kentucky.
General Leave
Mr. BARR. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days in which to revise and extend their remarks and
include extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Kentucky?
There was no objection.
Mr. BARR. Mr. Speaker, I yield myself 5 minutes.
Mr. Speaker, I am pleased to sponsor H.R. 3898, the Otto Warmbier
North Korea Nuclear Sanctions Act, which imposes the most far-reaching
financial sanctions ever directed at North Korea.
Since 2006, North Korea has undertaken six nuclear tests and, earlier
this summer, test-launched intercontinental ballistic missiles capable
of reaching United States territory. The most recent nuclear device
that the country detonated on September 3 had an estimated explosive
power 10 times greater than the bomb dropped at Hiroshima. We must not
allow the North to threaten a U.S. city with such weapons.
In short, Mr. Speaker, this bill would impose secondary sanctions on
foreign financial institutions that do business with virtually anyone
that trades with North Korea. In addition, H.R. 3898 would essentially
cut off Pyongyang's ability to earn hard currency through North Korean
laborers working abroad, and it would use our leverage at the IMF, the
World Bank, and other international financial institutions to
incentivize countries to crack down on North Korea's illicit
activities.
[[Page H8101]]
As many of my colleagues know, North Korea is already subject to both
U.S. and international sanctions, the latter deriving from a series of
U.N. Security Council resolutions. These sanctions have fallen short,
however, for two main reasons:
First, they have not given sufficient attention to North Korea's
enablers in third countries, especially foreign banks and middlemen in
China, Southeast Asia, and other parts of the world.
Second, even though U.N. Security Council resolutions are supposed to
bind U.N. members to enforce them, implementation has been weak. As the
U.N. Panel of Experts concluded earlier this year, member nations'
compliance with sanctions has been so lax that North Korea retains
access to the international financial system.
As the Trump administration has made clear, U.N. sanctions are a
floor, not a ceiling, for U.S. action. H.R. 3898 embodies this
principle through the use of secondary sanctions.
Here is how such sanctions would work, Mr. Speaker:
The front companies and middlemen that North Korea relies on in third
countries still need banks. Those banks, in turn, use correspondent or
payable-through accounts held at U.S. financial institutions to process
international transactions. It is counterproductive for U.S. policy to
permit foreign banks to do business in America as well as business that
ultimately helps North Korea. It is time for those banks to choose
between aiding and abetting the North Korean Government or standing for
peace with America and its allies.
{time} 1415
H.R. 3898 forces foreign banks to make that choice. Foreign banks can
either do business benefiting North Korea or business with the United
States. They cannot do both.
Under an executive order issued in September, the President
authorized the Treasury Department to levy sanctions on foreign banks
that finance North Korean trade. While this was a crucial step forward,
H.R. 3898 would widen the net still further.
Under this legislation, Congress would be codifying mandatory
sanctions on foreign banks. If someone is dealing with North Korea,
there is nowhere to run or hide: a foreign financial institution is
subject to sanctions for doing business with you, even if that bank
claims that it is not directly financing the trade.
H.R. 3898 also covers more economic activity than any previous
sanctions on North Korea, including the current U.N. sanctions round.
That means this bill goes after banks involved with petroleum, labor,
and virtually any kind of investment or North Korean use of shipping
vessels.
In addition, H.R. 3898 targets the knowledge and technological
support that North Korea needs for its weapons program and hacking
activities. Pyongyang's threats against cybersecurity are critical for
the regime to get its hands on financing.
The goal, Mr. Speaker, is to show North Korea that the path they are
on has devastating costs and leads to nowhere regardless. H.R. 3898
provides an off-ramp for North Korea if the country wants sanctions
relief, but it is up to Pyongyang to take it. Until then, the sanctions
we will be passing today hold tremendous economic pain in store for the
Kim Jong-un regime and its foreign enablers.
Finally, Mr. Speaker, we are honored to dedicate this bill to the
memory of Otto Warmbier, a young man who traveled to North Korea to
understand the country with his own eyes, and whose life was cut short
by the regime's brutality. Otto was a student at the University of
Virginia, my alma mater, and a special community that continues to
mourn the loss of this special young man. Otto held out his hand in
friendship to the people of North Korea, as we do. It is Pyongyang's
nuclear ambitions, though, that threaten what Otto represented: a world
of openness, understanding, and a desire for peaceful relations between
our country and North Korea. It is fitting that this legislation bears
Otto's name, and that its goals embody his spirit.
Mr. Speaker, I reserve the balance of my time.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such
time as I may consume.
First, allow me to say that I am very pleased that, by naming this
legislation after Otto Warmbier, we are able to honor him and let his
family know that we will not forget him. Nor will we forget the brutal,
lethal treatment of this young, decent American student by the
Government of North Korea.
There is simply no justification for the fury with which the Kim
regime turned the massive power of the state on this young American
man, who is alleged to have done nothing more than take a poster from a
hotel. It is this kind of brutality--and the ongoing fundamental
depravity of the North Korean regime--that will keep it from being a
member of the global community of nations.
This is also why the rapid acceleration in the scale and range of
North Korea's nuclear and missile programs is so alarming, including
the launch of two intercontinental ballistic missiles in July, one of
which experts believe could have had the capacity to reach the
continental United States. Then, in September, the regime tested its
sixth nuclear explosive device, and, according to U.S. and
international estimates, this thermonuclear test was significantly
higher in magnitude and yield than any previous test.
This has led to a bipartisan consensus in the Financial Services
Committee that a new policy towards North Korea involving a maximum
pressure campaign of financial isolation is the best chance we have to
resolve this situation peacefully.
Such a strategy must entail a dramatically greater level of pressure
than North Korea has faced to date, one strong enough to change Kim
Jong-un's calculus about whether he is safer with or without his
nuclear program.
The legislation before us today, H.R. 3898, calls for just such a
U.S. strategy towards North Korea--and it is one that has the advantage
of presenting an option other than a military-first response. As many
experts have called for, this legislation takes a page from the Iran
sanctions playbook by mandating the use of secondary sanctions, which
were widely credited with forcing Iran to the negotiating table.
In the context of North Korea, an American program of secondary
sanctions wouldn't just ban U.S. companies from doing business with
North Korea, it would also force companies, individuals, banks, and
governments to make a choice: stop doing business with North Korea and
its enablers or be cut off from the global financial system.
Although we saw in the Iran context just how powerful this approach
can be when carefully fashioned as part of a broad coalition, we must
remember that sanctions alone are not a strategy. Sanctions are a tool,
and in order for them to work, they must be linked to a broader
strategic effort, with the high level of skill in their design and
implementation, and with a clear understanding of the policy goals we
are trying to achieve.
According to Adam Szubin, who formerly served as the Under Secretary
of the Treasury for Terrorism and Financial Crimes, when Congress
adopted a series of secondary sanction measures in 2010, aimed at
containing Iran's nuclear program, the administration was already
staffed, well-resourced, and ready to immediately deploy senior
officials around the world.
Specifically, senior Treasury, White House, and State Department
officials traveled around the world to explain the new U.S. sanctions
regime and pressure governments, bankers, traders, and companies to
enforce these sanctions in a tough and meaningful way.
Today, there is widespread recognition that a successful strategy to
isolate and pressure North Korea must not only entail the effective
implementation of sanctions, but also arguably an even more complex and
sophisticated degree of statecraft in order to coordinate with our
allies, and, in particular, to convince China that we have shared
objectives when it comes to addressing the increasing destabilizing
North Korean threat.
It is extremely concerning, therefore, that President Trump has shown
virtually no capacity or willingness for the hard work necessary to
secure concessions from North Korea, or enlist China and other key
players to do their part to isolate the Kim regime. In fact, President
Trump's reckless threats, his vow to destroy the Kim regime, his
[[Page H8102]]
name-calling, warmongering, and rejection of diplomacy contradict key
administration officials, and leading experts, who continue to stress
the importance of imposing pressure on the Kim regime. It also
demonstrates a Commander in Chief who lacks the discipline and quality
of leadership it takes to convince our allies to join us in dealing
with the North Korean threat.
Given the high-stakes objectives; the lack of a unified, coherent
policy from the executive branch; and concern about U.S. credibility on
the global stage, I am pleased that, on this critical issue, Members
from both sides of the aisle were able to come together behind a
concrete strategic objective to force Pyongyang into nuclear diplomacy
with the goal of permanently and verifiably limiting North Korea's WMD
and ballistic missile programs.
Mr. Speaker, I reserve the balance of my time.
The SPEAKER pro tempore. Members are advised to not engage in
personalities toward the President.
Mr. BARR. Mr. Speaker, I yield 3 minutes to the gentleman from Texas
(Mr. Hensarling), the chairman of the Financial Services Committee.
Mr. HENSARLING. Mr. Speaker, I thank the gentleman for yielding.
Mr. Speaker, I rise in strong support of H.R. 3898, the Otto Warmbier
North Korea Nuclear Sanctions Act, which our committee, the Financial
Services Committee, passed on a unanimous basis.
I thank the gentleman from Kentucky (Mr. Barr), who is leading this
debate today, for his leadership on our committee and for this bill. I
also thank his ranking member, Ms. Moore, the gentlewoman from
Wisconsin, for her work on this bipartisan bill as well.
I also think that it is a good and proper thing, Mr. Speaker, that
this bill is named after Otto Warmbier, a young life that was
tragically ended far too soon, who, in his untimely demise, has become
an international symbol of the crushing brutality of the North Korean
regime.
So it is with his memory that this bill is designed. And, simply put,
Mr. Speaker, the bill before us today represents the toughest set of
financial sanctions ever directed against the nuclear armed North
Korean regime, a regime that still represents a clear and present
danger to the global community.
The sanctions our committee is bringing to the House today target
foreign financial institutions that, in some way, are connected to
North Korea's economic activity--activity that ultimately allows this
rogue regime to both develop and proliferate weapons of mass
destruction.
Under H.R. 3898, those foreign financial institutions are going to be
confronted with a choice. As my colleague from Kentucky put it, they
can either do business that benefits North Korea or they can do
business with the United States, they cannot do both.
Given the far-reaching impact of the sanctions, our committee does
not take them lightly. They are reserved for the gravest threats to our
national security, and their application should be targeted at clear
and achievable goals. That is why H.R. 3898 cuts off virtually any path
that North Korea can take to generate hard currency, yet it holds out
the prospect of sanctions relief, if there are real and verifiable
limits to the regime's weapons program.
As punishing as these sanctions will be, there is a way out for North
Korea, if it chooses to take it, and that is to comply. Otherwise, the
Kim regime and its foreign enablers will learn that hostility towards
America carries enormous cost.
Mr. Speaker, I again thank the gentleman from Kentucky for his
effort, and I urge all of my colleagues to support this vitally needed
legislation.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 3 minutes to
the gentlewoman from New York (Mrs. Carolyn B. Maloney).
Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, I thank the ranking
member for yielding and for her leadership on this committee.
Mr. Speaker, I rise today in support of H.R. 3898.
In August, I was part of a congressional delegation led by Senator
Markey that visited South Korea, Japan, and the border between China
and North Korea. It is just a short drive from Seoul, a city of about
10 million people, to the DMZ, which is the border line with North
Korea. Standing there, you understand and see firsthand that even
though the United States would prevail unquestionably in any armed
conflict, the casualties suffered by South Korea would be horrendous.
Later, I hosted a meeting with Congresswoman Wagner with South Korean
Foreign Minister Kang here in the Congress. From these two meetings, I
came back more convinced than ever that we have to leave no stone
unturned to solve the most dangerous problem of our times peacefully
through negotiations.
I firmly believe that the only way to drive North Korea to the
negotiation table is to increase the financial pressure on this
reckless rogue regime, which is what this bill does. It is one of the
toughest sanction bills financially we have ever considered, and may be
the toughest.
The fact that the dollar is the world's Reserve currency gives our
country a very important bit of leverage. Companies doing business all
over the world want to be paid, need to be paid, in dollars, not in any
other currency. So if we restrict international and U.S. financial
institutions from doing business with North Korea, then no matter how
determined they might be to continue their destabilizing reckless
course, they simply will not be able to get the dollars to buy the
tools of terror that they need on the international market.
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This is not the kind of action we should ever take lightly. This is
not a tool to use, an action to take indiscriminately. But in this rare
case, in the case of North Korea, such action is not only justified, it
is necessary for the defense of our Nation and the defense of other
nations.
If North Korea cannot buy the materials necessary to build long-
range, nuclear-tipped missiles because they just don't have the
dollars, then every country, every person on this globe can breathe a
little easier and be a little safer.
The SPEAKER pro tempore. The time of the gentlewoman has expired.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield an additional 1
minute to the gentlewoman from New York.
Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, this is really an
urgently needed bill that not only directly addresses our own security
needs, but also does a great service to the community of nations.
I would like to thank my friend, Mr. Barr, for all of his creative
and hard work on this bill. I thank Chairman Hensarling and Ranking
Member Waters for their leadership and support.
Mr. Speaker, I urge my colleagues to support this important bill.
Mr. BARR. Mr. Speaker, I, too, appreciate the bipartisan work on this
piece of legislation, but I just do have to respond to my friend, the
gentlewoman from California, and her comments about the Trump
administration and the shift in policy.
It is hard to dispute that President Trump's public statements and
official actions on North Korea have gotten Beijing's attention in a
way that previous American Presidents have not. President Trump's tough
rhetoric and tough talk on North Korea matches a shift in policy away
from strategic patience to one that uses enhanced pressure through
sanctions and the credible threat of military force to give substance
and meaning to our diplomacy.
Even the Democrat witness in our hearing on this legislation admitted
that the President's strong language had made a difference in giving us
additional leverage in our negotiations with China.
Mr. Speaker, I yield 1 minute to the gentleman from Ohio (Mr.
Wenstrup).
Mr. WENSTRUP. Mr. Speaker, I strongly urge my colleagues to support
Mr. Barr's legislation, the Otto Warmbier North Korea Nuclear Sanctions
Act.
North Korea has continued to prove a dangerous and destabilizing
force to the northeast Asian region, as well as to the United States
and its allies. Its repeated missile tests, nuclear weapons tests, and
heinous human rights violations demand that the United States continue
its diplomatic and economic isolation campaign.
[[Page H8103]]
Today's bill is named for my constituent, Otto Warmbier, from
Wyoming, Ohio, in the greater Cincinnati area.
Otto passed away on June 19 after spending 18 months in detention by
the North Korean regime, the brutality of which was far beyond human
decency or civility. The pain and heartache endured by Otto, his
family, and his friends can never be undone or erased, but Congress can
continue to take action by passing H.R. 3898 today and imposing the
most far-reaching sanctions yet to be directed at North Korea.
There is no simple solution to countering such complex national
security threats, but it is critical that we utilize both economic and
diplomatic tools to hold hostile regimes like North Korea accountable
when they act repeatedly and aggressively against our interests, our
allies, our citizens, and our security.
Mr. Speaker, I strongly and sincerely urge support of this bill by
every Member of this Chamber.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such
time as I may consume.
To my colleague on the opposite side of the aisle who was responding
to part of my statement, of course there are many in this country who
worry about President Trump's reckless threats, his promise of fire and
fury, his vow to destroy the Kim regime, his name-calling,
warmongering, and rejection of diplomacy.
It directly contradicts his leading Cabinet officials who continue to
stress the importance of imposing pressure on the Kim regime. It also
demonstrates a Commander in Chief who lacks the discipline and the
capacity to convince our allies to join us in dealing with the North
Korean threat.
The SPEAKER pro tempore. The gentlewoman is reminded not to engage in
personalities toward the President.
Ms. MAXINE WATERS of California. The gentlewoman will happily not
engage in personalities except to say that the rhetoric to call Kim
Jong-un the little rocket man is not productive and it does not do us
well.
We have a situation in which nearly every high-level official in the
U.S. Government believes the threats posed by the North Korean nuclear
and missile programs must be front and center in U.S. national security
decisionmaking.
This is a time for U.S. diplomatic and foreign policy efforts to be
aggressively focused on intensifying economic and diplomatic
coordination with our allies and China in a strategy that would entail
sophisticated policymaking capacity and coordination across the U.S.
Government. Instead, a week ago, in a move that I believe history will
strongly condemn, President Trump refused to recertify the Iran nuclear
deal, throwing into question continued U.S. support for the landmark
nuclear accord.
Whether you support or hate the Iran nuclear deal, it is widely
viewed, at least so far, as successfully containing Iran's nuclear
ambitions, and will for many years.
There can be no question that President Trump's threat to walk away
from the international nuclear accord will have a direct and profoundly
negative effect on our ability to convince Kim Jong-un or our allies
that America will honor any commitment to integrate North Korea into
the global community if it gives up its nuclear and missile programs.
In short, the President's threat to withdraw from the Iran nuclear
deal undermines our credibility as a negotiating partner and throws
into question the prospect of any effective nuclear diplomacy with
North Korea. At a time when we are facing a nuclear crisis with North
Korea, raising questions about our commitment to the Iran nuclear deal
not only defies strategic logic, but it also undermines our national
security.
On that issue, I would welcome, as I do with the legislation before
us today, a stronger, more unified, bipartisan front.
Mr. Speaker, I reserve the balance of my time.
Mr. BARR. Mr. Speaker, I yield 3 minutes to the gentleman from
Pennsylvania (Mr. Rothfus), the vice chairman of the Financial
Institutions Subcommittee.
Mr. ROTHFUS. Mr. Speaker, I thank the gentleman from Kentucky for
yielding.
Mr. Speaker, I rise in strong support of this bipartisan legislation
sponsored by my friend and colleague, Mr. Barr from Kentucky.
This legislation sends a clear message to the rest of the world: you
can either do business with the United States and the free world or you
can do business with the brutal dictatorship of Kim Jong-un and the
Democratic People's Republic of North Korea. You cannot deal with both.
Mr. Speaker, the gravest threat facing our Nation today is North
Korea, the world's worst perpetrator of human rights. Kim's contempt
for human life animates both his human rights record and his nuclear
ambitions.
Just this past June, we learned how Kim's regime tortured University
of Virginia student Otto Warmbier. His parents, Cindy and Fred, went
public with the details of their son's suffering in September during an
interview with CNN.
These are just a few of the details that Fred and Cindy shared in
that interview: ``Halfway up the stairs, we hear this loud, guttural
howling, inhuman sound.''
They found him strapped to a stretcher. He has a shaved head. His
eyes are darting around. He is blind, he is deaf, he is on a feeding
tube. His bottom teeth looked like they had been taken with a pair of
pliers and rearranged. His mother, Cindy, described how his hands and
legs were totally deformed.
Otto's story serves as a very real and very tangible reminder, and
teaches a new generation of Americans of what happens under
totalitarian governments and communist dictators.
Now, as the brutal Kim regime continues its nuclear quest, the same
barbarism that killed Otto threatens all Americans. This July, the
dictatorship claimed they had the capacity to send an intercontinental
ballistic missile anywhere in the world. In September, they conducted
their sixth nuclear weapons test and claimed to have detonated a
hydrogen bomb that could be mounted on an intercontinental ballistic
missile. These actions must not be ignored.
This legislation adds secondary sanctions to those passed in May. It
not only prevents persons from trading with, facilitating trade with,
investing in or participating in a joint venture with a North Korean
entity, but it also targets foreign financial institutions from aiding
in such actions. Simply put, this bill forces banks to cut off all
participation with North Korea-related business interests, freezing out
the capital that funds North Korea.
Mr. Speaker, 56 years ago, at the height of the Cold War, when
another godless communist regime threatened the world, President
Kennedy reminded us of America's exceptional nature and consequent
leadership in the world. His inaugural address included this
reflection: ``And yet the same revolutionary beliefs for which our
forebears fought are still at issue around the globe--the belief that
the rights of man come not from the generosity of the state, but from
the hand of God.''
Mr. Speaker, I urge my colleagues to support this legislation not
just for Otto and his family, but for all those who might be harmed by
North Korea if we do not act now.
Mr. Speaker, I again thank the gentleman from Kentucky for his
leadership on this vital issue.
Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance
of my time.
Mr. BARR. Mr. Speaker, I yield 2 minutes to the gentleman from
Arkansas (Mr. Hill), a distinguished member of the Financial Services
Committee.
Mr. HILL. Mr. Speaker, I thank our distinguished subcommittee
chairman for yielding. I am proud to support my colleague from Kentucky
on his bill, H.R. 3898, the Otto Warmbier North Korea Nuclear Sanctions
Act.
I think it is important for all of us in this Chamber to know, as
well as the people across this country, that there is no daylight
between the two political parties in this capital, and there is no
daylight between the United States Government and our Allied
Governments around the world in working together to develop sanction
regimes both bilaterally here in the United States and multilaterally
across the world to end this nuclear threat.
For 24 years, Mr. Speaker, we have had three Presidencies--we are in
our
[[Page H8104]]
fourth Presidency--dealing with this issue. This issue has not been
handled. We have not sanctioned this regime. We have not enforced those
sanctions. We have not obtained multilateral sanctions. We have not
ever given the Kim dictatorship one reason to think that our government
and our allied friends around the world are serious about ending the
nuclear threat from North Korea.
Mr. Speaker, I thank my friend from Kentucky for standing up in the
Financial Services Committee and leading the way for secondary
sanctions. I thank my friends, Chairman Royce and Ranking Member Engel
in the Foreign Affairs Committee, for their work with this
administration to end this threat to not only north Asia, our economic
allies, our national security allies, but also our friends around the
world.
Mr. Speaker, I urge all my colleagues to support this important
legislation.
Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance
of my time.
Mr. BARR. Mr. Speaker, I yield 2 minutes to the gentleman from North
Carolina (Mr. Budd), a member of the Financial Services Committee.
Mr. BUDD. Mr. Speaker, I rise today in support of Representative
Barr's bill, the Otto Warmbier North Korea Nuclear Sanctions Act.
Mr. Speaker, how is it that a tiny, isolated country like North Korea
has the ability to fund and develop a nuclear weapons program with the
capability to strike American soil?
The answer to that question is found in part through correspondent
and payable-through accounts, which are tools used by North Korea to
bypass the existing U.S. and U.N. sanctions against them.
Non-North Korean actors use these accounts to fund the government
through shell and front companies. While these sanctions are
implemented in good faith, it is time to acknowledge that sometimes
they just don't work.
There is some good news, Mr. Speaker. If enacted, this bill requires
the Treasury Secretary to impose strict conditions on those who
knowingly do business with North Korea through those accounts.
We have also seen the United Nations take action recently by banning
North Korea's export of iron ore, which is another legitimate step in
stopping the continued development of their nuclear weapons program.
Finally, the Trump administration's executive orders will help us
more easily target companies that do business with North Korea.
These actions, plus the enactment of this legislation, will create
the most debilitating sanctions package Pyongyang and their financial
surrogates have ever seen.
Of all the positive things in this bill, though, I am most excited by
the language amending the Bretton Woods Agreement Act to instruct U.S.
executive directors at international financial institutions, like the
IMF and the World Bank, to use our ``voice and vote'' to oppose
financial assistance to governments that knowingly support the Kim
regime.
{time} 1445
The United States has long used its economic influence, a more
aggressive element of soft power, to advance an agenda that liberates
the oppressed in the darkest corners of the world like North Korea.
Mr. Speaker, I thank the gentleman from Kentucky for introducing this
bill, and I urge its adoption.
Mr. BARR. Mr. Speaker, may I inquire how much time is remaining.
The SPEAKER pro tempore. The gentleman from Kentucky has 3 minutes
remaining, and the gentlewoman from California has 7 minutes remaining.
Mr. BARR. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Indiana (Mr. Hollingsworth), another distinguished member of the
Financial Services Committee.
Mr. HOLLINGSWORTH. Mr. Speaker, I, too, rise in strong support of
this legislation.
Every single week, I make phone calls to Hoosiers back home, and I
hear every night on those phone calls how hard they are working to
build a better and brighter future for themselves, for their families,
and for their children; but they understand that, in order to have a
brighter, better future, they must have a future. I hear on the phone
every single night how concerned they are that there won't be a future
with all that they see, all that they read, all that they hear about
these threats from North Korea.
We in Congress have heard their pleas to do something, that enough is
enough, that threats against Guam, that ICBMs flying off the Peninsula,
that nuclear tests, that the time has come for decisive action, and
decisive action is what we are taking here.
The toughest financial sanctions ever put in place, that is what this
bill does, and that is what we need to put in place to ensure that we
demand real change from North Korea, that we demand that they stop
threatening Americans and the American way of life.
Mr. Speaker, I support this legislation, support the work that is
being done to confront this challenge once and for all, and this bill
demands the question: Will you do business with the United States or
will you do business with North Korea?
Mr. Speaker, I am excited to stand up in support of this legislation.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield back the
balance of my time.
Mr. BARR. Mr. Speaker, I yield the balance of my time to the
gentleman from Indiana (Mr. Messer), another distinguished member of
the Financial Services Committee.
Mr. MESSER. Mr. Speaker, I want to thank my colleague from Kentucky
for his leadership and my colleague from Indiana for his leadership on
this legislation as well.
Mr. Speaker, from day one, President Trump's message to North Korea
has been clear: the U.S. will not tolerate any North Korean actions
that threaten American lives.
Hoosiers appreciate President Trump's leadership and understand the
crisis we face. North Korea is an erratic and brutal regime. We simply
cannot accept a world in which North Korea has nuclear weapons that can
reach American shores.
Unfortunately, with each missile test, we are moving closer to that
world becoming a reality. That is why I am proud to work with my
colleague from Kentucky and other colleagues on the Otto Warmbier North
Korean Nuclear Sanctions Act. With this bill, we will give foreign
financial institutions a clear choice: you can either do business with
Kim Jong-un in North Korea, or you can do business with the United
States--but not both.
By imposing the toughest financial sanctions ever on North Korea,
this bill cuts off crucial resources that the regime relies on to
finance its weapons program.
Mr. Speaker, I urge my colleagues to support this measure, help us
meet the North Korean threat head-on, and do what is necessary to
protect our country.
Mr. BARR. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Kentucky (Mr. Barr) that the House suspend the rules and
pass the bill, H.R. 3898, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. BARR. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
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