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COUNTERING THE NORTH KOREAN THREAT:

NEW STEPS IN U.S. POLICY

HEARING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTEENTH CONGRESS

FIRST SESSION

FEBRUARY 7, 2017

Serial No. 115–4

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 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

MO BROOKS, Alabama 

PAUL COOK, California 

SCOTT PERRY, Pennsylvania 

RON DESANTIS, Florida 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

ADAM KINZINGER, Illinois 

LEE M. ZELDIN, New York 

DANIEL M. DONOVAN, JR., New York 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

ANN WAGNER, Missouri 

BRIAN J. MAST, Florida 

FRANCIS ROONEY, Florida 

BRIAN K. FITZPATRICK, Pennsylvania 

THOMAS A. GARRETT, JR., Virginia 

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 

KAREN BASS, California 

WILLIAM R. KEATING, Massachusetts 

DAVID N. CICILLINE, Rhode Island 

AMI BERA, California 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas 

ROBIN L. KELLY, Illinois 

BRENDAN F. BOYLE, Pennsylvania 

DINA TITUS, Nevada 

NORMA J. TORRES, California 

BRADLEY SCOTT SCHNEIDER, Illinois 

THOMAS R. SUOZZI, New York 

ADRIANO ESPAILLAT, New York 

TED LIEU, California

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

(III)

C O N T E N T S 

Page

WITNESSES 

Victor Cha, Ph.D., senior adviser and Korea chair, Center for Strategic and 

International Studies ........................................................................................... 5

Sue Mi Terry, Ph.D., managing director, Bower Group Asia ............................... 15

Mr. Anthony Ruggiero, senior fellow, Foundation for Defense of Democracies . 28

The Honorable Robert L. Gallucci, distinguished professor in the practice 

of diplomacy, Walsh School of Foreign Service, Georgetown University ......... 41

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Victor Cha, Ph.D.: Prepared statement ................................................................. 8

Sue Mi Terry, Ph.D.: Prepared statement ............................................................. 17

Mr. Anthony Ruggiero: Prepared statement ......................................................... 29

The Honorable Robert L. Gallucci: Prepared statement ...................................... 44

APPENDIX 

Hearing notice .......................................................................................................... 74

Hearing minutes ...................................................................................................... 75

Victor Cha, Ph.D.: George W. Bush Institute report, ‘‘Toward a New Policy 

and Strategy for North Korea’’ ............................................................................ 77

The Honorable Eliot L. Engel, a Representative in Congress from the State 

of New York: Statement by Former Senator Sam Nunn .................................. 78

The Honorable Tom Marino, a Representative in Congress from the Commonwealth of Pennsylvania: Prepared statement .................................................... 82

The Honorable Gerald E. Connolly, a Representative in Congress from the 

Commonwealth of Virginia: 

Prepared statement .............................................................................................. 83

Washington Post articles ..................................................................................... 85

Written responses from the witnesses to questions submitted for the record 

by: 

The Honorable Michael T. McCaul, a Representative in Congress from 

the State of Texas ............................................................................................. 88

The Honorable Brian K. Fitzpatrick, a Representative in Congress from 

the Commonwealth of Pennsylvania ............................................................... 94

(1)

COUNTERING THE NORTH KOREAN THREAT: 

NEW STEPS IN U.S. POLICY 

TUESDAY, FEBRUARY 7, 2017

HOUSE OF REPRESENTATIVES,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The committee met, pursuant to notice, at 10:08 a.m., in room 

2172 Rayburn House Office Building, Hon. Edward Royce (chairman of the committee) presiding. 

Chairman ROYCE. This committee hearing will come to order. I’ll 

ask all the members if you can take your seats at this time. 

And for the members of this committee, for many, many years 

one of our key concerns has been North Korea’s nuclear weapons 

program, and last year, as we’ll recall, we saw two tests of an 

atomic weapon in North Korea along with 20 separate tests of their 

intercontinental ballistic missile system, including—and I think 

this is concerning to all of us—including a test in which a submarine fired an ICBM. Right now the effort in North Korea is to 

miniaturize the size of their atomic weapon so as to put it on the 

head of that missile. And that’s what’s got our attention. 

At this point it’s clear that very, very soon North Korea is going 

to be able to target all 50 States in the United States, as well as 

target our allies. At the same time, it’s the rapid speed of this advance and the fact also that North Korea has this history of proliferating. They get their ICBM technology or they get their ability 

to create a nuclear bomb and they sell that, and this is another 

concern that we have, because this is really a ‘‘game changer’’ to 

our national security. 

When you think about the history of this, and I will remind the 

members here, we do have a strategy that in the past has worked, 

and I think the members might all concur on this. In South Africa, 

our strategy of implementing sanctions actually worked, with respect to the Banco Delta Asia the strategy of implementing sanctions on North Korea, it did halt their ability for a while to develop 

their missile program, and so you find a strategy that does work 

and you try to implement it. 

My concern is since the ’94 Framework Agreement, since that 

Clinton administration agreement and then during the Bush years 

when, again, the administration was talked out of deploying the 

sanctions which Treasury had put on North Korea, which was 

causing real pain in North Korea. Kim Jong Il was not able to pay 

his generals—that was lifted. Then we go to the Obama adminisVerDate 0ct 09 2002 08:44 Mar 24, 2017 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\24032 SHIRL
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tration and for 8 years we’ve had what is called ‘‘strategic patience.’’ These strategies have not worked. 

One of the steps we took in this committee was to pass legislation authored by myself and Mr. Engel which would deploy a strategy which I think will work, and that is the types of sanctions that 

really cut off all of the hard currency. The situation was desperate 

enough that the Security Council also took up this approach at the 

United Nations and passed a similar provision. 

The question is at this point, will we implement it and will we 

implement it in time to really cut off that access to the one asset 

North Korea needs in order to build out its weapons program and 

advance it? And that’s one of the reasons for this hearing. 

With that law what we did was designate North Korea as a ‘‘primary money-laundering concern’’ and we found the head of that regime, Kim Jong Un, responsible for, as the Economist summed up 

our messaging here, ‘‘running a gulag masquerading as a country.’’ 

So with that push our question now is what else can we do to crack 

down on that regime? We have $2 billion that that regime is using from indentured servitude in which North Korean workers are sent abroad and the 

money comes into the government rather than being paid to the 

worker. That’s one area where the international community and 

where the United States can put additional pressure. We could target that expat labor. 

There are loopholes in the North Korean shipping and financial 

sectors with respect to the implementation of some of these agreements. That should be closed. When we discover that foreign banks 

have helped Kim Jong Un skirt sanctions, as those in China have 

recently done, we’ve got to give those banks a stark choice. This is 

what was done by Treasury back during the Banco Delta Asia period where they were told you’re either going to do business with 

the United States or you’re going to do it with North Korea, but 

not both. And those 10 banks froze the North Korean accounts. 

We also, obviously, should step up our defenses of the homeland 

here and should have a more concerted information push about 

North Korea internationally to build support. 

One of the things I’ll call the attention of the members of the 

committee to is Thae Yong Ho, the former deputy ambassador from 

North Korea to Britain—that’s the highest ranking defector we’ve 

talked to since the Minister of Propaganda defected—and we had 

an opportunity—we were the first in the West to have an opportunity to talk to him in Seoul at the time. He had defected through 

China. He said last month that international sanctions are really 

squeezing the regime. And he said the spread of information from 

the outside world is having a real and negative impact on that regime, so it shouldn’t be a surprise to us that South Korea has reported a very high level of defections, that they are surging. 

We won’t be able to tackle the North Korean threat on our own, 

so I’m glad that the Secretary of Defense made his first trip overseas to visit our allies in South Korea and visit our allies in Japan 

and beyond. General Mattis called the U.S.-South Korea alliance 

the ‘‘linchpin of peace and stability in the Asia Pacific region,’’ and 

made clear the administration’s commitment to deploy a U.S. missile system known as ‘‘THAAD.’’ General Mattis’ trip to the region 

3

was an important reminder that our ironclad relationship continues through political transitions—both here and at home in 

South Korea. 

So our panel this morning has important insights on Kim Jong 

Un’s goals, on vulnerabilities that we can exploit, and on how the 

President can better use the authorities that Congress has given 

him through the legislation that we passed here in the committee. 

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

Mr. ENGEL. Thank you, Mr. Chairman. Thank you for calling this 

hearing to look into one of the most complicated and dangerous national security issues we’re facing. The Kim regime’s nuclear missile and offensive cyber capabilities are a problem for us and for 

our friends and allies in the Asia-Pacific. I would say they’re a 

problem to everybody. 

To our witnesses, welcome to the Foreign Affairs Committee. 

We’re grateful for your time and your expertise on this matter. 

Because I’ve been to North Korea twice people think I’m an expert on Korea, but actually I’m not. I have been there twice, one 

time with my friend, Joe Wilson. I don’t know if Joe is here yet, 

but Joe said to me that he and I are the only two Members of Congress currently who have visited North Korea. I can tell you, we 

only were in Pyongyang, but it’s unlike lots of things you’ve seen 

before. 

Last year, North Korea conducted an unprecedented number of 

illegal nuclear and conventional weapons tests. These tests were 

met with strong rebukes by the U.N. Security Council, and the 

Obama administration played a pivotal role working with China to 

close a loophole in existing sanctions related to coal. We’re watching closely to see if China is keeping its word about limiting coal 

imports from North Korea. 

With each test, the North Koreans learn more and more about 

how to perfect their illegal weapons, and with each test our allies 

in Seoul and Tokyo are reminded of just how dangerous their 

neighborhood has become. After all, they’re sitting in the direct 

path of a North Korean conventional or nuclear attack every day. 

That’s why the South Korean Government is moving ahead with 

the deployment of a THAAD anti-ballistic missile, a purely defensive system, despite protests from Beijing. And we should be clear, 

this threat is not limited to Northeast Asia. The best minds working on this problem agree that North Korea is just a few years or 

even less from a weapon that could reach the United States. So 

we’re left with a critically short period of time to stop that from 

happening. 

The President recently tweeted that it never will. Well, I hope for 

our sake he’s asking the questions and shaping the policies that 

would forestall such a development. I must say, however, I worry 

about some of the new President’s other comments that touch on 

this issue, that more countries should have access to nuclear weapons, that we should increase our own nuclear arsenal, that we 

should wage a trade war with China, whose cooperation is essential 

in dealing with North Korea. And, of course, when we’re talking 

about a regime where the human rights record is terrible as North 

Korea, slamming our door on refugees is in a sense turning away 

from the plight that the North Korean people are enduring. So I 

4

hope today we can have a good conversation about that right approach to these policies and the best way to see them put in place. 

Now in my view, our approach needs to factor in just how volatile the Kim regime can be. At the same time, we have little visibility into their military capabilities and decision making apparatus, so we need to come at this challenge with a combination of 

shrewd diplomacy, tough economic sanctions, offensive military 

measures, and cool-headed calculation—a sort of wrap-around approach that gets all our international partners involved. 

This is not a problem we can solve on our own; we need our allies, so keeping our promises to them matters for their security and 

for the security of the U.S. servicemembers deployed in Northeast 

Asia. 

I’m glad that Secretary Mattis’ first trip was to Asia, and I trust 

that his meetings provided a sense of reassurance to our friends, 

and I’m sure we’ll be able to ask him questions hopefully when he 

comes before the committee. 

We also need to keep China from working at cross-purposes with 

us in this effort. China is the linchpin for sanctions enforcement 

against the Kim regime, so it would be foolish to alienate Beijing 

either through a reckless trade policy or by sweeping second and 

third order sanctions that crack down on Chinese entities but cost 

us Beijing support. So we have to keep a lot of balls in the air, 

pressure the regime, keep China on board with existing sanctions, 

while stepping up enforcement, reassure our allies, get the Kim regime back to the table. 

Obviously, it’s complex stuff. Foreign policy usually is, and we’ve 

struggled across Republican and Democratic administrations to 

find the right balance, but I’m convinced that American leadership 

can and will make the difference. We cannot back away from this 

responsibility because the cost of failure in this case is just too 

great. 

So I’m interested in hearing our witnesses’ views on getting to 

a reasonable policy toward North Korea. Our chairman has been 

especially interested in this region and has done a lot of good work 

in the region. I know many of his constituents are interested in it, 

as well, but we all should be interested because it is such an important region for us and for the world. 

So, Mr. Chairman, I thank you again, and I yield back. 

Chairman ROYCE. Thank you, Mr. Engel. Mr. Engel and I have 

been in North Korea. It’s a very depressing place. I spent a couple 

of days there, but up until very recently when we’ve had now many 

more defectors in the last year or so, it was very hard to access information. 

We’re joined by a distinguished panel today which can give us all 

much greater insight about North Korea. And if I could introduce 

them, Dr. Victor Cha is senior advisor and Korea chair at the Center for Strategic and International Studies. Previously, he served as 

the Director for Asian Affairs on the National Security Council. 

We have Dr. Sue Mi Terry, managing director for Korea at 

Bower Group Asia, and previously, Dr. Terry served in a series of 

positions focusing on Asia at the National Intelligence Council, the 

National Security Council, and at the Central Intelligence Agency. 

5

We have Mr. Anthony Ruggiero, senior fellow at the Foundation 

for Defense of Democracies, and he served previously in the Treasury Department as Director of the Office of Global Affairs where 

he developed and implemented policy to combat all forms of illicit 

finance. 

And lastly, we have Ambassador Bob Gallucci, distinguished professor at Georgetown University, previously served in multiple senior positions at the State Department where he focused on non-proliferation. Ambassador Gallucci was the chief U.S. negotiator during the North Korean nuclear crisis of 1994. 

Without objection, the witnesses full prepared statements will be 

made part of the record, and members will have 5 calendar days 

to submit statements, or questions, or any extraneous material for 

the record. We’ll start with Dr. Cha, if you could please summarize 

your remarks. 

STATEMENT OF VICTOR CHA, PH.D., SENIOR ADVISER AND 

KOREA CHAIR, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES 

Mr. CHA. Thank you, Chairman Royce, Ranking Member Engel, 

and distinguished members of the committee. It is a distinct honor 

to appear before you to discuss the challenges posed by North 

Korea. 

Mr. Chairman, Presidencies are defined not by the agenda they 

have coming into office; instead, the mettle of every Presidency is 

tested by the unexpected crises that come their way, and in particular, how they respond to those crises. For President Bush, for 

example, this crisis was clearly 9/11. For President Trump, the crisis could very well come from North Korea. 

Over the past 8 years the regime in Pyongyang has demonstrated three tendencies; it has spurned any serious and substantive diplomacy with its neighbors, and has pressed forward aggressively with a military testing program of ballistic missiles and 

nuclear devices, and it has continued to perpetrate human rights 

abuses of the worst kind in the country. 

It is highly likely that the North will carry out another ICBM 

test or nuclear test early in the Trump administration. The purpose would be to demonstrate advancements in their technology 

and to assert a position of strength that will put the President back 

on his heels. 

Any new strategy toward North Korea must be based on a full 

reading of the negotiating record of past administrations. As veterans of past negotiations for both Democratic and Republican administrations, Bob Gallucci and I have laid out the general principles that should undergird any policy review in a report for the 

Bush Institute last November, which we have submitted for the 

record. 

In addition to those principles, I believe that a new policy must 

be based on certain assumptions, all of which represent changes 

from the past. 

First, North Korea under the current regime will not give up its 

nuclear weapons. Second, the portfolio of pressure and diplomacy 

administered over the past 25 years has been ineffective. Third, the 

DPRK program is a significant threat. It is no longer a small proVerDate 0ct 09 2002 08:44 Mar 24, 2017 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\24032 SHIRL
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gram. The uranium-based program has the potential for a nuclear 

breakout producing scores of weapons on an annual basis. Fourth, 

absent a change in its strategic thinking, China will limit its cooperation to those measures that do not risk a collapse of the North 

Korean regime. Fifth, the threat currently faced in the theater by 

North Korea’s nuclear progress will enlarge to a Homeland Security threat in the course of the current administration’s tenure. 

The situation requires that we seek a new policy that revisits 

some of the core tenets of U.S. policies practiced by previous administrations. 

The first new tenet has to do with the question of risk. A new 

policy toward North Korea must entail a higher level of risk acceptance on the part of the United States. In general, we seek to minimize risk as we deal with North Korea policy but this minimization 

has had two effects. First, it has restricted the options available to 

us and, second, it has allowed the DPRK to incrementally but significantly grow their program. We have to be willing to accept more 

risk both in military strategy and in diplomacy. 

Second, with regard to defense and deterrence, the United States 

and the ROK have no choice but to expedite the deployment of 

THAAD on the peninsula. In addition, North Korea’s claims that 

they are now able to make a nuclear warhead with a long-range 

ballistic missile compels the United States to think about its declaratory policy. Absent very good intelligence, which is rare with 

North Korea, we will not know what is atop the next Unha rocket 

that they put on a launch pad. 

Third, with regard to sanctions we need to keep the pressure on 

and expand the scope of sanctions. We’ve had, as the chairman 

said, the Section 311 sanction, the coal sanctions, but sanctioning 

of North Korea’s slave labor exports and third party entities that 

have willful involvement in DPRK insurance fraud schemes should 

be considered, as well. 

With regard to China, China is both part of the problem and part 

of the solution. We need Beijing’s cooperation, particularly on sanctions, but as we talk about in our report we should not subcontract 

our policy to our premiere competitor in the region. Secondary 

sanctioning against Chinese entities that knowingly or unknowingly facilitate North Korea’s WMD proliferation activities and 

other illicit activities is a must. 

Regarding Russia, Russia has traditionally been a bit player on 

the Korean Peninsula, and in the Six-Party Talks, but there may 

be more opportunities for a larger Russian role. Aside for cooperation on nuclear counterproliferation, the U.N. Security Council’s 

strategy that sought Russian acquiescence through new resolutions, for example on human rights, could increase pressure on 

both the DPRK and China. 

Finally, on diplomacy we should remember that no U.S. policy 

should be composed only of sanctions, military exercises, and diplomatic isolation. Historians would remember such a policy as paving 

a path to war. 

As I noted, a new U.S. policy must entail greater risk, and this 

applies not just to coercive measures, but also to diplomacy. I’m not 

in a position today to map out those new diplomatic overtures to 

the regime, but these will be incumbent upon the new administraVerDate 0ct 09 2002 08:44 Mar 24, 2017 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\24032 SHIRL
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tion to contend with as they map out a path in dealing with the 

most vexing security challenge in Asia today. Thank you. 

[The prepared statement of Mr. Cha follows:]

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Chairman ROYCE. Thank you, Dr. Cha. Dr. Terry. 

STATEMENT OF SUE MI TERRY, PH.D., MANAGING DIRECTOR, 

BOWER GROUP ASIA 

Ms. TERRY. Yes, thank you. 

Chairman Royce, Ranking Member Engel, and members of the 

committee, thank you for this opportunity to testify before you 

today. 

This year North Korea is sure to continue with its dangerous 

provocations, including hostile missile and nuclear tests. According 

to Thae Yong Ho, a high-ranking North Korean official who defected to Seoul last year, Kim Jong Un is determined to complete 

development of his nuclear weapons program by the end of this 

year, 2017. 

Mr. Thae’s statements confirm what we’ve known all along: That 

Kim has staked his legitimacy on perfecting the nuclear arsenal 

that his father and grandfather have pursued at the cost of billions 

of dollars and millions of lives. And he’s unlikely to give it up for 

any price. 

In terms of timing, I think he may choose to wait a little bit to 

buy time because he may calculate that it is better to show some 

restraint to explore to see if there’s a pathway to talks with the 

Trump administration. While Kim has no intention of giving up his 

nuclear program, he still seeks dialogue with Washington to shore 

up both his internal standing and to secure international recognition of the North as a nuclear weapons state. 

In response to this North Korean threat, there is a number of respected Korea watchers, some of our dearest colleagues who argue 

that the sanction strategy has failed, and that it is time to return 

to negotiations even without preconditions. They point out that 

since seeking denuclearization is no longer a realistic goal, we are 

left with no option but to negotiate with the North to at least 

freeze or cap the North’s nuclear weapons program. 

As well-intentioned as these arguments may be, following such 

an advice would be a mistake. As a veteran Korea watcher, David 

Straub has recently stated very aptly, a negotiated freeze is like a 

mirage. It’s an illusion that recedes very quickly as one tries to approach it. 

What would a freeze or cap agreement say to the rest of the 

world? Agreeing to a cap means the U.S. accepts North Korea as 

a nuclear weapons state for the indefinite future, which would destroy our credibility not only with our allies but with other rogue 

regimes, such as Iran, that are watching what we do with North 

Korea very closely. 

Secondly, one has to wonder what exactly would be frozen or 

capped anyway. North Korea has many undeclared facilities and 

we simply do not know where they all are. This is not to say we 

should never return to negotiations with North Korea, but we 

should only return to negotiations after decisively raising the cost 

for the Kim Jong Un regime, and only when Kim Jong Un is genuinely interested in denuclearization. At the present moment, the 

Kim regime has not indicated that it is ready to reconsider its policy choices. 

16

Kim Jong Un used this year’s New Year’s address to again announce his plans to test an ICBM that could deliver a nuclear warhead to the continental United States. President Trump has responded with a Twitter message simply saying, ‘‘That won’t happen’’ or ‘‘It won’t happen.’’

Kim now needs to understand that Washington is very serious 

about the President’s statement. Words alone will not convey a 

strong message to the North. If there’s any chance at all that the 

North would ever entertain the idea of giving up its nuclear weapons program, it is only because the new administration has made 

it very clear that the Kim regime is facing a stark choice between 

keeping the nuclear arsenal and regime survival. 

Contrary to what some believe, the U.S. has not yet used every 

option available at our disposal to ratchet up pressure against the 

Kim regime. I agree with everything that Victor has said wholeheartedly. As a near term solution there’s much more we can do 

still on the sanctions front, on the human rights front, on getting 

information into North Korea, as well as deterrence and defense, 

and on diplomacy. 

In my written testimony, I go into some concrete ideas we should 

pursue in this effort, but here I would like to also make one point 

before I close my opening remarks, which is on the need to promote 

unification of the two Koreas as the ultimate solution. We should 

understand that even all these measures that we’re going to talk 

about today, strengthening sanctions and other pressure measures, 

could ultimately fail, and we need to accept that in terms of bringing about change and denuclearization in the North. But all these 

measures are still worthwhile to pursue because they will also help 

in the effort toward unification. 

Whatever North Korea’s immediate future, there’s no question in 

my mind that over the long term its prospects are very bleak, and 

I look forward to discussing this point more during our Q&A session. 

While Kim Jong Un’s hold on power seems strong for now there 

are signs there’s growing elite discord among the ruling class, and 

Mr. Thae himself testified to this effect. All the frequent purges 

and executions of high level elites in recent years may help 

strengthen Kim’s rule in the short run by terrorizing his rivals, but 

fundamentally Kim’s heavy-handed rule is likely eroding long term 

support, elite support for the regime. So in the final analysis, it 

may be that there’s only one way that the threat from North Korea 

will come to an end, and that’s when the current regime itself 

comes to an end. Thank you. 

[The prepared statement of Ms. Terry follows:]

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Chairman ROYCE. Thank you, Dr. Terry. Anthony. 

STATEMENT OF MR. ANTHONY RUGGIERO, SENIOR FELLOW, 

FOUNDATION FOR DEFENSE OF DEMOCRACIES 

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

Engel, and distinguished members of the committee, thank you for 

the opportunity to address you today on this important issue. 

Before I summarize elements of my written testimony, I want to 

recognize Chairman Royce and Ranking Member Engel in particular for their leadership, and their drafting, and successful advocacy for the first comprehensive bipartisan North Korea Sanctions 

Law. 

The number of North Korea designations has nearly doubled over 

the last year, thanks largely to the law, but 88 percent of those 

persons designated were located inside of North Korea at the time 

of their designation. To get at North Korea’s international business, we need to target additional persons outside of North Korea. 

In my written testimony, I review the accomplishments of the 

North Korea Sanctions and Policy Enhancement Act of 2016, outline four core elements to create a more effective North Korea policy, clear away myths about North Korean sanctions, and provide 

recommendations for Congress and the Trump administration. I 

will summarize my recommendations for Congress here. 

First, Congress could provide additional resources to the Treasury Department, Justice Department, Intelligence community, and 

other government agencies to investigate violations of the law, to 

allow us to stay one step ahead of North Korea. 

Second, restrict all tourist travel to North Korea to protect the 

safety of U.S. nationals. Banning tourist travel would also amplify 

the effectiveness of the recent designation of North Korea’s flag 

carrier, Air Koryo, and deny Pyongyang another source of hard currency. 

Third, as part of the oversight function increased transparency 

into investigations insuring that Congress is fully aware of ongoing 

investigations. And fourth, investigate China. 

It is important that Congress and the American people understand the extent of China’s efforts, or lack thereof, to combat 

money laundering, sanctions, violations, and proliferation financing. I recommend that any new legislation include specific sections 

on investigating North Korea’s network inside China. 

North Korea is a difficult foreign policy challenge that the United 

States has failed to appropriately address. The new Trump administration presents another opportunity, perhaps our last one, to 

harness all the tools of American power to address this direct 

threat to the United States non-violently. Today’s hearing is an important step in that direction. 

On behalf of the Foundation for Defense of Democracies, I thank 

you again for inviting me today and look forward to addressing 

your questions. 

[The prepared statement of Mr. Ruggiero follows:]

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Chairman ROYCE. Thank you very much, Mr. Ruggiero. 

Ambassador Gallucci; good to see you, sir. 

I think that red button there may not be on. 

STATEMENT OF THE HONORABLE ROBERT L. GALLUCCI, DISTINGUISHED PROFESSOR IN THE PRACTICE OF DIPLOMACY, 

WALSH SCHOOL OF FOREIGN SERVICE, GEORGETOWN UNIVERSITY 

Ambassador GALLUCCI. The red button was not on. 

Mr. Chairman, members of the committee, I’m grateful for this 

opportunity to share some thoughts with you this morning on this 

important topic. 

Twenty-four years ago, a new administration came into office and 

was confronted with the first foreign policy challenge, and it was 

North Korea with a secret then nuclear weapons program, violation 

of safeguards, and announced intention to withdraw from the Nuclear Non-Proliferation Treaty. 

A year and a half of negotiations later, a deal was struck with 

the North Koreans. Essentially, we got what we wanted out of that 

deal. We wanted to shut down a plutonium program that would 

have produced, the estimate was by the Intelligence Community, 

150 kilograms of plutonium a year, enough for 30 nuclear weapons 

a year. We got that program shut down and it was shut down for 

about a decade. So when the Bush administration came in, there 

were no nuclear weapons that we knew of in North Korea, as opposed to hundreds. They got two light-water reactors or got a commitment to build two light-water reactors worth about $6 billion. 

They never were completed. 

Early in the Bush administration, the North Koreans were called 

on their cheating on the deal. They were doing a secret deal with 

the Pakistanis for the other technology which produces fissile material, uranium enrichment. So we have a case, and you can read 

that case lots of different ways. Will negotiations work? Will they 

always cheat? I think men and women of good will can disagree, 

but it is a case, and it’s a non-trivial one. 

The Obama administration followed the Bush administration and 

did much the same thing: Pursued sanctions, attempted to have negotiations, never got as far as the Bush administration or the Clinton administration. I think it’s fair to say that after more than a 

decade of negotiations and sanctions, what my colleagues have said 

is true. The policy has failed up until now to stop the North Korea 

nuclear program, and it has blossomed along with a ballistic missile program. So I think what we have now is a question of what 

will work? 

The first thing that has occurred to a lot of analysts is, let’s let 

China do it. They’re closer, they have influence, and the question 

is can we rely on the Chinese to rein in the North Korean nuclear 

program, and I think the short answer is no, we cannot. The Chinese have overlapping interests with us but not congruent interests, and as Victor said before, subcontracting this issue to our 

principal competitor in the Asia-Pacific region is not a brilliant 

strategy for us to follow. 

A second question is, and it goes to the heart of what everyone 

has talked about, is will sanctions do the trick? By ‘‘do the trick,’’ 

42

I mean will they bring the regime down, will they stop the ballistic 

missile and nuclear weapons program, will they force the North 

Koreans to the negotiating table in the right frame of mind? 

And I’ve heard it said, ‘‘If we have the right sanctions it would 

do all that.’’ I don’t believe it. I don’t believe it; yet, if I did believe 

it, I would be more enthusiastic about sanctions. I don’t oppose 

sanctions. I just think if that is your strategy it’s not a winning 

strategy; certainly, not, if you have not gotten the Chinese on board 

to those sanctions. 

I think another question for us, this administration, for the 

United States is, for those who favor negotiations, should we settle 

for a freeze in the North Korean program? Even my colleagues 

have said the North Koreans will never give up their nuclear weapons program. So if you negotiate and that’s your deal, then you 

want to say let’s at least go for a freeze and cap it. Okay. I believe 

the answer to that is also no, do not do that. 

A freeze is not good enough. A freeze, as one of my colleagues 

said, legitimizes the North Korean nuclear weapons program. It 

will be offensive in Seoul and in Tokyo, allies of the United States 

whom we have asked to forego nuclear weapons, to then confront 

an adversary like North Korea that we would permit and legitimize 

with nuclear weapons. So I say no, a freeze is not adequate. 

What I would propose is that instead of decreasing our goals we 

increase our goals. And I’m an advocate generally speaking of negotiation. You’ve seen the Ambassador line there. I come from an institution that does this for a living. And my view here is that if we 

insist that the outcome is no nuclear weapons, a return to the NonProliferation Treaty, if we insist that North Korea behave as a normal country in the international system and at least meet minimum standards with respect to how they treat their own citizens, 

in other words, their human rights records, we have a chance for 

success. And the reason is this: The North Korean Nuclear Weapons Program is designed for really one thing, regime survival, and 

to deter the United States of America. The only other thing that 

will give the North Koreans assurance that they don’t have to 

worry about the United States executing what they have said to me 

more than once is our favorite policy of regime change. The only 

thing apart from having their own nuclear weapons as a deterrent 

is a relationship with the United States in which that is no longer 

our objective. And that outcome is implausible with a North Korea 

that treats its own people with the disrespect it does. When we 

look at that regime and are horrified by what it has done by its 

human rights record, we are not going to get into a normal relationship. 

So my proposal here is that we stick to a high level in terms of 

what we want, nonproliferation, preventing the nuclear weapons 

programs, but at the same time insist that the human rights record 

in North Korea improve so that there’s a plausible outcome in 

which the United States and North Korea move out of the situation 

of an adversarial relationship. 

I don’t think that can happen quickly or easily, but I think it’s 

plausible. I think that the carrot for the North Koreans here might 

be some sort of assistance, might have to do with our military exercises with the South Koreans, but fundamentally, the thing they 

43

want is a normalized relationship with us. And we have to give 

them a roadmap, a path to that that meets our needs. And if we 

do that over the long term, I think actually removing North Korea 

as a threat to the region and to the Continental United States is 

a plausible outcome. 

I would say that through this all, if we were to proceed in anything like that, it would have to be in close concert with our allies, 

particularly the South Koreans. And I would also say that we 

would be well off if we could avoid ourselves making the first provocation to the North in the relationship of the new administration 

to the DPRK. In other words, if the North Koreans test, as many 

of you believe they will, a ballistic missile and a nuclear weapon, 

I’m perfectly prepared to believe the proper response is tougher 

sanctions, whatever exactly that means. But I would ask that we 

all consider the virtue of us not being the first to strike at the 

North Koreans with tougher sanctions, that we look and see whether there is an outcome that might be negotiated. 

Thank you, Mr. Chairman. 

[The prepared statement of Ambassador Gallucci follows:]

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Chairman ROYCE. Thank you, Ambassador. 

I must say, in ’94 I was convinced by the line of reasoning that 

if we did reach out to the North Koreans, we could get them to 

change their behavior, so I was one of those who supported the 

North Korean Framework Agreement. But, subsequently, I had the 

opportunity to talk to Hwang Jang-yop who was the Minister of 

Propaganda who defected through China, and he convinced me that 

this was a blunder. In his mind, it was an opportunity of North 

Korea to get on the life support system that would give them the 

wherewithal to continue to build support for the regime while they 

focused on their number one goal. And the problem with the number one goal of developing this nuclear weapons system is that it 

doesn’t just stay local. 

As we saw in 2007, right in the middle of the Six-Party Talks, 

we suddenly stumbled over the fact, or maybe we didn’t, but other 

intelligence services stumbled onto the fact that they were building 

a replica of their nuclear weapons program on the banks of the 

East Euphrates River for Syria. That facility was taken out by the 

IDF, but it was a reminder that as we were watching other rogue 

regimes, we were watching them take these flights up to 

Pyongyang, and we were watching the transfer of this technology 

and capability, ICBM and nuclear weapons capability. 

And so I go to an issue that I think is very important to this 

committee, and that was the argument we heard expressed over 

and over again about South Africa; that it would be absolutely implausible that sanctions passed here from this committee could 

have such an effect as to implode the government in South Africa 

and end apartheid. This was viewed as conventional wisdom, so 

much so that when this committee, and this is before my time, but 

when this committee passed that legislation it was vetoed by the 

administration. 

Fortunately, Republicans and Democrats, I think over 80 percent 

of the House and Senate overrode that veto, as I recall history, and 

deployed those sanctions. The reason I tell this story is, I was in 

South Africa with some of my colleagues here, and I had a conversation with one of the key decision makers who back at that 

time had been a prominent industrialist defending the apartheid 

system. And what he said to us is that we would not have lasted 

another week under the types of sanctions that the United States 

and Europe led and deployed against apartheid. We could not last 

another week without it absolutely imploding the system. 

And so as a consequence of that information at least that I got 

from the Minister of Propaganda, and that we’re now hearing increasingly from this number two in the Embassy in Britain who defected from North Korea, is not unlike the same information we got 

from those who worked on the missile program, who told us not 

only was there not the money to buy any longer the clandestine gyroscopes we bought on the black market, or pay for the missile program, but we couldn’t—he couldn’t pay his generals. This young 

man’s father could not pay his generals during that year’s time 

that Treasury Department had deployed those sanctions. And this 

is not a good position for dictators to be in, as related to us by 

those who had defected out of the country. 

49

So inasmuch as we have tried every other approach from my 

standpoint since ’94, it would be wise I would think once to approach again as we did once before the Chinese financial system 

and ask those banks to make that choice, whether or not they’re 

going to freeze the accounts, as they made the decision then to 

freeze the accounts, or whether their primary objective is to continue to do business in that way. Not a single Chinese bank was 

designated, or fined, or investigated under the legislation that 

we’ve passed. 

So I would ask Mr. Ruggiero, you were a professional at the 

Treasury Department working on these types of cases. Was this an 

isolated incident? I’d just like to get your view, and also Dr. Terry’s 

view on this. 

Mr. RUGGIERO. Sure. I guess I would start by saying that a Section 311 action against China is not the only option available. Obviously, there could—as you have suggested, there could be trips to 

China to talk to those Chinese banks, and talk about the choice 

that you laid out, or talk to them about knowing your customer’s 

customer. There could be fines like we did with several European 

banks, billions of dollars worth of fines that were assessed against 

European banks. 

I think it’s important to talk about the Justice Department and 

Treasury Department action in late September where you had four 

Chinese nationals and a Chinese company that described itself as 

attached to North Korea in terms of trade, and those Chinese 

banks clearly did not provide strict scrutiny on the transactions of 

those individuals and that company. They set up 22 front companies outside of China to allow U.S. dollar transactions through the 

U.S. financial system that were on behalf of a U.S. designated 

North Korean bank. That was shocking, and the fact that a Chinese bank has not been punished for that at all is quite appalling. 

Chairman ROYCE. Dr. Terry. Thank you. 

Ms. TERRY. So your comment about not being able to pay generals really struck me. From my experience, for North Korean regimes, the key pillar of stability for North Korean regimes is elite 

support. Right? This is how the Kim regime, the family has survived for decades. As long as you have the elite support, it’s okay, 

it does not matter what happens to the public. 

Sanctions is one way to get at that elite support that you mentioned. This is why in my written testimony toward the end, I mention that the more we intensify the economic pressure against the 

regime, we are getting at that discontent of the elites. The less that 

Kim Jong Un has money, the foreign currency to underwrite the 

lifestyle of the elites, we are building a potential foundation for instability. 

You mentioned that Mr. Thae himself had talked about how elite 

defection to South Korea has really increased last year, that there 

is a disunity among the ruling class. And the only way to get at 

that is to continually stir trouble at their leadership level. As far 

as I’m concerned, economic sanctions is the only leverage we really 

have to get at that. 

Chairman ROYCE. Thank you, Dr. Terry. I need to go to Mr. 

Engel. My time has expired. 

50

Mr. ENGEL. Thank you, Mr. Chairman. Last year, former Senator 

Sam Nunn co-led an Independent Council and Foreign Relations 

Task Force that produced a report called ‘‘A Sharper Choice on 

North Korea.’’ Unfortunately, Senator Nunn was not able to join us 

today, but he did share his thoughts in the form of written testimony, so I’d ask unanimous consent to ask for Senator Nunn’s testimony to be entered into the record. 

Chairman ROYCE. Without objection, I’d ask for unanimous consent. Thank you. 

Mr. ENGEL. Thank you. 

Former Secretary of Defense, Bill Perry, has also recommended 

a last ditch effort to revive sanctions with North Korea, in part to 

pave the way for China to become more amenable to tougher sanctions if the talks should break down. 

Let me ask, Mr. Ruggiero, let me ask you this. How would you 

suggest we shape a tougher sanctions policy while not alienating 

China? How can Congress best preserve space for the administration diplomatically to probe North Korea? If negotiations fail, in addition to tougher sanctions, what steps should the United States 

and South Korea take to bolster our defense capabilities in the face 

of increasing aggression from the North? And how might Beijing 

react to these measures? 

Mr. RUGGIERO. Sure. I think on the sanctions piece, as I noted 

in my oral testimony, the fact that it was a good step forward that 

we nearly doubled the number of designations, but most of those 

were inside North Korea; 88 percent inside North Korea. And as 

I just described, when you have a 22 entity front company scheme 

and none of those were designated, that seems to be the wrong approach. That would be sort of the first approach I would take, is 

looking at more of the companies outside North Korea. 

North Korea clearly uses front companies to obscure its access 

not only to the U.S. financial system, but to the global financial 

system. When you talk to banks, as I have, they wonder, you 

know—they don’t want to do business with North Korea, but how 

do they stop the business that is clearly ongoing; and that is, identifying the front companies very clearly. That’s an action the Treasury Department can take. 

And as I noted with the chairman’s question, there are many 

steps you can take. I understand that in a lot of ways people want 

to jump right to a Section 311 action against China, which I understand will have ramifications beyond just North Korea, but there 

are steps you can take. I’m fairly certain that both foreign financial 

institutions inside China—and frankly, the big Chinese banks do 

not want to be doing this business with North Korea. And so making a clear and stark choice for them that if they do that business, 

if they do not have the systems in place to detect that business, 

that maybe they won’t get a 311, but they’ll get a hefty fine, or 

they themselves might—or elements of the Chinese financial system could be designated, as was done with Iran; a Chinese bank 

was designated. So there are different ways to do it to really show 

China that it’s time for them to take a different approach. 

Mr. ENGEL. Ambassador Gallucci, do you agree? 

Ambassador GALLUCCI. My view is that if the chairman was 

right about sanctions and their impact, and the South African 

51

model is a good model, then I think pursuing sanctions, maybe not 

initially, maybe trying for negotiations is a plausible way to proceed. But, ultimately, proceeding with the most effective sanctions 

and avoiding the highest risk, as I understood him to be recommending, sounds perfectly plausible to me as a policy. But I remain 

skeptical that it will produce the results we want, that we’ll see 

that nuclear weapons program slow down or stop, that we’ll see the 

regime be shaken, or that we’ll see the regime feel threatened sufficiently to come to a negotiating table in a new frame of mind. So 

I’m skeptical of that, but I honestly don’t know. 

Mr. ENGEL. Thank you. Dr. Terry, you mentioned the elites in 

the regime. 

You know, one of the things that surprised me when I went to 

North Korea, first of all, they didn’t allow us to go out of 

Pyongyang, so there. And they told us we could go anywhere in 

Pyongyang, so we got up real early and we took the train, you 

know, the train, and we watched people going to work. If I didn’t 

know I was in North Korea, it would seem like any other place. 

The elites seemed pretty well fed. They looked good, things were 

fashionable, people wore nice clothes. It could have been any big 

city. You know, I’m from New York, so I’m kind of used to the 

hustle and bustle. 

There are certain things that gave it away. For instance, there 

was a big crane building I think it was an 80 or a 90-story hotel 

that apparently was not done correctly engineering-wise, and so it 

was just laying there, you know, staying there. And we came back 

a year and a half later, it was still there, so there were things 

there. There aren’t many cars. A lot of the traffic lights don’t even 

work. There are propaganda posters all over, including one that 

Joe Wilson—I don’t know if Joe is here today, but Joe Wilson took 

a picture of which showed a North Korean soldier putting a bayonet in the head of an American soldier, and it said, ‘‘U.S.A.,’’ on the 

soldier. 

So tell me a little bit about the elites, and how what we saw really wasn’t reflective of what goes on there. 

Ms. TERRY. Ki Il Sung used to enjoy not only elite support, but 

elite loyalty. Even during the Kim Jong Il years, that loyalty the 

elites had has decreased. Now under Kim Jong Un, of course you 

have less support of what Kim Jong Un has been doing for last several years. Right? He even publicly executed his uncle, and many 

elites, even last week he just purged yet another guy. 

What Kim Jong Il used to do is you have the sticks and carrots 

approach, because elites do have vested interest in keeping the system going, because their fate is tied to the Kim regime. But what 

Kim Jong Un has done is instead of the carrots and sticks, too, it’s 

over the top purging and terrorizing the elites. So that’s what Mr. 

Thae himself said—and with more information, most elites are 

aware. 

Now should they tie their fate to this regime? This is why I said 

the more we make it a difficult choice for the elites, I think we will 

be successful. We want more elite defection. 

In my written testimony when we talk about information penetration, I talk about how we should also target it toward the elites, 

so we need to do two things. We need to get both information to 

52

the elites, to the North Korean elites. One, that nuclear policy, this 

keeping the nuclear arsenal is not a path forward for you guys for 

long term survival of themselves. Secondly, if they were to defect, 

there is an alternate path, a better path for their lifestyle; perhaps 

that involves some amnesty, giving amnesty to these elites. But I 

think we need to get that information to the elites. 

And I think there is a definite deterioration of the support, and 

elite support for the regime is absolutely fundamental in keeping 

the regime going. 

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

Chairman ROYCE. Thank you. We go now to Mr. Chris Smith of 

New Jersey. 

Mr. SMITH. Thank you, Mr. Chairman, and thank you all for your 

excellent testimonies and your leadership. 

A couple of questions. In a hearing that I held in June 2014, one 

of our key witnesses was Andrew Natsios. We all know him, a 

great leader, former head of USAID. He had some very powerful 

insights about how we de-emphasized human rights, particularly at 

the Six-Party Talks, and, Dr. Terry, in your testimony today you 

make, I think, a very important point. ‘‘It’s time now for Washington to integrate,’’ and I would just add the word ‘‘reintegrate,’’ 

‘‘a focus on security, and a focus on human rights—normally two 

different policy approaches—into a single unified approach.’’ Andrew Natsios had made that very strong admonishment, as well. 

And, Dr. Cha, you make a very similar recommendation. 

My questions, since the U.N. Commission of Inquiry made some 

very important recommendations, which still have not been acted 

upon as far as I can tell, maybe you can enlighten us on that. It 

is time to really ratchet up the diplomacy at the U.N. to make sure 

that happens, especially the establishment of an ad hoc tribunal 

which was recommended, or a referral to the ICC. 

Frankly, I think the ICC referral would likely fail, not in a vote, 

perhaps, but in its implementation. They have had a very 

unremarkable record, as we all know; two convictions in over 12 

years, all of them in sub-Saharan Africa. And I think there needs 

to be a robust court like the Sierra Leone court, or perhaps Yugoslavia, or Rwanda, so a hybrid court I think would really send a 

powerful message perhaps even to Kim himself, but certainly 

would begin naming names that people will be held to account. 

Part of the problem with the ICC is that they look at a couple of 

people at the top, and very often get somebody in the middle; two 

convictions so far. So your thoughts on that; a hybrid court. Is it 

time for us to be pushing for such a court? 

And secondly, on the whole issue of China and the U.N. Commission of Inquiry, properly pointed out that ‘‘persons who are forcibly 

repatriated with China are commonly subjected to torture, arbitrary detention, summary execution, forced abortion, and other 

forms of sexual violence.’’

I’ve had several hearings of people who made their way into 

China, escaped, only to be sent back by the Chinese officials after 

being trafficked and exploited cruelly while in China for a couple 

of years, and then they went to prison and some of them were executed. People spoke of those, of course, but our witnesses talked 

53

about this violation of the Refugee Convention to which China is 

a signatory. So your comments on both of those issues. Dr. Cha. 

Mr. CHA. So first, on the point of human rights and the overall 

policy, it has been sort of orphaned in the past. And I think since 

the 2014 U.N. COI report, there’s been a change I think in the 

mind set about integrating human rights with the policy. It makes 

commonsense that, you know, a regime that treats its people as 

bad as it does, cannot be expected to keep agreements or to treat 

other countries with any sort of respect. 

I think things like ad hoc tribunal, as you mentioned, and ICC 

referral, a U.N. Security Council strategy to try to fulfill some of 

the recommendations of the COI report are important even if they 

don’t succeed, because they create a drum beat of accountability 

that is certainly heard within the regime. So I think that’s important. 

And with regard to China, there have long been calls for the Chinese to allow the U.N. HCR access to the border to determine 

whether these people who cross the border qualify as refugees. The 

Chinese have been completely unwilling to do that, and this is another arena in which you need to continue to call China out. 

I think what Anthony was talking about in terms of visits with 

banks and bank presidents, that’s something that can be done 

quietly and still very effective, but on this U.N. HCR issue, I think 

it has to be very loud, and it has to be very public. 

Mr. SMITH. Thank you. Just parenthetically before going to Dr. 

Terry, I’ve asked the Secretary-General of the U.N. when he sat as 

High Commissioner for Refugees, on several occasions asked him to 

try to implement the law, the treaty obligation. Dr. Terry. 

Ms. TERRY. Victor, actually—and the Bush Center actually have 

been doing very important work on this human rights front, so in 

my written testimony I point out that focusing on North Korea’s 

human rights is not only a right thing to do, it’s obviously a moral 

thing to do. But I also think it’s a source of leverage, as well, because the regime is truly bothered by all our focus on the human 

rights issue. 

And Chairman Royce talked about South Africa, but I think that 

was a case with South Africa apartheid era, this global isolation 

was a key driver, key important factor in changing the system. So 

we need to really continue with our efforts to isolate North Korea 

on this front internationally, beginning with us. 

And I do think what’s really important is that we challenge Kim 

Jong Un’s legitimacy, continue to challenge his legitimacy not only 

for the regime’s continued violations of the U.N. resolutions and 

nuclear front, but challenge his legitimacy based on the failure of 

the regime to provide for the people, and what it does to the people. 

I think that would be an important point of leverage. 

Mr. SMITH. Ambassador. 

Ambassador GALLUCCI. It’s probably worth saying that 25 years 

ago when we did this negotiation with North Korea, I’m not terribly comfortable saying this, but we ran away from the human 

rights issue. We thought rolling that into a negotiation would complicate it. It was as though when we were asking to talk about the 

array of artillery pieces that the North Koreans had along the 

DMZ, that wasn’t what we were about. We’re about the nuclear 

54

issue. We needed, as one of the principals said in a meeting, we’ve 

lived with North Korea for a long time, a horrendous regime, a conventional weapons threat. Why we’re really involved in a crisis is 

because of nuclear weapons. And so the ethical, moral issue of 

human rights was put aside. 

I’m not here to say that was a mistake, or it was even—or 

whether it was wise, but that was then, and this is now. And my 

argument here is that the nuclear issue, if you really wish North 

Korea to end up as a non-nuclear weapons state, that outcome is 

not going to be reached if you leave the state as it is. And as Dr. 

Terry said, as it happens, this is constructive interference. The prudential thing from a security perspective turns out to be the moral 

and ethical thing to do, so for both those reasons. 

Mr. SMITH. Thank you very much. Brad Sherman. 

Mr. SHERMAN. Thank you. 

Just by a show of hands because we’ve got limited time; how 

many of you think we should designate North Korea as a state 

sponsor of terrorism? All for. 

We all pray for the overthrow of this regime, but no regime has 

been overthrown to my knowledge in maybe the last 50 years 

where they had a core of fighting men who were willing to machine 

gun thousands of their own citizens, if necessary. That’s why 

Tehran remains in power, that’s why Tunisia changed. 

Dr. Terry, is there any doubt that if necessary, Kim Jong Un can 

count on people to machine gun a few thousand of his citizens? 

Does he have a hard core of people with machine guns? 

Ms. TERRY. Yes, he does. 

Mr. SHERMAN. Thank you. 

Ms. TERRY. But——

Mr. SHERMAN. That’s okay. 

Now the policy that’s easiest for us psychologically and politically 

is to pound the table and say we’ll accept nothing less than either 

a democratic government or a human rights supporting government, or at least one without any nuclear weapons. We’ve been 

seeking this since the ’50s. We have failed. There’s an analogy to 

South Africa, and I’m in support of all the sanctions that we can 

put on, but we also have to be realistic. 

South Africa had Nelson Mandela and the elites knew that they 

faced neither expulsion nor liquidation. I don’t think that 

Pyongyang falls quietly and softly. 

The other point about South Africa is, every country in the 

world, or virtually every country, sanctioned them. In contrast, 

North Korea doesn’t just face an absence of real sanctions from 

China, it gets a subsidy from China. So one can only imagine what 

would have happened in South Africa if the second most powerful 

economy in the world was dedicated to their survival and was willing to give them subsidies. 

It does meet our psychological needs, however, to say we demand—matter of fact, we wouldn’t sign a non-aggression pact with 

them back when Cheney dreamed of aggressing, and so it meets 

our political needs. 

Speaking of that, we ought to have civil defense in this country. 

Some of us are old enough to remember when we had civil defense 

and we were under our desks. That met only the political and psyVerDate 0ct 09 2002 08:44 Mar 24, 2017 Jkt 000000 PO 00000 Frm 00058 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\24032 SHIRL
55

chological needs of our country’s leaders because, obviously, if we 

faced several thousand Soviet thermonuclear weapons, the civil defense would have done us very little good. But at least the leadership of the country could say well, we know that you face the Soviet Union. You’re afraid of that; we’ll give you something, you can 

go under your desk. 

Now we have a foreign policy establishment that will not admit 

to the American people that it may fail to prevent us from being 

hit by not a thermonuclear weapon, but something roughly 1/50th 

size. We could prepare to minimize casualties. We won’t because 

that will mean that we have to admit that there’s the possibility 

that we’d face casualties. 

Now, missile defense is okay politically, but remember you can 

smuggle a nuclear weapon inside a bale of marijuana. 

I want to turn to North Korea’s involvement in the Middle East. 

They provided the plans and the tools for the reactor on the Euphrates. Do any of our witnesses have any information as to how 

much money was given to North Korea in return for that very limited help? Yes, I’ve seen speculation, roughly the $100-million figure, but it’s just the best available speculation. 

Now, Iran wants an indigenous program. They want to produce 

dozens of nuclear weapons on their own, but we all get what we 

need, and we can’t get what want. 

You’ve testified, all of you, that North Korea needs hard cur- rency. I know where there’s over $1 billion of hard currency 

wrapped in cellophane. Now, North Korea needs about 12 nuclear 

weapons at least to defend themselves from us. They have that. 

They’re producing more this year. Why wouldn’t North Korea sell 

some nuclear weapons in return for this stuff inside the cellophane? Does anybody have a reason why they wouldn’t do that? 

Okay, Dr. Cha. 

Mr. CHA. No. I mean, the historical record shows that they’ve 

sold every weapon system they’ve ever developed, so I wouldn’t expect it would be any different with weapons of mass destruction. 

Mr. SHERMAN. I’ve been urging the Chinese to prohibit nonstop 

flights between Tehran and Pyongyang, and I think that it would—

that the United States has to make it clear that we would hold 

China responsible for allowing that flight. There’s always a reason 

to stop in Beijing and get some fuel, and I’m confident that nothing 

goes through the Beijing Airport that the Chinese don’t want. 

One last question. We face a number of problems with China, the 

South China Sea, North Korea, a trade deficit. I know the easiest 

thing for us to do is to pound the table and say we’re going to get 

a beneficial resolution of all three of these. If we had to prioritize 

those three issues what would we do? And I realize you folks are 

not economic, you’re more national security, so how do you rate the 

need for Chinese cooperation with regard to North Korea with the 

need for China to be restrained in the South China Sea? Anybody 

willing to assess those two priorities, or just take the easy road of 

saying damn it, we should get everything? Yes, Ambassador. 

Ambassador GALLUCCI. I would resist the question. 

Mr. SHERMAN. Of course. We should resist all questions in which 

we don’t get everything we want, because it’s politically unacceptable for us to accept less. 

56

Ambassador GALLUCCI. I think because they’re interrelated, and 

my sense about the way diplomacy will work with Beijing will not 

be that we can trade things off quite that way. The argument——

Mr. SHERMAN. I will point out that the present policy has utterly 

failed to get Beijing to either limit what it does in the South China 

Sea, or to really pull the strings on Pyongyang. And if you’re going 

to advocate that somehow we’re going to get them to do everything 

by demanding everything, you’ll need to do it on another member’s 

time because I’m out of time. 

Mr. WILSON. Thank you, Mr. Sherman. And thank each of you 

for being here today. Your insight has been very positive and we’re 

just grateful. I’m also very grateful to Chairman Ed Royce and 

Ranking Member Eliot Engel for their leadership on the issue of 

the danger of North Korea. I believe North Korea’s increasingly aggressive rhetoric and actions are of utmost concern for the security 

of our nation and American families. 

Yesterday, I introduced H.Res.92, a bipartisan initiative along 

with Congressmen Mike Rogers, Seth Moulton, Ted Yoho, and Brad 

Sherman, which condemns North Korea’s development of multiple 

intercontinental ballistic missiles, urging the prompt deployment of 

the terminal high altitude area defense, THAAD system, to protect 

the people of South Korea. 

This calls on the U.S. to apply all available economic sanctions 

on North Korea. I’m very grateful that, again, Chairman Ed Royce 

was crucial in helping develop this resolution. It’s also been my opportunity, and I was—I ran into Congressman Engel as we were 

departing—the ranking member, as he was running to another 

meeting. He and I had the extraordinary opportunity to serve on 

a delegation to Pyongyang, so we have seen what sadly, to me, appeared to be a Potemkin village. But we’ve also had the opportunity over the years, many of us, to visit South Korea. What a 

marvel. And when I meet veterans of the Korean War, I love to 

point out to them what a difference you made. 

In the early 1950s when you departed, Korea was in ash. Today, 

it’s one of the wealthiest countries on earth. And as you visit Seoul, 

it’s a forest of 40 and 50-story high condominiums with golf driving 

ranges and tennis clubs on top. What an achievement, and the economic vitality. 

We also appreciate so much the alliance that we have with the 

Republic of Korea, and I’ve had sons serve in Iraq and Afghanistan 

serving alongside troops from Korea, making a difference particularly with reconstruction teams to help the people of both Iraq and 

Afghanistan recover. 

The resolution serves as an important opportunity to send a 

strong bipartisan message to North Korea that the House of Representatives will not stand for their ongoing illicit activities and 

we’ll support our allies, especially South Korea. It is my hope that 

this resolution will be marked up by the committee and brought to 

the floor for a recorded vote. It’s crucial we send a clear message 

to not only North Korea, but our allies of the region. 

With that in mind, Dr. Cha, what role would the prompt deployment of the THAAD system in South Korea have as a counter to 

North Korean aggression? 

57

Mr. CHA. Well, the THAAD system provides an area of defense 

for the peninsula which really doesn’t exist right now. There’s been 

a lot of opposition to THAAD by the Chinese, and they have been 

really taking unprecedented actions with regard to South Korean 

domestic politics and businesses to try to stop the deployment of 

THAAD. But there’s no denying that this is a required capability 

on the peninsula now, in addition to the capabilities that already 

exist in Japan and in other parts of Asia. And there’s no doubt in 

my mind that this administration should not just reaffirm, but 

should expedite the deployment of THAAD as the threat grows. 

Mr. WILSON. And it should be so clear, this is not a threat to the 

People’s Republic. 

Mr. CHA. This is not a threat to any other country. 

Mr. WILSON. It only applies to one country, DPRK. 

Mr. CHA. That’s right. 

Mr. WILSON. So thank you. 

And, Dr. Terry, do you believe the ICBM technology would be 

game changing for North Korea, and the threat they pose to the 

United States and the region? 

Ms. TERRY. It would be a game changing situation because what 

I’m concerned about are three things. Number one, with that, and 

once Kim Jong Un is confident that he has this capability, I think 

there’s the chance for miscalculation, and then that leading to further escalation is very real. So I’m worried about dangerous miscalculation and escalation. 

And then what we talked about earlier, I’m very concerned about 

proliferation. North Korea is a serial proliferater. It has proliferated everything under the sun in the past. And in the long run, 

what does it really say to the East Asian region? Once North Korea 

becomes full nuclear capable power like that, I’m worried about potential regional arms race. 

Mr. WILSON. And again, thank each of you. I’m going to hopefully 

be a good role model. My time is up, and so I now refer to Congressman Connolly from the Commonwealth of Virginia, Dominion 

of Virginia. 

Mr. CONNOLLY. Thank you. It is, indeed, a Commonwealth, one 

of four. And I would say to my good friend from South Carolina as 

the co-chair of the Korea Caucus, I’d be glad to be a cosponsor of 

his legislation. 

Mr. WILSON. Please. 

Mr. CONNOLLY. Yes. 

Mr. WILSON. You are joined. 

Mr. CONNOLLY. Thank you, and welcome to our panel. 

Dr. Cha, it has been reported that General Kim, the head of the 

State Security Agency, was demoted from four stars to one star, 

and then removed from the State Agency. If the past is prologue, 

his fate is not a good one. He was, arguably, one of the most powerful people in the regime. What does this tell us about security stability in the regime? And how long can the Dear Leader get away 

with removing so many of the elites Dr. Terry talked about in such 

a brutal fashion? I mean, it creates insecurity, and maybe people 

cower. It worked for Stalin, it worked for Saddam Hussein, but it 

doesn’t always work. It can also lead to serious instability and unVerDate 0ct 09 2002 08:44 Mar 24, 2017 Jkt 000000 PO 00000 Frm 00061 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\24032 SHIRL
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rest. What’s your read of this latest development, and how we 

should interpret it? 

Mr. CHA. Well, thank you for the question. 

So I think I would have three responses. The first, I think, is 

that these sorts of purges can be seen as consolidation of power, 

but we’re 6 years into this, and they’re still conducting these high 

level purges, over 100 high level purges, including not just cabinet 

officials, but also mid-level military officials, Army Chief of Staff, 

Deputy Chief of Staff. There’s a high turnover——

Mr. CONNOLLY. And as Dr. Terry indicated, his own uncle, who 

was seen as sort of the major go-between with China. 

Mr. CHA. Right. Right. So I think what it really shows is there’s 

still significant churn inside the system, that he’s having problems. 

The second thing is that there’s this dynamic, I think, happening 

at the elite level. And then at the general society level, North 

Korea society is much more—I mean, they are still a closed society, 

but they have much more access to foreign information than they 

did in the past. 

We in CSIS have partnered with NGOs. When we’ve asked average North Korean people how often they consume foreign information, and they say very regularly. And they believe the foreign information more than they do the information they get from the government. So at the social level, too——

Mr. CONNOLLY. So they’re not into fake news yet. 

Mr. CHA. They’re—I’m sorry? No, they’re not there yet. 

Mr. CONNOLLY. Right. 

Mr. CHA. But there is a shift happening both at the societal level, 

and that’s happening more slowly. And at the elite level you have 

these—you know, this internal fighting that’s going on. So this is 

by any metric an unstable situation. And so just because their leader is now in his sixth year, we should not offer to sit back and say 

oh, everything is fine. He’s got everything under control. I don’t 

think that’s the case, or that’s clear at all. 

Mr. CONNOLLY. Mr. Ruggiero, you were talking about ways we 

could try to leverage China to leverage Pyongyang, and there were 

other ways, fining and so forth, secondary sanction, penalties, and 

so forth. And I would ask you, and I would ask Ambassador 

Gallucci, how does this work, though? 

We have a new administration, the head of which has really already taken what from Beijing’s point of view are very provocative 

statements and actions, and I’m not passing any moral judgment 

on them. But if you’re trying to woo China’s cooperation in trying 

to sanction Pyongyang or moderate behavior, it seems an odd way 

to do it when you are castigating them for the South China Sea, 

you know, you’re making phone calls that historically have been 

avoided to avoid tension, you threaten them on currency manipulation, even though that information is several years old. You’re, you 

know, castigating them because of unfair trade practices, and the 

imbalance in our economic trade. 

How does all of that work? Doesn’t that kind of run counter to 

the desire we have here with respect to North Korea? China’s 

about the only country left with leverage, it would seem to me, so 

how does that work? Are we working at cross purposes in our policy here with the new administration? 

59

Mr. RUGGIERO. I guess from my perspective, I would not advocate 

wooing China with regard to the financial sanctions. I think that 

is the policy we have tried, and that is the policy that has failed. 

Mr. CONNOLLY. Oh, so beating them over the head, that will 

work. 

Mr. RUGGIERO. I think taking actions against their financial institutions, whether that is sending Treasury officials to describe 

the consequences of those actions. When you have Chinese nationals and a Chinese company advertising that they are working on 

behalf of North Korea, and those Chinese banks and other banks 

are still processing U.S. dollars through the U.S. financial system, 

that is a serious and direct threat to the United States. 

Mr. CONNOLLY. Mr. Chairman, I would just ask if Ambassador 

Gallucci could answer, and then I yield back. 

Chairman ROYCE. Well, it’s—we’re already over. I want to make 

sure these guys get in, so you can ask your question. I’m going to 

recognize Marino, and if he wants to answer on someone else’s 

time, that’s fine. 

Mr. CONNOLLY. I would only note that we have indulged every 

other member except Mr. Wilson in several minutes overtime, and 

I simply wanted the courtesy of allowing Ambassador Gallucci to 

answer the question already asked. But if the chairman wants to 

deny that courtesy, so be it. I would ask——

Chairman ROYCE. The gentleman has 30 seconds. 

Mr. CONNOLLY. I thank the chair. Ambassador Gallucci. 

Ambassador GALLUCCI. Thank you. All I would say is that as 

with the previous question about China, about which would you 

give up, and how would you prioritize? I don’t understand that the 

best way to engage China is to say we’ll give you this if you’ll give 

us that. That is, I think, not the way it works with the Chinese, 

with Beijing, and with Washington, and we need to engage them 

on what our mutual interests are both in their position in South 

China Sea, and the outcome we want on the Korean Peninsula, and 

that’s the way to go. 

Mr. CONNOLLY. Thank you. Mr. Chairman, I thank you for the 

courtesy. I just ask unanimous consent to enter several articles 

from the Washington Post into the record regarding this subject. 

Chairman ROYCE. Without objection. 

Mr. CONNOLLY. I thank the chair. 

Chairman ROYCE. The Chair now recognizes the gentleman from 

Pennsylvania, Mr. Marino, for 5 minutes. 

Mr. MARINO. Thank you, Chairman. 

My first question is rhetorical. How has it been going the last 24 

years with wooing? Not well, I think. 

I’m going to start with the Ambassador, and then go to your 

right, if you wish to answer my question or give me your opinion. 

What is the reality of overthrowing the regime in North Korea? 

How will we do it? Can it be done? And who takes over? Ambassador. 

Ambassador GALLUCCI. I don’t have detailed knowledge as in 

current sensitive knowledge about the vulnerability of the regime, 

and the types of activities that we would use if we wish to overthrow a regime such as the one in the DPRK. So I can’t directly 

answer your question; let me admit that straight up. 

60

I think if there were an easy way to go, a safe way to go, a way 

that would not produce a war in the Korean Peninsula, we probably would have been exploring that for decades. I don’t think 

there’s an easy outcome in that direction. I think what we are trying to do is limit this threat, not exacerbate it. 

Ms. TERRY. There’s no easy answer to that question, but this is 

why I said the same measures that we’re talking about are actually 

an effort toward that—towards unification, and potentially regional 

stability. The information penetration front where we’re trying to 

get information into North Korea, we need to start working creatively with private companies and government agencies, whatever 

we can do to get information to North Korea, not only to the public, 

but to the elites. 

And by the way, for the public, too, it’s not just that they should 

get information and watch South Korean DVDs, and so on. But we 

need to find a way to get them to be able to mobilize, organize, because right now public does not have any kind of mechanism to do 

that. There’s no internet, there’s no social media, you can’t get together to organize themselves. But the same kind of measures that 

we’re talking about while not satisfying, if pressed upon, I think 

those are the right steps even for this goal. 

Mr. MARINO. Doctor? 

Mr. CHA. So, historically, change has only come to the Korean 

Peninsula dramatically. It’s never come gradually. And that would 

most likely be the case in North Korea. 

To me, the most likely source of instability would be the next 

time that the government tries to undertake some sort of widespread anti-market measure, to try to suck all the personal savings 

and disposable income out of the system. The two times they have 

done that in the past are the two times we’ve heard the most anecdotal evidence about resistance both at the elite and at the social 

level inside the regime. 

Mr. MARINO. What’s our concern involving China from an economic standpoint, a financial standpoint? China is what now, the 

second largest outside holder of our debt. China has a substantial 

amount of money that’s lent to it from the United States, not in 

the trillions but in the billions, so what would happen should 

China decide not to hold our debt an more and not pay our banks 

back the money that they owe them because we are putting some 

type of pressure on North Korea? Anyone? 

Mr. CHA. So, Congressman, the way I would respond to that 

would be to say that—and it goes to this question about—it’s the 

same idea as approaching Chinese banks and saying look, you have 

a choice. You can deal with the rest of the international financial 

system, or you can deal with North Korea. And they will make rational choices. And I think it’s the same thing more broadly with 

regard to China policy vis-a-vis North Korea. 

You know, they—it seems to me that if framed correctly they will 

face choices, while they will not want to leverage the entire relationship with the United States for this one little country that may 

have some very small financial stake in some of their marginal financial institutions. So this is not—this is a choice that China has 

to make, and I don’t think it’s a difficult one for them, if it’s framed 

correctly. 

61

Mr. MARINO. All right, thank you. I want the record to reflect 

that I’m yielding back 32 seconds, which no one has done here yet. 

Thank you. 

Chairman ROYCE. Congresswoman Karen Bass from California. 

Ms. BASS. Thank you, Mr. Chair. 

You know, there’s been a number of comparisons made in this 

hearing to South Africa, and the ending of apartheid, and the impact that sanctions had on that. I think it’s important that we remember that history correctly, because it wasn’t just that we imposed sanctions, but it was there was an international movement 

that demanded the world pay attention to apartheid, and that reinforced the sanctions. 

And so I wanted to ask you about that. 

And during that international movement, too, a lot of it was led 

or participated by South Africans who were in exile. And so my 

question to you is, is that outside of South Korea, is there interest 

internationally in—well, in making the sanctions in North Korea 

strengthened and bringing the regime down? And wondering, also, 

for North Koreans dissidents and some of the ones that have been 

in exile, are they doing anything like that in other countries that 

maybe just hasn’t gotten a lot of publicity in the United States? 

Mr. CHA. So, I think it’s a great question, and the points that you 

make about the comparison, I think, are very important. 

In the case of North Korea, I would say the closest thing that you 

have to the beginnings of an international movement have been 

over the last 3 years in terms of the human rights issue, and the 

U.N. Commission of Inquiry’s report on North Korea. 

I think this has created much more interest in the U.N., among 

U.N. member states, General Assembly resolutions that pass by 

vast majorities condemning North Korea for human rights abuses. 

And so I think that’s one sort of platform for building that international movement. 

You asked about sort of folks outside of North Korea. And, of 

course, there’s the refugee community in the South, but there’s also 

a very small community here in the United States. President Bush 

created the North Korean Refugee Act which allowed for North Koreans to reside here in the United States. There are about 250 of 

them. Most of them just want to get an education, they want to get 

a job, but in the end, I think they could play a very important role 

in terms of the future of the country. 

What we don’t have in the case of North Korea that you had in 

South Africa, also, was this broad non-governmental movement. I 

remember, you know, divest campaigns on my college campus——

Ms. BASS. Right, sure. 

Mr. CHA [continuing]. At that time, and so there are smaller 

North Korean human rights groups on college campuses, but they 

haven’t been mobilized in the same way as we saw in the divest 

campaign. 

Ms. BASS. You know, the other thing, too, of course, that was—

that existed in South Africa was what was going on internally in 

South Africa. And we’ve got lots of news about that. And, you 

know, I think that’s one of the things that’s the most challenging 

about North Korea, is that who knows what goes on? And I don’t 

know if there’s any other efforts. I mean, every now and then you 

62

hear about a journalist that goes, you know, underground and we 

get some information, but I think that’s the other challenge. I don’t 

know if you know of any organized efforts? 

Mr. CHA. Well, I think probably the most important efforts we’ve 

seen thus far that are organized and more systematic have been 

the effort to get foreign radio broadcasting into North Korea; Voice 

of America, Radio Free Asia, BBC now is planning to do this. 

That’s something where the Congress has a role in terms of appropriating funds as part of the reauthorization of the North Korean 

Human Rights Act. There’s opportunities there for increasing resources for getting more information into the country. 

The North Korean people, if you give them a sliver of daylight, 

they will go right for it because they’re no different than the industrializing and affluent South Koreans on the other side of the border that had their opportunity. So information is a very important 

part of this overall equation. 

Ms. BASS. Thank you. And, Dr. Terry, when one of my colleagues 

was asking you a question about whether or not the leader of 

North Korea could machine gun down his population, you seemed 

as though you wanted to add something, and you weren’t able to 

finish your sentence. And I just wonder if that would be connected 

to like the anti-market measures where there was protests in 

North Korea, and people were shot down? But I was wondering 

what you were going to say. 

Ms. TERRY. Yes. I mean, that’s true, too, but what I was going 

to say is that actually the corruption level is very high, because 

loyalty is now something that’s more of a question. I do think even 

with the security forces you hear a lot of stories, anecdotes about 

how they’re bribed, everybody can bribe them, even if they catch 

North Koreans watching DVDs and so on, you can just bribe them. 

And to leave North Korea, often it’s the way, you bribe the soldiers 

and security guards and get out. So even at that level, you know—

I mentioned elite support is one of the key pillars of stability. Another pillar of stability is the loyalty of security services and these 

men, and I feel that even that pillar has been eroding for some 

time because of a high level of corruption. 

And if I could just answer your—what Victor mentioned about 

human rights awareness internationally. I think this is a very important point. North Korea is one of the world’s worst human 

rights violator, and there’s not enough international attention 

that’s been paid to this. One of our colleagues, a professor from 

Tuft’s University, just wrote a piece in Foreign Affairs talking 

about how maybe it’s time for President Trump to publicly call for 

North Korea to shut down, for example, its prison camps where 

they house up to 120,000 political prisoners that’s separate from 

regular criminal penal system. But I absolutely agree with Victor’s 

statement that there needs to be more of international awareness 

in terms of North Korea’s human rights violations. Thank you. 

Chairman ROYCE. Mr. Yoho, chairman of the Subcommittee on 

Asia. 

Mr. YOHO. Thank you, sir. Appreciate you all being here. 

And I really appreciate my colleague, Mr. Sherman, bringing up 

the compare and contrast between South Africa and North Korea, 

and how they gave up their weapons system. But what I saw there 

63

was a world community coming together, putting sanctions on 

there, and the desire to get away from that, because they were 

going broke. They couldn’t tolerate that any longer. And I think 

we’re all in agreement that that’s a good thing. 

When I look at North Korea, we see somebody that’s been rattling their saber for a long time, and they’re getting closer to developing a long range ICBM capable of carrying a miniaturized nuclear weapon is what everybody is pretty much in agreement, possibly a hydrogen bomb that would do mass destruction anywhere 

it even got close to. 

And with China involved with the sanctions, the thing that perplexes me, I don’t think anybody in the world thinks North Korea 

with this kind of technology is good. Do they? I mean, nobody does. 

Right? So, therefore, why is China not putting more pressure, and/

or Iran, and/or Russia? Is there—I don’t want to be a—is the—do 

more harm to us, you know? And we’re in a world economy, this 

would disrupt the whole world, and I would think everybody would 

come together. 

And so my question is, if you can answer, kind of allude and enlighten me on that, but the question is, how do we get China and 

other nations to stick to the agreement? Ambassador, if you’d start. 

Ambassador GALLUCCI. I think the conventional wisdom on the 

Chinese view here is probably correct, and the conventional wisdom 

is that there are things about North Korea, of course, that trouble 

China greatly, and they are reported to be very unhappy with Kim 

Jong Un at various times. But at the end of the day, they do not 

take the role that we would like them to take in support of sanctions and, obviously, even undercut those sanctions. They do so because the very thing we’re hoping to do, which is have a sanctions 

regime that bites in Pyongyang, is something that the Chinese 

worry about; namely, sanctions that would bite so much that it 

would destabilize the regime. What the Chinese fear more than a 

North Korean nuclear weapons program, that could be provocative 

to the United States and the rest of the world, what they fear more 

is instability and collapse. It’s an economically-based fear about 

what that would mean in refugee flows, but what it might also 

mean in terms of the U.S. military presence, and the problems that 

they would confront actually literally on their borders. So what the 

Chinese are doing, it seems to me, is behaving as sort of a thermostat here, and making sure that at times when the North Koreans 

are being so provocative they can be reined in. At other times, 

they’re trying to make sure that the sanctions regime and other 

pressure on the North Koreans do not bring about the outcome we 

would like, which is sufficient pressure either to collapse the regime or to bring the regime to the table. I will defer to my——

Mr. YOHO. Let me go onto this because, Dr. Terry, you brought 

this up, as you all have. Getting more messages in there, positive 

messages to the Korean people, because what I see is, if people 

aren’t going to stick to the sanctions, if other countries aren’t, we 

need to bring it from within and empower the North Korean people. And I would think China with the destabilization that North 

Korea is doing going down this route that it is now, would be more 

willing to help us bring that regime change, because I think it 

would be more stabilized. And, you know, your goal is to negotiate 

64

and talk about negotiations, that’s what you do. But I would like 

to hear about your thoughts, Dr. Terry and Mr. Ruggiero, on broadcasting more positive messages in there about bringing the regime—not bring it down, but just telling the alternative that they 

can go to with a freer society. 

Ms. TERRY. First, I would just echo Ambassador Gallucci’s statement that China’s longstanding policy has been no war, no instability, no nukes, and in that order. So it’s not that they are not concerned about denuclearization of North Korea. They care very 

much about that, it’s just that the priorities are flipped. While we 

care about denuclearization first and foremost, they’re worried 

about instability. 

In terms of getting information into North Korea, this is what 

I’ve been advocating. And, again, it’s not only about getting information into North Korea. I think we should also tailor the kind of 

information, and target both elites and the average North Koreans, 

and not also just have information getting in, but being able to find 

some way for people to mobilize. Because again, I mentioned before, that North Koreans have no mechanism where they can organize themselves and mobilize themselves. 

Mr. YOHO. I’m going to cut you off because I’m out of time. 

Ms. TERRY. Sure. 

Mr. YOHO. And I appreciate you all being here, and I look forward to following up with you. 

Chairman ROYCE. Lois Frankel of Florida. 

Ms. FRANKEL. Thank you, Mr. Chair. Here we are. 

Chairman ROYCE. You’re a trooper, Lois, I’ve said it before, and 

great on these codels, too. 

Ms. FRANKEL. Thank you, Mr. Chairman. That you to the panel. 

This has been a very confusing hearing because I’m hearing different things from sanctions, no sanctions, negotiate, unify. So I’ll 

ask a couple of questions. 

First is, what if any implications does this what seems to be an 

instability right now in the South Korean Government with the 

corruption—I don’t know whether it’s corruption or not corruption, 

but whatever it is—I’m particularly interested if you think that has 

any effect on all this. And, especially, I guess, Dr. Terry, you talked 

about unification. I was assuming you meant unification with 

South Korea. Is that correct? 

Ms. TERRY. Unification and—I mean, South Korean-led unification. So a unified Korea would look like a much larger South 

Korea. 

I think it does have a lot of implications for us because, as you 

mentioned, President Park is waiting right now for Constitutional 

Court’s decision on upholding impeachment, and the new election 

could come sooner rather than later. And former U.N. SecretaryGeneral Ban Ki-moon has dropped out of the race, and now it looks 

like a progressive could take over the Blue House most definitely 

this year, but sooner than December. 

The one issue—it’s not that I personally have an issue with a 

progressive government in South Korea—but one concern that I 

have is that we might see a potential divergence in policy in terms 

of dealing with North Korea from Washington and Seoul. And one 

of the key important things I think in terms of dealing with North 

65

Korea is having a very tight bilateral coordination between Washington and Seoul and trilateral coordination between Washington, 

Seoul, and Tokyo. So my concern is that the new South Korean 

Government may pursue policies that’s different from what we 

would like. 

Ms. FRANKEL. Could you explain that? 

Ms. TERRY. Meaning, a progressive government and leading candidate right now, Mr. Moon Jae-in is pro inter-Korea relations, engagement, more conciliatory gesture toward South Korea, and 

other progressive candidates have similar views on North Korea. 

Some of them have even gone as far as to say they want to postpone THAAD deployment. One or two candidates talked about reopening Kaesong Industrial Complex, a joint venture that North 

Korea and South Korea had, so these kind of policies will be something that we would not be pursuing. So this is a risk that Washington has to, obviously, consider. But regardless, it’s extremely 

critical that Washington, Seoul, and Tokyo have a close coordination when it comes to North Korea policy. There should be no daylight when it comes to our North Korea approach. Thank you. 

Ms. FRANKEL. So I know this would be very hard to predict, but 

the new administration, it seems to me would be against regime 

change or dealing with human rights violations unless they felt 

that it had a direct impact on our national security. I’m guessing. 

I don’t really know. But I would be interested if any of you have 

an opinion as to what, you know, based upon what has been said, 

or speculated that—whether our policies would change? 

Ambassador GALLUCCI. If I might, what I’ve been trying to sell 

this morning is the idea that there’s consistency in the objective of 

addressing the human rights concerns in North Korea and getting 

an improved relationship with North Korea from which one could 

argue they might be willing to give up a nuclear weapons program 

which they see as guaranteeing their security. So if the administration accepted such a line of argument that this was a good way to 

go into a negotiation, then there’s a way to get to our national security through a human rights approach. 

Ms. FRANKEL. Do—anyone else want to make a comment? 

Mr. CHA. So on your question about the situation in South Korea, 

I mean, this is clearly not good for the U.S.-Korea alliance relationship. Secretary Mattis went out to the region and Secretary 

Tillerson spoke with the South Korean Foreign Minister. That’s 

fine and that’s good for now, but those people aren’t going to be in 

position in a few months, and it may be until the fall before the 

South Koreans ever have a government, progressive or conservative 

in power; meanwhile, the world is moving on and the South Koreans are falling behind. So this is a 3-month crisis that is likely to 

extend for at least another 3 months, which is far less than ideal, 

especially if the North Koreans do something over the next 3 

months. 

Ms. FRANKEL. Thank you, Mr. Chair. I yield back. 

Chairman ROYCE. Mr. Perry, General Perry, of Pennsylvania. 

Mr. PERRY. Thank you, Mr. Chairman. 

Dr. Terry, I’ve heard that there’s an idea of a nuclear freeze deal 

or a cap being thrown around in an attempt to deal with the growing threat of North Korea. Could you in any way outline what a 

66

freeze deal would look like and provide your opinion on the likelihood of any such deal stopping North Korea functionally from obtaining a nuclear device capable of striking the Homeland? 

Ms. TERRY. Ambassador Gallucci, you might be able to answer 

this since you’re a negotiator, yourself. 

I really don’t believe in this so called freeze or cap, because my 

personal take is that every single time the deal fell apart over 

verification. And this is why I—you know, I don’t think the Intelligence community even knows where all their undeclared facilities 

are, so what are we freezing? We’re going to just take North Korea’s word for it that they have frozen whatever they say they’re 

going to freeze? 

So it’s a very difficult—this is why I called it a mirage. It sounds 

good in theory, but I think it’s something very hard to execute because it will fall apart over verification. 

Mr. PERRY. Thank you. Ambassador? 

Ambassador GALLUCCI. I think Dr. Terry and I end up in the 

same place, but by a different route. I agree with her that it 

wouldn’t be wise to have as a goal a freeze on North Korean nuclear weapons activity, because I think it would be provocative to 

our allies to legitimize and accept the North Korean nuclear weapons program where it is, rather than try to roll it back. 

Secondly——

Mr. PERRY. So yours is a difference of opinion from the Doctor’s—

hers is on verification. 

Ms. TERRY. No, I actually agree with that, because we are also 

accepting North Korea as a nuclear weapon state which would, obviously, alienate our allies. But I agree with that, it’s just that 

there’s another angle of how do we verify? 

Ambassador GALLUCCI. I don’t disagree that there’s a verification 

issue because there are facilities whose location and existence we 

are uncertain of, so that is plausibly there, too. 

But I want to say that if we were looking at what we do now 

with North Korea, saying that as a first step we’d like no more 

testing of nuclear weapons, no more testing of ballistic missiles, a 

freeze on plutonium production at the reactor we’re aware of, and 

the one centrifuge facility that we could monitor, we’d like not to 

operate, and we call that a freeze, but know there may be other 

facilities. That’s not bad, it’s just not an end game. It’s a step. 

Mr. PERRY. Okay, thank you. 

Mr. Ruggiero, can you talk about the collaboration between 

North Korea, Iran, and China on not only things nuclear, but ballistic missiles, and weaponry, or accouterments, if I will, of that 

sort? 

Mr. RUGGIERO. Sure. Iran and North Korea have a longstanding 

ballistic missile relationship, and it has been for over a decade at 

least. The Treasury Department last week acted against Chinese 

nationals inside China working with the Iranian missile program. 

I’ve detailed both in my written testimony about how there are 

Chinese nationals and Chinese companies that are assisting North 

Korea, both in the processing of the U.S. dollar transactions, but 

then also acquiring parts for their ballistic missile program. 

I also wanted to point out that when I talk about how we should 

approach China with regard to their financial system, that we 

67

should take maybe a page from the Iran play book where about 10 

years ago we found that financial institutions were more interested 

in some of the restrictions that we wanted to put in place, the sort 

of choice that the chairman asked about: It’s either us or them. 

And I fully expect that the Chinese Government will not be on 

board with that, but I think that Chinese and foreign financial institutions inside China are happy to make that choice, and they 

will not choose North Korea. 

Mr. PERRY. And do you think that will be potentially effective in 

curbing the sale or the transfer of the technology, the implements, 

et cetera? Isn’t it also if the stuff is confiscated over the ocean or 

at the port, it would be deemed as illegal at that point, as well, 

wouldn’t it? 

Mr. RUGGIERO. Sure. I think in the sort of seas and the interdiction provisions that I think you’re referencing in the resolutions, I 

would call for the United States and our close allies to have a robust definition of what those U.N. Security Council resolutions look 

like and should be. I mean, it’s hard to predict in the North Korea 

space as other spaces, but I guess my point on the statistics is that 

if we had a doubling of sanctions, which we did over the last year, 

it suggests to me—and that most of those, 88 percent of those are 

inside of North Korea, perhaps we’re doing it the wrong way. And 

if we started, as I said, with the myths—in my written testimony, 

if we started to do it the right way, in a sustained way, then maybe 

we would get to the change in the calculus for North Korea. 

Mr. PERRY. Thank you. Mr. Chairman, I yield. 

Chairman ROYCE. We go to Mr. Ted Lieu, Colonel Ted Lieu of 

California. 

Mr. LIEU. And thank you for the panel for being here. 

Last year, I had the opportunity to go to South Korea on a bipartisan delegation with Chairman Royce and others where we received threat assessments on North Korea. We visited the DMZ 

and met with our war fighters. And one of the issues that struck 

me is the continuing advances in ballistic missile technology by 

North Korea. And I do believe sooner rather than later they will 

develop an ICBM that can strike Alaska, or Hawaii, or California. 

And as you know, the THAAD missile system hits missiles on 

their way down, so a THAAD missile system in South Korea 

wouldn’t actually do anything to protect the U.S. Homeland from 

such a launch. 

What is your view on airborne lasers? So we used to, as you 

know, have an airborne laser program. It was quite expensive at 

the time, but it did meet its requirements. It was scrapped because 

it was too expensive, and Secretary Gates when he said why he 

didn’t want it, said you had to get, for example, in Iran within its 

own air space to shoot down these sites. 

North Korea is geographically quite different. It is much smaller. 

You could, in fact, have airborne assets that get quite close. With 

new advancements in laser technology, is this something we should 

be investing more in? And I want to get your thoughts. Anyone can 

answer. 

Ambassador GALLUCCI. I’m going to take the question, sir, as 

that opportunity to say that we ought to be careful about what 

we’re advocating when we advocate for THAAD. I think we ought 

68

to advocate for THAAD, but we ought to understand the limits of 

that system within the layer of defense that we are deploying in 

Northeast Asia. And if you take THAAD and the AEGIS system 

and the terminal phase patriot, Patriot III, we have systems there 

that really are not going to protect us against the kind of missile, 

not with any kind of confidence, anyway, that we’re talking about 

and that most people are concerned about right now; namely, a 

missile of ICBM range and reentry vehicles velocities. The geography, the orientation of the launch, none of this makes much 

sense. 

You raise particularly the airborne laser, and I think the appeal 

of that, people who think about ballistic missile defense, is that 

that’s a launch phase intercept, and if you had a launch phase 

intercept one doesn’t worry about decoys, doesn’t worry about numbers of missiles to deal with in the radar at one particular time. 

It has many advantages. 

My appreciation of that issue is that there are enormous numbers of technical challenges of keeping a laser on target, of being, 

as you say, geographically proximate to the launch, and these are 

not trivial. I have really no idea whether we have looked hard at 

the application for North Korea, but I wouldn’t see it as a near 

term solution, in any event. 

Mr. LIEU. Well, the reason I’m asking is, they don’t have a near 

term ICBM that can strike the U.S. Homeland, but it seems like 

we ought to invest in defenses that potentially could stop one of 

those launches, because it’s not clear to me that there’s any other 

way to stop their advancements in ICBM technology. 

Ambassador GALLUCCI. I think if we put our energy into ballistic 

missile defense to deal with the North Korea case, the North Korea 

case will advance much more quickly. The offense-defense competition, much favors North Korea over us. And this is not an argument against ballistic missile defense. I think our continuing efforts here are worthwhile, but I think we need to think this 

through without depending upon an ability to shoot down a North 

Korean ICBM. 

Mr. LIEU. Okay, thank you. Anybody else have any other 

thoughts on that, or do you agree with that testimony? 

Mr. CHA. I think Ambassador Gallucci’s response really covered 

what I wanted to say. 

The only thing I would add is that this is where the previous discussion about a freeze and a cap become important, because that 

would at least become a platform from which you could start to retard the growth of the program. So I don’t have any problem with 

a freeze or a cap, but the problem that I have is paying for it, because in the past two agreements we paid for it, and we paid nearly $1⁄2 billion if you put the two agreements together to freeze their 

program, which they eventually broke. And for some reason, I just 

don’t think this White House is going to be willing to pay for a 

freeze. 

Mr. LIEU. Thank you. Let me just give you one more concluding 

thought. 

I agree that there’s technological challenges. I think there is also 

some usefulness if there’s a threat, the U.S. could do this. If there’s 

69

a system that might work, that even gives us more leverage than 

we do now, which is we don’t really have a system. 

And with that, thank you for being here. 

Chairman ROYCE. It was leverage we used with the former Soviet regime, that tactic, that strategy. 

We go to Ambassador Wagner. 

Mrs. WAGNER. I thank the chairman very much, and I thank you 

all for being here with us today. 

While the effects of the 2016 sanctions cannot yet be fully determined, it is clear that to date global sanctions efforts in combination with the Obama administration’s policy of strategic patience 

failed to disrupt growth of the North Korean economy or to advance denuclearization. 

Jim Walsh and John Park’s research convincingly argues that 

North Korea has successfully innovated around sanctions. Clearly, 

there is much work to be done on gathering intelligence about 

North Korea, engaging China, encouraging corporate compliance 

with sanctions, and seriously considering, I believe, secondary sanctions. But for North Korea to give up its nuclear program, the regime must feel that denuclearization—a denuclearized, I should 

say, North Korea with good U.S. relations would be superior to a 

nuclearized North Korea with bad U.S. relations. 

Given new political realities in South Korea and the United 

States, and Prime Minister Abe’s longtime interest in the abduction 

issue, we should also seriously consider, I think, trilateral diplomatic efforts. 

Ambassador Gallucci, could you please discuss the strategic validity of reestablishing official in-country engagement either 

through engagement on retrieving POW MIA’s remains, or through 

projects on agriculture, public health, education, or even weather 

forecast technology? 

Ambassador GALLUCCI. Thank you very much for the question. 

I think those sorts of things that increase the contact, and one 

sums it up and says the engagement with Pyongyang, are generally 

thought to be a good idea if they’re going someplace. And if we 

didn’t have an overwhelming security threat from North Korea, we 

could say well, we need an improvement in relations, this will improve relations. But as we move along, this is not fine wine; it 

doesn’t get better with the passage of time. The threat increases, 

the threat of transfer, the threat of war, the threat of a ballistic 

missile capability that reaches us. So that what you have mentioned are the kinds of things which fit in terms of an overall strategy if we had one. In other words, if we were engaged with the 

North, and we were trying to persuade them exactly as you said 

it, that they would be better off not being in an adversarial relationship with us. They wouldn’t have to worry about us launching 

an effort at regime change. They could count on us. Then, okay, I 

think this all makes sense. 

Mrs. WAGNER. Dr. Cha, you wrote briefly about engaging with 

North Korea on nuclear safety. I believe with the right sequencing 

there could eventually be room for multilateral exchange here. 

Would nuclear safety talks be prohibited by current U.N. sanctions? 

70

Mr. CHA. I don’t have the specific answer to that, but I think 

they might be. Yes. 

Mrs. WAGNER. Well, under that circumstance would you recommend dismantling those prohibitions to establish nuclear safety 

talks with North Korea? 

Mr. CHA. Well, I think there’s another way to approach it, Congresswoman, which is to do it at the Track II level, experts talks 

which could be useful. I mean, this is a program that is growing 

quickly and has not had any sort of international inspection for 

over a decade. And if they run the nuclear program like they run 

the rest of the country, they do cut corners on things. And so 

some—at the expert level, I think that might be one way to address 

the issue. 

Mrs. WAGNER. My limited time now, Mr. Ruggiero, could you 

quickly discuss economic ties between North Korea and our Southeast Asian partners like Vietnam, and Thailand? How can the U.N. 

and U.S. better track trade numbers, and should the U.S. be applying more pressure to these countries? 

Mr. RUGGIERO. Sure. I’m happy to address that. I would also 

mention that in the training and technical provisions of the 

UNSCRs there’s an ability for the committee to approve certain; so 

if there is a restriction with the U.N.——

Mrs. WAGNER. Good. 

Mr. RUGGIERO. So I don’t think you have to get rid of them completely. But I would raise the point, the U.N. Panel of Experts has 

talked about the lack of implementation reports with regard to 

their U.N. resolutions, and I think Southeast Asia is one area. 

There are other areas; there are some, I believe it’s 90 countries 

that have never reported on their implementation with regard to 

the resolution, North Korea-related resolution, so that’s an area 

really where the United States can lead and get those countries——

Mrs. WAGNER. And we need to. I think the numbers would be astounding and have better tracking of these trade numbers, et 

cetera, is important. We’ve got to apply more pressure to make 

sure that that happens. 

I believe I’m over my time. I thank the chairman for his indulgence, and I thank you all very, very much. 

Chairman ROYCE. I thank the gentlelady. I think this concludes 

our committee hearing. 

I would make the observation that we really appreciate the battery of witnesses that have come before us today, and we probably 

will continue to be engaged with all of you as we try to wrestle 

with this. And given the nature of this threat described today, it’s 

not that surprising that in the meeting between President Obama 

and President Trump, President Obama conveyed the thought that 

the number one threat to the United States was going to be North 

Korea. 

And I think, fortunately, this committee has provided the administration some powerful authorities to deploy in this circumstance, 

and I think our witnesses argued very powerfully that there is a 

number of things that can be done on this front that would be helpful. And we look forward to continuing to work with you as we 

move forward. Thank you, again. 

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We are adjourned. 

[Whereupon, at 12:07 p.m., the committee was adjourned.] 

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