[Congressional Record (Bound Edition), Volume 163 (2017), Part 11]
[House]
[Pages 16352-16358]
[From the U.S. 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,

[[Page 16353]]

     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 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:

[[Page 16354]]

       (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.
  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

[[Page 16355]]

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 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

[[Page 16356]]

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.

                              {time}  1430

  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.
  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

[[Page 16357]]

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 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.

[[Page 16358]]

  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.
  Mr. JOHNSON of Georgia. Mr. Speaker, I rise in support of H.R. 3898, 
the Otto Warmbier North Korea Nuclear Sanctions Act of 2017. This 
legislation imposes heavy economic sanctions on North Korea.
  These sanctions will signal to North Korea and its enablers that the 
United States condemns North Korea's current nuclear and long-range 
missile programs. Specifically, the bill would impose conditions and 
oversight of foreign banks that seek to open American accounts for any 
North Korean or any agent of North Korea.
  As United Nations Ambassador Nikki Haley stated, ``[c]ountless 
innocent men and women have died at the hands of North Korea, but the 
singular case of Otto Warmbier touches the American heart like no 
other.'' In remembrance of Otto Warmbier, this bill demonstrates to 
North Korea that its human rights violations and military actions are 
unacceptable. North Korea's nuclear and long-range missile programs 
have been a noted threat to our security for many years and its 
frequent missile testing in the past year demonstrates the even greater 
risk they now pose. By supporting H.R. 3898, we are showing North Korea 
that there are consequences to its pursuit of nuclear warfare and we 
intend to increase economic pressure on it each time they show 
willingness to use force against us or our allies.
  We have a responsibility to do all that we can to protect American 
citizens. H.R. 3898 will discourage North Korea from further developing 
their nuclear weapons program and take a much-needed step towards the 
goal of international peace, and this is why I support this 
legislation.
  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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