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THE NORTH KOREAN THREAT:

NUCLEAR, MISSILES AND CYBER

BRIEFING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS

FIRST SESSION

JANUARY 13, 2015

Serial No. 114–2

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

MO BROOKS, Alabama 

PAUL COOK, California 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

RON DESANTIS, Florida 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

CURT CLAWSON, Florida 

SCOTT DESJARLAIS, Tennessee 

REID J. RIBBLE, Wisconsin 

DAVID A. TROTT, Michigan 

LEE M. ZELDIN, New York 

TOM EMMER, Minnesota 

ELIOT L. ENGEL, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas 

ROBIN L. KELLY, Illinois 

BRENDAN F. BOYLE, Pennsylvania

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

(III)

C O N T E N T S 

Page

BRIEFERS 

The Honorable Sung Kim, Special Representative for North Korea Policy 

and Deputy Assistant Secretary for Korea and Japan, U.S. Department 

of State .................................................................................................................. 5

The Honorable Daniel Glaser, Assistant Secretary for Terrorist Financing, 

Office of Terrorism and Financial Intelligence, U.S. Department of the 

Treasury ................................................................................................................ 22

Brigadier General Gregory J. Touhill, USAF, Retired, Deputy Assistant Secretary for Cybersecurity Operations and Programs, U.S. Department of 

Homeland Security ............................................................................................... 28

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE RECORD 

The Honorable Sung Kim: Prepared statement .................................................... 8

The Honorable Daniel Glaser: Prepared statement .............................................. 24

Brigadier General Gregory J. Touhill, USAF, Retired: Prepared statement ...... 30

APPENDIX 

Briefing notice .......................................................................................................... 72

Briefing minutes ...................................................................................................... 73

(1)

THE NORTH KOREAN THREAT:

NUCLEAR, MISSILES AND CYBER 

TUESDAY, JANUARY 13, 2015

HOUSE OF REPRESENTATIVES,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The briefing was held, pursuant to notice, at 10:10 a.m., in room 

2172, Rayburn House Office Building, Hon. Ed Royce (chairman of 

the committee) presiding. 

Chairman ROYCE. This briefing will come to order. 

As the members here know, we are not going to be able to formally organize until next week, but I very much appreciate the 

ranking member, Mr. Engel, his cooperation in beginning this process of holding today a briefing so that we can get started on the 

many pressing issues that we face, and I look forward to meeting 

next week to formally organize the committee and discuss how all 

of us can work together in a bipartisan way in order to advance 

U.S. interests around the world. 

And one of the things I have enjoyed about working with this 

committee is the way Mr. Engel and myself and the members here 

on the committee have been able to advance the idea that we work 

on a consensus and then move that forward with one voice overseas, and I think that amplifies the message from the United 

States. 

But the issue that we are discussing today, North Korea, is one 

where for years the United States and our allies have been rightly 

concerned about the threat from North Korea’s nuclear missile programs. 

Mr. Sherman and myself remember very vividly the situation of 

proliferation by North Korea with respect to the transfer of that capability into Syria and, on the banks of the Euphrates, a weapons 

program being developed there as a consequence of North Korea, 

and for years we have watched that program grow. 

And now this brutal regime has added a new weapon to its arsenal, which is cyberattacks, and the state-sanctioned cyber attack on 

Sony pictures underscored three unchanging facts about North 

Korea: First, this rogue regime has no interest in being a responsible state. 

Second, while Kim Jong Un continues to carry out human rights 

abuses around the world and by carrying out attacks, for those of 

you who remember some of the exercises that the North Koreans 

have taken offshore, as well, most importantly, of what they have 

done to their own people. 

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The way in which a country treats its own people will sometimes 

tell us how they will treat others. The current President of South 

Korea, her mother was assassinated by North Korean agents. 

So, we looked at that U.N. report that was recently filed, after 

the evidence and interviews with many of the survivors, defectors 

out of North Korea, this was the conclusion of the report. The 

United Nations has found no parallel in the contemporary world for 

the treatment of people in North Korea. That is quite a statement. 

And in the meantime, of course, instead of assisting that population, the resources that North Korea gets its hands on continues 

to go into its nuclear and missile systems and, of course, cyber 

weapon capability as well. 

And third, the third point, North Korea’s weapons are not merely 

for show. We and our allies in Northeast Asia are facing a brutal 

and dangerous regime, one that not only is trying to miniaturize 

nuclear weapons to put them on ICBM’s, but also one, as I said 

earlier, that has been involved in the past in central Asia and in 

the Middle East in proliferating these different types of weapons, 

missiles and other types of offensive capabilities as well as nuclear 

weapons capability. 

So North Korea’s growing cyber capability emerged most starkly 

in 2013. Our ally, South Korea, suffered a series of cyberattacks 

that temporarily brought down some of the commercial and media 

networks, it disrupted banking systems. The hackers called this 

Dark Soul, but in particular what they were able to do was to shut 

down the banking systems in parts of the country, shut down the 

ATM systems and so forth. 

Despite limited internet capability in North Korea, the fact is 

that there is an elite cyber ware warfare unit the defectors have 

told us about, Bureau 121, which was traced back as the source of 

these attacks on South Korea. And some of the expertise was obtained overseas by sending them to other countries for training, but 

certainly that capability was deployed against South Korea. 

And last year’s cyber attack is estimated to have cost Sony hundreds of millions of dollars in damage. It was a state-sanctioned attack that has many Americans asking, ‘‘If that is what North 

Korea can do to a movie company, how vulnerable is our critical 

infrastructure, how vulnerable is our electric grid?’’ You know, 

what if electricity was cut off? I mean, that obviously could be a 

dark chapter. 

Earlier this month the administration announced long overdue 

sanctions targeting officials and front companies of the North Korean Government. And I am glad the administration has described 

this as just the first aspect of its response, because many of those 

individuals who were blacklisted had already been targeted by U.S. 

sanctions. 

But the significance of this new Executive order may come from 

the broad power it gives the President to target anyone who is a 

part of the North Korean Government or is assisting them in any 

way, that is, if the administration chooses to use it to its full advantage. 

We need to step up and target those financial institutions in Asia 

and beyond that are supporting the brutal and dangerous North 

Korean regime. Such sanctions have crippled North Korea in the 

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past. For those of us who remember the consequences on Banco 

Delta Asia being sanctioned, and left the regime unable to buy the 

loyalties of its generals at that time, who could not be paid. 

This committee has been focused on the North Korea threat for 

years, bringing attention to the regime’s human rights abuses, its 

illicit criminal activities, its growing nuclear and missile programs, 

and helpful scrutiny of North Korean nuclear negotiations. 

Indeed, last Congress the House passed legislation that Ranking 

Member Eliot Engel and I authored to ramp up the financial pressure on North Korea, pressing for North Korea to be designated a 

primary money laundering concern, as has been done with Iran, 

curtailing its sale of weapons and stepping up inspections of North 

Korean ships, among other steps. Unfortunately, the Senate failed 

to act on this critical legislation before it adjourned, but we will 

soon try again and give the Senate a chance to join us in tackling 

this growing threat. 

And I will now turn to the ranking member for his opening comments. 

Mr. ENGEL. Thank you very much, Chairman Royce. 

Thank you for calling this briefing on the threat that North Korea’s nuclear missile and cyber capabilities pose to our national security and that of our friends and allies in the Asia Pacific region. 

I want to on a personal note say that I commend your strong 

leadership on this issue, and it means a great deal that this briefing is the very first item on our committee’s agenda in the 114th 

Congress. 

I look forward to working with you and the rest of our colleagues 

to address this challenge and to continue working in a bipartisan 

and productive way in the year ahead, and I want to second what 

you said. It is very important for us, whenever possible, to have 

one voice in international affairs. It strengthens us, it strengthens 

us around the world, and that is what we have tried to do in this 

committee. 

So you and I, Mr. Chairman, have introduced joint legislation, we 

have written joint pieces, joint op ed pieces, we have done joint letters to officials, and I believe that we have gotten the biggest bang 

for the buck because we have shown unity on this committee. 

One of the things that I have noticed is when I go overseas and 

we take a bipartisan delegation along, our differences really, really 

narrow, because we are all Americans and we all love this country, 

and I think it is very important. I think this committee leads the 

way in terms of the way Congress ought to govern in a bipartisan 

fashion. 

So I want to thank you, Mr. Chairman, for all you do to ensure 

that that continues. 

I also want to thank our witnesses for their service and for their 

testimony today. 

The recalcitrance, cruelty, and unpredictability of the Kim regime makes North Korea one of the toughest challenges we face on 

the global stage. The last three administrations, Democratic and 

Republican alike, have attempted to address the problem of North 

Korea’s nuclear program. Unfortunately, very little progress has 

been made. Despite a long list of sanctions, North Korea is no closer to denuclearization today than it was several decades ago; rathVerDate 0ct 09 2002 12:53 Mar 05, 2015 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\011315\92556 SHIRL
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er, North Korea has continued to develop its nuclear, conventional 

and cyber capabilities at an alarming rate. 

Already North Korea has a significant arsenal of short-range 

missiles that could reach South Korea and Japan. Most troubling 

to me is the continued development of North Korea’s medium and 

long-range missile capabilities. They may be unreliable today, but 

some of these missiles could eventually pose a threat to Guam, 

Alaska or even the west coast of the continental United States. And 

some believe that North Korea has aspirations to build submarines 

that could carry these missiles even closer to American shores. 

North Korea appears to be working toward a miniaturized nuclear warhead that could be mounted on intermediate and longrange missiles. I was concerned by comments made in October by 

the commander of U.S. forces in Korea that at this moment, North 

Korea may possess the ability to miniaturize a nuclear warhead. 

And based on recent events, it is clear that North Korea’s aspirations do not stop at conventional or even nuclear weapons. The 

Kim regime is wielding 21st century weapons as well, and has 

quietly developed an offensive cyber capability. 

Like many others, I was deeply disturbed by the cyber attack on 

Sony that took place in November, an attack that was not just disruptive, but also destructive. Agents working for the North Korea 

regime vandalized, threatened and coerced a company operating in 

the United States. This attack and the ensuing threats of violence 

were a perverse and inexcusable act by the North Korean Government. 

As I said then, no one, especially an entity operating in the 

United States, should feel that they must cede their rights to operate within the law because of veiled threats from rogue actors. 

I look forward to the witnesses, to hearing how each of your departments is dealing with this threat, are you engaging with the 

private sector? Are you ramping up information sharing and collaboration across agencies? Are you putting safeguards in place to 

ensure that these kinds of attacks will not be successful in the future? I look forward to hearing about your progress in these areas. 

There is no international agreement or clear definition of what 

constitutes cyber war or cyber terror, yet, it is clear that 

cyberattacks can cause destruction of property, stoke fear, intimidate the public, or even bring about the loss of life that could be 

as serious as conventional acts of war or terrorism. 

We must assure that North Korea’s cyber capabilities and the 

cyber capabilities of other state-sponsored and rogue actors do not 

threaten our citizens, our businesses, or our national security. I 

would like to hear the witnesses’ assessments of these risks and 

our ability and the ability of allies and partners to effectively defend against them. 

Finally, let’s remember that the greatest threat the regime in 

Pyongyang poses is to its own people. I have visited North Korea 

twice myself—Mr. Wilson of this committee was with me on one of 

the trips—and I still remember the incredible uneasiness that I felt 

being in a place where absolute power is consolidated among a very 

few and where the rest of society is systematically and brutally oppressed. 

5

For years we have heard reports about the abuses endured by 

the people of North Korea, torture, starvation, forced labor and execution. A recent United Nations Commission of Inquiry report confirmed these reports, calling the North Korean regime responsible 

for systematic, widespread, and gross human rights violations, including what they said was crimes against humanity. 

The chairman and I share a deep commitment to addressing the 

injustices endured by the North Korean people. So we face a delicate balance: Holding the Korean leaders who perpetuate this violence accountable while recognizing the need for basic support for 

the North Korean people. Maintaining that balance makes our 

work on North Korea all the more critical and all the more difficult. 

So I look forward to hearing your perspectives on this issue, and 

I thank you for joining us today. 

Thank you, Mr. Chairman. 

Chairman ROYCE. Thank you, Mr. Engel. 

This morning we are joined by representatives from the Department of State, from Treasury and from Homeland Security. 

Ambassador Sung Kim is the Special Representative for the 

North Korea Policy and the Deputy Assistant Secretary for Korea 

and Japan. Previously he served as U.S. Ambassador to the Republic of Korea and he was the special envoy for the Six-Party Talks. 

Honorable Daniel Glaser, prior to his confirmation as Assistant 

Secretary for Terrorist Finance in the Office of Terrorism and Financial Intelligence at the Department of Treasury, he served as 

the first director of the Treasury’s Executive Office of Terrorist Financing and Financial Crimes. 

Brigadier General Gregory Touhill is Deputy Assistant Secretary 

for Cybersecurity Operations and Programs at the Department of 

Homeland Security. Previously he served in the United States Air 

Force as the Chief Information Officer and Director of Command 

Control Communications and Cybersystems at U.S. Transportation 

Command. 

And so without objection, the briefer’s full prepared statement 

will be made part of the record here, members will have 5 calendar 

days to submit any statements to you or questions or put any extraneous material into the record. 

And, Ambassador Kim, if you would like to begin. And if you 

could summarize your remarks, and then we will go to questions. 

STATEMENT OF THE HONORABLE SUNG KIM, SPECIAL REPRESENTATIVE FOR NORTH KOREA POLICY AND DEPUTY ASSISTANT SECRETARY FOR KOREA AND JAPAN, U.S. DEPARTMENT OF STATE 

Ambassador KIM. Thank you very much, Mr. Chairman, Ranking 

Member Engel and members of the committee. 

Thank you very much for inviting me today along with my colleagues from Treasury and Homeland Security to testify about 

North Korea. 

As we respond to North Korea’s destabilizing, provocative and repressive policies and actions, we appreciate the interest and attention you and the committee have given to this important issue. 

6

In recent weeks, Mr. Chairman, the American people and the 

international community have been deeply troubled by the destructive cyber attack on Sony Pictures Entertainment. An extensive 

FBI investigation has concluded that the attack was conducted by 

the Government of North Korea. 

The administration is totally committed to defending U.S. citizens, U.S. businesses, and our Nation’s constitutionally-protected 

right of free speech. That is why the President made clear that the 

United States would respond proportionally to the DPRK’s attack 

in a time and a manner of our choosing. 

Our response to the attack on Sony is consistent with our policy 

on the DPRK across the board, one which seeks to work with our 

allies and partners to increase the cost to North Korea of its irresponsible behavior, to sharpen the regime’s choices, and to persuade the DPRK peacefully to abandon its nuclear weapons program, respect the human rights of its people, and abide by international norms and obligations. 

Mr. Chairman, as you stated eloquently in a recent interview, we 

need to change the equilibrium in North Korea and move the regime away from hostility. Together with the international community, we are using the full range of tools at our disposal to make 

clear to the DPRK that abandoning its nuclear weapons, provocative actions and human rights abuses is the only way to end the 

political and economic isolation. 

In our messages to the DPRK and to our partners, we have made 

clear that we will respond to the DPRK’s misbehavior. The Executive order signed by the President on January 2nd is an important 

new tool. It responds to the attack on Sony Pictures, but also provides a framework for addressing the full range of DPRK illicit behavior. 

In applying this pressure, just as in our efforts at engagement, 

our work with our allies is vital. The United States has very limited economic and other ties with the DPRK, so our financial sanctions are much more effective when supported by our partners. 

We also work with our allies to deter DPRK aggression. Having 

left Seoul as Ambassador just a few months ago, I can tell you that 

our alliance with South Korea is stronger than ever, and our growing trilateral security cooperation with South Korea and Japan also 

sends a powerful message of deterrence to Pyongyang. 

If I may Mr. Chairman, I would like to take this opportunity to 

thank you and the committee for the committee’s strong support for 

our robust alliances with both Japan and South Korea. 

Mr. Chairman, as we apply unilateral and multilateral pressure 

and strengthen our deterrence, we will continue our principal diplomacy. We have made clear to the DPRK that the door is open to 

meaningful engagement. Close coordination with our partners in 

the Six-Party process is essential. Thanks to our continued robust 

engagement with South Korea, Japan, China and Russia, our unity 

has never been stronger. Wherever Pyongyang turns, it hears a 

strong, unwavering message from all five parties echoed by the 

wider international community that it will not be accepted as a nuclear power. 

Our alliances with Japan and the Republic of Korea are a bedrock of our Six-Party diplomacy. Both allies are resolute and their 

7

commitment in their goal of the denuclearization of the Korean peninsula and the end to North Korea’s illicit behavior. Both governments have condemned the attack on Sony Pictures and express 

solidarity with the United States in our response. 

To intensify our coordination, I will travel to Tokyo for trilateral 

talks with my Japanese and South Korean counterparts later this 

month. On that trip, I will also visit Beijing to strengthen our cooperation with China. 

China has done a great deal on North Korea. We believe it can 

do more. In the wake of the cyber attack against Sony Pictures, 

China did condemn malicious behavior in cyberspace. 

Although Russia has recently pursued investment in North 

Korea and invited Kim Jong Un to visit Moscow later this year, our 

alignment on the core goal of denuclearization remains strong as 

ever. 

We also work actively with partners in the broader international 

community, especially on human rights. Building on the important 

work of the U.N. Commission of Inquiry, this past year the U.N. 

Human Rights Commission and General Assembly adopted by overwhelming margins resolutions calling for accountability for North 

Korea’s human rights abuses. Just last month, the U.N. Security 

Council took up the DPRK’s grave human rights injustices on their 

standing agenda for the very first time. 

Mr. Chairman, standing up to North Korea requires a sustained 

and concerted effort by all of the countries in the Six-Party process 

and indeed by the entire international community. Together, we 

will, to borrow your words again, ‘‘change the equilibrium in North 

Korea and persuade Pyongyang that North Korea will not achieve 

security or economic prosperity while pursuing nuclear weapons, 

trampling on international norms, and abusing its own people.’’

Thank you again for the opportunity to appear before this committee. 

Chairman ROYCE. Thank you, Ambassador Kim. 

[The prepared statement of Ambassador Kim follows:]

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Chairman ROYCE. Dan? 

STATEMENT OF THE HONORABLE DANIEL GLASER, ASSISTANT SECRETARY FOR TERRORIST FINANCING, OFFICE OF 

TERRORISM AND FINANCIAL INTELLIGENCE, U.S. DEPARTMENT OF THE TREASURY 

Mr. GLASER. Thank you, Chairman Royce, Ranking Member 

Engel, and distinguished members of this committee. 

Thank you for inviting me to speak today about the U.S. Government’s efforts to counter the threat posed by the malicious 

cyberattacks of the DPRK. 

The DPRK is a brazen and isolated regime that has repeatedly 

shown flagrant disregard for international standards. This is evident in the DPRK’s development and proliferation of its illicit nuclear and ballistic missile programs, its repeated violations of U.N. 

Security Council resolutions, its repression of its people through serious human rights abuses, and most recently its cyber attack on 

a U.S. company in attempts to stifle freedom of expression in our 

country. 

In response to the DPRK’s cyber attack on Sony Pictures, the 

President signed an Executive order, Executive Order 13687, on 

January 6th, 2015, granting the Treasury Department the authority to impose sanctions against agencies, instrumentalities, officials 

and entities controlled by the Government of North Korea and the 

Worker’s Party of Korea. 

Executive Order 13687 represented a significant broadening of 

Treasury’s authority to increase financial pressure on the DPRK 

and to further isolate it from the international financial system. 

For the first time, Treasury has the authority to designate individuals and entities based solely on their status as officials, agencies, 

or controlled entities of the Government of the DPRK. Treasury 

also now has the authority to designate those providing material 

support to the Government of the DPRK. 

Simultaneous to the issue of this Executive order, Treasury designated three entities and ten individuals, whom Secretary Jack 

Lew described as ‘‘critical North Korean operatives.’’ These include 

the Reconnaissance General Bureau, known as RGB, which is the 

DPRK’s primary intelligence organization, which is responsible for 

many of its cyber operations; the Korean Mining Development 

Trading Corporation, also known as KOMID, which is the DPRK’s 

primary arms dealer; and ten officials of the DPRK Government, 

including eight KOMID officials based throughout the world. 

Secretary Lew also made clear that we will continue to use this 

broad and powerful tool to expose the activities of North Korean 

Government officials and entities. Treasury has also used existing 

tools to raise the cost to the DPRK of its provocative actions. 

Since 2005, Treasury has designated over 60 North Korean-related entities and individuals under Executive Order 13382, which 

targets WMD proliferation-related activities, and Executive Order 

13551, which targets North Korean arms sales, the procurement of 

luxury goods, and illicit economic activity. Under these authorities, 

Treasury has exposed and cut off access to the U.S. financial system to entities and individuals, such as the Foreign Trade Bank 

and Daedong Credit Bank, which are two of North Korea’s most 

23

important banks, and have provided crucial financial support for a 

number of DPRK illicit activities. 

We have also designated General Kim Yong Chol, the head of the 

RGB, whom Director James Clapper recently named as the official 

who likely ordered the cyber attack on Sony. 

Today the DPRK is financially isolated, thanks in no small part 

to the actions I have described. Over the years, Treasury has ensured that the DPRK has limited access to the U.S. financial system and worked with our allies to restrict Pyongyang’s access to 

the international financial system. 

As a result of sanctions and other measures targeting the 

DPRK’s illicit conduct, financial institutions around the world 

began severing their ties with the DPRK in order to avoid entanglement with North Korea’s illicit activities. These actions contributed to the DPRK’s economic isolation and spurs positive change 

in the behavior of banks across the globe. 

While this increased isolation has made targeting the DPRK 

more complex, Treasury continues to deploy the tools at its disposal 

to raise the cost of the DPRK’s defiant behavior and induce the 

government to abide by its international obligations. 

The U.S. Government’s response to the malicious Sony cyber attack is a demonstration of our determination to hold the DPRK responsible for its actions. But protecting the U.S. from cyberattacks 

isn’t just about implementing sanctions, it is also about working 

with the private sector to safeguard our economy and the infrastructure more broadly. Beyond our response to the Sony cyber attack, safeguarding the U.S. financial system and its critical infrastructure from the threat posed by state-sponsored malicious cyber 

activity is also part of Treasury’s mission. 

Treasury partners with the financial sector to share specific 

threat information, improve baseline security, and enhance industry response and recovery. I go into much of this in my written testimony in greater detail. 

As the United States confronts the destabilizing and destructive 

actions of the DPRK, Treasury is employing its authorities to isolate North Korea from the international financial system. Treasury 

will continue to use its arsenal of financial measures to combat the 

cyber threat by the DPRK. 

Thank you, Mr. Chairman, for your invitation to testify before 

the committee today, and I look forward to answering any questions. 

Chairman ROYCE. Thank you, Secretary Glaser. 

[The prepared statement of Mr. Glaser follows:]

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Chairman ROYCE. General? 

STATEMENT OF BRIGADIER GENERAL GREGORY J. TOUHILL, 

USAF, RETIRED, DEPUTY ASSISTANT SECRETARY FOR 

CYBERSECURITY OPERATIONS AND PROGRAMS, U.S. DEPARTMENT OF HOMELAND SECURITY 

General TOUHILL. Thank you very much, Mr. Chairman. 

And Ranking Member Engel and distinguished members of the 

committee, thank you very much for having me today. 

I appreciate the opportunity to appear before you today alongside 

my colleagues from the Departments of State and Treasury. 

The Department of Homeland Security leads the national effort 

to secure Federal civilian networks, and coordinates the overall national effort to protect critical infrastructure and enhance 

cybersecurity. The DHS cybersecurity mission includes analysis, 

warning, information sharing, vulnerability reduction, mitigation, 

and aid to national recovery efforts for critical infrastructure information systems. DHS ensures maximum coordination and partnership with Federal and private sector stakeholders while working to 

safeguard the public’s privacy, confidentiality, civil rights and civil 

liberties. 

Within DHS, the office of Cybersecurity and Communications focuses on managing risk to the communications and information 

technology infrastructures and the sectors that depend upon them, 

as well as enabling timely response and recovery to incidents affecting critical infrastructure and government systems. 

Our office executes its mission by supporting 24x7 information 

sharing, analysis and incident response for private and public sector partners. We provide tools and capabilities to strengthen the security of Federal civilian executive branch networks, and engage in 

strategic level coordination with private sector organizations on 

cybersecurity and communications issues. 

DHS offers capabilities and services to assist Federal agencies 

and stakeholders based upon their cybersecurity status and requirements. The department engages its stakeholders through a 

variety of mechanisms, including information-sharing forums as 

well as through the National Cybersecurity and Communications 

Integration Center, which we call the NCCIC. The NCCIC, a 24x7 

cyber situational awareness, incident response and management 

center, is a national nexus of cyber and communications integration 

for the Federal Government, the intelligence community, and law 

enforcement. 

Our activities include, first, incident response. And during—or 

following a cybersecurity incident, DHS may provide response capabilities that can aid in mitigation and recovery. Through our integration center, DHS further disseminates information on potential or active cybersecurity threats to public and private sector 

partners. And when requested by an affected stakeholder, DHS 

provides incident response through the United States Computer 

Emergency Readiness Team, commonly referred to as the US–

CERT, or the Industrial Control Systems-Cyber Emergency Response Team, commonly referred to as the ICS–CERT. 

Our second activity is assessing security posture and recommending improvements. And upon request, DHS conducts risk and 

29

vulnerability assessments to identify potential risks to specific 

operational networks, systems and applications, and then we provide recommendations for mitigation. 

Our third activity is providing technical assistance. DHS may 

provide direct technical assistance upon request. For instance, following attacks on the financial services sector in 2013 and 2014, 

our United States Computer Emergency Readiness Team went onsite with major financial institutions and other critical infrastructures to provide direct technical assistance. 

US–CERT’s technical assistance and technical data include identifying 600,000 distributed denial-of-service-related IP addresses, 

and contextual information about the source of the attacks, the 

identity of the attacker, and associated details behind the attack. 

We have had a long-term, consistent threat engagement discussion 

with the Department of the Treasury, the FBI and private sector 

partners in the financial services sector. 

Regarding the Sony Pictures Entertainment incident, in November 2014, the NCCIC was made aware of a specific significant 

breach in the private sector, impacting Sony Pictures Entertainment. Cyber threat actors targeting Sony used a sophisticated 

worm to conduct cyber exploitation activities. 

Since that time, DHS has initiated a series of proactive steps designed to protect not only the dot gov space from any potential 

spillover, but to share information with our private sector partners. 

We have worked extensively with our partners, including the FBI 

and other agencies, and international partners to share information 

and collaborate on incident analysis. DHS has published multiple 

products related to this incident, has shared with other Federal 

agencies, our international partners, the private sector and the 

general public. 

As a trusted information-sharing partner to the private sector, 

the NCCIC does not have a regulatory role. Our mission includes 

securing critical infrastructure and protecting the Federal dot gov 

space. 

As we conclude, evolving and sophisticated cyber threats present 

a challenge to the cybersecurity of the Nation’s critical infrastructure and its civilian government systems. DHS remains committed 

to reducing risks of Federal agencies and critical infrastructure. We 

will continue to leverage our partnerships inside and outside of 

government to enhance the security and resilience of our networks, 

while incorporating privacy and civil liberties safeguards into all 

aspects of our work. 

Thank you again for the opportunity to provide this information, 

and I look forward to your questions. 

Chairman ROYCE. Thank you very much, General. 

[The prepared statement of General Touhill follows:]

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Chairman ROYCE. I was going to start with a question of Assistant Secretary Glaser. And Ambassador Kim made the point that 

increasingly Russia has stepped in where China has curtailed with 

respect to support for North Korea. He is speaking about the issue 

of forgiving debt and certainly the investments from Russia into 

the rail network. I have traveled in North Korea, and the functioning rail network just ends at the border, and once you are in 

North Korea, it is not operational, so—or at least none that I could 

see. And so the investment would seem to be critical coming from 

Russia. 

The question I have is, is that investment that—would then be 

sanctionable, right? Under the interpretation that I just read. 

And on top of that, if we look at the Section 311 sanctions, which 

you were at the center of in 2005, I remember working with you 

on that at the time with respect to Banco Delta Asia, there is a lot 

more that we could be doing here if we were to label North Korea 

a primary money laundering concern, as we have done with Iran. 

That would be possible. After all, we caught them, you know, with 

100 dollar U.S. currency. We saw that in Macau, we had $100 bills 

there that were counterfeited out of North Korea. 

So the question I have, then, is let’s go to that issue of financial 

sanctions on North Korea. As Kurt Campbell, former top State Department official for Asia noted recently, we could really move effectively with that and make life much more difficult for those who 

are making life difficult in South Korea and here. 

Mr. GLASER. Thank you for the question, Chairman Royce. 

I certainly agree with you. It is our goal and it has been our 

strategy, it has been our strategy at the Treasury Department for 

many years now to implement sanctions and other financial measures in a way that isolates North Korea from the international financial system, and that would be from the international financial 

system everywhere, whether it is China or Russia or the United 

States or Europe or other places in Asia. The goal is to squeeze 

them financially as much as possible. 

With respect to the new Executive order that you make reference 

to and that I discussed in my testimony, that is an important new 

tool that we have at our disposal precisely because it gives us a tremendous amount of flexibility in how we approach targeting. 

So we could go—we could target any North Korean Government 

agency, we could target any North Korean Government official, and 

then once they are targeted, we could apply sanctions with respect 

to any individual or entity who is providing them in turn material 

support or any individual entity that they in turn control. So that 

gives us—that gives us a large——

Chairman ROYCE. And I think that is where we need to have the 

focus, because the Foreign Trade Bank, that was a designation a 

long time coming, but just designating North Korean institutions 

is not going to curtail the kind of hard currency that the regime 

uses in order to continue to expand their ICBM program, for example. 

Mr. GLASER. Right. And that is why what we are trying to do is 

identity what their notes are into the international financial system. You mentioned Banco Delta Asia, a designation under 311 

that we did 10 years ago. Why that was so successful was not with 

37

respect to the specific action on Banco Delta Asia, but that tied up 

about $25 million of North—money that North Korea said was 

North Korean money. 

But the real impact of Banco Delta Asia and that designation 

and that action was it that it created a chilling effect throughout 

the financial system. Banks around the world stopped doing business with North Korea. We still live in that world today. That action and a lot of other actions we have taken have made it a lot 

harder. 

Chairman ROYCE. And that is why Mr. Engel and I have our legislation that we have over in the Senate, because my observation 

at the time was that, as you said, it wasn’t just Banco Delta Asia, 

it was a dozen banks all that were willingly doing business in laundering, basically, or doing business with North Korea, and once 

those accounts were frozen, not only could he not pay his generals, 

but I later talked to defectors who had worked—one had worked 

on the mission program. He said, that program came to a halt because we did not have the hard currency. We couldn’t even buy the 

clandestine gyroscopes that we would buy on the black market for 

those missiles. We couldn’t pay for anything. 

And that is the kind of pressure, I think, could cause a regime 

to recalibrate its thinking. There has to be consequences directly 

and it has to impact, you know, the family itself that run that 

country. And the best way I can think of doing that is to not give 

them the hard currency, so that those generals are not paid, the 

army is not paid. And at some point people turn and say there has 

to be a better way forward than the kind of repression that is going 

on. 

And that is why we are trying to jump-start this beyond just 

sanctions within North Korea, to the financial sanctions that would 

truly, truly create additional pressure. 

Do you think our legislation, which we had passed into the Senate last year, if we get that out of the Senate this year, do you 

think that would be a useful tool? 

Mr. GLASER. Well, we, you know, you say, Chairman, that it was 

dozens of banks. It was more than dozens of banks; it was hundreds of banks making the decision at the time to not do business 

with North Korea. So we have that impact, and that is an impact 

that we are still—that we are—that is a world that we are still living in. 

So, again, you say the goal is to identify financial institutions 

outside of North Korea that provide these points of access, and that 

is exactly what we are trying to do. You mentioned, Chairman, Foreign Trade Bank. I thought that was an extremely significant action. That was North Korea’s primary source of access to the international financial system, and action——

Chairman ROYCE. True enough, but I would just point out, there 

are a number of small banks that we have been following that are 

doing business with North Korea that, frankly, if we really wanted 

to squeeze, we could cut that off. And if we do cut that off, it becomes very problematic for them to get the resources even to send 

these hackers, you know, to Moscow, or in the past they sent them 

to Beijing to get the kind of training. I mean, if you cut off the hard 

38

currency, these regimes like North Korea cannot carry out the 

kinds of offensive attacks that they are given to. 

Mr. GLASER. Right. And that is exactly what we are trying to do. 

Foreign Trade Bank, Daedong Credit Bank, Daesong Bank, Bank 

of Eastland, these are banks that we have targeted with sanctions. 

We used Section 311 on Banco Delta Asia. You know, the actions 

that we have taken have caused a chilling effect even within the 

Chinese financial system, even banks, major commercial banks 

within China have cut off their relationships with entities such as 

Foreign Trade Bank. 

So I think, Chairman, that that is exactly the right approach 

that we should be taking. 

Chairman ROYCE. We are on the right road, we just want to accelerate it. Dan, thanks for being here to testify today. 

Mr. GLASER. Thank you. 

Chairman ROYCE. We go now to Mr. Engel. 

Mr. ENGEL. Thank you, Mr. Chairman. 

The chairman mentioned, and I agree, that the bottom line is 

that there needs to be an impact on the family that runs the county, the Kim family, obviously, and all of their entanglements. 

When we went to Pyongyang, now granted—I was there twice, 

and granted, you are limited to what you can see, we were told 

that we could only be in the capital, that we couldn’t go outside of 

the capital, and then we got up early and we observed people going 

to work in the morning, everything seemed really normal. People 

looked to me like they were fed properly, people were wearing 

dress clothes for work, it seemed like almost any other major city, 

but we are told that Pyongyang is essentially where the elites live. 

And so the elites are treated relatively well, while the rest of the 

country is starving, and that is really the problem. 

So what can be done to bolster the enforcement of existing sanctions in a way that would impose meaningful costs for the North 

Korean elites? What do we—what other levers would we have to 

influence them to make sure that it is not a situation of where you 

have elites in the capital doing relatively well, and then we impose 

sanctions, the sanctions hurt all the people that are starving all 

around the country, but the elites basically are untouched? What 

might we do to make sure that they are caught up in this, that 

they suffer the penalties for their actions? 

Mr. GLASER. Thank you for the question, Congressman. I don’t 

think that the misery that has been inflicted on the North Korean 

people can be attributed to sanctions. I think the North Korean 

Government bears sole responsibility for the misery of the North 

Korean people. 

But I do take your point that the goal is to try to put pressure 

on the elites, and I think that it is precisely through access to the 

international financial system that we can do that, because that is 

who benefits, that is how the elites acquire the hard currency that 

the chairman talked about, the luxury goods, the other things that 

make their life—that make their life pleasant and that make, you 

know, the system run as far as the system actually runs. So that 

is what we are trying to do. 

We are trying to identify their sources of currency. One of the 

important sources, for example, is conventional arms sales. That is 

39

why we targeted eight KOMID officials in our recent round of sanctions a couple of weeks ago. These are individuals who operate in 

places like Africa, who are raising hard currency for the regime, 

and we are trying to cut that off as a source. 

And as the chairman said, we try to identify their points of access so that they can’t repatriate the funds or they can’t use the 

funds that they do have. We have identified a number of banks, 

but this is an ongoing effort. This is an effort that has been ongoing for 10 years. It is a hard target, because their needs are relatively small. They only need a handful of points of access. It 

makes it very effective when we do find a node. When we can put 

our finger on a node, we could have a big impact. 

But they try to gain access through deceptive financial measures, 

they try to gain access through countries in which we have less influence, and so it is an ongoing effort and we are continuing to 

work on that. And I think that the recent Executive order gives us 

the flexibility to really step that up. 

Mr. ENGEL. Thank you. 

I am wondering if any of you can talk about the—obviously 

North Korea is gaining additional conventional and nuclear capabilities, and obviously it seems to us that this emboldens themselves with respect to belligerent activity in other domains, such as 

cyberspace. 

Can anybody talk about that? I would be interested in hearing 

your perspective on that. 

Ambassador? 

Ambassador KIM. Thank you, Ranking Member Engel. 

We are obviously deeply concerned about North Korea’s efforts to 

improve their dangerous capabilities in the nuclear front, missiles, 

as well as now cyberspace. They pose a great threat, not just to the 

region, but to the United States directly. 

I think what we need to do is continue to strengthen our efforts 

on sanctions, pressure, but also continue to work on strengthening 

our deterrent capability on all fronts, and this requires a continuing effort with our partners, not just in the Six-Party process, 

but more broadly in the international community. 

I can assure you that despite North Korea’s continued efforts to 

improve their capabilities, we are fully capable of defending against 

any threat posed by the North Koreans. 

And I point to one upcoming example, which is our military exercise with the South Korean’s that is going to be coming up shortly. 

This is a very important exercise, defense oriented, but very effective exercise in making sure that we maintain the strongest possible combined deterrent capability on the peninsula so that we are 

prepared to deal with any threat posed by North Korea. 

Mr. ENGEL. And don’t the North Korean’s usually react hostilely 

to joint maneuvers between South Korea and the United States? I 

mean, we are saying that this drill, the joint drill that we are doing 

together, is routine and it is not related to a report that North 

Korea is trying to increase its submarine capabilities. 

Whether it is or isn’t, aren’t we likely to see some acting out by 

North Korea as a result of these joint maneuvers? 

Ambassador KIM. Sir, I mean, I don’t want to speculate on what 

the North Korean’s may be planning to do. You are quite correct 

40

that they don’t like our exercises, because I think they understand 

that our exercises strengthen our combined deterrent capability. 

But these are routine, non-provocative defense oriented exercises 

that we have carried out for 40 years. We have been quite open 

about it. So the North Koreans really have no right to complain 

about these exercises. 

Mr. ENGEL. Now, you mentioned, Ambassador, the Six-Party 

Talks. When we were there, and it was several years ago, so things 

may have changed, the North Koreans seemed to be more interested in having Two-Party Talks with the United States rather 

than the Six-Party Talks. Is that still what we—what we find coming from them? 

Ambassador KIM. Unfortunately at the moment, the North Koreans don’t seem to be interested in any constructive dialogue with 

anybody, including the United States, as well as the Six-Party 

Talks. I mean, we believe that the Six-Party Talks framework still 

provides a viable forum for discussing this issue. 

One of the main reasons is that the north—it is in the Six-Party 

process that the North Koreans made the most clear commitment 

to denuclearization. It is their own commitment, and I think we 

need to hold them to it. And the Six-Party process also includes all 

of the key countries in the region that have a stake in this issue. 

This is not an issue just for the United States. This is an issue for 

the whole region. 

And we have the Chinese, who actually chair the process, the 

Japanese, South Koreans and the Russians in the process. And I 

think we need to try to work within the process to make some lasting progress in denuclearization. 

Mr. ENGEL. Thank you. 

My last question, Mr. Glaser, I want to just follow up on the 

elites discussion that we had before. We find that the elites in 

North Korea find creative ways around the existing sanctions, obviously. They work through Chinese banks, and those banks are not 

exposed or integrated into the international market. 

So what are we doing to go after these types of institutions? 

Mr. GLASER. Well, the Chinese financial system is integrated into 

the international financial system. I think one good example of our 

ability to impact behavior even within China was, as I had the exchange with Chairman Royce, our designation of Foreign Trade 

Bank, which is North Korea’s main commercial bank, it is the bank 

through which they do most of their commercial conduct. 

Upon our designation, the main—the major commercial banks in 

China, the big commercial banks acted as you would expect any 

international commercial bank to act, and they announced that 

they were cutting Foreign Trade Bank off from their banks. So we 

can have an impact on commercial banks in China. 

That said, I think that you are exactly right. China does provide 

North Korea the lion’s share of its access to the international financial system. It is an issue. It is a subject that I have had discussions with the Chinese many times on, and it is something that we 

need to continue to talk to the Chinese about to try to get Chinese 

assistance in making sure that their financial system does not provide North Korea the opportunity to engage in proliferation or any 

other illicit economic activity. 

41

Sung and I were talking about this just before this hearing, and 

I know that Sung plans on having this conversation with the Chinese as well. So it is a significant issue, and it is one we are focused on and will continue to be focused on. 

Chairman ROYCE. And we will be in Beijing in March, all right, 

so we will continue that dialogue. 

We are going to Mr. Steve Chabot of Ohio. 

Mr. CHABOT. Thank you, Mr. Chairman, and thank you for convening this briefing to examine the North Korean threat. 

This committee has long recognized the dangers of Pyongyang’s 

growing capabilities. In fact, last year as the former chairman of 

the Asia-Pacific Subcommittee, I held two hearings specifically on 

North Korea because not only is it the greatest security threat to 

the peace and stability of Asia, but it is one of the United States’ 

most vexing security challenges and, I would argue, greatest policy 

failures in many ways. So just a couple of questions. 

Ambassador Kim, in June of last year, the Asia-Pacific Subcommittee heard testimony from your predecessor, Ambassador 

Glyn Davies, and in his testimony, he stated that China is North 

Korea’s ‘‘last remaining patron’’; however, as Chairman Royce already mentioned, Pyongyang has a growing relationship with Russia and illicit networks with countries in the Middle East, especially Iran. 

We know that North Korea maintains a fairly robust illicit trading network with these various Nation states and terrorist organizations, and last year signed an economic trade deal with Russia. 

This will provide Pyongyang with an economic boost to counter 

sanctions and counterbalance the Chinese, who have been putting 

some pressure on them. 

In light of North Korea’s recent cyber attack on Sony, there is 

a growing speculation about how big North Korea’s cyber army 

really is and where it has received the training to orchestrate such 

an attack. 

Ambassador Kim and General Touhill, could you, either of you, 

discuss first, who are North Korea’s primary patrons at this time, 

and second, could you discuss where North Korea’s gaining its 

cyber capabilities and expertise, and finally, do you have a more accurate sense as to how big North Korea’s cyber army really is? And 

I will let either one of you go first. 

Ambassador KIM. Thank you very much, Representative Chabot. 

I will defer to General Touhill on the cyberspace issue. 

With regard to North Korea’s patrons, frankly, I think North Koreans are running out of friends. I think they are becoming increasingly isolated because of their misbehavior on the nuclear front, on 

missiles, human rights abuses. 

Of course, China has a special relationship with North Korea. 

They have considerable leverage over North Korea. I think what 

we have seen in our cooperation with China is that China is working with us more effectively in trying to stifle North Korea’s dangerous activities. And it is an ongoing effort. I think all of us need 

to do more, including China. 

Russia, as you mentioned, sir, there has been some contact, there 

has been some senior level discussion, some investment flows, but 

I believe the bottom line is that the Russians remain committed to 

42

the shared goal of denuclearization and they do want to work with 

us to make sure that the North Koreans move in that direction, despite some of the contact that we have seen recently. 

Mr. CHABOT. General Touhill. 

General TOUHILL. Thank you very much for the question, sir. 

You know, regarding the acquisition of tools and capabilities in 

cyberspace and being able to employ them, many of these tools, as 

a matter of fact, most of these tools are readily available to anybody around the world through open source acquisition. Many of 

the tactics, techniques and procedures used by attackers in cyberspace, and predominantly criminals, are openly available through 

the marketplace and frequently posted online. So the acquisition of 

capabilities is readily available to anybody, including the North Koreans, through open source activities. 

Mr. CHABOT. Thank you. 

I think I have time for one more question. 

I will direct this to you as well, General. 

North Korea’s cyber capabilities were first revealed back in 

March 2013 as South Korean financial services and media firms 

were attacked. At that time, it was it latest attack to emerge from 

a malware development project called Operation Troy, which revealed Pyongyang was attempting to spy on and disrupt South Korea’s military and government activities. 

Could you say whether North Korea’s focus on using the master 

boot record wipe functionality, if you are familiar with that, for its 

attack on South Korea is similar to the attack launched on Sony, 

and what possible responses or protections do we have against this 

type of cyber attack? 

General TOUHILL. Well, thank you very much for that question. 

The attack using a wiper virus or capability to attack the master 

boot record in essence means that every computer has an instruction set that is contained in part of the disk called the master boot 

record, and it tells the computer what to do when it is turned on 

and it tells where the information is stored and the like. 

Using an attack against that master boot record basically wipes 

out the record, and the computer no longer knows how to turn 

itself on and look for the information, so it is a very devastating 

attack to the computer. 

As we take a look at the code, and we have done some malware 

forensics with the malicious code that was discovered as a result 

of this attack, it was a very sophisticated, well organized piece of 

code that was specifically engineered to attack that master boot 

record. 

When it comes to detecting that type of malicious code, it is very 

difficult to do that for each and every piece of code. Our current 

database of malicious software numbers over 100 million different 

sample sizes. 

That said, we have taken the information we have done from our 

malware forensics and we have loaded those indicators not only 

into the Einstein system to help protect our Federal systems, but 

we have also shared that with our international partners, with the 

private sector and the like. 

So the indicators that we have derived from our analysis, we 

have shared, but this is very, very well crafted code, sir. 

43

Mr. CHABOT. Thank you very much. 

Yield back. 

Chairman ROYCE. We go now to Mr. Brad Sherman of California. 

Mr. SHERMAN. The witnesses should relax for a few minutes, as 

I have kind of an opening statement that I will use some of my 

time with, but don’t relax too long. I will have a question for you, 

General, in a few minutes. 

Obviously North Korea is worthy of sanctions, but how do you 

have trade sanctions against a nation where we have no trade, 

deny visitor visas to a country that sends us no visitors, name and 

shame a country that is shameless? 

The ranking member and the chairman have pointed out that we 

could have secondary sanctions. Their bill does just that. And secondary sanctions are where we threaten another country or a bank 

or other company in another country with sanctions if they do business with North Korea, but if we are going to designate those who 

provide material support to the DPRK, we would start with the 

Government of China, which doesn’t just do business with North 

Korea, but gives them free money, free oil, subsidies. 

And I know the Ambassador points out that the Chinese have 

perhaps on occasion stifled North Korean behavior by pushing 

them to be a little bit less aggressive, but the fact is that just last 

month they threatened to blow up multiplexes in the districts of 

every member up here, so I am not sure that they have been all 

that stifled. 

I don’t think China—China has made a strategic decision: For 

now, regardless of the annoyances, they are backing North Korea. 

Every day they are giving them free oil, every day they are supporting them militarily and diplomatically. 

And so we would have to do things that China disagrees with, 

do things to Chinese companies, do things to China’s own trade relationship. One thing we could do is designate them a currency manipulator if they don’t radically change their behavior toward the 

Korean Peninsula. This has the additional advantage of being true. 

They are a currency manipulator. 

Since we are probably unwilling to do that, we will target this 

or that Chinese company or bank, I think with some success, to at 

least suppress and annoy North Korea, but China seems to have 

made a strategic decision that North Korea’s success is so important, that they will give them free money, so I can’t imagine that 

they will allow us to completely shut off their banking relationships. 

So I support all the efforts of the gentlemen here and of the 

ranking member and the chairman to try to turn the spigot down 

a little bit, but I don’t think we can turn it off. 

There is one other thing we can do. First, we ought to reflect that 

this was a unique attack. It wasn’t just an attack on a company, 

it was an attack against freedom of speech in the United States, 

and so I would like to give North Korea a double dose of free 

speech. We spend $8 million broadcasting into North Korea. We 

could increase that to 16. That is an additional cost of $8 million, 

or roughly one-thousandth of 1 percent of what we spent on the 

naval, air and land forces that confront North Korea. 

44

Right now we are broadcasting into North Korea only 11 hours 

a day. The target is 12 hours a day. It ought to be 24 hours a day. 

And I believe that those broadcasts will undermine the regime, 

both with the people and the elite. I can’t think of anything we can 

do for $8 million that would better express our dedication to the 

First Amendment and to posing difficulties for the North Korean 

regime. 

I would like to explore satellite television broadcasting into 

North Korea, another broad television broadcasting, because I particularly want to broadcast a particular movie, and I hope that we 

do the director’s cut before they toned down the climactic scene. 

I commend to all of those on the committee the December 8th report, just a month old, issued by the Broadcasting Board of Governors, which of course oversees Voice of America and Radio Free 

Asia. This report was issued pursuant to the North Korean Human 

Rights Reauthorization Act that went through this committee. 

General. 

General TOUHILL. Yes, sir. 

Mr. SHERMAN. How certain are you, and I realize now you are 

out of government so you may not have seen all the information, 

that North Korea is the entity that both hacked Sony and threatened terrorist action on our—against our movie theaters? 

General TOUHILL. Well, thank you very much for the question, 

sir. Just for clarification. I just changed uniforms. I am still part 

of the government. 

Mr. SHERMAN. Oh. 

General TOUHILL. I retired from active duty and was recruited to 

come on board with DHS as the deputy assistant secretary for 

cybersecurity. 

Mr. SHERMAN. Thank you for that clarification. 

General TOUHILL. Thank you. Attribution of these type of events 

is not a function of my organization. It is a function of the intelligence and law enforcement communities. That said, I am very 

well familiar with the attribution methodology, the preservation of 

evidence, and the things that are done by the intelligence and the 

law enforcement communities, and based upon what I have seen 

and in consultation with my partners from both the intelligence 

communities and law enforcement communities, in this particular 

instance, I have—I have trust and confidence in their conclusions. 

Mr. SHERMAN. And you have seen more than some of these outside experts on 24-hour news channels that think they can second 

guess the FBI? 

General TOUHILL. Yes, sir. I have seen more than some of my colleagues in the private sector. 

Mr. SHERMAN. Thank you. I yield back. 

Chairman ROYCE. Thank you. We go to Mr. Mike McCaul. 

Mr. MCCAUL. I thank the chairman. 

Chairman ROYCE. By the way, our chairman of the Homeland 

Security. 

Mr. MCCAUL. I appreciate you mentioning me here. Thank you. 

We just passed a bill the last day of the last Congress, 5 cyber security bills, one codifying, General, as you know, the NCIC, which 

is like the cyber command within DHS, giving you the congresVerDate 0ct 09 2002 12:53 Mar 05, 2015 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\011315\92556 SHIRL
45

sional seal of approval. I see it as really the civilian portal to the 

private sector. 

When Sony happened, I had asked the question, well, which of 

the 16 critical infrastructures does this fall under, and it is a bit—

it is not clear. I know the President is announcing a cyber plan this 

afternoon. I just got off the phone with the Secretary. I think the 

vision is to make the Department of Homeland Security the portal 

civilian interface to the private sector between the Federal Government and the private sector, sharing information from various data 

points, whether it be NSA, FBI through the NCIC to the private 

sector with liability protections to incentivize participation in this 

civilian interface safe harbor, if you will, within the Department. 

I just wanted to—and after this I want to talk about the foreign 

affairs aspect of cyber and the cyber jihad threat to CENTCOM 

that we just recently saw, but how do you view the role of NCIC 

of DHS broadening with respect to an event that happened with 

Sony? 

General TOUHILL. Well, thank you very much, sir, for the question, and thank you very much for your leadership in helping us 

with the legislation that just passed and your continued support of 

the Department. Thank you very much. 

As we take a look at the NCIC, integration is part of our name 

with the National Cybersecurity and Communications Integration 

Center, and as you mentioned, sir, you know, the law enforcement 

partners, the intelligence community, the other departments and 

agencies, and our private sector partners are all coming together 

as part of the NCIC team. 

On the floor of the NCIC, which I had the honor to direct on an 

acting basis from August through last month, the NCIC has the 

ability where we are bringing in folks from all aspects of our critical infrastructure, law enforcement, and the intelligence community, as well as representatives from the Department of Defense so 

that we are sharing information. We are very transparent with 

each other. 

The information ranges from top secret, sensitive compartmented 

information, down to unclassified information. And we are finding 

that these partnerships and having everybody co-located and working together is helping strengthen not only our situational awareness, but in getting solutions to issues as they come in. 

We are working together to secure and make our infrastructure 

more resilient by leveraging the activities of the NCIC. We have 

come a long way in the last couple of years, and as we look to the 

future, the legislation that is proposed and the activities that have 

already occurred are making us better able and capable. 

Mr. MCCAUL. Well, the vision I would like to see is it expands 

not just to the 16 critical infrastructures but really to the private 

sector so the Sonys of the world could participate in this as well, 

and I think that is the vision. And I—personally, I like the idea 

of the privacy groups came out so strongly in support of not only 

my legislation, but also your efforts, sir, at DHS because there is 

a robust privacy office at the Department of Homeland Security. 

I want to just close with, you know, we had the Sony attack and 

then we had yesterday an attack by cyber jihadists purporting to 

be on behalf of ISIS at CENTCOM saying, ‘‘American soldiers, we 

46

are coming. Watch your back. ISIS.’’ This is disturbing because, as 

a threat, vectors develop, as we look at China, Russia, the normal 

ones, but Iran, becoming more sophisticated, and now with these 

jihadist groups that we have seen attempting to get this type of 

technology and this type of malware, now actually be successful at 

hacking into our CENTCOM, into our military, ISIS, this is severely disturbing to me. 

We don’t know how to respond to these things. We don’t—proportional response, what does that mean? Act of warfare, what does 

that mean? 

And Mr. Chairman, I would like to work with you on a cyber 

agenda on this committee because it is outside the lanes of my 

committee in terms of what we do with other countries. Do we have 

a NATO alliance with cyber, one of the countries hit the other? 

What is the appropriate response when a nation state hits our infrastructures, and in this case, when a terrorist organization hits 

our military? General. 

General TOUHILL. Well, thank you very much, sir. To address the 

points. The first one about the attack and the attribution that it 

got into the CENTCOM networks. First of all, this was a commercial space, a Twitter account. It didn’t—there was no compromise 

and there is no evidence of any penetration into government and 

specifically the military computer systems. Rather, it was a commercially-facing bulletin board, as it were, through the Twitter account, and certainly anytime there is a compromise of any account, 

it is serious business. And in talking with my partners in the Department of Defense and the FBI last night, they are investigating 

it with all due vigor, and I will be getting an update from them 

later today. 

Mr. MCCAUL. Just let me close with that, I think, Mr. Chairman, 

we have an opportunity to work in this committee on legislation 

that could deal with defining what is proportionate response, how 

other countries should respond with us, what is going to be the response of the United States of America when our companies are attacked and when our departments are attacked and when our military is under fire? And with that, I yield back. 

Chairman ROYCE. Thank you. By the way, Mr. McCaul, I would 

be happy to work with you. I was working with Mike Rogers on a 

piece of legislation, and maybe we can work together on 

cybersecurity, and I appreciate you bringing it up and look forward 

to working with Mr. Engel as well on those concepts, okay. 

We now go to Gerry Connolly from Virginia. 

Mr. CONNOLLY. Thank you, Mr. Chairman. And Mr. McCaul, if 

you are looking for a Democrat, I will be glad to work with you on 

that as well. 

Chairman ROYCE. Balance in all things. 

Mr. CONNOLLY. Cybersecurity is a really big issue in my district. 

We do a lot of work on it, so I would be delighted to help in any 

way, and I thank the chairman and ranking member for holding 

this hearing, and welcome to our panel. 

Your last comment, General, I think underscores something, 

though. I mean, the distinction between the private sector and the 

public sector when it comes to cybersecurity really isn’t a helpful 

distinction. Eighty-five percent of the critical infrastructure in this 

47

country, for example, is controlled by the private sector. That 

doesn’t mean we don’t have a public sector interest in it, and the 

interface between social media and other things we may be doing 

in the public sector is often almost seamless and—because they are 

so connected. 

So that is why, it seems to me, we have got to be concerned even 

with the kind of attack that occurred the other day on social media 

and the Pentagon and better understand where the boundaries are, 

or even if we want to recognize there are boundaries. And I think 

Mr. McCaul was pointing out, too, we really need to be rethinking 

the codification of cybersecurity attacks and the severity and what 

it means from our point of view, not only U.S. law but, frankly, 

what it should mean in international law. 

When—you know, if you have a cyber Pearl Harbor, is that an 

act of war? I mean, at what point does the intensity and severity 

and magnitude constitute an aggressive act that has to be addressed? 

General TOUHILL. Thank you, sir, for that question, and the magnitude and severity of the rubric of crossing that line, when does 

it become an act of war, is one that has been hotly and actively debated for many years. 

Currently, the administration is working to put together a codified construct for the priorities and the prioritization and taking a 

look at it from a risk management and consequence management 

standpoint. That is still a work in progress, but ultimately, through 

our congressional processes and our constitutional processes, rather, you know, we will be making those determinations. 

Mr. CONNOLLY. Right. I fully appreciate that is going to be a 

work in progress, but I think one of the tasks our Government 

faces and the international community faces is looking afresh at 

the legal codification of this subject because we are really at a very 

early stage, and I think that is—we want to make the international 

law serve as a tool and an ally in protecting. 

I am going to try to do this real quickly. Mr. Ambassador, does 

my memory serve me well that a few years ago probably the North 

Koreans helped shut down much of the banking system in South 

Korea for a day or two? 

Ambassador KIM. Instead there was a cyber attack on South Korean financial system. 

Mr. CONNOLLY. And do we believe that was generated by the 

North? 

Ambassador KIM. We believe so. More importantly, the South 

Korean authorities have indicated——

Mr. CONNOLLY. Yes. 

Ambassador KIM [continuing]. That it was. 

Mr. CONNOLLY. And that was—I mean, think about it, virtually 

the entire banking system went down. 

Ambassador KIM. I don’t recall the exact extent, but it was a serious attack on the——

Mr. CONNOLLY. And the South Korean economy, for example, 

ranks where in the world? 

Ambassador KIM. 10th or 11th. 

Mr. CONNOLLY. Yeah. So the 10th or 11th largest economy in the 

world had its banking system shut down by a cyber attack, and I 

48

think that is a real warning in terms of both what the North’s capability is and the vulnerability of a whole sector of not just South 

Korea’s economy, but, frankly, our own as well. 

China. How—how helpful do we think—you mentioned in your 

opening statement that China has been more forthcoming and we 

want them to be even more forthcoming, but the Chinese themselves are engaged in cybersecurity attacks in a very systematic 

way sponsored by the PLA. That is state-sponsored cybersecurity 

attacks, so how reliable do we think the Chinese are going to be 

in trying to rein in the North Koreans in their cybersecurity malfeasance? 

Ambassador KIM. Well, I will defer to General Touhill for part 

of the question. 

Mr. CONNOLLY. Who are you—to whom? 

Ambassador KIM. To our DHS colleague——

Mr. CONNOLLY. Okay. 

Ambassador KIM [continuing]. For part of your question. 

Mr. CONNOLLY. All right. 

Ambassador KIM. Just more generally, I do believe that the Chinese cooperation on the North Korean issue, all dimensions of it, 

has improved in recent years. I would point to their cooperation in 

the U.N. Security Council for passing a resolution act of the North 

Korean nuclear test last year as an example of how their cooperation has improved. I think it can improve much further, and we are 

going to continue to work on persuading the Chinese that when 

they think about their strategic interests, unconditionally defending North Korean behavior——

Mr. CONNOLLY. Yes, but my question—we are limited in time, 

Mr. Ambassador. I understand all of that in general, but when it 

comes to this topic, cybersecurity, their hands are dirty. 

Ambassador KIM. Well——

Mr. CONNOLLY. And the question, why would we count on them 

to help us rein in North Korean cybersecurity attacks when they 

are engaged in it with all four paws in the snow? 

Ambassador KIM. Well, I think one of the reasons is that when 

they saw our company, Sony Pictures Entertainment attacked like 

this in such a disruptive manner, it should have been a wake-up 

call to Chinese. 

Mr. CONNOLLY. Yes. 

Ambassador KIM. The Chinese contingencies are also subject to 

irresponsible attacks from countries like North Korea and——

Mr. CONNOLLY. I am sorry. We are running out of time, but 

thank you. General, did you want to comment? 

General TOUHILL. As we take a look at information sharing and 

the common threats and vulnerabilities that are out there, when 

we have a common threat, and as the Ambassador had mentioned, 

some of the things that were observed could just as easily threaten 

the Chinese, so it is in everyone’s best interest to address the 

issues and make sure that everyone is a responsible member of the 

world community. 

Mr. CONNOLLY. Well, Mr. Chairman, just a final observation. 

That sounds very noble and Boy Scout-like, but the fact is that the 

Chinese have been stealing military secrets from us, including 

weapons designs and bypassing, you know, the R&D stage for quite 

49

some time in a very systematic way. The Pentagon knows that because the Pentagon has been one of the biggest victims, and it just 

seems to me, I wouldn’t rely on the Chinese in that respect on this 

subject given their record, and it is a problematic aspect of what 

we are talking about today. Thank you, Mr. Chairman. 

Chairman ROYCE. We go to Judge Poe of Texas. 

Mr. POE. Thank you, Mr. Chairman. Thank you all for being 

here. Globally, there seems to be, among the many bad folks in the 

world, three main countries. You got Syria, you got Iran, and you 

got North Korea. I call them the SIK axis, S–I–K axis, because 

they are in different parts of the world, and they are a little sick. 

But I understand that the official definition of nuclear weapons 

from our Government is you have the bomb but you also have a 

delivery system. I want to divide that definition and just talk about 

the weapon, the bomb itself. 

Does North Korea have a bomb of some magnitude? Ambassador? 

It is just yes or no. 

Ambassador KIM. I wish I could just give you a simple yes-or-no 

answer. 

Mr. POE. Can you say yes or no? I just need a yes or no. Either 

they have got it or they don’t have it. 

Ambassador KIM. Well, we know that they have continued to 

work on their nuclear capabilities. 

Mr. POE. We all know that. Do they have the bomb, Ambassador? 

I just need an answer. 

Ambassador KIM. I am not sure I can say that. 

Mr. POE. Mr. Glaser, you got an answer? 

Mr. GLASER. I would defer to the State Department on that. 

Mr. POE. So you don’t know whether they have a bomb or not. 

Mr. GLASER. As Ambassador Kim stated, North Korea has—well, 

North Korea has conducted nuclear tests. 

Mr. POE. And they have sent satellites into orbit. 

Mr. GLASER. They have conducted nuclear tests. 

Mr. POE. All right. General, you going to pick a horse and ride 

it? Do they have a bomb or do they not have a bomb? 

General TOUHILL. Sir, I do not know. 

Mr. POE. You don’t know. All right. 

Now, I personally think they have the capability to make one 

based on hearings we have had in this committee. Looking on the 

other end, the delivery system. The President of North Korea said 

he wants to develop intercontinental ballistic missiles, and for some 

reason, he said he wants the first intercontinental missile to go to 

Austin, Texas. I take that a little personally, since I am from 

Texas. 

What is the status of the delivery system, if you know? General. 

General TOUHILL. Sir, I do not know. 

Mr. POE. Mr. Glaser? 

Mr. GLASER. It is——

Mr. POE. Do you know? 

Mr. GLASER [continuing]. Really not a Treasury Department 

issue, the status of the delivery system. 

Mr. POE. How about you, Mr. Ambassador, back to you? 

50

Ambassador KIM. Sir, we will be happy to provide you a full 

briefing in a classified setting on their capabilities, both on nuclear 

and missiles. 

Mr. POE. Okay. Well, we have had some open hearings. They 

have the ability, I understand, to develop and make, as they call 

it, a scud in a bucket. Are you familiar with that, Mr. Ambassador? 

A missile that can go from North Korea to South Korea. 

Ambassador KIM. Yes, I am. Yes. 

Mr. POE. They have the capability to do that? 

Ambassador KIM. Yes. 

Mr. POE. All right. The United States used to have North Korea 

on a state sponsor of terror list, but it was removed in 2008. Based 

on what you know, do you think it might be a good idea to put 

them back on the state sponsor of terror list, Mr. Ambassador? 

Ambassador KIM. Sir, there is—as you know, there is very clear 

criteria on designating——

Mr. POE. Do you think they should be back on the list? I am just 

asking another yes-or-no question. 

Ambassador KIM. Sir, my personal opinion I don’t think is relevant. 

Mr. POE. But that is what I want to know is your personal opinion. 

Ambassador KIM. There is a criteria. There is a process, sir, and 

we are constantly evaluating all available intelligence and information to determine whether North Korea should be designated. 

Mr. POE. How long is that evaluation going to take? I mean, after 

all, they are hacking into our cybersecurity in the United States. 

I mean, do you all have a time limit on how long you are going to 

take? 

Ambassador KIM. Sir, I understand your concern and frustration, 

but as a matter of law, the Secretary of State must determine that 

the government of that country has repeatedly provided support for 

acts of international terrorism, and we are in an ongoing process 

to determine whether North Koreans meet that criteria. If they 

do——

Mr. POE. Do you think that——

Ambassador KIM. If they do, we will take immediate action. 

Mr. POE. Excuse me, Mr. Kim, I am reclaiming my time. Do you 

think that hacking into our system is an act of terror or not? 

Ambassador KIM. I believe that is beyond my——

Mr. POE. So you don’t have an opinion. 

General, you got an opinion? You are in the military. Is that an 

act of terror or not? I mean, people are afraid to say it is an act 

of war. I am just wanting your opinion. 

General TOUHILL. I think, sir, as we take a look at this, this is 

something that should be part of the public debate, and we should 

have a conversation not necessarily constrained to this particular 

incident, but as we take a look to the future for any cyber incidents, we should have a public conversation as our next step. 

Mr. POE. That is the diplomatic version, I assume, but it seems 

to me that it is an act of terror. We ought to strongly consider putting North Korea, these outlaws, on state sponsor of terrorism list. 

I don’t know why we are so timid in doing that. It seems like the 

right thing to do. The logical thing to do. 

51

I hope the State Department eventually makes up their mind before more of these attacks occur against the United States. I agree 

with Mr. Connolly when he said that the line is very thin between 

an attack upon the Government of the United States and attack on 

private industry in the United States. That seems to me to be an 

act, an attack, is a terrorist attack. Anyway, I will yield back, Mr. 

Chairman. Thank you. 

Chairman ROYCE. Very good. We go to Brian Higgins of New 

York. Mr. Higgins. 

Mr. HIGGINS. Thank you, Mr. Chairman. The nuclear missile and 

cyber threat of North Korea is profound. Now, the question is how 

does the United States respond to North Korea’s cyber attack on 

Sony, an attack to punish Sony for making a movie that humiliated 

the Supreme Leader. United States’ options are very few. Counterattack to weaken North Korea’s political military and economic assets, highly ineffectual. Number two, relisting North Korea as a 

state sponsor of terrorism with new sanctions, and that, we don’t 

have much of an economic relationship with North Korea. That, 

too, would be highly ineffectual. The serious threat posed by North 

Korea far exceeds cyber attacks. North Korean cyber attacks, I 

think, are indicative of future intent. Intent backed by considerable 

capability. 

There is only one geopolitical option equal to North Korea’s 

threat, and that is to work with our allies, both new and old, to 

end North Korea’s existence as an independent entity, and reunifying the Korean peninsula. 

North Korea’s nuclear threat. North Korea has four to 10 nuclear 

devices, and hundreds of short and intermediate range missiles. 

They have an active uranium and plutonium program, and it is not 

inconceivable that North Korea, in time, will have a nuclear capability to reach the United States. 

The North Korean regime is a proliferation threat. A decade ago, 

it was helping to build a nuclear reactor in Syria, and it is a potential source of missiles and nuclear materials to rogue states, including terrorists. North Korea has a serious conventional military 

which is a threat, an existential threat to the region. It has a population of 25 million people, and the fourth largest army in the 

world. North Korea’s army is two times that of South Korea with 

its population which is half of South Korea. 

There are 28,500 American troops in South Korea. Further aggression by North Korea would bring the United States into a 

major costly and dangerous war. North Korea is a threat to its own 

people. Their crimes against humanity, crimes against their own 

people include extermination and murder, enslavement and forced 

starvation. One hundred thousand political prisoners held under 

horrendous conditions. North Korean cyber attacks against Sony 

are not new. North Korea regularly attacks South Korean banks 

and businesses. 

Also, there is a changing view of North Korea by its neighbors 

and only economic sponsor. China and South Korea have changed 

their views. The South Korean President used to be lukewarm to 

talk about a unified Korea. Today, the South Korean President 

speaks openly of reunification and of the enormous economic benefits of that unification. 

52

China is frustrated that North Korea ignores its request to freeze 

or dismantle its nuclear program. With a nuclear armed North 

Korea, South Korea and Japan will want or need to develop a nuclear weapons program. China increasingly is viewing North Korea 

as a strategic liability, not an asset. China views North Korea as 

a growing threat to China’s stability, and China’s ties to South 

Korea have flourished. China is South Korea’s leading economic 

partner, and China’s President regularly visits South Korea and 

not North Korea. 

So while the discussion here is centered on cyber attacks, I think 

there is a large discussion that needs to take place. Your thoughts. 

Ambassador KIM. Thank you, Congressman. I think you are absolutely right about China’s evolving, improving relations with 

South Korea, and this is relevant to one of the points that one of 

your colleagues made earlier which is, I mean, what China’s strategic perspective? I don’t think we can continue to assume that unconditionally defending North Korean misbehavior is in China’s 

strategic interest. In fact, I think there is an ongoing serious debate going on in Beijing on the future direction of their North Korean policy, and one of the reasons is because they see the future 

of their relationship with South Korea, a major trading relationship, huge flow of traffic, students, tourists, business people, and 

I think that is where the future is for China on the grand peninsula. And this is one of the reasons why we are starting to get 

more forthcoming cooperation from the Chinese with regards to 

dealing with North Korean threats and misbehavior. 

Ms. ROS-LEHTINEN [presiding]. Gentleman’s time is expired. 

Mr. Duncan of South Carolina. 

Mr. DUNCAN. Thank you, Madam Chairman. North Korea has a 

history of cooperation with a wide range of other rogue regimes, including Syria, Iran, and Cuba, although I don’t guess it is politically correct to say Cuba is a rogue regime, but I am going to keep 

them on the list because I don’t believe a tiger changes his stripes 

that quickly. 

Let’s make some connections. North Korea. A North Korean ship 

was seized by Panama in July 2013. It was found to be carrying 

Cuban and Soviet air weapons from Cuba. It actually sailed 

through the Panama Canal to Cuba, turned its transponder off, 

went to Havana, was loaded with aircraft parts, MiG–21s, and 

other aircraft and military hardware covered with sugar, taken 

back to the Panama canal, seized by Panama, found—discovered 

the weapons in the ship. Thirty-two crew members were released. 

The other three are still being held, I understand. 

So you have got the Cuban/North Korean connection there. Let’s 

talk about Venezuela. Venezuela is Cuba’s largest and best ally in 

the region and especially in the post-Soviet era. Venezuela. If I look 

back to, I guess, December 2011, Venezuela’s top diplomat in 

Miami was linked to an alleged cyber terrorism plot against the 

U.S. in collusion with Iran. There is another rogue connection with 

Iran, and there has been flights from Tehran to Havana to Venezuela, I believe. 

So you have got Venezuela involved in cyber terrorism possibly 

against the United States, at least allegedly. You have got a Cuba 

connection with North Korea, and we have got now a North Korean 

53

cyber attack on an American company. Continues a lot of rogue nations involved in cyber terrorism and other things, so I have got to 

ask, Ambassador, how and to what extent is North Korea engaging 

with allies such as China, Russia, Iran, Syria, Cuba, and possibly 

maybe just by association, Venezuela, and the connection to cyber 

terrorism there? 

Ambassador KIM. Generally speaking, we are obviously deeply 

concerned about North Korea’s relations with some of the countries 

you mentioned. I mean, I don’t have any specific information with 

regards to their cooperation in cyber attacks and cyber space, but 

we do know that North Koreans had relations with a number of the 

countries you mentioned, and it is something that we monitor very 

closely. The ship interdiction that you mentioned is one important 

example of how international cooperation can yield results on the 

sanctions front, and I think that is a very important point, because 

as the Congressman from New York mentioned, because of our limited dealings with North Korea directly, we need international cooperation to make sure that sanctions, both international and unilateral sanctions actually can be effective, and that the situation 

you mentioned is a perfect example of that. 

Mr. DUNCAN. Okay. Treasury, are you tracking money? Is there 

any evidence of money going from North Korea to Iran to Cuba to 

Venezuela, any of these connections, are you aware of any of that? 

Mr. GLASER. Yes, we spend a lot of time, obviously, working 

closely with the intelligence community that does—does the real 

tracking to try to identify North Korean financial networks wherever they might be, whether it is with the regime such as Iran or 

institutions in Iran, in Asia, potentially in South America. 

To be honest with you, I think when it comes to trying to apply 

financial pressure on North Korea, we shouldn’t take our eye off 

the ball, and the ball is Asia. That is where North Korea gets its 

primary access to the international financial system. Asia broadly, 

certainly China specifically, and that is—as we divide strategies to 

try to put pressure on North Korea, that is——

Mr. DUNCAN. They are sending some of that money in his hemisphere. They purchase weapons from Cuba. 

Mr. GLASER. And we responded, I mean, as Ambassador Kim——

Mr. DUNCAN. I don’t think Castro just gave them the weapons. 

Mr. GLASER. Right. And that is—and again, that is why we look 

at KOMID, their primary arms dealer. There is other arms dealers 

we targeted. We are trying to go after those arms dealers. We are 

trying to go after the financial networks that support those arms 

dealers. Tanchon is the designated entity. That is the financial arm 

of KOMID. That is another entity that we go after. 

So what we are trying to do is make it more difficult, if not impossible, I don’t know that you ever get to impossible, but certainly 

to disrupt and dismantle their ability to move these funds around 

the world and ultimately repatriate and use those funds. And that 

involves, as you point out, chasing the financial networks, but I 

think importantly what it involves is identifying where the financial nodes are that allows them to ultimately use those funds. 

Mr. DUNCAN. Okay. I am going to reclaim my time because you 

are aware of it, and I think you have answered the question for me. 

I want to ask on the cyber side. Are you——

54

Ms. ROS-LEHTINEN. Gentleman’s times is expired. Thank you, 

Mr. Duncan. 

Mr. Lowenthal is recognized. 

Mr. LOWENTHAL. Thank you, Madam Chair. I am going to follow 

up on some questions that have already been asked, and I think 

to Ambassador Kim. You have already indicated that we are beginning to see indications that China, too, has grown weary of North 

Korea aggression. I think you answered that. I would like to know 

is there anything else that you could add—two questions. Is there 

anything else you can add to the evolving relationship that you 

haven’t described between People’s Republic of China and 

Pyongyang, and specifically also, what I am interested in as we go 

forward, how is the United States engaging the People’s Republic 

of China and our common interests in a more stable Korea? What 

specifically are we doing as we go forward? 

Ambassador KIM. Thank you very much, Congressman. I think 

in terms of evolving relations between Beijing and Pyongyang, to 

me it is clear that Chinese are thinking much more seriously about 

their North Korea policy, and I think they are beginning to realize 

that when North Koreans misbehave, it hurts China’s own interest. 

It is not a question of North Koreans misbehaving without any effect on China. China’s own interests are harmed when North Koreans misbehave, and I think that affects Chinese approach in North 

Korea, affects their cooperation with us on how to deal with the 

threat posed by North Korea. 

One obvious example is if you look at the interaction between the 

leadership of China, South Korea, North Korea. Xi Jinping and 

Park Guen-hye have had numerous meetings in the first 2 years 

of their leadership. President Xi visited South Korea. President 

Park’s second overseas visit after her election was to China after 

visiting the United States first, and a number of interactions in 

multilateral 4 as well. Zero interaction between Xi Jinping and 

Kim Jong Un. I think that actually says quite a bit about the state 

of relations between China and North Korea. 

I think we want to want to work with China so that they work 

more effective with us, they cooperate better with us in terms of 

sanctions enforcement, in terms of preventing North Korea from 

taking provocative actions, and also in terms of working toward a 

credible return to negotiations, because we haven’t given up on negotiations. We do want to try to resolve the nuclear issue through 

the Six-Party process, and I think Chinese have a clear stake in 

that. For one thing, they chaired the Six-Party process. 

So we—this is a prominent topic between us and the Chinese at 

all levels. President Obama talks about it with President Xi at 

every meeting and on down, Secretary Kerry, et cetera, and this is 

an effort that will continue to take very seriously. 

Mr. LOWENTHAL. Thank you. My next question is to General 

Touhill. You have indicated to us that you are fairly satisfied that 

it really was the North Koreans in terms of the Sony cyber attack 

even though you are not able to discuss with us some of the classified—potentially classified information. 

Recently FBI Director James Comey, in responding to some of 

the same issues, has urged the intelligence community to declassify 

more details of the evidence to counter some of these skeptics. Can 

55

any of you—can you specifically talk to us about the status of declassification and whether we will be able to—what those discussions are and will we be able to see some of this information? 

General TOUHILL. Thank you very much for the question, sir. Regarding that particular declassification effort, I am not part of that 

conversation, but overall, our position has always been information 

sharing requires as transparent information transfer and declassification as much as possible. We believe that it is important to 

share information across the whole community as much as possible, so we are very much in favor of Director Comey’s efforts. 

Mr. LOWENTHAL. The other question, the last question for any of 

you. Is there a potential fear on the part of the Chinese or others 

that there could be a collapse in the North Korean Government? 

Ambassador KIM. I mean, I think we think about—prepare for all 

contingencies on the peninsula. I don’t think any of us have a 

magic insight into what might happen to the North Korean Government any time soon, but the important thing is that we continue to coordinate very closely with partners in the region, including China, so that we are best prepared—effectively prepared for 

whatever happens on the peninsula. 

Mr. LOWENTHAL. Anyone else wish to take—General? 

General TOUHILL. I have nothing further to answer. 

Ms. ROS-LEHTINEN. Gentleman’s time is expired. 

Mr. LOWENTHAL. I yield back. 

Ms. ROS-LEHTINEN. Thank you. And now we are so pleased to 

recognize Mr. Ribble of Wisconsin, a new member of our committee. 

Mr. RIBBLE. Thank you, Madam Chair, and I want to thank the 

panel. You guys have been patient this morning. Thanks for being 

here. 

Mr. Glaser, how large is North Korea’s GDP? 

Mr. GLASER. I am sorry, Congressman. I don’t have the exact 

number. It is relatively small certainly for a country that size, but 

we can get you the percentage. 

Mr. RIBBLE. Okay. Mr. Kim, do you know, by any chance? 

Ambassador KIM. Not offhand. 

Mr. RIBBLE. Okay. I mean, reports—reports would tell us it is 

somewhere in the range of 13 to 20 billion, somewhere in that. 

Does that sound reasonable to you? I want to go back to the line 

of questioning given that about 25 percent of their GDP is agriculture. It is really relatively small. 

Give you a point of reference. Sony pictures’ annual revenue is 

8 billion. So if their GDP is at the lower end of that spectrum, you 

remove the amount for agriculture, Sony’s revenue is about the 

same size of their GDP, so this goes back to the money. 

I think ultimately if you can follow the money, you can get some 

sense of what their capabilities actually are. I am curious again on 

the money, where it is coming from, and could you talk to us a little bit about the use of forced labor in North Korea, and is that 

part of where the money is coming from, at least the workforce is 

coming from? 

Mr. GLASER. Well, as far as their access to hard currency, there 

is a little bit of legitimate trade that they engage in with a variety 

of countries. They also receive a significant amount of support from 

56

China, and then, of course, they engage in a variety of illicit activity to supplement their income. 

As you point out, they are a very small country. They really only 

care about the needs of the top echelons of their society. So by engaging in illicit activity and illicit financial activity, by engaging in 

conventional arm sales, they can raise hard currency that keeps 

things comfortable, at least for the small—you know, the small 

group of people that is on top. 

That is why—you know, that presents us challenges and opportunities. The challenges are, they don’t need broad access. When you 

are dealing with a country, say, like Iran and you look at our sanctions program with respect to Iran, it was a target-rich environment, and the idea was, you know, this is a large economy. We 

need to shut off broad access. 

We have already—you know, as I had the exchange with Chairman Royce, that has already been accomplished with North Korea 

based on actions that we have taken in the past and just based on 

the fact that they are—that they self-impose isolation on themselves. So the idea is trying to identify the nodes that you could 

put your finger on that really have an impact. Foreign Trade Bank, 

Daedong Bank, Daesong bank, these are points of access to the financial system, and then how do you work with—where will they 

get, you know, their key points of access, namely China, to persuade the Chinese that it is in Chinese interest. 

There has been a lot of questions on how do we—you know, why 

would China work with us? China is not going to do us any favors. 

China is going to work with us because it is precisely in their interest that North Korea not engage in illicit activity because it is precisely in their interest that North Korea not abuse their financial 

system, and we have seen their commercial banks make that decision time and again. 

So that is the challenge. That is the strategy. It is frustrating because it is difficult, but it is something that we have been committed to for 10 years, and it is something that we are committed 

to continue in. 

Mr. RIBBLE. And it is extraordinarily frustrating because the 

economy is so small. It is difficult to get it. That is why my question went more on forced labor and human trafficking, the element 

of revenue that is there because free labor is actually a large—

could be a large number, and are you aware of the North Koreans 

using, in essence, forced labor to do construction or anything? 

Mr. GLASER. Sure. You know, North Korea is a human rights disaster, and as I said before, the North Korean Government bears 

full responsibility for all the misery that they inflict on their people. I would defer to Ambassador Kim to get into the details of 

how—of the precise mechanisms by which they oppress their people 

but certainly there have been extensive reports on the use of forced 

labor. 

Mr. RIBBLE. Ambassador Kim, would you would like to add anything? 

Ambassador KIM. Thank you. I would just add that we know that 

forced labor is a part of North Korean human rights abuse. We 

don’t have any figures on how much that contributes to their GDP, 

but the important thing is that the North Korean human rights 

57

record is among the worst, if not the worst, and this is why we 

need to pay attention to this issue, and this is why I think what 

happened in the U.N. Context last year is so significant with both 

the Commission of Inquiry report findings as well as the overwhelming passage of the human rights resolutions. 

Mr. RIBBLE. Thank you, Madam Chair. I yield back. 

Chairman ROYCE [presiding]. And Mr. Ribble, there has been 

some good reporting on the use, for example, in forestry and other 

sectors, mining. But forestry, in particular, the use of chain gangs, 

North Korean, what would you call it, forced labor, in order to 

bring hard currency back into the country and the fact that those 

workers never see any of that money. 

We now go to Ms. Tulsi Gabbard of Hawaii. 

Ms. GABBARD. Thank you very much, Mr. Chairman. Thank you, 

gentlemen, for being here. Mr. Ambassador, it is good to see you 

again. As you know, and as is very apparent to all of my constituents, I come from Hawaii, which is a place geographically most 

closest to the Korean peninsula and a place where people, people 

who are not sitting in rooms like this, actually monitor and listen 

when North Korea beats its drums and delivers its threats, and 

when we learn about these nuclear tests and continual increased 

capabilities by North Korea because it is something that is real for 

everyday families in Hawaii who currently sit within range of 

North Korea’s missile program. 

I think it has been unfortunate that we have seen a disconnect 

in a lot of different ways. Some people within our Government, others who are so-called experts on North Korea who have really been 

very dismissive of the real threat that exists coming from North 

Korea, so I appreciate that we are having this hearing to kick off 

this year because it is a threat that we have to take seriously. 

My first question goes to Ambassador Kim and Mr. Glaser with 

regards to China. Clearly, China has expressed that it is in their 

best interest to continue to have stability, and it is good to see that 

they are interested in working with us to deal with the instability 

that is caused by North Korea’s cycle of threats, and I am wondering what specific things, what specific targets are you looking 

for in working with China to deal with North Korea? 

Ambassador KIM. Thank you very much, Congresswoman. China 

obviously values stability on the peninsula, but as you suggest, I 

think they are beginning to realize that North Korean misbehavior 

causes instability on the peninsula, and that hurts China’s interest. 

We are looking to improve our cooperation with China on several 

fronts. Number 1, on sanctions enforcement, and here I think we 

have seen some instances where Chinese enforcement has been 

strengthened considerably. We also want to work with them to 

make sure that North Koreans don’t take any provocative actions, 

and over the years we have seen numerous examples of North Koreans taking irresponsible provocative actions; this cyber attack on 

Sony is just the latest example. But they have had attacks on 

South Korean assets, islands, et cetera. So we need to prevent 

North Koreans from acting that way. 

We also want to work with the Chinese on how we can get back 

to some credible and meaningful negotiations on denuclearization 

because we cannot forget that the North Koreans are continuing to 

58

pursue this dangerous program, and we need to work with China 

and other parties in the region to try to get this problem under control and work toward lasting, verifiable, and complete 

denuclearization of the Korean peninsula. 

Ms. GABBARD. Anything to add? 

Mr. GLASER. Just to go back to your question about the types of 

targets that we look for and that we work with the Chinese on. I 

guess you could think about it this way, that there are—the North 

Koreans, I would say, have two primary ways that they would access the international financial system, including the Chinese financial system, and that would be directly through their banks or 

that would be working through front companies or individuals who 

are disguised—disguise their true employer, their true origin. And 

so we would—we would want to, we do focus on both. We work 

with the Chinese on both. We try to share information on both with 

respect to financial institutions. 

As I said before, we have imposed sanctions on the major North 

Korean financial institutions that give it access to the financial systems, including Korea Kwan Sang Bank which has a branch in 

China, and this is obviously an issue that we raise on a regular 

basis with the Chinese. We have seen that there has been an impact, and the major Chinese banks have cut these institutions off. 

Now, there are many smaller banks in China, so there are many 

opportunities for them to gain access, but at least as far as the 

large commercial banks, we know we have had an impact. With respect to front companies, that is an ongoing challenge. We try to 

share information with our Chinese counterparts on that so that 

they could take steps to protect their financial system. Sometimes 

they follow up on that, sometimes we are less successful in persuading them to follow up on that type of information. 

Ms. GABBARD. Just real quick. Sorry. I am about to run out of 

time. You had mentioned earlier when the chairman brought up 

hard currency sanctions, you had said that they had the impact 

that was intended. The policy, in my view, wasn’t in place long 

enough to really have the impact that it could have to force major 

change within North Korea, so we would like to see how this policy 

will be pursued again. I am out of time. 

Mr. GLASER. Again, for 10 years now we have been trying to isolate North Korea from the international financial system. We have 

had a lot of success in doing that. As I said before, though, the 

problem is that they don’t need broad access. They only need a few 

points of access to gain—to get what they need, which again presents challenges and opportunities. The challenges are finding 

those points of access. The opportunities are when you do find 

those points of access, you can have a major impact. 

So certainly the goal, the overall goal is for North Korea to act 

as a responsible member of the international community. We have 

not achieved that goal. That is an ongoing effort that is going to 

be not based solely on sanctions but our overall policy and all those 

things Ambassador Kim talked about. 

But from a Treasury perspective, we are going to keep doing our 

part of that which is keeping the pressure on and increasing that 

pressure as much as possible to try to present a starker choice for 

the North Korean regime as possible. 

59

Chairman ROYCE. Congresswoman, North Korea had indicated to 

State that they would open negotiations again. That is where the 

sanctions were lifted. Unfortunately it turned out they fibbed, and 

this has been sort of the problem with North Korea. We get a little 

leverage, and then they somehow manage to convince us that they 

are going to turn over a new leaf, the sanctions are lifted, and then 

after the fact, we find out they are full bore again, you know, developing toward their nuclear weapons programs. And I think the 

problem, at the end of the day, having talked to their former minister of propaganda who defected into China, at the end of the day, 

the problem is that their number one goal is to get that ICBM delivery capability for a nuclear weapon, and we should recognize 

that that is what is driving them, and cutting off their access of 

funds to do that is very much in our national interest. 

Let’s go to Mr. Curt Clawson of Florida. 

Mr. CLAWSON. Thank you all. Excuse me. Express my appreciation to all three of you for coming here today and also your service 

to our country is noted, and we are very grateful for what you do. 

Let’s drill down a little bit on something that was mentioned earlier if you all don’t mind about submarines. The research group 38 

North recently reported that North Korea may have installed 

vertical missile launch tubes on a submarine. 

Mr. Kim, does the administration concur that North Korea has 

installed missile launch tube capabilities on this submarine? Does 

the administration believe that North Korea is pursuing a seabased nuclear strike capability? And what would the consequences 

of that sort of capability be for the region, for the security of our 

allies, and for the security of the United States? Thank you. 

Ambassador KIM. Thank you, Congressman. I don’t have anything to offer in terms of specifically confirming the 38 parallel report. As I said before, we are obviously deeply concerned that 

North Koreans are continuing to pursue many dangerous capabilities. We do know they have been interested in developing their 

submarine capabilities, so I would not rule anything out. But beyond that, I would be happy to arrange a classified briefing for you 

in which we can provide a fuller picture of our assessment of their 

capabilities at the moment. 

Mr. CLAWSON. I appreciate that offer. I think that would be excellent. And if, with their growing nuclear capability in the region 

in general, what does that imply for us and for our allies, not just 

in submarine? 

Ambassador KIM. I think it poses a grave threat to our allies in 

the region. It poses a grave threat to the U.S. directly, and this is 

why we need to intensify our effort on all aspects that we talked 

about this morning, which is on sanctions, making—trying our best 

to cut off funding for them to use on their dangerous programs, to 

working with our partners, and that brought in the international 

community to change, to borrow the chairman’s words again, to 

change the equilibrium in North Korea so that they realize that 

they cannot continue to pursue their dangerous programs and hope 

to get out of this international isolation that they have been suffering. 

One of your colleagues also mentioned earlier that the greatest 

threat—I believe it is Ranking Member Engel who eloquently menVerDate 0ct 09 2002 12:53 Mar 05, 2015 Jkt 000000 PO 00000 Frm 00063 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\011315\92556 SHIRL
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tioned that the greatest threat the North Koreans pose is to their 

own people, and I believe that is true. I mean, having visited North 

Korea several times myself, I have deep sympathy for the North 

Korean public, which has continued to suffer as a result of the 

leadership’s bad decisions, and I think we need to try to work harder so that we are not only dealing with the dangerous nuclear and 

missile programs that North Koreans are continuing to pursue but 

also to try to improve the situation for the North Korean public 

which has been suffering so badly. 

Mr. CLAWSON. Thank you. 

Chairman ROYCE. Bill Keating from Massachusetts. 

Mr. KEATING. Thank you, Mr. Chairman, and I would like to 

thank our witnesses for their patience and for being here. We 

talked a lot about the international community and how they can 

affect things. I am a member also of the Cybersecurity Subcommittee of the Homeland Security Committee. We realize we 

have to go further than just our own domestic abilities to influence 

the situation, and we have discussed China a great deal. But let 

me ask you a question about Russia. 

Russia continues to supply oil to Jong Un, and recently this reports, and I think it is for the first time that Kim Jong Un has favorably acted on an invitation from Russia to attend ceremonies in 

May commemorating the anniversary of World War II’s ending. 

This, to my knowledge, is the first, one of the first public international visits that he will do as a supreme leader, so if you factor 

in those kind of issues, what is the relationship with Russia and 

North Korea in the opinion of any of the witnesses that would like 

to comment on that? 

Ambassador KIM. Thank you, Congressman. As you point out, 

Russia has recently had some senior level contact with North Korean officials. In fact, Kim Jong Un sent one of his top deputies to 

Moscow just recently. There has been some indication of Russian 

investment into North Korea, but I am convinced that the Russians 

do remain committed to our shared goal of denuclearization. In 

fact, if you look at the public statements that came out immediately following the senior North Korean officials visit to Moscow 

was all about Russia’s commitment to the Six Party process, to 

denuclearization, and how they would strongly oppose a nuclear 

test by North Korea. So yes, the picture looks mixed, but I think 

fundamentally the Russians do remain committed to the goal of 

denuclearization. 

Mr. KEATING. Do you think there is any possibility that North 

Korea did have some assistance either in the Sony attack or other 

attacks from other experts, and then, you know, not to deny that 

their sole responsibility as the instigator, but getting expertise they 

may not have had, could have that happened formally or even on 

the private side with Russia, given their expertise in this area? Are 

there any concerns that that might have been a factor? 

General TOUHILL. Thanks for that question, sir. You know, 

frankly there is—there is always that possibility. At this point, 

however, I have not seen any intelligence that indicates that. 

Thank you. 

Mr. KEATING. Just lastly, because we did spend a great deal of 

time talking about China. What other Asian communities do you 

61

feel could be useful in our efforts to deter this kind of cyber activity? What other countries could we get assistance from allying together on this cause? 

General TOUHILL. Well, thank you, sir, for that question. As we 

have taken a look at it from the Department of Homeland Security 

and our information sharing, we have several different engagement 

organizations such as the Asian Pacific Computer Emergency Response Team, which we did, in fact, share information on, the collection of 21 different countries. We also used our International 

Watch and Warning Network membership and shared information 

out to over a dozen other countries. This really is something that 

has impact across many, many different countries, and we have leveraged all of our different partnerships across the international 

community to share information regarding this incident. 

Mr. KEATING. Great. Well, thank you. I yield back, Mr. Chairman. 

Chairman ROYCE. Thank you. Thank you, Bill. We go now to 

Dave Trott of Michigan, a new member of this committee. 

Mr. TROTT. I want to thank the chairman and all of you gentlemen for being here and allowing me to ask a few questions this 

afternoon. The first question is to Assistant Secretary Glaser. Do 

you think Executive Order 13687 is sufficient to accomplish our 

goals? 

Mr. GLASER. Again, Congressman, our goal is for North Korea to 

act as a responsible member of the international community, so 

certainly that Executive order standing alone is not—is not going 

to get us there. It is about all of the Executive orders, all of the 

financial tools we have, combined with all of the efforts that Sung 

and the State Department are engaged in, and even then, it is an 

incredibly difficult and frustrating issue. But I don’t think a single 

action or a single Executive order is going to get us there, nor have 

we asserted that it would. 

Mr. TROTT. Do you think our actions and Executive orders over 

the past 10 years have moved the ball forward or have we lost 

ground with respect to what we want to accomplish? 

Mr. GLASER. Again, it depends on what you are referring to specifically. I think that we have been quite successful in applying financial and economic pressure on North Korea. 

Mr. TROTT. You think there are fewer human rights atrocities, 

you think they are paying greater heed to the U.N. After 10 years 

or not? 

Mr. GLASER. No, I don’t. As I said, I don’t think that we have 

achieved our goal of them acting responsible, absolutely not. 

Mr. TROTT. So does the Executive order give you the latitude 

that the chairman’s bill that passed in the last Congress with respect to secondary sanctions or do you feel you need more to pursue 

those sanctions? Because I think earlier you, I believe you spoke 

and you said you supported the North Korean Sanctions Enforcement Act that the chairman introduced last year. Would that be a 

fair statement? 

Mr. GLASER. No. It is not for me to opine on that legislation at 

this point. What I can say is that what the new Executive order 

gives us is a flexibility that we haven’t had before to target the 

North Korean Government, to target North Korean officials, and to 

62

target those, and this is to your point, that provide material support to any designated entity. That is not authority that we have 

had before, and that is authority that I am sure we will put to good 

use. 

Mr. TROTT. So if this doesn’t work as well as we hope, what is 

plan B? 

Mr. GLASER. Plan B with respect to sanctions? 

Mr. TROTT. What if North Korea doesn’t change its bad behavior, 

what is plan B? 

Mr. GLASER. Well, again, there is a broad policy that is trying 

to move North Korea in the right direction. From our perspective, 

we have a strategy that we have been implementing for many, 

many years now to try to increasingly isolate North Korea from the 

financial sector, and I think that we have a lot of success that we 

can show. I think it is one way to bring pressure to bear on precisely the people that we need to, which are the decision makers 

in North Korea, because they are the ones who benefit from that. 

But, again, the broad goal is not to bring financial pressure on 

North Korea, the broad goal is to effect a change in North Korean 

behavior. And as you point out, we are not there, and it is incredibly frustrating and it is something that we work on every day to 

try to change. 

Mr. TROTT. Thank you. 

Ambassador, is there any expedited effort to review the criteria 

to designate North Korea as a State sponsor of terrorism? 

Ambassador KIM. So the criteria is set by law. So what we are 

doing is to evaluate all of the available intelligence and information 

to determine whether the North Koreans meet that criteria. 

Mr. TROTT. Any idea when that will be done? 

Ambassador KIM. Well, it is an ongoing process, but I think as 

soon as we make the determination that there is credible evidence 

to support designation, we will move forward. 

Mr. TROTT. And what problems, let’s say we made an egregious 

error and somehow concluded that they were actually not responsible for state-sponsored terrorism, what problems would be created for us? Would they stop being as friendly and cooperative as 

they have been? 

Ambassador KIM. So I think it is a fairly straightforward matter 

in which we are trying to meet the requirements of the law, which 

says that the Secretary of State must determine that the government of that country has repeatedly provided support for acts of 

international terrorism. And we are trying to determine whether 

the North Koreans meet that criteria, and when we do, we will 

move forward. 

Mr. TROTT. Any idea when that will be done, again? 

Ambassador KIM. Again, I think it is an ongoing process. 

Mr. TROTT. Okay. Ambassador, how does South Korea view our 

actions and the measures we have taken, would they like us to do 

more? 

Ambassador KIM. They have been very supportive. We have 

stayed in very close touch with South Korea, as well as other allies, 

including Japan. As I mentioned earlier, they issued a very strong 

condemnation of the attack on Sony and have expressed strong 

support for our reaction to the attack. 

63

Mr. TROTT. Thank you. 

Yield my time. Thank you. 

Chairman ROYCE. Thank you. 

We go now to Mr. Tom Emmer of Minnesota, a new member of 

the committee. 

Mr. EMMER. Thank you, Chairman Royce and Ranking Member 

Engel, for holding this important hearing. I would also like to 

thank the committee staff for their work and their patience, and 

the distinguished panel for attending the hearing to provide us 

with their analysis. 

Ambassador Kim, David Albright, the president of the Institute 

for Science and International Security, has commented that the 

North Korean policy of President Barack Obama’s administration 

has been called ‘‘strategic patience.’’ And recently the President 

said, in response to the hacking, the Sony hacking, that the U.S. 

would respond ‘‘proportionally.’’ Can you define that for me and 

comment, if you will, on this strategic patience reference? 

Ambassador KIM. Thank you, Congressman. Strategic patience, I 

think, has been misunderstood as our policy. It is not. It was just 

a description of the approach we were taking about resumption of 

negotiations, precisely because of some of the important lessons we 

have learned from our previous efforts in negotiating with the 

North Koreans, both in the Six-Party process, but also bilaterally 

earlier in the Agreed Framework days of the mid-1990s. 

We wanted to make sure to take a very deliberate, cautious approach in coordination with our partners so that if and when negotiations resume we would have a much better chance, much more 

credible chance of actually making some lasting progress on the nuclear issue. So strategic patience just simply referred to that approach. It was not necessarily our policy per se. And I think that 

is where we are still, which is to say that we want to make sure 

that there is adequate preparation and that there is demonstration 

of commitment from the North Koreans to denuclearization before 

we return to negotiations. 

Mr. EMMER. So, Mr. Ambassador, if I can then take you to the 

next part of my question. And I understand that the ‘‘proportional 

response’’ language was in response to the Sony episode, but is the 

administration now signaling an increase in intensity? 

Ambassador KIM. I think that would be accurate. As Assistant 

Secretary Glaser pointed out, the new Executive order signed by 

the President gives us tremendous flexibility and broad authority 

to go after targets. As we develop information, as we meet standards of evidence, we will designate more North Korean entities, 

North Korean personnel, and this will make it more difficult for 

them to pursue their dangerous programs. 

Mr. EMMER. There are so many questions, and you have been 

very patient for all the people that are here. And this is a new 

process for me, and I know that time is limited. So if you could just 

give me this. 

Ranking Member Engel at the beginning today talked about the 

delicate balance of holding the North Korean leaders accountable 

while at the same time being mindful of the oppressed population. 

Can you tell me, and maybe this is a combination of Ambassador 

Kim and the Assistant Secretary Glaser, but how are you doing 

64

that, managing that delicate balance, and can you give us specific 

examples of how these supposed expanded authorities under the recent Executive order are being applied? 

Mr. GLASER. Well, again, I fail to see how any actions that we 

have taken through our financial sanctions or other financial measures we have applied to North Korea have negatively impacted the 

Korean people. As I have said time and again, the misery of the 

Korean people is attributable entirely to the policies and decisions 

of the Government of North Korea. 

Why we have adopted the approach that we have adopted is for 

a couple of different reasons, one of which is that in order for the 

Government of North Korea to maintain itself it needs access to 

hard currency, it needs access to the international financial system—not a lot, but it does need it. So when you identify——

Mr. EMMER. And the time is running out. 

Mr. GLASER. I am sorry. 

Mr. EMMER. So if I could claim back the time. Could you give me 

a specific example of how you are doing that since the Executive 

order? 

Mr. GLASER. Well, simultaneous with the Executive order it was 

announced that we had employed the Executive order with respect 

to 3 North Korean entities and 10 North Korean individuals. Importantly, with respect to those 10 individuals, 8 of them were employees of KOMID, which is the primary conventional arms company of North Korea. One of the impacts of that, at least as it has 

been reported in the press, is that the Government of Namibia is 

considering expelling two of those individuals. Now, this is an important source of hard currency, conventional arms sales in Africa. 

So, look, I am not doing a victory lap about this, but it is an example, one example, and it is going to be an ongoing effort of how 

we can and how we will continue to use that authority. 

Mr. EMMER. Thank you very much. 

Chairman ROYCE. Mr. Issa of California. 

Mr. ISSA. Thank you, Mr. Chairman. 

General, a couple of questions. You are familiar in the National 

Defense Authorization Act of late last year that applies now that 

it provides sanctions against anyone supporting or engaging in industrial espionage in cybersecurity. Is that correct? 

General TOUHILL. Yes, sir, I am aware of that. 

Mr. ISSA. Now, let me just go through quickly a couple of questions. North Korea has no independent access to the Internet. Is 

that correct? 

General TOUHILL. That is correct. 

Mr. ISSA. So they are entirely dependent on a single strand, so 

to speak, of IP that comes from China. Is that correct? 

General TOUHILL. That is my understanding, yes, sir. 

Mr. ISSA. And do you happen to know what the bandwidth of 

that is, if it is publicly available? 

General TOUHILL. I do not know off the top of my head, sir. We 

can get that for you. 

Mr. ISSA. For argument’s sake, let’s call it the equivalent of what 

one home has from Cox or Comcast. So they have a range of IPs 

provided by China as though they were being provided by Comcast 

65

here in the District of Columbia, one line coming in from China. 

Is that correct? 

General TOUHILL. In essence, sir, that is correct. 

Mr. ISSA. So two questions. First of all, do you have high confidence today that North Korea participated in the Sony espionage 

and/or any other espionage in the last year? 

General TOUHILL. Based on the evidence that has been provided 

by the Intelligence Community and the law enforcement community regarding attribution, I have confidence in their conclusion, 

sir. 

Mr. ISSA. So pursuant to the NDAA, you now have the ability to 

have sanctions based on that, correct? Beyond financial. I mean, 

sanctions are a broader term. 

General TOUHILL. Agreed. 

Mr. ISSA. However, the NDAA said provide sanctions against 

anyone supporting or engaging. Wouldn’t it inherently be said that 

since the only way North Korea had the ability to do this was 

through a route provided by the People’s Republic of China, that 

mainland China, China itself, has in fact supported espionage? 

Reasonable assertion by the American people. Couldn’t have done 

it without China, China gives them the lifeline. As we know, China 

monitors all of its Internet transactions, it doesn’t have a true open 

Internet per se. China, in fact, had to know what you know. Isn’t 

that correct? 

General TOUHILL. You know, at this point, sir—and thank you 

for that question—I do not know what China knew at the time. 

Mr. ISSA. Do they know now? Have we directed to them the 

knowledge that we have sufficient so they know that in fact their 

lifeline to the Internet was, in fact, engaged in espionage, in other 

words, supporting industrial espionage by North Korea? 

General TOUHILL. Sir, we have shared our information with the 

Chinese Computer Emergency Response Team, we have had telephone conversations with them as well, and we continue to exchange information regarding this incident. 

Mr. ISSA. So based on that, my question, which goes to the very 

heart of not the sanctions on a country that is so isolated that the 

only thing we know for sure is that their people are at least 6 

inches shorter than people in the south, in fact, since sanctions on 

North Korea are extreme and have not worked, because they simply do not care enough about their people to relieve their suffering, 

and since the Government of China now knows that their lifeline 

was used to conduct industrial espionage, are we and will we hold 

China responsible to be an active participant in preventing this in 

the future, or should we, in fact, this committee, consider that 

under the NDAA China would then, by supporting espionage, by 

not taking action, be in fact held accountable in the future? 

General TOUHILL. I would have to defer to my colleagues for that 

question. 

Mr. ISSA. Well, we don’t have a China desk person, but, Mr. 

Glaser, you are close enough. Do you agree that, in fact, if another 

country, anywhere, provides direct support, and the Internet line 

is by definition direct support, that, as we like to say, they either 

have to be part of the solution or they are part of the problem? 

66

Mr. GLASER. Thank you, Congressman. I wouldn’t want to opine 

under the statute, but I could say that, at least from a Treasury 

Department perspective, we are fully committed to holding entities 

within China responsible, and we have demonstrated that we are 

willing to target entities within China. 

Mr. ISSA. Pursuant to China, the Government of China providing 

a line to the Government of Korea that has been used in industrial 

espionage. 

Mr. GLASER. Again, Congressman, I don’t think I am familiar 

enough with the details of all the facts and intelligence on that particular line of questioning. All I can say is that we have demonstrated that with respect to the authorities that we have, that 

we are prepared to use them with respect to parties that need to 

be held accountable. 

Mr. ISSA. Thank you. 

Mr. Chairman——

Chairman ROYCE. It is a very good point and it is one that in 

dialogue with Beijing, I certainly think, Mr. Issa, should be explored, because you are right, that line obviously has been used. 

And I think the other consideration is the fact that some of those 

involved in the hacking in the past, maybe not currently, but in the 

past had training in Beijing, as some have training in Moscow. And 

so I think reminding Mr. Glaser of the necessity of discussing this 

with those who might enable this kind of activity is a good point 

for you to raise. 

Go ahead. You had the floor. 

Mr. ISSA. I was only sort of befuddled that the general, who now 

has authority over cybersecurity ultimately, in the last days of last 

year we transferred principal authority over cybersecurity to 

Homeland Security, so the General is here, he can provide Mr. 

Glaser with the questions and answers as to whether or not China, 

one, government line, two, North Korea perpetrated this, and 

three, the real question, which is, if that lifeline remains in effect 

and another attack occurs or is occurring as we speak, how do we 

deal with China? 

Obviously, it is beyond the scope of this hearing, but I think it 

is an important one of will China be part of the solution actively 

or are we to continue basically dealing with sanctions over a country that seems almost immune to sanctions because they are almost immune to outside hard currency except when they sell conventional weapons and/or nuclear secrets and use that to gain hard 

currency. That is where the challenge of how do we get China as 

an open partner, and that is why I had that line of questioning. 

And I thank you for your indulgence, Mr. Chairman. 

Chairman ROYCE. Well, thank you. 

We go now to Mr. Ted Yoho of Florida. 

Thank you, Mr. Issa. 

Mr. YOHO. Thank you, Mr. Chairman. 

Gentlemen, I appreciate you being here. I want to go back to 

1994. What was the original intent of the nuclear talks and the 

agreement? Wasn’t it to get away from nuclear proliferation and 

get into energy production in North Korea? 

67

Ambassador KIM. Well, it was the same purpose that we are pursuing now, which is denuclearization, to make the North Koreans 

abandon their nuclear program. 

Mr. YOHO. So they entered into the North Korea Agreed Framework with the United States. That broke down and they kept building nuclear capabilities. At what point were there triggers or signs 

that we knew they weren’t staying true to their mission to get 

away from nuclear proliferation and getting away from—or their 

getting into nuclear proliferation and getting away from energy 

production? What were those signs? 

Ambassador KIM. Well, we had credible evidence, intelligence, 

that the North Koreans were continuing to pursue nuclear programs despite entering into this Agreed Framework arrangement 

with us. 

Mr. YOHO. All right. I am asking you these questions because we 

didn’t respond in a timely manner and I want to know what parallels there are between North Korea and where we are with Iran 

right now in the nuclear so we don’t make the same mistakes. Do 

you see any that we need to pay attention more closely to make 

sure we don’t make that same mistake with Iran? 

Ambassador KIM. I am not in a position to comment specifically 

on our ongoing efforts with Iran. But I will note in the North Korea 

context, as we discussed earlier with the chairman, we have 

learned some very important lessons from our previous efforts, both 

the Agreed Framework, as well as the Six-Party process, and I 

think this is causing us to move much more deliberately and much 

more cautiously toward any resumption of negotiations. Because 

we want to make sure that when we resume negotiations, that we 

are going to actually achieve lasting progress and not repeat the 

mistakes of what we had——

Mr. YOHO. That is exactly what we have to do, and we need to 

learn from the past so we don’t make those mistakes with Iran. 

General Touhill, what is your feeling on that as far as what we 

have learned from our negotiations with Korea and where we are 

at with Iran? 

General TOUHILL. Well, thank you for the question, sir. Frankly, 

that is out of the scope of my expertise. 

Mr. YOHO. Okay. I will come back to that. I have got some other 

questions here. One of these goes along the line of what Mr. Issa 

was saying. I can’t imagine North Korea being able to act alone in 

this. And I don’t know if it is right to say, but I would see China 

acting as the puppeteer or North Korea being the puppet or the 

stooge being directed by China. Do you feel the same way in this? 

General TOUHILL. Thank you very much for that question as 

well, sir. At this point, I don’t have any indication or any information that would indicate anybody but those that have been attributed by the law enforcement community. 

Mr. YOHO. All right. Let me ask, Mr. Glaser, what do feel on 

that? 

Mr. GLASER. I don’t have any information for you on the ongoing 

investigation, but I can say that while China and North Korea are 

allies, I don’t think it is correct to say that everything North Korea 

does it does under Chinese instructions or even blessing. 

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Mr. YOHO. But knowing their limited ability on the Internet, 

they have to be working with somebody, I would think. 

How about you, Ambassador Kim? 

Ambassador KIM. I think that is a very important question, and 

that is a question that interagency, including our Intelligence Community and our experts, should be looking at very closely to determine whether the requirements of NDAA sanctions are met by virtue of the fact that the North Koreans used an IP located in China. 

But I agree with Danny that there is no indication that the Chinese Government or Chinese authorities knew about the attack or 

in any way condoned the attack on Sony. 

Mr. YOHO. All right. 

One last point, and this goes off to my colleague, Mr. Connolly. 

He was talking about what constitutes a cyber attack and at what 

point do we deem it an act of war, how many people need to maybe 

die from it or how much damage needs to happen to a country. 

These are things that need to be answered so that there is clear 

definitions of what an act of war is, because right now I see just 

a big gray area, nobody is willing to commit. I think it would behoove the American Government, the American people, and improve our national security if we drew some lines and said, if you 

cross this line, this is considered an act of war. 

What are your thoughts on that, General? 

General TOUHILL. Thank you for that question. Frankly, sir, that 

has been debated in the war colleges for many years. And as a 

graduate of the War College, I believe that we should have that 

dialogue and we should——

Mr. YOHO. I think we don’t need anymore debates. I think we 

need to define it, because the day is coming, I mean, with what we 

are seeing. 

How about you, Mr. Glaser? 

Mr. GLASER. I am sorry, what constitutes an act of war falls well 

outside my area of expertise. 

Mr. YOHO. I am out of time here, so I am going to have to have 

you submit those, if you would, to the record. 

Thank you, Mr. Chairman. 

Chairman ROYCE. Thank you. Thank you, Mr. Yoho. 

And let me go now to Ileana Ros-Lehtinen, chairman emeritus 

for this committee. 

Ms. ROS-LEHTINEN. Thank you so much, Mr. Chairman. 

Thank you, gentlemen. 

Following up on Mr. Duncan’s point earlier on the North KoreaCuba nexus, in 2014, just recently, North Korea attempted to ship 

from Cuba a concealed shipment of ‘‘various components of surfaceto-air missile systems and launchers, MiG–21 jet fighters, parts 

and engines, shell casings, rocket-propelled projectiles, and other 

ammunition.’’

Now, our Treasury Department did penalize the North Koreans—we thank you, Mr. Glaser—but not their enablers: The Cuban 

regime. Why not sanction Cuba for aiding and abetting the North 

Koreans? 

Now, this illegal shipment of military hardware, I just read a little snippet of parts of what it entailed, were traveling from Cuba 

to North Korea in containers filled with sugar, quickly melting 

69

sugar. Panamanian officials stopped it at the canal, and the North 

Korean captain attempted to commit suicide. He didn’t try to commit suicide because he feared U.N. Sanctions or he feared U.S. 

sanctions. He feared the revenge of Kim Jong Un. 

Now, I want to know why we don’t sanction Cuba for aiding and 

abetting the North Koreans and why didn’t we work with the U.N. 

So that the U.N. Could impose their sanctions. You correctly point 

out, Ambassador Kim, that sanctions are important. This is what 

the U.N. Response was. This is the Security Council committee 

four-page, strongly worded memo. That is what Cuba got. It said, 

the concealed cargo of arms and related materiel, illicit cargo, to 

include the hazardous cargo, was not declared on the ship’s manifest and the cargo was hidden under 218,000 bags of raw sugar. 

But, boy, they got really tough. They said, the committee encourages all member states to remain vigilant regarding their obligations and responsibility to inspect suspect cargo to prevent prohibited items going to and from the DPRK and to ensure the relevant 

national implementing instruments, blah, blah, blah, blah, blah. In 

regard, the committee draws the attention of member states to security resolution—oh, my golly. 

This is all that happened, when they were shipping MiGs and everything else under melting sugar. And you talk about the sanctions and how important they are, yet the Treasury Department 

looked the other way. It was like that ship just came magically 

from Cuba, a phantom ship, violating all kinds of sanctions of the 

U.S. and the United Nations, and there was no penalty to pay. So 

we wonder why North Korea does what it is doing and why it is 

in cahoots with other rogue nations. So I encourage you to be a little tougher. It takes two to tango. North Korea was not shipping 

these on their own. 

And lastly, Mr. Chairman, I know I am out of time, but on 

WIPO, I have been very concerned about this, and with former 

Ranking Member Howard Berman we asked for an investigation on 

the transfer of U.S. origin technology by the U.N.’s World Intellectual Property Organization (WIPO) to North Korea and Iran. And 

it was clear that this administration did nothing to prevent WIPO 

from transferring sensitive dual-use technology to North Korea and 

that it has not taken the threat of technology transfer seriously. 

Incredibly, after WIPO Director General Francis Gurry knowingly withheld the organization’s transactions with North Korea in 

2012, in violation of U.N. Security Council resolutions, WIPO again 

ran a controversial mission to North Korea last June and has been 

less than forthcoming with details about that mission. Yet not only 

was Gurry not held accountable, he was once again reappointed, in 

May 2014, as director general of WIPO, with little resistance from 

the Obama administration. We just looked the other way. 

What are we going to do to prevent U.S. technology and U.S. taxpayer dollars from being transferred in the future when we have 

that kind of an attitude? We don’t have much time, you don’t need 

to answer. Sanctions are important, we need to implement them. 

A strongly worded memo from either the Treasury or the U.N. Is 

not going to do the trick, it is not going to stop anybody. 

Thank you, Mr. Chairman. 

Chairman ROYCE. Thank you. 

70

In adjourning here, let me thank our witnesses, but let me also 

say that Mr. Engel and myself look forward to working with State 

and Treasury. We are going to bring this legislation up again that 

we passed into the Senate last year, and we are going to try to 

move it fairly quickly. So we will be meeting with all of you. 

And I think that, frankly, a lot of these actions against North 

Korea have been very long in coming. And for those of us that have 

urged a more robust response, we want to make certain the tools 

are there to do it, do it effectively, and cut off the hard currency 

for the regime. So we will be in contact with you. Thank you very 

much for your testimony. 

[Whereupon, at 12:37 p.m., the committee was adjourned.] 

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