[House Hearing, 114 Congress] [From the U.S. Government Publishing Office] NORTH KOREA'S PERPETUAL PROVOCATIONS: ANOTHER DANGEROUS, ESCALATORY NUCLEAR TEST ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON ASIA AND THE PACIFIC OF THE COMMITTEE ON FOREIGN AFFAIRS HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTEENTH CONGRESS SECOND SESSION __________ SEPTEMBER 14, 2016 __________ Serial No. 114-230 __________ Printed for the use of the Committee on Foreign Affairs [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or http://www.gpo.gov/fdsys/ _________ U.S. GOVERNMENT PUBLISHING OFFICE 21-543PDF WASHINGTON : 2016 ________________________________________________________________________________________ For sale by the Superintendent of Documents, U.S. Government Publishing Office, http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). E-mail, [email protected]. COMMITTEE ON FOREIGN AFFAIRS EDWARD R. ROYCE, California, Chairman CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York ILEANA ROS-LEHTINEN, Florida BRAD SHERMAN, California DANA ROHRABACHER, California GREGORY W. MEEKS, New York STEVE CHABOT, Ohio ALBIO SIRES, New Jersey JOE WILSON, South Carolina GERALD E. CONNOLLY, Virginia MICHAEL T. McCAUL, Texas THEODORE E. DEUTCH, Florida TED POE, Texas BRIAN HIGGINS, New York MATT SALMON, Arizona KAREN BASS, California DARRELL E. ISSA, California WILLIAM KEATING, Massachusetts TOM MARINO, Pennsylvania DAVID CICILLINE, Rhode Island JEFF DUNCAN, South Carolina ALAN GRAYSON, Florida MO BROOKS, Alabama AMI BERA, California PAUL COOK, California ALAN S. LOWENTHAL, California RANDY K. WEBER SR., Texas GRACE MENG, New York SCOTT PERRY, Pennsylvania LOIS FRANKEL, Florida RON DeSANTIS, Florida TULSI GABBARD, Hawaii MARK MEADOWS, North Carolina JOAQUIN CASTRO, Texas TED S. YOHO, Florida ROBIN L. KELLY, Illinois CURT CLAWSON, Florida BRENDAN F. BOYLE, Pennsylvania SCOTT DesJARLAIS, Tennessee REID J. RIBBLE, Wisconsin DAVID A. TROTT, Michigan LEE M. ZELDIN, New York DANIEL DONOVAN, New York Amy Porter, Chief of Staff Thomas Sheehy, Staff Director Jason Steinbaum, Democratic Staff Director ------ Subcommittee on Asia and the Pacific MATT SALMON, Arizona Chairman DANA ROHRABACHER, California BRAD SHERMAN, California STEVE CHABOT, Ohio AMI BERA, California TOM MARINO, Pennsylvania TULSI GABBARD, Hawaii JEFF DUNCAN, South Carolina ALAN S. LOWENTHAL, California MO BROOKS, Alabama GERALD E. CONNOLLY, Virginia SCOTT PERRY, Pennsylvania GRACE MENG, New York SCOTT DesJARLAIS, Tennessee C O N T E N T S ---------- Page WITNESSES Victor Cha, Ph.D., senior adviser and Korea chair, Center for Strategic and International Studies............................ 5 Mr. Bruce Klingner, senior research fellow for Northeast Asia, The Heritage Foundation........................................ 13 Sue Mi Terry, Ph.D., managing director, Bower Group Asia......... 27 Mr. David Albright, president and founder, Institute for Science and International Security..................................... 38 LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING Victor Cha, Ph.D.: Prepared statement............................ 7 Mr. Bruce Klingner: Prepared statement........................... 15 Sue Mi Terry, Ph.D.: Prepared statement.......................... 29 Mr. David Albright: Prepared statement........................... 40 APPENDIX Hearing notice................................................... 60 Hearing minutes.................................................. 61 The Honorable Matt Salmon, a Representative in Congress from the State of Arizona, and chairman, Subcommittee on Asia and the Pacific: Material submitted for the record..................... 62 The Honorable Grace Meng, a Representative in Congress from the State of New York: Prepared statement.......................... 67 NORTH KOREA'S PERPETUAL PROVOCATIONS: ANOTHER DANGEROUS, ESCALATORY NUCLEAR TEST ---------- WEDNESDAY, SEPTEMBER 14, 2016 House of Representatives, Subcommittee on Asia and the Pacific, Committee on Foreign Affairs, Washington, DC. The subcommittee met, pursuant to notice, at 3:27 p.m., in room 2255, Rayburn House Office Building, Hon. Matt Salmon (chairman of the subcommittee) presiding. Mr. Salmon. I apologize for both of us being a little bit tardy. We had the Foreign Minister from Burma, who was here to meet with the chairman of the full committee, and we were asked to attend. So, thanks for being so patient. I really appreciate you not leaving. The subcommittee will come to order. Members present will be permitted to submit written statements to be included in the official hearing record. Without objection, the hearing record will remain open for 5 calendar days to allow statements, questions and extraneous materials for the record, subject to the length limitation in the rules. Last Friday, North Korea conducted its fifth and most powerful nuclear test to date. This latest provocation coming just weeks after they fired off three additional missiles during the G-20 summit in China. While U.S. and United Nations sanctions have undoubtedly hurt the North Korean economy, Kim Jong-un continues to willingly and belligerently defy U.N. Security Council resolutions as well as international norms. Clearly, he is not fazed by the administration's so-called plan of strategic patience, and so continues with his childlike behavior that endangers much of the world. The House Committee on Foreign Affairs, under the leadership of Chairman Royce, has taken the lead to address this intransigence. While we have already taken bold steps in increasing sanctions, clearly, more must be done. We are here today to identify and work toward proactive policy solutions that will put an end to the provocations of this rogue regime. Enough is enough. As good as the additional sanctions have been, without China's enforcement, it will never be enough. I would like to hear from our panel on how to best engage China on this issue. We have been talking about this for a very, very long time, and it doesn't seem like we have gotten them properly motivated. We have talked to some of our allies about the same issue. And, frankly, China's almost nonintervention in this issue is very, very frustrating. We would love to hear any thoughts you might have on how we can get them a little bit more excited about getting more involved. China prefers the status quo in North Korea rather than risk a flood of North Korean refugees and a shared border with the Korea-U.S. alliance. Some experts even worry that China may use its enforcement of U.N. Security Council resolutions and diplomatic assistance as a wedge, forcing South Korea to choose between China and the United States as its main partner on the peninsula. The international community at large is alarmed at China's indifference to date over North Korean provocations, especially with nuclear detonations so near its own border. Even North Korea's willingness to embarrass China by upstaging the G-20 ceremonies with a nuclear test has not yet led to real action by China. The administration has appeared to make some progress on our trilateral engagement with Korea and Japan, our two closest allies in East Asia. The House recently passed my legislation, which was cosponsored by Mr. Sherman, to encourage further dialogue and cooperation between our nations, with particular emphasis toward the North Korean threat. I will be very interested to hear from our panel on the potential for further cooperation from South Korea and Japan on how we might best work together to address North Korea's dangerous behavior. The United States recently convened its annual joint military exercises with South Korea. The U.S. flew two bombers over South Korea to provide some reassurance to our friends in Seoul, but I am not sure these messages resonate with Pyongyang. We all know that there are few options to instill real change from within North Korea, but waiting it out will not solve anything. We need a proactive approach. Most agree that getting information to the people of North Korea, unfiltered by the current regime, would greatly benefit the people of North Korea and aid efforts to diminish the stranglehold Kim has over the nation. I have legislation that passed through this subcommittee that would provide an overdue update and enhancement of those efforts. Boosting the information flow in North Korea would cripple Kim Jong-un where he is most vulnerable, and that is in the realm of reality. Again, sanctions efforts have been a huge focus in Congress, but due to China's lack of resolve, they seem to have little practical impact. I would like to determine what we can do to take it to the next level. What other chokepoints can we squeeze to shut off funding to North Korea's nuclear ambitions? Cutting off access to financial messaging systems, such as SWIFT, was a successful strategy to induce compliance with Iran, and we should pursue the same strategy toward North Korea, in my belief. The rogue regime should not have access to the international financial system. As if its other activities weren't reason enough to cut off its financial messaging access, North Korea has been identified as the likely culprit of a serious hack on SWIFT earlier this year, in which the culprits stole $81 million from Bangladesh's central bank. For that reason, I am working on legislation to end North Korea's access to interbank financial transfers to prevent further abuses and reduce funding to North Korea's nuclear program. Time and again, North Korea has proven that, so long as it is able, it will continue to advance its nuclear program, for both internal domestic strength as well as international bargaining power. While the United States has shown a willingness to negotiate with North Korea when it takes even modest steps toward denuclearization, North Korea has shown no interest--zero interest--in maintaining international norms. This cycle cannot continue, and we cannot strategically wait with a potential catastrophe looming. I look forward to a frank discussion with our witnesses on what to do next with this rogue regime. And I would like to recognize the ranking member for his opening statement, and then we will go to you, the witnesses. Thank you. Mr. Sherman. Mr. Chairman, thank you for holding these hearings. To amplify your reason why we were both late, we met with the Foreign Minister of Burma, also known as Myanmar, who happens to be Aung San Suu Kyi, one of the most inspirational women in the world. And, some would say, the de facto head of state of an important nation in Southeast Asia. I want to thank you for holding these hearings as we look at North Korea's fifth test overall. Its second test conducted just this year. The bomb's yield is estimated to be as much as 20 kilotons or even more. And, if accurate, that would mean that the test involved a bomb with at least twice the yield of any other bomb tested by North Korea. We used to have the luxury of saying the North Koreans just want to get our attention; they just want some this or that concession. That is why they tested the missile; that is why they tested the nuclear explosive device. We can no longer just view North Korea as an annoying, petulant child. It is clear that North Korea is testing missiles and bombs for the purpose of developing warheads and ICBMs that can be put together and can reach our allies and, ultimately, the continental United States. The testing they are engaging in is necessary to achieve that goal. The fact that North Koreans have greatly increased the tempo of their testing is consistent with the view of an all-out effort to achieve these frightening capacities. We need to approach this problem with both a clenched fist and an open hand. As to the clenched fist, we can have sanctions on North Korea and its leaders, but these will be significant but not enough to change its policy unless we have the cooperation of China. China is North Korea's lifeline, whether it is food, whether it is oil, whether it is trade, whether it is money, whether it is hard currency. China is North Korea's window to the world and the provider of the financial services that they need. China needs to realize that there will be consequences well beyond our current targeted sanctions on this or that business entity if it continues to do business as usual with North Korea. China needs to understand that if North Korea uses its nuclear weapons, we will blame not only the regime in Pyongyang but also the regime in Beijing. China needs to know that it risks a serious change in relationship with the United States if it does not assist us in this effort. It cannot assume that it will always have access to the United States market the way it does now. And, there are those who say that it is unthinkable to link the trading relationship with the foreign policy relationship. I think it is time to think the unthinkable. But, what we are likely to do is just keep doing what we have been doing, which has been very ineffective in stopping North Korea's efforts. At the same time, we need an open hand. We should be discussing with North Korea a nonaggression pact, if they are still seeking one. We should be discussing with China that if there was a unification of the Korean Peninsula, something I don't think is going to happen anytime soon, but that if that were to happen, that the United States would not take military advantage of that, that, if anything, there would be a smaller American military presence on the Korean Peninsula and that it would not be north of the 38th parallel. And, we should explore whether some of our sanctions on North Korea could be reduced or eliminated, at least for a while, if there were very intrusive inspections to enforce a regime that froze its nuclear program. The idea of accepting, even for a while, that North Korea keeps what it has may sound like a departure from orthodoxy. But, every year, they have more, and it would be a good year if they did not increase their nuclear capabilities. I should point out that North Korean nuclear doctrine seems to call for having about 12 usable nuclear weapons to defend their country. They will soon have a 13th, and it may go on eBay. Not exactly on eBay, but once they get a certain number, they can think of selling the next one. If it is sold, it will not be for tens of millions of dollars; it will be for billions of dollars. Fortunately, there is no terrorist organization in the world that can provide that amount of money, but I can think of one or two states that would like to have nuclear weapons that could muster billions of dollars. And, I am going to continue my effort to convince the Chinese Government that they should not allow nonstop flights between Pyongyang and Tehran that don't stop for fuel in China. It is always good to get more fuel, and it is always good for the Chinese Government to be in a position to know what is on the plane. What is more likely is we are just going to keep doing what we are doing. We will talk at China, but we won't do anything that forces them to change their policy. And we will be back here, unfortunately, without our chairman in the years to come--unless you want to do a third iteration of your congressional career to hold hearings--and by then, we may be talking about testing an ICBM that has proven to go thousands of miles. I don't want to be here to do that, but I am not moving to Arizona, so if it does happen, I will be here to see it. And, I yield back. Mr. Salmon. I thank you. In the interest of time, we would like to move to the witnesses, and upon your conclusion, we will have questions by the members of the panel up here. You have all testified before Congress before, but let me just remind you that, with our lighting system, when it is green, you are good as gold; when it turns amber, you have got a minute left; when it is red, please finish. I know we have a lot of questions, a lot of interest. This is a very pressing issue and pressing time. First of all, we have Dr. Cha, senior adviser and Korea chair at the Center for Strategic and International Studies; Mr. Bruce Klingner, senior research fellow for Northeast Asia at the Heritage Foundation; we have Dr. Sue Mi Terry, managing director of Bower Group Asia; and Mr. David Albright, the president and founder of Institute for Science and International Security. We thank the panel for joining us today to share their experience and expertise. And, Dr. Cha, we will start with you. STATEMENT OF VICTOR CHA, PH.D., SENIOR ADVISER AND KOREA CHAIR, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES Mr. Cha. Thank you, Chairman Salmon, Representative Sherman, and committee members. North Korea is shaping up to be the number one security threat for the next U.S. Presidency. Since 2009, there have been 62 ballistic missile and nuclear tests, versus 17 ballistic missile and nuclear tests during the Clinton and Bush administrations. So, there has been a steep change, and neither of the candidates have really addressed this issue. This issue is going to hatch in the next administration. What the North Koreans want--as Representative Sherman said, we used to think they wanted attention and that is why they did these sorts of things. That is clearly not what we are talking about anymore. In my opinion, they are trying to demonstrate, to the best of their ability, a survivable nuclear capability. And, they are trying to do that, at least signal that, before the next U.S. President comes into office. And I think we have more provocations to come. The data that we are collecting at CSIS on our Beyond Parallel Web site, which we will be releasing soon, indicates that they like to do things in a specified window around U.S. Presidential elections. So, I expect that there is more to come. The threats are obvious, and I think both Chairman Salmon and Representative Sherman have spoken to these. And, I particularly want to emphasize the horizontal proliferation threat. I mean, their statements are talking about standardizing a weapons design. The suggestion is that the next step is production. And, if they do produce scores of missiles, nuclear-tipped missiles, there is only one thing that they can do with them, and that is to sell them. History has shown that they have sold every finished weapon system they have ever developed, whether it is missiles to Pakistan and Iran, whether it is a nuclear design for a 5-megawatt reactor to Syria, or even discussions with Saddam Hussein at one point, except Saddam was not ready to pay for anything yet. Unfortunately, we are going to go back to the usual playbook: Angry statements from the United Nations, perhaps another Security Council resolution. The sanctions are not doing the things that we want them to do. They are not retarding the program. They are not forcing the North Koreans back to the negotiation table. And they are not--even though this is an unspoken aspect of sanctions--they are not causing the regime to be unstable. So the current pattern is not working. So, what should we do? I mean, I will offer some ideas. I don't know if they are new ideas, but I will offer some ideas. The first, and I think foremost, is that we need to deploy THAAD on the Korean Peninsula. Both the South Korean people and U.S. forces on the peninsula are naked without it. And, I know this is shaping up to be a controversial issue in South Korea, but this is not a political issue, even though it is being played as political in South Korea. This is a national security issue. Second, I think we can do more in terms of sanctions. We can certainly boost or turbocharge the sanctions. We can close the loophole in 2270 when it comes to the sectoral measures, coal and these sorts of things. We can ban fuel exports to North Korea. We can ban the overseas labor exports. As Chairman Salmon said, we can do something with SWIFT. We can designate Air Koryo for violating the U.N. ban on importing luxury goods and bulk cash transportation. We can try to ban North Korean transactions in other foreign currencies, including the RMB. So there are a number of sanctions that we could do. I also want to draw attention to the importance of continuing to focus on trying to implement the U.N. Commission of Inquiry recommendations, including discussion in the U.N. Security Council about holding North Korean leaders responsible for human rights abuses. I do agree that we can't do all of this without leaving open some sort of diplomatic path. Otherwise, we are just headed on a path to war. And, so I think, in this regard, China should convene a five-party meeting. When we created the Six Party Talks, that was the purpose, was to have five-party meetings in which we could talk with the Chinese and others about more coordination on contingency planning. Finally, let me say that I think we do need to engage China more on sanctioning, but I think we also need to engage them on thinking about the overall direction of the leadership in North Korea and how we might be able to effect change there. This problem, as we can see, based on the number of tests they have been doing, really coincides with the assumption of power of this leadership, this new young leadership. And, as long as that is there, this is going to continue to be a problem. Thank you very much. [The prepared statement of Mr. Cha follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] ---------- Mr. Salmon. Thank you. Mr. Klingner. STATEMENT OF MR. BRUCE KLINGNER, SENIOR RESEARCH FELLOW FOR NORTHEAST ASIA, THE HERITAGE FOUNDATION Mr. Klingner. Thank you, Mr. Chairman, Ranking Member Sherman, and distinguished members of the panel. It is truly an honor to be asked to appear before you again on such an important issue to U.S. national security. North Korea's repeated violations of U.N. resolutions have led to a new international consensus on the need for stronger, more comprehensive sanctions. The enhanced punitive measures are welcome, if long overdue, but their utility is dependent on complete and forceful implementation. This year, Congress passed the North Korea Sanctions and Policy Enforcement Act, which had a major impact by inspiring or pressuring others to implement long overdue measures on North Korea. The act increased U.S. leverage at the U.N. Security Council. It led other nations to undertake similar actions or to wean themselves away from business dealings with Pyongyang. And it led the Obama administration to finally designate North Korea as a primary money laundering concern and target several North Korean entities, including Kim Jong-un, for human rights abuses. Yet, more can and needs to be done. Besides the Obama administration's policy of timid incrementalism of sanctions enforcement, another major problem, as you have identified, is China. In March, China agreed to U.N. Resolution 2270, which has been touted as the toughest to date. That is true, but as has been the case with every previous resolution, it was watered down due to the demands of Beijing. And Chinese banks and businesses seemed to be pulling back from North Korea early in 2016. However, China took similar action after every previous North Korean nuclear test, and each time, China temporarily tightened trade and bank transactions with Pyongyang only to subsequently reduce enforcement and resume normal economic trade within only a few months. For years, China has been an enabler of North Korean misbehavior at the U.N. China's reluctance to strongly pressure its ally provides Pyongyang a feeling of impunity, which encourages it only toward further belligerence. The effectiveness of international sanctions is hindered by China's weak implementation. The economic noose is now tightening on the North Korean regime, and it faces a perfect storm of conditions that make it more vulnerable to economic pressure. The regime is facing a reduced flow of hard currency due to the increased financial sanctions; the increasing pariah status of the regime that is scaring away business partners; decreased global prices for resource commodities, which is a major North Korean export; the slowing Chinese economy; and South Korea ending its involvement in the failed Kaesong joint economic venture, which had generated nearly a quarter of North Korea's foreign trade. Now, how to respond to North Korea? The international community should take all possible measures to cut off the flow of money into North Korea and substantially increase pressure on the regime. In my written testimony, I have provided a lengthy list of specific recommendations, and I will highlight a few here. There are additional measures we can take, but as important is fully implementing all the measures and the powers that we already have. But some of the steps, as you have already alluded to, are imposing secondary sanctions and penalizing entities, particularly Chinese financial institutions and businesses that trade with those on the sanctions list. Imposing secondary sanctions could have a chilling effect on Chinese economic engagement with North Korea. To date, the Obama administration has not sanctioned a single Chinese entity for facilitating North Korean prohibited behavior. Compel the removal of North Korea from the SWIFT financial transfer network, as you pointed out, Mr. Chairman. The Obama administration and the European Union pressured the Belgian- based hub for electronic financial transactions to disconnect sanctioned Iranian banks in 2012. We should do the same with North Korea. We should also work to ban North Korean overseas workers exploited in highly abusive conditions. North Korea has an estimated 60,000 to 100,000 workers overseas, earning the regime an estimated $300 million to $400 million a year. We should also increase information operations, through overt and covert means, to promote greater North Korean exposure to the outside world to have a long-term corrosive effect on the regime. The U.S. and its allies must also implement measures to defend themselves against the spectrum of North Korea's military threat. As Mr. Cha has pointed out, we should deploy the THAAD ballistic missile defense system in South Korea. It is better than anything Korea has or will have for decades to defend against North Korean land-based missiles. We should also urge South Korea to deploy sea-based ballistic missile defense against the submarine missile threat from North Korea. Currently, Seoul has no systems to defend itself against an SLBM. We should also augment allied antisubmarine warfare capabilities. North Korea's apparent ability to evade allied submarine detection systems is worrisome. And, finally, we should fully fund U.S. defense requirements. The U.S. military is smaller today than it was on 9/11. In conclusion, at present, any offer of economic inducements to entice North Korea to abandon its nuclear arsenal is an ill-conceived Wile E. Coyote plan with little chance of success. Sanctions and targeted financial measures may take time to have an impact on the regime's financial condition. In the near term, however, such measures enforce U.S. and international law, impose a penalty on violators, and constrain the inflow and export of prohibited items for the nuclear missile programs. The difficulty will be maintaining international resolve to stay the course. Thank you very much. [The prepared statement of Mr. Klingner follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] ---------- Mr. Salmon. Thank you. Dr. Terry. STATEMENT OF SUE MI TERRY, PH.D., MANAGING DIRECTOR, BOWER GROUP ASIA Ms. Terry. Mr. Chairman, Ranking Member Sherman, and distinguished members of the committee, thank you for this opportunity to testify before you on this very difficult problem. North Korea is a very personal issue for me. My entire paternal side of the family came from the north, and I have personally witnessed the pain of divided families. In the aftermath of the fifth nuclear test, again, the community of Korea watchers is divided as to what the next steps should be. As a number of North Korea experts argue, sanction strategy as a policy of U.S. policy is no longer working, and it is time to return to negotiations with North Korea even without preconditions. Other experts call for ratcheting up more pressure against the Kim regime by enforcement of sanctions and other measures, such as information warfare, even if it means potentially risking escalation by the regime or even potentially risking instability. I actually believe that if there is any chance at all that North Korea would ever entertain the idea of ever giving up nuclear weapons program, it would be only because we have made it so that the Kim regime is facing a very stark choice between keeping its nuclear arsenal and regime survival. Victor and Bruce Klingner just laid out before you--as they laid out, I agree that this ratcheting up pressure must begin with tougher sanctions and, more importantly, better enforcement. As you have heard, we have just not done that yet. It is premature to argue that sanctions are not working, or it has failed. Until February of this year, we did not even have comprehensive sanctions against North Korea. We finally have stronger sanctions in place, but for sanctions to work, it needs to be enforced. Here again, the chief problem has been China. China is still reluctant to enforce--to implement the U.N. sanctions. There are many examples of China's noncompliance, and I point out some of this in my written testimony. President Obama has also yet to fully use the broad powers that the Congress has given him to penalize any Chinese companies or banks for continuing to do business with North Korea. Confronting Kim Jong-un credibly depends on getting bankers in China and other countries to comply with the sanctions, which means a credible threat of secondary sanctions is necessary. In addition to enforcement of sanctions, the next steps are to close existing loopholes and add even more individuals and entities to the list. You have heard what some of them could be both by Victor and Bruce. That includes banning labor and disconnecting North Korean banks from SWIFT system. Beyond sanctions, I think there are other actions that we can take to ratchet up pressure, including: Promoting human rights in North Korea, seeking ways to increase information dissemination into the north, and finding ways to give Internet access to North Korean citizens. North Korea should also be placed back on the State Sponsors of Terrorism list. I know you have discussed this with both speakers in the past. Now, even as we push for enforcement of sanctions and ratcheting up pressure on the Kim regime, I am very aware that these measures could also fail and no amount of pressure may change the regime's calculus. Nonetheless, after more than two decades of dealing with North Korea, I think we are left with very, very few options. And if we manage to enforce sanctions, including secondary sanctions, over a sustained period of time, I think this will be the first time we decisively raised the stakes, the cost for Kim Jong-un in pursuing the nuclear weapons program. And this might, just might, make him reconsider his policies. If it doesn't and the critics of sanctions policy are right, that even the strictest enforcement of sanctions will not make the Kim regime reconsider its nuclear program. Even so, I believe enforcement of sanctions and a containment policy are the right next steps, even as we leave the door open for engagement down the road. In addition to sending a message to other rogue regimes about the cost of flouting international law, I think these pressures could also weaken Kim Jon-un's grip on power. And while they might at some point precipitate instability, potential instability, I believe that this is an outcome that we should welcome, not fear, because over the longer term, we should really be pursuing a policy of unification of the two Koreas. Let me just conclude with this point. While Kim Jong-un's hold on power appears to be firm right now, I think there is a growing sign of discord among the elite class. We have recently seen an increasing rate of defection by very high-ranking elites. All these frequent purges and executions of high-level elites may help strengthen Kim Jon-un's rule in the short run, but all this heavy-handed rule is more likely to corrode long- term elite support for Kim. This is, again, where the sanctions enforcement will help. The more we intensify economic pressure against the Kim regime, the more we shake the confidence of the elites, the more that Kim Jong-un will be left vulnerable, as he will have less foreign currency to underwrite the lifestyle of the elites, whose support is essential in maintaining his grip on power. And at the end of the day, it is when Kim Jong-un is facing really an abyss, he might finally choose to disarm, or, failing that, it may be that the North's policy will only change if a different leadership fundamentally emerged. Tightening the sanctions screws now, I think, will hasten that day. Thank you. [The prepared statement of Ms. Terry follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] ---------- Mr. Salmon. Thank you. Mr. Albright. STATEMENT OF MR. DAVID ALBRIGHT, PRESIDENT AND FOUNDER, INSTITUTE FOR SCIENCE AND INTERNATIONAL SECURITY Mr. Albright. Thank you, Mr. Chairman, Ranking Member Sherman, and distinguished members of the subcommittee, for holding this hearing. North Korea's recent nuclear test, its second this year, demonstrates its resolve and commitment to developing a nuclear arsenal able to strike its enemies. Reversing that growing threat must be a greater U.S. priority. This test, its largest to date, combined with a number of recent ballistic missile tests, should lead the United States and its partners to accept that North Korea can strike its neighbors with nuclear weapons, and it is making progress on building a long-range nuclear- capable force. Diplomatic efforts so far have proven inadequate to stop North Korea's progress. However, when agreements were reached, they improved transparency over North Korea's nuclear programs, slowed its progress, and led to fewer regional provocations by the regime. In short, negotiating with North Korea is a strategy that can yield both short- and long-term gains. The United States needs to reinvigorate its efforts to seek the dismantlement of North Korea's nuclear arsenal for sure. With regards to that endeavor, it has to be recognized that China is not going to deliver North Korea's denuclearization. Unless China dramatically changes its current policies, it is not going to institute sanctions or other measures that it views as risking the collapse of the North Korean regime. Although we at my institute support increasing pressure on China to apply more effective sanctions on North Korea, the United States cannot rely on China to press hard enough to get North Korea to make significant nuclear concessions. The United States needs to find additional ways to influence North Korea, including direct negotiations. At my institute, we are still assessing the recent test, but based on North Korea's statements and the yield of the test, we preliminarily assessed that North Korea may have a family of relatively reliable miniaturized fission weapons with a destructive force rivaling the size of the Hiroshima blast that can use plutonium or weapons-grade uranium and fit on a number of ballistic missiles. North Korea's statement after the test implies that North Korea could have learned to use weapons-grade uranium in what it has called the standardization of the nuclear warhead. This opens the path to building a large number of miniaturized nuclear weapons using weapons-grade uranium. North Korea is likely to be able to produce considerably more weapons-grade uranium than plutonium and in ways that largely escape our current detection. Taking account of the recent tests, my institute estimates that North Korea has about 12 to over 20 nuclear weapons. We believe, over the next 5 to 10 years, it can significantly increase the number of weapons. There remains plenty of room to improve and strengthen the sanctions on North Korea. To my institute, the immediate priority is the United States sanctioning Chinese companies involved in providing controlled or sensitive goods to North Korea. The U.S. Government should use its authority to sanction illicit actors in China that supply North Korea's nuclear missile and other nuclear programs. In addition, in order to prevent the further expansion of North Korea's nuclear programs, more coordination is needed among allies to thwart North Korea's overseas purchases for its nuclear and missile programs. It is also useful to step up sanctioning of banks and financial institutions involved in business with North Korean nuclear missile and military programs. Reestablishing meaningful negotiations with North Korea will not be easy, but it should be a major U.S. priority. How to achieve meaningful denuclearization negotiations, and what they should cover requires much deeper study, but any negotiation should be premised on a firm commitment to achieve North Korean denuclearization and avoid in any way legitimizing North Korean nuclear weapons. These negotiations should include broader initial declarations of its uranium and plutonium pathways to the bomb and provide access to nuclear sites outside of the Yongbyon complex. Moreover, the negotiations cannot focus only on the nuclear program. They will need to ratchet back North Korea's ballistic missile programs and resolve regional security issues. Finally, North Korea must commit to not proliferate abroad and not to engage in nuclear and missile cooperation with Iran or other countries. Congress has an important role in establishing U.S. sanctions and sanctions policy on North Korea, and it should encourage the administration to use its authorities given in the North Korea Sanctions and Policy Enhancement Act of 2016. It should also explore more ways to encourage China to apply sanctions on North Korea. However, as I have said, the United States should not depend solely on China. It also needs to develop other ways to influence North Korea to denuclearize. Engaging North Korea has historically shown that it yields limitations and more transparency into North Korea's nuclear activities compared to a policy of ignoring the threat while it grows. Combined with greater efforts to rein in its illicit activities and addressing regional security concerns, changing the status quo of North Korea's ongoing dangerous provocations is possible. New thinking is needed to reengage this dangerous regime and start the process of achieving denuclearization. Thank you. [The prepared statement of Mr. Albright follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] ---------- Mr. Salmon. Thank you. I appreciate the witnesses' comments. The United States has engaged in negotiations with North Korea in the past from time to time during the Bush administration. We agreed to certain lifting of sanctions at the commitment that Korea would do certain things. We lifted the sanctions, started the flow back into North Korea, and quickly found out that it was a ruse. They went back to doing exactly what they did before. While, Mr. Albright, I don't discount the importance of diplomacy and negotiations, I don't think most of us are very trustful that Kim Jong-un is an honest broker and that he is somebody that we can count on to keep his word once he gives it. I think that the sanctions that we have employed heretofore, both by the United States and the international community at large, have been largely unsuccessful in getting any kind of change or desired change from North Korea. And, I am increasingly believing that China's intransigence on the issue is becoming more and more frustrating. On one hand, they loudly proclaim that they are just as committed to stopping the proliferation of nuclear weapons in North Korea as the rest of us are, but yet they are really not doing that which they can to make change. The chief reason is, as I have talked with some of our Chinese diplomats, they say it is their concern that there will be a flood of refugees over the China border if they impose the kind of sanctions, economic and otherwise, that would really motivate North Korea that it could implode their economy. So, there is a fear of that. I am not sure that I buy that. In fact, I kind of almost feel like, on one side, they are saying, ``Don't do it''; on the other side, you know, they are allowing many of their companies to provide the wherewithal to increase that nuclear program. I would really like to explore more ideas. I mean, we have talked about the deployment of THAAD on the Korean Peninsula, which I strongly support. In fact, we just passed a bill that I and Brad Sherman authored dealing with trilateral relationship between us, Japan, and South Korea, but also strong language in there about the deployment of THAAD on the Korean Peninsula. So, on one hand, that, you know, is a step in the right direction, but China is also using all their political influences to pressure China--or, excuse me, pressure Seoul not to do that. In fact, that is probably one of the biggest sources of political blowback that they are getting to getting it done, because South Korea counts on China very heavily in their economic projections and economic strength. So that kind of pressure from China is very inordinate. What are some of the other things that we can do to get China to the table? I agree with targeted sanctions against Chinese companies that are in the mix, you know, with this Chinese--or excuse me, this North Korean proliferation. But Mr. Sherman has suggested at times past--I think it is kind of provocative--maybe we should be looking at other potential economic sanctions against China because of their lack of interest in getting this done. And I am asking, you know, what are your thoughts on that? Are those possible motivators? The other thing that I am wondering is--I know when it was said during the campaign, a lot of people got real excited, but what is the likelihood that China and South Korea at some point in time, if North Korea develops a really robust nuclear program and it is proven to be reliable, what is the likelihood that South Korea and Japan, those two entities, might start looking at their own nuclear programs in a defensive realm? Those are my thoughts. And, Dr. Cha, would you maybe start off your response? Mr. Cha. Thank you, Chairman. I will try to address a couple of these. I think they are all very important points, and I think you have framed the policy problem quite well. Let me just say, on negotiations, as someone who participated in the last set of negotiations, the 2005-2007 Six Party Agreed Framework, I know what that rabbit hole looks like. And it will start out with--in terms of what we could get. It will start out with a ban on--they will self-declare a testing ban as long as we are in talks with them. And then, if we are lucky, we might get a freeze on operations at the 5- megawatt reactor at Yongbyon. I think that will be about as far as we can get during the course of negotiations. That freeze won't be verifiable in the sense that they won't let the IAEA in, I don't think. And, of course, it won't include anything outside of Yongbyon, even the one facility that they have said is a uranium facility at Yongbyon. So I think it is going to be--so we have been down that rabbit hole. And it will do something, but, at best, it is a holding position and a suboptimal holding position. So I am also one for negotiations, but it is going to be very difficult. On what we should do, I mean, I think there are two areas of vulnerability that we should press on. With regard to China, China doesn't respond to what North Korea does. China responds to what the United States does in response to North Korea. And whether it is secondary sanctioning or even something that is a little bit more radical, including possibly altering the disposition of our forces on the peninsula in a way that makes our overall capabilities more robust but makes our forces less vulnerable. That would be something China would take notice of. And, with regard to North Korea, you have already hit on it. Both of you have hit on it, and that is the information issue. That is what they see as a vulnerability. But, the thing is, either of these things entails more risk on the part of the United States and our policies on this issue. What we see thus far, what we all find so distasteful, the current position, is because we have generally been quite risk-averse when it comes to dealing with this problem. But, it has grown so out of control that some of these other measures we might consider that press on vulnerabilities of both China and North Korea are there, but it requires us being willing to take on more risk. Mr. Salmon. I am going to yield to the next question, but the risk of the status quo is far worse than anything that you are talking about as far as what those risks entail, I believe. The risk of just allowing it to go as it is going right now is a very frightening venture, and I think that if we are doing risk assessment, you got to take that into account as well. Mr. Lowenthal. Mr. Lowenthal. Thank you, Mr. Chair. I would like to follow up on your questioning now. After listening, I find this fascinating. I have heard a lot about, you know, China and China's intransigence and lack of compliance to really helping, especially in terms of--and then the response of, what kinds of pressure can we put on? What about other kinds of alternatives? I am not really understanding very well the role of China in the sense that, is there a way that we can enlist China as a partner, not as an adversary in this relationship, but as a partner in terms of what does China fear about North Korea's weakness? Does China need North Korea strong, or would they like to see something different, and what are they frightened of? And what does China want in all of this? I am not hearing, what would China want in something like this? Because I am just hearing one side, what we want, what we do. And I agree with that. But what does China want in this relationship, and are they frightened of something? I would like to kind of understand more if we are really talking about other kinds of alternatives. Anybody? Ms. Terry. Yes. I would like to just discuss some of the points that the chairman and you have just made. And China, just briefly to go over your point, I think economic sanctions, trade, it is all good, but there is no political will in the Obama administration. So I think we really need to still focus on the secondary sanctions and target Bank of China, Bank of Daedong, Chinpo Shipping, and so on. Regarding your point about what does China fear, I think part of what we can discuss with China is that China fears instability in the Korean Peninsula. China fears unification ultimately, because it does not want a pro-U.S. unified Korea with potential U.S. forces on the---- Mr. Lowenthal. Is that an obstacle, or could that be a potential for us to have discussions with them? Ms. Terry. This is somewhat controversial, but I would like to argue that--in terms of trying to help come up with creative thinking is, say, if you can engage and try to have a candid discussion with China. It would be very difficult to do so, but--not only about the nuclear program, but the potential instability and potential unification scenarios. And, we might have to make that kind of grand bargain where we do sort of promise to reduce U.S. troop presence or even it has to be, post-unification, pulling U.S. forces out. But, that is something that we could consider in addition to just sort of trying to pressure China. I just want to get back to your point about South Korea and Japan arms race. I think that is a very big concern, that if we let nuclear North Korea happen, ultimately, I think there will be an instability in the region. Because South Korea is already talking about bringing tactical nuclear--some South Koreans are--bringing tactical nuclears back to South Korea, and they will cause arms race both by South Korea and Japan. Mr. Klingner. I would just add, Mr. Albright pointed out the exponentially growing North Korean threat. We have had what to some were sudden unexpected revelations that ``gambling was going on in the casino,'' in that missiles that had been under development for years had success, and that shocked people. So now you have this new fear that the threat is real. It would be humorous if it weren't disturbing. So we have a submarine-launched ballistic missile which had a breakthrough. The intermediate-range missile had a breakthrough. Guam is now under direct threat. So it is a question of, are we serious or not? There are things we can do at the U.N. We should push for eliminating what is called the ``livelihood purposes'' loophole on the ban on North Korea's export of resources. The loophole is bigger than the ban. With regard to China, I think they don't want a crisis on their border, but their behavior is only creating the conditions that will bring about that crisis. The Obama administration and the Bush administration have had conversations with China, trying to explain that their reluctance to pressure their ally is only bringing about the crisis they don't want, and it is only going to cause the U.S. and its allies to take responsive measures that they won't like. So we can try to induce their cooperation, but when we talk about secondary sanctions on China, we can almost sort of toss that off, but it is actually very, very important, because what it can do is actually induce Chinese banks and businesses to do things that the government doesn't want them to do. We saw that back in the mid-2000s with Banco Delta Asia. The Chinese Government didn't want Bank of China to cut off North Korea. The Bank of China knew it could be susceptible under U.S. law to being precluded from access to the U.S. financial system. So the Bank of China, in essence, told the government: Well, we hear you, but we have to disagree. We have to cut off North Korea. Otherwise, the Bank of China could face sanctions. So if we were to sanction even one Chinese entity, it would send a very strong signal to the others. Mr. Albright. Could I add to that? Is there still time? Because I think it is very important that the enforcement of the existing sanctions be done rather than--I mean, it is important to look for new ones. I mean, maybe there is a silver bullet out there and maybe SWIFT is potentially that. But at the same time, it is critical to send a message to China, because another issue with China is that on a lot of these exports to North Korea, it claims it is just a big large developing country that can't manage its own system. And, I think, there is some truth to that. There are hundreds of thousands of companies licensed for export in China. And even if you take a European country, some of the smaller ones, you are talking about hundreds or 1,000 companies that can do that. So the control issues are profound. But I think that that also creates an opportunity, that China doesn't support these exports, but it is not going to do anything. And I think the U.S. can play a very important role in sending a signal into China that it needs to do it. And I think it is critically important at this time to enforce the sanctions that this Congress has passed. And there are companies in China that are known to deal with North Korea, and strong cases can be made that they are violating the sanctions and the U.S. should actually sanction them. Mr. Salmon. Thank you. General Perry. Mr. Sherman. I would ask for 1 minute. I want to address this issue what I think China would want. I mean, they would prefer if North Korea didn't have a nuclear program, but that is not high on their list. They would like to continue trade. That is not the highest thing on their list. The purpose of sanctions is to force the regime to change its policy by creating regime-threatening sanctions, and China does not want this regime threatened. And the one thing that they don't want---- Mr. Lowenthal. Because of---- Mr. Sherman. Because they could see, if this regime implodes, two very bad things happen for China: Millions of very poor North Koreans move north as refugees. And then you might see a unification under the South Korean Government. And unless we promise otherwise and unless they can believe the promise, an American military, not on the 37th, 38th parallel, but right up on their border. So, they don't want an American Army on their border. They don't want the implosion of the regime. Mr. Lowenthal. I agree with all those things that you are saying, but could that be the basis of a discussion? Mr. Sherman. It ought to be, but I will yield back. Mr. Salmon. Thanks. Congressman Perry. Mr. Perry. Thank you, Mr. Chairman. Dr. Cha, you suggested a new posture or profile for the United States military in South Korea. Can you be specific? Mr. Cha. Well, I think there is more that we can do in terms of missile defense, not just one THAAD battery, but more than one. My colleague Bruce referenced sea-based platforms in terms of missile defense. SM3, I think that is another name. And these sorts of things will both create better defense of the peninsula and get China's attention. Mr. Perry. What about land-based force? Mr. Cha. So that is the next piece. Mr. Perry. And other than missile defense, seagoing missile defense, what about seagoing? Mr. Cha. Seagoing missile defense---- Mr. Perry. No, other than missile defense. But I am talking about more robust naval posture. Is that---- Mr. Cha. Yes. I think that, both in Japan and in Hawaii and in Guam, and then the land-based forces on the Korean Peninsula. I mean, there is an argument--I am not necessarily advocating this argument, but there is an argument that could be made in the sense that those forces traditionally have been a tripwire for a second conventional ground invasion. That is not going to happen again. And in that sense, the tripwire concept may not be relevant anymore. There are other ways to defend and maintain the strength of the U.S. extended deterrence on the peninsula that don't require a tripwire and that also don't leave forces vulnerable to chem, bio, or a nuclear attack from the north. Now, you know, this is not the forum in which to get into details on things of that nature. But, all I am saying is that we should be willing to discuss new things, as the chairman said, new ideas, that make sense in terms of our defense against a nuclear North Korea, but also that are things that can create enough concern in the case of China that they might be willing to change their own risk assessment of pressuring North Korea. Mr. Perry. What is South Korea's--how would they view or how would they be interested in increasing those postures, ground forces, sea-based---- Mr. Cha. I think there would be a great deal of interest in things that augment the capabilities, both U.S. and combined capabilities. The ground troops would be a very controversial issue for them, just because there is a legacy issue there. Mr. Perry. Right. Mr. Cha. And that would be very controversial. Mr. Perry. Okay. And then one final question from a messaging standpoint or information operations, like the Voice of America, et cetera, how robust is our capability now? Is it used to the fullest extent? What can be done to increase that, or should that be increased? And, does it have any effect at all? Mr. Cha. It definitely has an effect. Defector testimony shows, not--well, 100 percent of defectors, but defector testimony suggests close to 80 or 90 percent of people inside North Korea have had exposure to a foreign radio broadcast. This is really a question of resources, I think. The more resources that can be put to this, the more you can enhance that capability. I mean, there is a hardware issue there too, in terms of, you know, where can you bounce these things off? So, I guess you could say that the tube is kind of small, but there is still a lot more that can go into that tube that would have an impact. Mr. Perry. What would be North Korea's response to increasing the volume on that? No pun intended. Mr. Cha. I think the regime would be very sensitive to it. And this is a bigger vulnerability I think for them than THAAD, for example. Mr. Perry. When you say ``very sensitive,'' I mean, I am sure they don't want any of it. They don't like what there is now, and they are going to like it less if we do more, but what is our risk in doing more? Mr. Cha. There is a risk. Mr. Perry. What is that risk? Mr. Cha. Well, in the past, when the South Koreans increased information coming across the border, the North Koreans have threatened to take out the speakers. So there is that risk. There is the risk that they could respond in anger and shell an island. There is definitely a risk to it. But my point is that these sorts of strategies will necessarily entail more risk. Otherwise, we remain stuck in the current cycle that we are in. Mr. Perry. Thanks. Mr. Chairman, I yield. Ms. Terry. Can I add a quick comment to that? I spent a lot of time debriefing North Korean defectors. I think information dissemination is one of the keys we have that we can use against the North Korean regime. The risk is that they are going to get angry, but so what? I mean, we are looking for ways to work here. Monopoly on information is one of the pillars of the regime's stability. This is how they were able to survive for this long. So I think finding ways to try and disseminate information into the north is critical for us. And we have got to find ways to open the Internet to the people of North Korea--I know we have been sort of working on that--so they can have access to information, they can communicate freely with their South Korean brethren and so on. I think there are ways to maybe work with Google and Facebook to pilot their global initiative in North Korea. I think we need to increase the range and power of TVs and AM broadcasting to North Korean audiences and so on. We can work on covert ways. We can work with the intelligence community to find covert ways. Whatever we can to get information into North Korea, I think, is one of the things that we can actually pursue. Mr. Perry. Dr. Terry, doesn't that all have to be covert? I mean, we can broadcast as much as we want. We can facilitate some way for them to see the Internet. But if you don't have the hardware and if it is punishable by death to be caught viewing these things---- Ms. Terry. Sure. Even in overt ways. I think overt ways, covert ways. I am just emphasizing the importance of trying to get information into North Korea. Mr. Perry. Thank you. Mr. Salmon. Thank you. Ms. Gabbard. Ms. Gabbard. Thank you, Mr. Chairman. We have seen how hard currency sanctions were more successful than other sanctions in the past. Can you comment on whether or not you think those types of sanctions would be as effective or more effective today, and, if so, why or why not? Mr. Klingner. I think it is first important to point out the multiple objectives that sanctions and targeted financial measures have. Some have said people are already impatient: ``Well, it has been 4 months. Sanctions haven't worked. Let's go back to diplomacy,'' which had 20 years of failure. But even before it changes North Korea's behavior, it is enforcing U.S. Law. It is imposing a penalty or pain on those that violate our law and U.N. resolutions. It constrains or puts in place measures to constrain the inflow of items for their prohibited nuclear missile programs, including money from illicit activities. It puts into place measures to reduce the risk of proliferation. And then, five, the most difficult in conjunction with all your instruments of national power, it is trying to alter their behavior. So I would say on four of the five, the sanctions have already been successful to some degree. The fifth is the most difficult. But when we have a very small country with very few avenues of access to the outside world--and that is mainly China--it is I think a better target than Iran. Some would say: ``Well, you can't sanction Iran, because it is so big, it is so connected with the world, it has got oil, et cetera; go after North Korea.'' Well, now that we had pressure on Iran, which brought about the negotiations, now people are saying: ``Well, that worked because it was so big and so well-connected; it won't work with North Korea.'' I would argue the opposite. Ms. Gabbard. Interesting. Mr. Cha. May I add? Ms. Gabbard. Dr. Cha. Mr. Cha. So I would agree with what Bruce said. I think there are two issues when we are talking about these currency sanctions. I don't know, Representative Gabbard, if your question is suggesting this. But one of them is--however it is--is to reduce the North Koreans to having to carry suitcases of cash if they want to do any sort of transaction. So that is one. And that is the proliferation findings. The other part--and this is the part that I am not sure if your question is--is the freezing of their assets and accounts overseas because that is a different--that is directly linked to the leadership, right. And that could have a very big impact on how this leadership thinks and addresses and behaves. And so, whatever sanctions the committee is working, whatever legislation, I think these are the two objectives. We want to reduce them to having to carry suitcases of cash, and then we also want to be able to target those assets that we think are connected to the leadership wherever they are. So---- Ms. Gabbard. Thank you. Mr. Albright. Mr. Albright. Yeah. I think one of the problems, though, is that China resists these kinds of sanctions. I mean, their view is, if you close off the financial system to North Korea, and it is concentrated in certain Chinese banks, it will collapse the state. So you immediately run into this problem where they just don't cooperate. But at the same time, we don't really know what is going to happen. And I think it is, again, an argument why we need to get the administration to enforce the existing sanctions and target some of these banks, target some of these entities, and then let's see what happens. One thing--I don't know, I don't want to take your time, but I think, on the engagement, I don't think that we have to accept crumby conditions of engagement, shutting down 5- megawatt reactor--I forget the other condition you gave. I mean, we simply say: No, it is not enough. And even I was engaged in the discussions on the--before the Leap Day Deal, and North Koreans were willing to shut down and stop the centrifuges at the Pyongyang centrifuge plant. Who knows if they would have followed through. But even that is not enough today. We need to have more than that if there is going to be a negotiation. So I think it is up to us to sculpt the engagement, not to accept kind of the pitiful things that North Korea may offer initially. Ms. Gabbard. I think that is the remaining question. I don't have time for it now, but, you know, people have raised getting back to the negotiating table, setting the conditions to be able to make that possible, but then addressing the chairman's point about the lack of trust in actually being able to execute knowing that there has to be truly enforceable consequences to noncompliance in that situation. So thank you all for being here. Mr. Salmon. Thank you. Mr. Sherman. Mr. Sherman. Well, if we are going to achieve our political objectives for the foreign policy establishment, et cetera, here in this country, we need to do two things: First, don't make compromises, and don't admit how weak our position is. And, second, cling to the idea that we are somehow going to completely disarm North Korea of all nuclear weapons. And then, third, when we fail to achieve our objectives, which has been true this entire century, just shrug it off, and as long as you don't propose any radical change in policy, the foreign policy establishment will say you know what you are talking about. And the fact that we have totally failed to slow down this program doesn't mean that we haven't achieved the political objectives of all telling each other that we know what we are talking about. If I gather from your testimony, China is loath to accept regime-threatening sanctions on this regime, and this regime is not going to eliminate its nuclear program unless it faces regime-threatening sanctions. The question here is, is this a regime willing to settle for 10 to 15 nuclear weapons and a lot of monitoring? Because we know that they won't give up all of their nuclear weapons unless they face regime change and regime endangerment. Will they, just to avoid pressure and get along with China, accept a world in which they are a limited nuclear state? I am not saying that we would make this concession, but how would that look from their standpoint? Mr. Albright. Mr. Albright. I think they would be interested. I mean, I would be scared to make that kind of concession. It could be very damaging in the region, but I take your point. And I would say that---- Mr. Sherman. Are you predicting that, I mean, when you close your eyes and think of the world 15 years from now, do you think that North Korea will have a greater or lesser nuclear capacity than they have today? Mr. Albright. Well, I feel that they are going to have a greater, but we have to be guided by denuclearization in order to ensure---- Mr. Sherman. It would be nice to cling to denuclearization, but as I think you predict, I think as most of us would predict, if we keep doing what we have been doing, we are going to get a very similar result, but I want to---- Mr. Albright. I am just afraid we are going to get that result if we do accept 15 deliverable nuclear weapons. Mr. Sherman. Okay, keep in mind, unless the regime is truly threatened and close to falling, they are not going to give up their 10 to 15 weapons because they feel they need those to defend themselves from us. And keep in mind, when they asked for a nonaggression treaty, the response from Vice President Cheney was no because we contemplate aggression. So it is not like I would expect them to completely. But I want to go to a much smaller issue, not that it is a small issue, and that is state sponsor of terrorism designation. The first issue is, is this legally justified? One could argue that, you know, long ago, North Korea kidnapped people. They kidnapped people to make movies. They kidnapped people to get advice on Japanese etiquette. They kidnapped people, and some would say, well, that happened a long time ago so you can't call them a state sponsor of terrorism. But they haven't released them. So it is a continuing act of terrorism. They haven't returned their bodies if they died of natural or unnatural causes. So maybe that is a continuing act of terrorism. But I will ask Dr. Cha, what is the most recent act of terrorism other than continuing to hold these hostages committed by the North Korean regime? Mr. Cha. I would focus on cyber. The attack against Sony Pictures Entertainment. Mr. Sherman. Yeah. I haven't studied the statute, but is that something that justifies designating a state as a state sponsor of terrorism? Mr. Cha. I think it does. I mean, the administration defined it as cyber vandalism, I think, or cybercrime, but there was the destruction of hardware. There was a taking of information. Mr. Sherman. Okay. So it is a strong legal argument whether you look at kidnapping movie actors and directors, or vandalizing movie software. But now let's look at the policy. Is it good policy to designate North Korea as a state sponsor of terrorism? Does that move us in the direction of limiting this regime? Mr. Albright. Mr. Albright. I think it is useful to consider. I mean, it was a big goal of theirs to be taken off the list. So it certainly argues to threaten to put them back on. I mean, again, I don't know the legal aspect of this and whether cyber attack is terrorism. Mr. Sherman. Mr. Klingner and Dr. Terry. Mr. Klingner. I think if you look at 18 U.S. Code section 2331 and the definitions there of what constitutes international terrorism, I think the Sony hack and the threats of ``9/11-style attacks'' against a population, and these threats were to intimidate and coerce a population, influence a policy of government, et cetera; I think that in and of itself fulfills it. In my testimony in January, I included a list of other acts that they have done, including attempts against---- Mr. Sherman. Good. So that is in our record. And, Dr. Terry, would designating them be good foreign policy. I will ask for a quick answer. Ms. Terry. Yes. I absolutely agree. I think it would be largely symbolic, to be honest, but North Korea was very keen on getting off that list, as Victor knows. They tried very hard. It truly bothered them, so I think it is useful. I think it is a leverage that we can use against North Korea, and I do think they have done a lot of things, including repeated assassination attempts and kidnapping attempts on humans. So there is a whole list of reasons why they can be put back on the list. Mr. Sherman. Just to conclude, I think we need to bring a lot more effort and settle for a much smaller objective. We have been trying to see a completely nonnuclear North Korea and somehow achieve that without doing anything that ruffled anybody's feathers, here or Beijing. What we ought to be is settling for less and being willing to ruffle some feathers to get even that limited objective. We should be willing to tax Chinese exports to the United States. We should be willing to build the Voice of America towers. We should be willing to list them as a state sponsor of terrorism. They need a hell of a lot more carrots and a hell of a lot more sticks if we are even going to get them to something that most of you would say would be an unacceptable solution. It is just much better than what is likely to happen if we do nothing. I yield back. Mr. Salmon. Thank you. Mr. Connolly. Mr. Connolly. Thank you, Mr. Chairman, and thank you all for being here. I come here as a member of this committee and subcommittee and also as the co-chair of the Congressional Caucus on Korea. Let me begin by expressing my skepticism about the efficacy of sanctions. Up here, when we want to condemn, cite, punish bad behavior, almost always we invoke sanctions as if, well, that will deter the behavior. And I don't know--a former colleague of yours, Dr. Cha, Gary Hufbauer, wrote a very thoughtful book years ago on the history of sanctions and how effective they are and raised a lot of questions. You know, in some cases, they seemed to have had the desired effect, but usually, it is combined with some other external thing so that at the margins, whoops, the sanctions really made it hurt--oil prices plummeting or whatever it may be. In and of themselves, it is very difficult to create a regime that really can squeeze to the point where we get the desired outcome and the intended target--you know, it renounces its undesirable behavior. And I am just concerned here that, with respect to North Korea, I don't think we have--I mean, it is not apparent to me that we have a lot of options. I have noticed, for example, in the printed media now we are talking now about, well, maybe we can try to get countries to send back North Korean workers to deny North Korea that capital, that foreign exchange. You mentioned, Dr. Cha, well, maybe we could target leadership through certain sanctions. So Kim Jong-un can't, you know, access Courvoisier. His father seemed to like Courvoisier, as I recall. But if we are reduced to that, just how effective, I mean, shouldn't we be realistic about what sanctions can and cannot do? And it just seems to me that we are, remember, the goal here is to give up that nuclear ambition and destroy those existing 15 nuclear weapons or whatever number. I mean, that is our goal. It may or may not be achievable, but what sanction provides that tradeoff, from the North Korean point of view? Mr. Cha. Well, I have no disagreement with you, Congressman, about the inefficacy of sanctions thus far. I think where the policy debate really is, is that lack of efficacy because sanctions in general don't work or because we haven't done enough? And for many in the policy community, and I think for this administration, the answer right now is we haven't done enough because when we compare the sanctions on DPRK versus those on Iran, the Iran sanctions were much more comprehensive than what we are seeing on DPRK. So I think that is where the administration is now and that is where they have been pushing. Having said that, I would agree with you. I mean, I think the sanctions are meant to do one of three things, and none of them are happening. They are supposed to either bring the North back to the table, which they haven't done. They are supposed to retard the growth of the program, which it hasn't done. Or, it is supposed to destabilize the regime. And it hasn't done any of these three things. Mr. Connolly. I will just say, when I commended Gary Hufbauer's book, that was pre-North Korea sanctions, I think, and he really raised a broader question, not about these sanctions with this regime, but sanctions in general. What kind of foreign policy really are sanctions? And they are of dubious value. I mean, sometimes they seem to have helped, but it is not clear you can single them out and say: That was dispositive. Rhodesia comes to mind. Mr. Albright. Can I add one? Mr. Connolly. Yes, and then we have got to go because we have got votes. Mr. Klingner. There is a difference between sanctions and targeted financial measures. And the smart sanctions that have been done in the last 10 years are very different from what traditional trade sanctions have been. And a book I would commend would be ``Treasury's War,'' by Juan Zarate, a former Treasury Department official, which articulates the very strong differences. You know, it is only this year that we actually have as many North Korean entities being sanctioned as Zimbabwe entities. So it took a number of years just to get to the level of Zimbabwe. And then, on the efficacy of diplomacy, some would say, well, North Korea builds nuclear weapons when we are not talking to them. That is true. They also build nuclear weapons when we are talking to them, and they also build nuclear weapons when they sign agreements never to build nuclear weapons and when they promise to give up the weapons that they promised never to build in the first place. We have had four agreements where they would never build weapons and four to give up those weapons, including the Leap Day agreement, which was a very low bar, and they broke that one. Mr. Albright. You know, I would just add, in the nuclear area, sanctions have---- Mr. Salmon. We have 4 minutes before we have to vote. Mr. Albright. Okay. I would just say, I think sanctions can work in the nuclear area better. But you can't do it alone. And I would agree with you. You have to have more. Mr. Salmon. I thank the panel. I thank the committee members and appreciate all of the insight. This meeting is adjourned, thank you. [Whereupon, at 4:44 p.m., the subcommittee was adjourned.] A P P E N D I X ---------- [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]