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24–751PDF 2017

PRESSURING NORTH KOREA:

EVALUATING OPTIONS

HEARING

BEFORE THE

SUBCOMMITTEE ON ASIA AND THE PACIFIC

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTEENTH CONGRESS

FIRST SESSION

MARCH 21, 2017

Serial No. 115–12

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 

SUBCOMMITTEE ON ASIA AND THE PACIFIC

TED S. YOHO, Florida, Chairman 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

TOM MARINO, Pennsylvania 

MO BROOKS, Alabama 

SCOTT PERRY, Pennsylvania 

ADAM KINZINGER, Illinois 

ANN WAGNER, Missouri 

BRAD SHERMAN, California 

AMI BERA, California 

DINA TITUS, Nevada 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

TULSI GABBARD, Hawaii 

(III)

C O N T E N T S 

Page

WITNESSES 

Mr. Bruce Klingner, senior research fellow for Northeast Asia, The Heritage 

Foundation ............................................................................................................ 10

Sung-Yoon Lee, Ph.D., Kim Koo-Korea Foundation professor in Korean studies and assistant professor, The Fletcher School of Law and Diplomacy, 

Tufts University ................................................................................................... 26

Mr. Anthony Ruggiero, senior fellow, Foundation for Defense of Democracies . 38

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Ted S. Yoho, a Representative in Congress from the State 

of Florida, and chairman, Subcommittee on Asia and the Pacific: Prepared 

statement .............................................................................................................. 4

Mr. Bruce Klingner: Prepared statement .............................................................. 12

Sung-Yoon Lee, Ph.D.: Prepared statement .......................................................... 28

Mr. Anthony Ruggiero: Prepared statement ......................................................... 40

APPENDIX 

Hearing notice .......................................................................................................... 66

Hearing minutes ...................................................................................................... 67

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

Commonwealth of Virginia: Prepared statement .............................................. 68

(1)

PRESSURING NORTH KOREA:

EVALUATING OPTIONS 

TUESDAY, MARCH 21, 2017

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON ASIA AND THE PACIFIC,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The subcommittee met, pursuant to notice, at 2:07 p.m., in room 

2172, Rayburn House Office Building, Hon. Ted Yoho (chairman of 

the subcommittee) presiding. 

Mr. YOHO. Well, good afternoon, everyone. My thanks to my colleagues and the panel for joining me today to conduct this timely 

and important hearing. We are meeting today during what is probably the most significant shift in U.S. policy toward North Korea 

since it began its illicit nuclear program. The new administration 

has shown a willingness to embrace new thinking on the North 

Korea issue, and my goal for today’s hearing is to discuss ways 

Congress can continue to drive a policy on North Korea that finally 

implements all the tools we have available. 

The subcommittee will come to order. Members present will be 

permitted to submit written statements to be included in the official hearing record. Without objection, the hearing record will remain open for 5 calendar days to allow statements, questions, and 

extraneous materials for the record, subject to length, limitations, 

and the rules. 

Again, I would like to welcome everybody here today. Secretary 

of State Tillerson left the world’s media breathless last week when 

he restated that all options are on the table regarding North Korea, 

implying military options. His next statement that we have had 

many, many steps we can take before we get to that point, received 

less attention, but was really actually more significant. 

This is what I hope to focus on today: The many unused or incompletely implemented tools that we can use before the last resort 

of military action, something none of us would like to see. North 

Korea’s nuclear program has never been a bigger threat, and we 

need to respond with all the tools at our disposal. 

If we can look at the first slide. It is a missile graph. If anything, 

Pyongyang has dramatically accelerated its belligerent behavior, 

conducting two nuclear tests and two dozen missile launches last 

year. Since 2015 Kim Jong Un has tested more missiles than Kim 

Jong Il, his father, and Kim Il Sung, his grandfather, combined, 

while making continued progress toward an ICBM capable of targeting nearly the entire continental U.S. If you look at the second 

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slide, you will see the range of those missiles that they currently 

have. While Secretary Tillerson was visiting China on Sunday, Kim 

Jong Un oversaw a rocket engine test that could contribute to these 

efforts. 

For 20 years, we have responded to every North Korean provocation with either isolation or inducements to negotiate. Our efforts 

to isolate Pyongyang have either been incomplete or hamstrung by 

China. Meanwhile, North Korea has used negotiations to extract 

wealth without ever slowing weapons development. Since 1995, we 

have provided $1.3 billion in economic and humanitarian assistance to North Korea, and weapons development has only accelerated. As Secretary Tillerson stated during his trip to the region last 

week, this is 20 years of failed approaches. 

The Obama administration’s strategic patience was a low-effort 

strategy, taking some measures to isolate North Korea, and then 

simply waiting for the Kim Jong Un regime to wake up and give 

away his nuclear weapons. Certainly, there is plenty of blame to 

go around, if we are looking at George Bush taking North Korea 

off the State Sponsors of Terrorism record, or the Clinton administration allowing North Korea to even start a nuclear program, although it was deemed for peaceful purposes, we saw they strayed 

from that. 

This ineffective approach has gotten us no closer to a denuclearized peninsula. A more forward leaning North Korea policy 

will require more effort and resolve, as we have seen passivity fail 

time and again. It takes time. It takes time for these threats—and 

take the threat seriously and use our entire toolbox. 

Congress can be important in this work, and we have to ensure 

that the things that we set forward, we follow through on. We have 

to ensure continued robust support for injecting outside information into North Korea to encourage defection and expose Kim’s 

propaganda. Thae Yong-Ho, the highest ranking North Korean defector in decades, recently said this was the best way to force 

change in North Korea. 

This committee has also done important work in increasing financial pressure on the regime, and I look forward to continuing 

our work on the sanctions this Congress. 

We should also re-list North Korea as a State Sponsor of Terrorism in light of its long history of horrific crimes, most recently, 

the assassination of Kim Jong Nam with the VX nerve agent in 

Malaysia. 

The administration must also start using its secondary sanctions 

authority against the Chinese entities that have allowed for North 

Korea’s continued weapons development. China accounts for 90 

percent of North Korea’s economic activity. The failed policies of 

the past assumed that if the United States did not anger China, 

China would help promote de-nuclearization. It is time to stop pretending that China’s North Korea policy is motivated by anything 

else than extreme self-interest of China. China has benefited from 

undermining sanctions and tolerating North Korea’s nuclear belligerence. North Korea’s missiles are not aimed at China, and the 

growing security challenge is an excellent distraction from China’s 

own illicit activities. 

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I have been heartened to see both Secretary Mattis and Tillerson 

reaffirm our critical alliance with the Republic of Korea and Japan. 

Our officials also rightly continue to reject proposals that we halt 

military exercise with South Korea to bring North Korea to negotiations. 

China’s retaliation against South Korea over the deployment of 

THAAD is also unacceptable. THAAD is solely oriented toward the 

defense of South Korea. China should address the threat that 

makes that necessary rather than interfering with our security cooperation. 

It is encouraging to hear that the administration will not make 

further concessions to hold talks or to negotiate a weapons freeze 

that leaves North Korea’s threat in place. SWIFT’s recent decision 

to finally cut off the remaining North Korean banks from its financial messaging service has also been a welcome development. 

I am looking forward to help build a stronger, more complete 

North Korea policy, and look forward to hearing from our panel on 

these developments and options. Without objections, the witnesses’ 

written statements will be entered into the hearing. 

I now turn to the ranking member for any remarks he may have. 

[The prepared statement of Mr. Yoho follows:]

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Mr. SHERMAN. Thank you, Chairman Yoho. I want to thank you 

for holding these hearings in light of North Korea testing of missiles in March and February of this year, with missiles landing in 

Japan’s exclusive economic zone. I join with you in believing that, 

certainly, North Korea ought to be listed as a State Sponsor of Terrorism, not only because its actions threaten the United States, but 

because of the assassination in Malaysia and the continuing terrorism, having kidnapped Japanese civilians and held them to this 

day. It is not an act of terrorism just when you do the kidnapping; 

it is an act of terrorism every day you hold the victim, or perhaps, 

in some cases, the body of the victim if they have expired. 

The last time we held this hearing was just a few months ago 

in September. North Korea had just conducted its fifth and largest 

nuclear weapons test. Kim Jong Un’s intentions are clear: He 

wants to be able to be accepted as a world nuclear power capable 

of threatening the United States. 

A February 27 report from the U.N. Panel of Experts on North 

Korea to the U.N. Security Council detailed the regime’s flouting 

of sanctions by trading in prohibited goods and by using evasion 

techniques. The Panel of Experts’ report also highlighted that 

North Korean banks, including designated banks or correspondent 

or pay-through accounts with foreign banks, foreign joint ventures 

with foreign companies maintain representative offices abroad, and 

that trading companies linked to North Korea, including designated entities, open bank accounts that perform the same financial services as banks. 

All of these issues need to be addressed, but we need to approach 

the problem of North Korea with both a clinched fist and an open 

hand. Our Secretary of State says all options are on the table. I 

don’t think the military option is on the table. I think, to some extent, his statement distracts us from the actions that we really 

need to take, actions that Wall Street will not like. At the same 

time, we need to put all options on the table in terms of the concessions that we are willing to make, or reasonable concessions, at 

least, in order to secure a binding and verifiable freeze and rollback 

of North Korea’s nuclear missile programs. 

We need our partners and allies. Whatever government emerges 

in South Korea should not reopen the Kaesong plant, because when 

North Korea can sell slave labor, whether it does so on the Korean 

Peninsula or in Malaysia, where there are 1,000, I guess they don’t 

call them slaves, but indentured workers, whose earnings go to 

Kim Jong Un, when that happens, not only do we violate labor 

standards, but we enrich the regime. 

As to China, our efforts have not been enough to change China’s 

cooperation with North Korea. China accounts for 90 percent of 

North Korea’s legitimate trade, 95 percent of its foreign direct investment. It is North Korea’s lifeline. China recently cut off purchases of North Korean coal. There is more there than meets the 

eye. China may have already reached its quota under U.N. Security 

Council resolution, which limits the amount of coal that it can purchase in any year. 

China fully understands what is the Wall Street policy here: 

Make a lot of noise, pound the table, sanction a few companies, but 

don’t interrupt the huge exports of China to the United States; do 

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nothing that really forces China to change its policy, but pound the 

table loud enough so that you cannot be accused of being weak. 

Strength is not proven by volume. Strength is proven by success. 

We are not going to be successful in changing China’s policy until 

we are willing to put a tariff on all Chinese, or virtually all Chinese, exports to the United States. Wall Street doesn’t want us to 

do it, therefore, we won’t do it. Therefore, the real objective of the 

Trump administration is to yell loudly, call that strength, and not 

actually do anything that would upset Wall Street or be effective. 

One more area I think we can be effective is in deterring 

Pyongyang from selling nuclear missile material or completed 

weapons to terrorist organizations or to Iran. This starts with 

reaching an agreement with China that at least they should not 

allow overflights of their territory from Iran to Pyongyang, unless 

those flights stop for inspection or refueling, which would include 

inspection, in China. If China is allowing planes to connect Iran 

and North Korea, cash can be going in one direction, missile material in the other, and China has to be held responsible. 

The North Korean Human Rights Act is set to expire. We need 

to reauthorize it this year. 

Yes, we have had 20 years of failure, 20 years in which we have 

refused to make any concession, not even a nonaggression pact, 

and therefore, we can seem strong while accomplishing nothing. I 

suspect that that is the policy that we will continue, and that we 

will be back in this room next year and the year after, and the only 

difference is the latest North Korean provocation will be a missile 

that flew further or a nuclear stockpile that is larger. I regret that 

I believe we will be in this room within a few years to talk about 

not atomic, but hydrogen nuclear weapons. 

Mr. YOHO. Let’s hope not. And that is the purpose of this meeting, so that we can help draft those. 

Mr. SHERMAN. I hope so. I yield back. 

Mr. YOHO. We are going to go now to members. We each get a 

minute, and we are going to hold you to that so that we can get 

on with that. We first go to Dana Rohrabacher. 

Mr. ROHRABACHER. Okay. It is time to get tough with Korea, 

right? North Korea, however, shouldn’t be mistaken, when we get 

tough with North Korea, that we are getting tough with the North 

Korean people. North Korean people are subjugated people. They 

are kept in place by a bloody tyranny. And whatever we do, it 

should be aimed at the leadership in North Korea, and not the people of North Korea. 

So, in fact, we should look at the people of North Korea as potential allies, our greatest potential allies in bringing about what 

needs to be brought about to have a more peaceful and secure 

world. Our goal should be the removal of this wacko regime that 

is just—that now is threatening the world as it develops its nuclear 

capability. Let us not forget that the Chinese have had the most 

influence of anyone. They could have stopped this a long time ago. 

So I suggest we look at banking, I suggest we look at other ways 

of putting the pressure directly on the North Korean leadership 

and make sure that our Chinese friends know they are accountable 

for what happens. 

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Mr. YOHO. Thank you, Mr. Rohrabacher. We are going to go to 

another Californian, Dr. Ami Bera. 

Mr. BERA. Thank you, Mr. Chairman. Thanks for having this 

hearing. 

Obviously, the North Korean dilemma isn’t one administration or 

another administration. As complicated as it was in the Obama administration, it is probably a bit more complicated now as they continue to move forward. 

I think the first step is to reassure our allies in the region, the 

Republic of Korea and Japan, that our commitment to the region, 

our commitment to the defense of the region has not wavered. I 

think that is important for the North Koreans to understand we 

are not wavering in our commitment. 

I do look forward to the testimony of the witnesses. I look forward to how we move forward, but, again, provocation on North 

Korea’s part is not a way to start a dialogue or start a path toward 

de-nuclearization or stability on the peninsula. This starts with 

dialogue and standing down. Again, our commitment is unwavering. 

I will yield back. 

Mr. YOHO. Thank you, Doctor. We will next go to Steve Chabot 

from Ohio. 

Mr. CHABOT. Thank you, Mr. Chairman. Thanks for holding this 

hearing. 

Days ago, North Korea touted the successful test of its new high 

thrust rocket engine. If this test was, in fact, successful, it would 

underscore North Korea’s growing nuclear delivery capabilities. 

Unfortunately, this does not come as a surprise, considering the 

rogue state’s relentless pursuit of nuclear armament. 

I am deeply concerned that this test confirms, yet again, that 

North Korea is making significant advances in its nuclear weapon 

technology. Other reports indicate that North Korea continues to 

make technological advancements in its delivery systems, and that 

it will soon be able to strike the United States. 

Now, considering the uncertainty of the political situation in 

South Korea and our new leadership here in the United States, it 

is important that Congress and the new Trump administration 

work together to come up with a coherent strategy. 

Let there be no mistake: If North Korea attains the ability to 

reach American soil with a nuclear device, our Government will 

have failed the American people. 

I yield back. 

Mr. YOHO. Thank you, sir. We will next go to Ms. Tulsi Gabbard 

from the State of Hawaii. 

Ms. GABBARD. Thank you very much, Mr. Chairman. Thank you, 

gentlemen, for being here. 

I represent a State that falls directly within North Korea’s range 

of their current intercontinental ballistic missile capabilities, and 

obviously, the people of my district in Hawaii view North Korea’s 

increased capabilities as a direct threat to the people of our State, 

as it is a direct threat to our country. 

Obviously, the current strategy that has been deployed for so 

long toward North Korea has been ineffective, both in achieving a 

de-nuclearized North Korea, but also in putting a halt on their 

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ever-increasing capabilities. This is something that we hear often 

by those who come and speak to us, a clear identification of the 

problem and the imminent threat it poses, but very few people 

have constructive solutions. So I am looking forward to hearing 

your comments, and hope that you can offer some ideas on how our 

current strategy should be changed. Thank you. 

Mr. YOHO. I appreciate your words. Next, we will go to Mrs. Ann 

Wagner from Missouri. 

Mrs. WAGNER. Thank you, Mr. Chairman. 

With a new administration in the White House, and South Korean Presidential elections scheduled for May, figuring out how the 

new U.S. and ROK administrations can act as harmoniously as 

possible in addressing the North Korean threat is certainly the 

question of the hour. 

Recently, former Director of National Intelligence James Clapper 

said that convincing North Korea to give up its nuclear arms is a 

‘‘lost cause.’’ But the Obama administration’s policies of strategic 

patience that have allowed the Kim regime to prosper is now over. 

And as has been stated here earlier, Secretary Tillerson says that 

all options are back on the table. 

Whether we can roll back the damage of the international failure 

to temper the Kim regime depends largely on whether we choose 

to understand North Korea’s intentions, and develop an intelligible 

strategy in response. I look forward to hearing your testimonies 

and engaging on this issue. 

And I thank you, Mr. Chairman. 

Mr. YOHO. We thank you. 

Next, we are going to go to our witnesses today, but before we 

start, Mr. Klingner, I had the opportunity to sit with you the other 

day. And, you know, I feel very strongly about that, that the information we will hear from you guys today will go into policies that 

we are going to direct at the State Department, to the White 

House, so that as my ranking member here, Mr. Sherman, said, we 

don’t have to have this talk again. I know you guys are tired of 

having the talk over and over again. So we want to have very concise language that we can take, and go to the administration to redirect this foreign policy so that we can bring the threat of the nuclear weapons—take it away. 

So, we are thankful today to be joined by Mr. Bruce Klingner, 

senior research fellow for Northeast Asia at the Heritage Foundation; Dr. Sung-Yoon Lee, Kim Koo-Korea Foundation professor in 

Korean studies and assistant professor at Tufts University, The 

Fletcher Law School and Diplomacy; and Mr. Anthony Ruggiero, 

senior fellow at the Foundation for Defense of Democracies. 

We thank the panel for joining us today to share their experience 

and your expertise, and I look forward to your comments. We are 

going to—if you would, stay with the timer, 5 minutes, don’t forget 

to push the talk button. And you will hear me kind of rattle the 

gavel little bit if you go over that. We look forward to getting onto 

the questions. 

So, Mr. Klingner, if you would start. Thank you. 

10

STATEMENT OF MR. BRUCE KLINGNER, SENIOR RESEARCH 

FELLOW FOR NORTHEAST ASIA, THE HERITAGE FOUNDATION 

Mr. KLINGNER. Thank you, Chairman Yoho, Ranking Member 

Sherman, and distinguished members of the panel. It is truly an 

honor to be asked to appear before you again. 

The security situation on the Korean Peninsula is dire and worsening. There is a disturbingly long list of reasons to be pessimistic 

about maintaining peace and stability in Northeast Asia. 

In response, some experts advocate negotiating a nuclear freeze, 

but a premature return to talks would be another case of ‘‘abandon 

hope, all ye who enter here.’’ Would the ninth time be the charm? 

Pyongyang signed four previous agreements never to develop nuclear weapons, and once caught with their hand in the nuclear 

cookie jar, four subsequent promises to abandon those weapons. 

And a record of 0-for-8 does not instill a strong sense of confidence 

about any future attempts of negotiation. 

During the decades of negotiation, the U.S. and its allies offered 

economic benefits, developmental and humanitarian assistance, 

diplomatic recognition, declarations of nonhostility, and turning a 

blind eye to violations and nonimplementation of U.S. law. All 

failed. Seoul has signed 240 inter-Korean agreements and participated in large joint economic ventures at Kaesong and 

Kumgangsan. All of these failed to induce Pyongyang to begin to 

comply with its de-nuclearization pledges, moderate its belligerent 

behavior, or implement economic or political reform. 

Moreover, it is difficult to have dialogue with a country that 

shuns it. It was North Korea that closed the New York Channel 

in July 2016, severing the last official communication link; they 

walked away from inter-Korean dialogue; and even refuses to answer the phone in the Joint Security Area which straddles the 

DMZ. 

And the freeze proposals all call for yet more concessions by the 

U.S. and its allies in return for North Korea to begin—to undertake a portion of what it has already obligated to do under U.N. 

resolutions. The strongest case against diplomacy can be found in 

the regime’s own words, in which the highest levels of the regime, 

including Kim Jong Un, have repeatedly and unambiguously made 

clear they will never abandon their ‘‘treasured sword’’ of nuclear 

weapons, as well as that the Six-Party Talks are dead and ‘‘null 

and void.’’ Hope is a poor reason to ignore a consistent track record 

of failure. 

And there are consequences of a bad agreement. A freeze would 

undermine the nonproliferation treaty and send the wrong signal 

to nuclear aspirants like Iran, that the path is open to nuclear 

weapons. Doing so would sacrifice one arms control agreement on 

the altar of expediency to get another. 

Instead, there is now an international consensus on the need to 

punish and pressure North Korea for its repeated violations. Increased financial sanctions, combined with the increasing pariah 

status of the regime from its human rights violations, have led nations and companies to sever their business relationships with 

North Korea, curtail North Korean overseas workers visas, and reduce the flow of hard currency to the regime. I have included a 

lengthy list of these actions in my written testimony. 

11

Cumulatively, these efforts reduce North Korea’s foreign revenue 

sources, they increase strains on the regime, and generate internal 

pressure. North Korean overseas financial operations are suffering. 

The U.S. has had all the authorities it needs. It has just lacked 

the political will to go beyond timid incrementalism in enforcing 

our laws. 

Now is also the time to break some China. The U.S. should stop 

pulling its punches, and go where the evidence takes it. The North 

Korea Sanctions and Policy Enhancement Act mandates secondary 

sanctions on third country, including China, whose banks and companies that violate U.N. sanctions and U.S. laws. 

Other measures that I will mention just briefly, but cover in 

more depth in my written testimony are, as you have already 

pointed out, put North Korea back on the State Sponsors of Terrorism list. Since its removal from the list, Pyongyang has conducted numerous terrorist acts which meet the U.S. legal requirements for being put back on the list. Returning North Korea to the 

list would be a proper and pragmatic recognition of the behavior 

that violates U.S. statutes. It also increases North Korea’s diplomatic and economic isolation for its actions. 

Also, we should designate additional entities for human rights 

abuses. Last year, the U.S. finally imposed sanctions on North Korean leader Kim Jong Un and 15 other entities for their ties to 

North Korea’s atrocious human rights records, which constitute 

crimes against humanity. 

Also, we should improve information access into North Korea. 

Promoting democracy and access to information in North Korea is 

in both the strategic and humanitarian interests of the United 

States. International efforts to penetrate the information firewall 

in North Korea should expand on ongoing efforts with radios, 

DVDs, cell phones, and thumb drives, but also utilize new technology for more innovative ways to get information in and out of 

North Korea. 

In conclusion, Washington must sharpen the choice for North 

Korea by raising the risk and the costs for its actions, as well as 

for those, particularly Beijing, who have been willing to facilitate 

the regime’s prohibited programs and illicit activities and condone 

its human rights violations. 

Sanctions require time and political will to maintain them in 

order to work. We must approach sanctions pressures and isolation 

in a sustained and comprehensive way. It is a policy of a slow 

python constriction rather than a rapid cobra strike. 

Thank you, again, for the privilege of appearing before you. 

[The prepared statement of Mr. Klingner follows:]

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Mr. YOHO. Mr. Klingner, I appreciate it. 

Dr. Lee, if you would, please. 

STATEMENT OF SUNG-YOON LEE, PH.D., KIM KOO-KOREA 

FOUNDATION PROFESSOR IN KOREAN STUDIES AND ASSISTANT PROFESSOR, THE FLETCHER SCHOOL OF LAW AND DIPLOMACY, TUFTS UNIVERSITY 

Mr. LEE. Thank you, Mr. Chairman, distinguished members of 

the subcommittee. 

With your permission, I would like to make five points in the following order: First, I would like to mention the mundane, and then 

proceed to comment on the arcane, the inane, the profane, and the 

humane. 

First the mundane. North Korea is a Korean state vying for legitimacy against a far more successful, attractive Korean state. The 

basic internal dynamic in the Korean Peninsula almost dictates 

that North Korea try to maximize its one strategic advantage over 

its neighbor. By the conventional industries of measuring state 

power, military power, political economic power, territorial size, 

soft power, North Korea does not fare very well against its southern neighbor except in the field of—except for military power. 

Therefore, the proposition that through artful diplomacy or a little 

bit of coercion, we can get North Korea to give up its nuclear weapons, as we did vis-a-vis the former Soviet republics of Kazakhstan, 

Belarus, Ukraine that inherited Soviet nukes, or South Africa, this 

is a tall order. It is quite unrealistic, in my opinion. So it is something new—a new approach is imperative at this point. 

The arcane. I think in the wake of North Korea’s third nuclear 

test in February 2013, the new, young Xi Jinping regime was quite 

irate, and they said a lot of things that seemed to please American 

ears in the spring of 2013: ‘‘We are going to put some hurt on 

them. We have finally come around. We are going to punish North 

Korea.’’ This is pure illusion. Historically, North Korea has insulted, defied the top Chinese leaders far more egregiously than in 

2013. Always, the Chinese grit their teeth, increase aid. And, indeed, in 2013, China-North Korea trade increased to $6.5 billion, 

an all-time high. 

May I just give you one example, historical example. In 1982, 

September, Kim Il Sung visited China, met with Deng Xiaoping 

and the top leaders, pleaded with the Chinese leadership to approve the hereditary succession of power from father to son, which 

is a sensitive topic in the communist system, it is a contradiction. 

Then the next summer, Kim Jong Il made a trip personally and 

met with Deng Xiaoping and used Deng Xiaoping as a foil, as a 

smokescreen for his plan to lay a bomb for the visiting South Korean President in Burma in October 1983. 

China, listening to North Korea’s request, conveyed to the 

Reagan administration repeatedly the message that, you can do 

business with these people, you can talk to them, please. Deng 

Xiaoping told the visiting Secretary of Defense, Caspar Weinberger, 

on September 28 that message. That very same day, Deng Xiaoping 

also agreed to give North Korea 20 former Soviet MiG-21-type 

fighter jets. 

27

Now, when the bomb went off on October 9, Deng Xiaoping lost 

face. He was very irate. He said Kim Jong Il will never, as long 

as I live, be able to set his foot on Chinese soil, and he didn’t until 

2000, the year 2000. Yet, Deng Xiaoping honored the agreement to 

provide North Korea with warplanes. 

My point here is China has a strategic interest in the Korean Peninsula that defies moral principles, that defies security interests 

of the United States. 

The profane. I don’t mean North Korea’s propensity to hurl insults at American and South Korean leaders. What I refer to is 

North Korea’s state policy of using food as a weapon, North Korea’s 

policy of mass, deliberate mass starvation, as the U.N. Commission 

of Inquiry of 2014 alleges. This is a very serious allegation. The 

U.N. Commission of Inquiry Report on Human Rights in North 

Korea states that North Korea’s crimes against humanity have ‘‘no 

parallel in the contemporary world.’’ The section on the violation of 

the right to food and other related aspects of the right to life, pages 

144 to 208, merits close reading. 

This is the kind of regime that we are dealing with, a regime 

that enjoys a tremendous advantage of industrialization, urbanization, nearly 100 percent literacy among the population; yet, is 

among the top nations of the world every year, every single year, 

afflicted with serious food insecurity. This is the product of the determined, perverse policy of the state, not U.S. sanctions or climate 

change or poor soil, poor weather, and so forth. 

Lastly, the humane. I think human rights is essential to our policy toward North Korea, because, as I mentioned, starvation, hunger, these are visceral, universal human emotions that can be understood quite easily. It will be very helpful in pushing for more 

human rights operations, information dissemination into North 

Korea so that the world, that the world public opinion changes in 

our favor, and that we name and shame North Korea, and that we 

educate the North Korean people of the true nature of the regime 

and try to invite them to take the risk of crossing the border into 

a free Korean state. 

Thank you. 

[The prepared statement of Mr. Lee follows:]

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Mr. YOHO. Dr. Lee, I appreciate it. And I almost opened announcing you, how poetic and eloquent your writing was, and I 

wished I had. 

Mr. Ruggiero, go ahead. 

STATEMENT OF MR. ANTHONY RUGGIERO, SENIOR FELLOW, 

FOUNDATION FOR DEFENSE OF DEMOCRACIES 

Mr. RUGGIERO. Thank you. Thank you, Chairman Yoho, Ranking 

Member Sherman, and distinguished members of the subcommittee. Thank you for the opportunity to testify today. 

The Kim family dynasty continues to threaten the United States 

and our allies in Japan and South Korea with its nuclear program. 

Secretary of State Tillerson’s trip to Asia last week noted that all 

options are on the table, including the military option. This is the 

right approach. We must take a page out of the Iran economic warfare effort and ensure that every option is considered. 

We should not kid ourselves. North Korea tested a four-missile 

salvo as preparation for a military conflict, and we need to be 

equally prepared. U.S.-South Korea military exercises are crucial to 

our preparedness. We should also look to increase military cooperation with Japan and South Korea, and even explore the possibility 

of stationing additional military assets in the region. 

In addition to military deterrence, we must use all other levers 

of American power. This includes offensive and defensive cyber 

warfare strategies. 

We must also include robust sanctions. The good news is we have 

a successful template, the Iran sanctions regime. I had the privilege to work on both North Korea and Iran sanctions programs at 

the State and Treasury Departments. We understood the gravity of 

the situation, and we engaged in robust economic and financial 

warfare to address Tehran’s direct threat to the United States. We 

need to replicate that approach with North Korea. 

The U.N. report released last month detailed the stunning finding that the SWIFT electronic banking network was providing financial messaging services to North Korean banks, including ones 

designated for proliferation activities. The report suggests that 

SWIFT will finally halt its services to North Korean banks, and it 

is long overdue. North Korea’s access to the SWIFT system is a 

symptom of a larger problem: Indifference toward Pyongyang’s financial activities. With extremely limited exceptions, North Korea 

should not have access to the international financial system. We 

cannot trust that Pyongyang’s financial transactions are legitimate. 

It is, therefore, our responsibility to block this access. 

To this end, we must act against Chinese banks that facilitate 

North Korean financial transactions, just as we acted against several European banks that helped Iran evade sanctions. In fact, the 

U.S. fined these banks over $12 billion collectively for sanctions 

violations. Chinese banks continue to be the financial lifeline for 

North Korea, and we have not done enough to cut off this flow of 

money. 

Two stories are instructive here: First, in September 2016, the 

Justice Department revealed that China-North Korea scheme that 

provided Kim’s regime access to the American banking system. A 

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panies, and Chinese banks were used to conduct transactions for 

U.S. sanctioned North Korean bank. No Chinese bank was sanctioned or fined for this activity, and this activity was allowed to 

take place for 6 years. 

Second, in the December 2015 trial of Chinpo Shipping in Singapore revealed that a Bank of China representative suggested that 

the company could transact in dollars, so long as it concealed references to North Korean vessels and wire transfers. Bank of China 

should have been fined by the U.S., even if it was limited to a single overzealous employee. The U.S. must clarify that this conduct 

is unacceptable. 

North Korea is a global foreign policy challenge. North Korea 

proliferated ballistic missiles to Iran, Syria, and other countries, 

and secretly built a nuclear reactor in Syria in a location that has 

since fallen to ISIS. The reactor was destroyed in 2007, reportedly 

by Israel. There have also been unconfirmed reports that Israel destroyed missiles destined for Hezbollah. 

A February 2016 CRS report on Iran-North Korea nexus showed 

that the ballistic missile relationship is significant and meaningful. 

The concern was so serious, that the Obama administration sanctioned Iran the day after the nuclear deal was implemented. In the 

accompanying explanation, Treasury revealed that senior Iranian 

officials were working with North Korea for several years and had 

traveled to Pyongyang to work on a component of North Korea’s 

missile system. 

Pyongyang will soon have in its possession a nuclear-armed ballistic missile capable of hitting North America. This deserves increasingly harsh responses from Washington. 

Similarly, China is deserving of increasingly harsh U.S. responses. Beijing is critical of any effort to increase sanctions 

against North Korea. We should not let it stand in our way, as it 

has been doing. 

Sanctions against North Korea and China are the only peaceful 

means for coercing the regime and are, for that reason, indispensable, but we must be prepared to deploy a full range of other 

measures to deter the threat. 

And I look forward to addressing your questions. 

[The prepared statement of Mr. Ruggiero follows:]

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Mr. YOHO. Thank you all for great testimonies, and we look forward to some spirited talks here. 

Bringing out the information, and it perplexes me, what does 

North Korea want? I know people say they want legitimacy of a nuclear power. Is that correct? 

But then what? If they become a nuclear power, are they going 

to play nicer? And I think—I don’t see a good end stage to the direction they are heading into. I don’t know what their fear is. 

Mr. Ruggiero, what is their underlying theme other than they 

want legitimacy as a nuclear power? 

Mr. RUGGIERO. Sure. I believe they want a nuclear weapon so 

that they can coerce the United States into what they want us to 

do, which is to acknowledge them as a nuclear weapon state. I 

think that is the fallacy of the discussion of a peace treaty as one 

of the prerequisites for solving this nuclear issue. 

Mr. YOHO. And I see that as a false narrative, because even if 

they get to that stage, which we all think they are pretty close to 

that, if they get to that stage, the behavior, I don’t see changing. 

Dr. Lee, do you see their behavior changing in North Korea? 

Mr. LEE. No, Mr. Chairman. It sounds rather absurd, but North 

Korea, I believe, has a long-term strategic goal in mind. It is a revisionist, revolutionary state. The North Korean Communist revolution still rages on in the eyes of the North Korean leadership. 

De-nuclearization would basically mean that North Korea would 

give up on its own raison d’etre, claiming to be the sole legitimate 

Korean state, the perennial fear of being absorbed by that other 

Korean state. That is an existential challenge. So North Korea, by 

demonstrating to the United States and to the world a credible capability of combining a nuclear warhead with a long-range missile 

that can hit all parts of the United States, then North Korea’s leverage, its ability to resort to nuclear blackmail, extortion on all 

kinds of issues. 

Mr. YOHO. But in the 21st century, I mean, that is just a nonstarter with the amount of nations with nuclear weapons, that I 

would think—and I know going through vet school, common sense 

was not common, one of my professors said, because if it was, everybody would have it. You know, I don’t see anybody wanting to 

invade North Korea. You would think they would want to become 

part of the world community and start doing what is best for their 

people. 

I am going to go to Mr. Klingner and ask you with the North 

Korea Sanctions and Policy Enhancement Act of 2016, which I am 

glad President Obama started to put the pressure on North Korea, 

I feel it was a little late, but I am glad it was there, what can we 

do so that this administration doesn’t back off from that. I am glad 

to hear the strong language from Mr. Tillerson that we continue 

down this road. Is there anything else that you would recommend 

that we throw in there, whether it is more sanctions on Chinese 

companies or any country that has business dealings with North 

Korea? 

Mr. KLINGNER. Yes. Thank you, sir. On your first point, their nuclear weapons serve a number of purposes, including a military 

purpose. We often see it only as a signal or a message. But, when 

Kim Jong Un came into power, he directed his military to come up 

51

with a new war plan to be able to occupy the Korean Peninsula 

within 7 days. That would require them to go nuclear early on. We 

have seen the development of capabilities to fulfill that plan. Last 

year, when they conducted missile launches, they said it was to 

practice nuclear air bursts over South Korean ports through which 

U.S. reinforcements would come through, and they had a graphic 

for it. Recently, with the salvo of four missiles, they said this was 

practicing an attack on U.S. bases in Japan. So they want that capability, and the ICBM is to be able to hit the United States with 

a nuclear weapon. They have been having this quest for decades. 

Now, that doesn’t mean they are going to wake up someday and 

just start a war, but by having that capability, they see it as—another reason would be deterring U.S. military action. They would 

depict it as us unilaterally attacking out of the blue; we would see 

it as them preventing us from responding to a tactical or operational-level North Korean attack. 

And also, as Mr. Ruggiero said, it is coercive diplomacy, not only 

acknowledgement of them as a nuclear weapon state, but also to 

intimidate South Korea into providing benefits or not responding to 

actions of North Korea. 

Opening up North Korea goes against what they want. They 

have said they do not want to allow the contagion of outside influence, they need to keep it out, because it would undermine the 

strength and legitimacy of the regime. 

I think the North Korea Sanctions and Policy Enhancement Act 

was a superb step forward, not only in the measures it had, but 

the ability to try to induce the Obama administration to move forward on exercising the authorities it already had. So I hope the 

Trump administration will——

Mr. YOHO. I want to cut you off there. I have got one quick question for each of you. Would you recommend putting North Korea 

back on the State Sponsor of Terrorism? Mr. Klingner? 

Mr. KLINGNER. Absolutely, sir. 

Mr. YOHO. Dr. Lee? 

Mr. LEE. Absolutely. 

Mr. YOHO. Mr. Ruggiero? 

Mr. RUGGIERO. Absolutely. 

Mr. YOHO. Thank you. I am going to yield back and go to the 

ranking member, Mr. Sherman. 

Mr. SHERMAN. You stole my question, but we got good answers. 

The chairman says no one wants to invade North Korea. That is 

easy for us to say. I was here when Dick Cheney did want to invade North Korea, or at least put the kibosh on any nonaggression 

pact with North Korea, because he wanted to keep open the idea 

of using force to bring democracy to the northern part of that peninsula. Who knows what we could have achieved in return for a 

nonaggression pact, but we very much wanted to keep all the—all 

options on the table, not to just to deal with North Korea’s nuclear 

program, but to deal with them, their continued existence as a repressive state. 

We have been hearing that for 20 years, we have had a failure. 

Yes, if you worry about our national security, but for 20 years, we 

have met the political needs of Washington and Wall Street. We do 

that by having a modest sanctions program that doesn’t get Wall 

52

Street out of joint or seriously affect trade with China, while maintaining maximum demands, because it is an affront to the foreign 

policy establishment here for us to ever talk about a slightly nuclear North Korea, or even to talk about giving them a peace treaty 

or nonaggression pact. So we have modest sanctions, maximum demands, no accomplishments, and we achieve all our domestic political objectives. I don’t know if that is failure or not. 

I do want to comment, as I have before, about civil defense. The 

purpose of civil defense appears to be, in this country, to calm our 

population. So back when Dana and I were kids, the population 

was concerned that we faced a massive Soviet nuclear hydrogen 

bomb threat, and they calmed us down a bit by having us hide 

under our desks. Not really anything effective. 

Now, we might be faced with one atomic bomb. Civil defense 

might be successful. Immediate aid would come to any victimized 

city from all over the country. But in this case, not having civil defense calms our population, because if we had any civil defense, we 

would admit that there was a threat from North Korea, or there 

would be soon. 

Mr. Ruggiero, I want to thank you for your comments about the 

trade between North Korea on the one hand, and the Shiite alliance, basically Assad and Iran, on the other. You pointed out how 

that has happened, continued to happen, and in light of Iran’s additional money, or financial resources, could very well happen in 

the future. 

Let’s see. We have got—so the question here is, will modest sanctions achieve our maximalist aims? 

I think, Dr. Lee, you have indicated that it goes to the very core 

of this regime to become a nuclear state. Would they give up on 

their nuclear program if that meant more luxury goods for their 

ruling elite, or would they be willing to suffer a 10 or 20 percent 

decline in luxury goods rather than give up their nuclear program? 

What is more important to them, Johnny Walker or nukes? 

Mr. LEE. Continued supply of Johnny Walker, Mr. Congressman. 

Mr. SHERMAN. Is more important to them than the nuclear program? 

Mr. LEE. Well, all carrots eventually dry up. What would they do 

once they give up their nuclear weapons and no longer have that 

great lever with which to bully, extort the biggest powers in the 

world, including the United States? Depend on the goodwill of their 

neighbors? That would be a very poor policy. 

I think there is no way that we can persuade, coerce the Kim regime to give up its nuclear weapons without, without putting sufficient pressure that makes them think that they are on the verge 

of political extinction. 

Mr. SHERMAN. And a 20 percent decline in high quality Scotch, 

that would not put them on the verge of extinction, would it? 

Mr. LEE. I believe it would be a big blow. So I think the ban, the 

U.N. Security Council ban on luxury goods exports to North Korea, 

that is an important component, but——

Mr. SHERMAN. So this regime is perhaps more fragile than I 

imagined. 

Mr. LEE. Well, we have not tried really tough financial sanctions, 

as you know, Mr. Congressman. We know that North Korea is still 

53

dependent on the U.S. dollar system. It is their preferred currency 

of choice in international financial transactions. There is a lot that 

we can do to block—to designate North Korean entities and their 

enablers. 

Mr. SHERMAN. Okay. So you are saying if we kept Chinese policy 

the same but were very effective in hurting the North Korean 

state, we could force a change in their behavior? 

I will ask your two colleagues on either side whether they agree 

with that characterization. 

Mr. KLINGNER. I would agree with you, sir, that weak sanctions 

are not effective, just as weakly enforcing the law in a city is 

not——

Mr. SHERMAN. But let’s say we had sanctions that were just directed at North Korea, so they were effective in cutting 20 percent 

less Scotch, 20 percent less of all the other luxury goods, but China 

continued its current subsidies and trade with North Korea. Would 

that be enough to imperil the regime? 

Mr. KLINGNER. Well, what I would argue is that we need to go 

after China as well. Anyone who violates U.S. laws and U.N. resolutions should not have immunity from our laws and the resolutions. 

Mr. SHERMAN. I have gone way over time. I yield back. Thank 

you. 

Mr. YOHO. Thank you, sir. I will go to our member from California, Mr. Rohrabacher. 

Mr. ROHRABACHER. Well, again, let me note that the problem is 

not North Korea or North Koreans, it is this clique that seems—

rather mentally ill clique that runs North Korea. The people of 

North Korea are victims. They are people who—perhaps many of 

them who don’t even know they are victims. And perhaps our 

greatest strategy could be putting out an all-out effort to inform 

the people of North Korea exactly what is happening in the rest of 

the world, and how they are being short-changed and that their future is being robbed from their children by this current unscrupulous and brutal regime that controls their lives. 

You know, one thing you could say, and this is a crazy regime, 

is the one—I was noting that this is one country, North Korea is 

one country that can accurately—it can accurately be said that its 

leaders have gone to the dogs. I mean, this is in—to think that a—

now, is that an accurate report that this leader has sent people to 

be eaten by dogs, who had actually opposed his regime? Is that an 

accurate report? 

Mr. KLINGNER. We don’t think so. The story that Jang Song 

Thaek, his uncle, was eaten by dogs was started by a Chinese 

blogger, which then was picked up by Chinese media and then 

picked up by a foreign media. We think, instead, he was killed or 

executed with anti-aircraft artillery, as many others have been. 

Mr. ROHRABACHER. Well, I see now—so he hasn’t been eaten by 

the dogs, but he may well have been killed by being shot by antiaircraft artillery. Hmm. All right. Gee, I am glad you said that. It 

really makes me feel better about the mental stability of those 

folks. 

Now, it also was noted in there that we have a situation where 

South Korea, with such a vibrant economy and somewhat stability, 

54

at least, they have democratic processes going, we just had a leader 

removed from office and there wasn’t blood shed. 

I remember during the Reagan years, there was an economist 

that did a study all over the world, and Korea was one of them, 

where communism and free enterprise, or at least capitalism in 

some way, came together, and the only thing that separated the 

Communist area from the free enterprise area was a line, an arbitrary political line. So on both sides, they had the same kind of soil, 

same kind of weather. This economist noted for us in the White 

House, we asked to do this study, that the production of food and 

the production of wealth was so much greater on the non-Communist side of the border as compared to the Communist side of 

the border, which then we interpreted as meaning either—let’s see. 

It was either that God exists and that God—it is either whether 

there is no God, or that God exists and he doesn’t like Communists. 

The fact is that they can blame it—and a lot of our people try to 

blame our failures and different failures on global warming as well, 

but the fact is that you have these situations around the world 

where people who live in tyranny do not do well financially, which 

is, I would say, the Achilles heel of this regime, in that its people 

live in such poverty, that their children are smaller, and that there 

are all sorts of demonstrations of this. 

I want to thank our witnesses today for giving us some specific 

things that we can do, especially in the economic arena, in terms 

of dealing with Chinese banks and making sure that we put the 

economic pressure on this regime. 

Again, it is better to have no sanctions than to have soft sanctions. Teddy Roosevelt said, it is the greatest sin—the greatest sin 

is to hit someone softly. Either we are going to do this and we are 

going to get rid of that regime and work with the people of North 

Korea to free themselves, or we are not. 

I would suggest that we should be working—and some of the 

suggestions you have given us today in terms of grabbing onto 

their economy so that that clique that runs North Korea cannot 

withstand the pressure that we have generated by this type of economic offensive on our side, that we take it and we do that seriously rather than thinking that our only methodology of stopping 

this nutty clique from getting a nuclear weapon is to have a military operation against North Korea. 

Mr. YOHO. I agree. 

Mr. ROHRABACHER. That would be terrible, and that should be 

averted if we can at all costs, which means, let’s go to the strategy 

you have outlined today, which is a serious economic strategy to 

bring down and to de-place the North Korean regime that oppresses the North Korean people. 

Mr. YOHO. Thank you for your comments. We will go to Dr. Ami 

Bera from California. 

Mr. BERA. Thank you, Mr. Chairman. 

I am just going to go through a series of questions, but a starting 

point, I think you all agree, if I am listening to your answers ask 

your opening testimony, at this juncture, North Korea is not going 

to back down and become nonnuclear. They see this as their only 

negotiating leverage. Would that be an accurate statement? So we 

don’t see voluntarily stepping back; probably the exact opposite. 

55

In addition, if we are not going to go to a kinetic denuclearization, which none of us think would be very easy, that 

means a commitment to the region, a commitment to deterrence, 

making sure all options obviously are on the table, but making sure 

our allies in the region are fully secure in our commitment. Would 

that be an accurate next step? And that would be exercises, that 

would be deployment of THAAD, and other assets that would send 

a strong message to North Korea that any military intervention, an 

errant missile going into Seoul or Tokyo would lead to dramatic repercussions. Is that accurate? 

Mr. KLINGNER. Yes. We hope that more vigorous enforcement of 

our laws and stronger sanctions, combined with the offer of engagement if they were to do so in a pragmatic sense, would alter their 

behavior, but of course we need to strengthen our defenses and 

those of our allies, including missile defense both here in the continental U.S. as well as with our allies. 

Mr. BERA. So that would be a certain next step, that deterrence, 

to say, it is not in your interest, North Korea, of taking provocative 

action. 

Obviously there was some campaign trail rhetoric about South 

Korea or Japan pursuing nuclear options. That is not in our interest, nor do we want to start a nuclear arms race in East Asia. You 

know, obviously, our commitment is to that. Would that be accurate? I think South Korea pursuing nuclear weapons or Japan pursuing nuclear weapons would be not in our interests. Would you—

Mr.——

Mr. LEE. With every North Korean provocation, nuclear test, the 

public opinion in South Korea, admittedly emotional as it may be 

as a snapshot of indignation of North Korea’s nuclear tests, supports South Korea going nuclear. We know South Korea has the 

technical capability within a few months or a year to go nuclear. 

And in the past, of course, South Korea attempted just that under 

President Park Chung-hee in the early 1970s. 

So although it is unlikely that South Korea will move in that direction in the foreseeable future, I think one should not be surprised if, say, 10 years from now, South Korea does make that determination at the risk of irritating or poor relations with its treaty 

ally, the United States, because the truth is, in the past when Britain, France, Israel went nuclear, what did the United States do? 

Abandon its allies and friends? No. 

Mr. BERA. Sure. The danger there is when China potentially 

steps up their nuclear proliferation as well. 

So you have given us a few tools that we could pursue. You 

know, let’s increase sanctions, let’s look at secondary sanctions, 

let’s obviously increase our commitment to the region through military exercises, et cetera, get to the point where Kim Jong Un has 

to make that political calculation that the instability and his political survival is such that it is better to come to the table. Would 

that be an accurate assessment of some of the tools that we ought 

to be using? 

Mr. RUGGIERO. Sure. I think that is the ultimate goal, is to increase sanctions, I would say, on North Korea and China, to try 

and get North Korea back to the negotiating table. But we should 

not kid ourselves that it is going to be easy. I would also say on 

56

the South Korea and Japan developing nuclear weapons, certainly 

not in our interests now, but we have to have that conversation 

with China. And as Dr. Lee said, that in 10 years, that calculus 

may change for us. 

Mr. BERA. So that is also a negotiating leverage, that China 

needs to understand that if North Korea continues on its current 

path, then it may have more nuclear-armed nations in its neighborhood, which the Chinese obviously don’t want. So it is in China’s 

interest to also step up to the table. 

Mr. Klingner. 

Mr. KLINGNER. I think on South Korea or Japan going nuclear, 

while it goes against U.S. nonproliferation policy for decades, it 

would undermine the Nonproliferation Treaty, it could subject our 

allies to international sanctions themselves. But if nothing else, it 

would also require them to divert a large amount of their defense 

budget away from what they should be spending on toward duplicating a system that the U.S. is already providing with our extended deterrence guarantee. 

Mr. BERA. All right. Thanks. 

Mr. YOHO. Thank you, sir. 

We will go to Mrs. Ann Wagner from Missouri. Thank you. 

Mrs. WAGNER. Thank you, Mr. Chairman. 

China is punishing South Korea economically for its decision 

about THAAD’s deployment, but it looks like only to the extent 

that these actions wouldn’t constitute WTO violations and that 

South Korea won’t have any recourse mechanisms. 

Mr. Klingner, do you believe China has gotten—how should I put 

this—smarter in how it applies economic pressures? And if over the 

course of the next year, if THAAD becomes a permanent reality, do 

you believe China will back off? 

Mr. KLINGNER. I believe South Korea is going to the WTO, or is 

considering taking China to the WTO for its actions. China has certainly been very heavyhanded in its, really, economic attacks on 

South Korea. They are far more strong in their actions against 

South Korea’s defensive moves than North Korea’s offensive moves. 

You know, eventually, one would hope that China would realize 

how counterproductive their action is. The South Korean public 

opinion of China has plummeted. It may lead South Korea to try 

to diversify its economic engagement elsewhere, away from China. 

They have seen the actions that China has taken in the past 

against Japan over the Senkakus Island conflict disagreement, the 

belligerent actions China has taken in the South China Sea against 

southeast Asian nations. It can lead to all of those nations seeing 

that China is not a reliable partner and that they should reduce 

their engagement with China. 

Mrs. WAGNER. And if THAAD becomes a permanent reality, you 

do not see China backing off? 

Mr. KLINGNER. Well, we have seen China back off in its intimidation against Japan after the Senkakus incidents in 2010 and 2012, 

where they resumed exports of rare Earth minerals, they stopped 

the kind of government-induced protests against Japanese businesses. So I would hope, and I would think it would be the case, 

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gressive President in South Korea, who would normally be more, 

you know, inclined to reach out to China and North Korea, if China 

continues that kind of behavior, it may induce even a progressive 

government to not lean toward China. 

Mrs. WAGNER. Thank you, Mr. Klingner. 

Mr. Ruggiero, major Chinese banks have limited their exposure 

to North Korea, at least on the surface, I will say. But North Korean firms have successfully used Chinese middlemen and Southeast Asia and Hong Kong commercial hubs to improve procurement. Given North Korea’s ability to outmaneuver current sanctions, how effective would secondary sanctions on Chinese institutions be in curbing North Korea’s missile and nuclear programs? 

Mr. RUGGIERO. Sure. You know, North Korea is very deceptive 

in its sanctions evasion activities, but the banks are responsible to 

ask the right questions. I would just give you one stat. In the company that we are talking about from September 2016, before the 

North Korean bank was designated, it did U.S. dollar transactions 

of $1.3 million, and afterwards, for 6 years afterwards, $110 million. So you are seeing a significant increase. 

That should have caused the Chinese bank to ask questions. The 

Chinese bank could have investigated that company and learned 

that it—it showed itself as, or promoted itself as key to ChinaNorth Korea trade. So that Chinese banks should have been asking 

questions of why are they engaged in these transactions with North 

Korea. 

Mrs. WAGNER. Here is an interesting question. We know that 

Chinese—and, again, for Mr. Ruggiero. We know that the Chinese 

Government has lost access to the regime’s inner circle since the 

execution of Jang Song-thaek, Kim Jong-un’s uncle. Do we know 

how China is mediating its lack of access to Kim Jong-un? 

Mr. RUGGIERO. Well, they have stated publicly that they believe 

they have no levers or no way to convince North Korea to do what 

we essentially want them to do. And I guess my argument is that 

we can talk here about how do we get North Korea to change its 

policy, but I think we equally have to talk about how China needs 

to change its policy. And the way to do that is to go after their companies and banks that are allowing North Korea to do these activities. 

Mrs. WAGNER. Thank you. I have many more questions, Mr. 

Chairman, but I will yield back my time, and I shall submit them 

in writing. Thank you so much. 

Mr. YOHO. Great questions. And I appreciate it. 

We will go to Mr. Gerry Connolly from Virginia. 

Mr. CONNOLLY. Thank you. 

And I am going to ask as many questions as I can, and urge you 

all to be concise. But thank you for being here. 

Mr. Klingner, you were talking earlier about the development of 

a nuclear capability in the north. How realistic is that threat, 

though? I mean, the Korean Peninsula is pretty intimate. And, you 

know, even in the nonnuclear sense, the north has artillery range 

to Seoul. So isn’t it the case that the detonation of a nuclear device 

of any magnitude would also adversely affect the north? 

Mr. KLINGNER. Yes. But they certainly have been pursuing it for 

years. We think the Nodong medium-range ballistic missile is alVerDate 0ct 09 2002 14:41 Apr 25, 2017 Jkt 000000 PO 00000 Frm 00061 Fmt 6633 Sfmt 6633 F:\WORK\_AP\032117\24751 SHIRL
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ready nuclear capable, that they can already range South Korea 

and Japan with nuclear weapons today. We think they have perhaps 5,000 tons of chemical agent, both pervasive and nonpervasive. 

Mr. CONNOLLY. Right. I get all that. My question, how real is the 

threat of actual utilization of such a weapon on the Korean Peninsula itself given the proximity of the north and south to each 

other? 

Mr. KLINGNER. I think it is the threat that they hope not to use. 

But there is sort of a famous story that Kim Il-sung, the grandfather, asked his generals, including Kim Jong-il, of, you know, 

what would we do if we were losing a war? And the generals all 

said, we would never lose. But Kim Jong-il said, what would be the 

worth of the world without North Korea? So they may do a Twilight of the Gods, use it in a last ditch pulling the temple down 

upon themselves. 

Mr. CONNOLLY. Got it. 

Mr. Ruggiero, how much leverage does the United States have 

with respect to sanctions that we haven’t deployed over North 

Korea? Because we don’t have trade relations. We don’t have economic relations. We don’t directly bank with them or invest in 

them. I mean, what are the levers here we can use? It seems to 

me they are pretty limited. 

Mr. RUGGIERO. Well, the U.N. Report noted, and others have 

noted, that North Korea needs U.S. dollars. And they need euros 

as well. 

Mr. CONNOLLY. Right. But there are lots of ways of getting both. 

Mr. RUGGIERO. Well, the ways they are doing it currently is 

through the American financial system. So that is a leverage point 

there. The second one I would say is that while the law that was 

passed by this committee and signed last year was useful, and 

nearly doubled the number of designations over the last year, 88 

percent of those are inside North Korea. That is not the way to get 

at the international business of North Korea. 

So if you are asking about leverage, it goes back to an earlier 

question, the way you get at North Korea is maybe not at getting 

at their cognac or other parts, which is important, but focusing on 

the international business that North Korea——

Mr. CONNOLLY. For the record, cognac would be one thing. Mr. 

Sherman was talking about Johnnie Walker Black Label. Cognac, 

now you are talking serious. 

Let me ask the same question about China. And I heard your 

testimony. We will stipulate what the Chinese say. But how much 

leverage do they have? Now, they just said that they are going to 

cease the purchase of coal exports from the north, which presumably is something pretty injurious to their economy. What other levers do they have they are not using? 

Mr. RUGGIERO. So I would say on the coal ban, I would point out 

that they had a similar ban in April of last year, and after that 

point, they imported $800 million worth of North Korean coal. So 

whether or not they abide by the ban is still up for a decision. I 

would also go back to the Iran example, which what we saw was 

European banks and European companies, mostly banks, that abided by the U.S. decision to say you want to do business with Iran, 

59

you may lose your access to the United States. And that happened 

before European Governments came to that same decision. That is 

the attitude we have to have with China. 

Mr. CONNOLLY. Do you believe a robust diplomatic effort by the 

United States is still called for and could still be efficacious? 

Mr. RUGGIERO. At this time, the North Koreans say they are not 

interested in it. But I would say that it could be down the road 

after robust sanctions implementation. I think accepting a freeze at 

this time would just put their program in place and have the 

United States accepting their program as a nuclear weapons state. 

Mr. CONNOLLY. Presumably, when and if that diplomatic effort 

needs to be launched, a planned 31 percent cut in the State Department and USAID’s budget would not really be helpful. 

Mr. RUGGIERO. Well, I think the diplomats at the State Department are more than capable of negotiating a deal with North Korea 

if they are ready to do so. 

Mr. CONNOLLY. Not if there are 31 percent fewer of them. You 

don’t have to answer. 

I yield back. 

Mr. YOHO. Thank you, sir, for your questions, as always. 

We are going to go back to Mr. Sherman for another round, if 

you guys are up to it. If so, we sure would appreciate it. 

Mr. SHERMAN. I want to build on Gerry’s comment about the 

need for a robust State Department. We may be able, no matter 

how big the State Department is, to send five diplomats or ten diplomats to Six-Party Talks or any kind of talks. But if we want 

sanctions, that means going to every country and trying to get 

them to change the behavior of their bank, their distillery, or I 

guess if you want cognac, maybe some other kind. That is incredibly labor-intensive. It is company by company, country by country. 

Mr. CONNOLLY. And that takes a skill set, does it not, Mr. Sherman? 

Mr. SHERMAN. Yes, it does. But I want to focus on, we saw the 

assassination of Kim Jong Nam. It happened to happen recently. 

Is that because there was a unique opportunity because of his travel outside China? Or is that because of a unique or increased level 

of desire by the Pyongyang regime to assassinate him? Was he 

uniquely vulnerable when he was assassinated or was there a 

change in North Korean policy? Dr. Lee, do you have a view? 

Mr. LEE. I think the timing of it is significant. In 1997, the day 

before Kim Jong-il’s birthday, which is February 16, on the 15th 

of February, 1997, Kim Jong-il’s nephew was assassinated in South 

Korea. Why? Because he had defected and written an expose on the 

royal family. And I believe that was sort of a birthday gift to the 

so-called Dear Leader by his agents, to kill him on the eve of Kim 

Jong-il’s birthday. 

Mr. SHERMAN. But has North Korea been trying pretty hard to 

kill this uncle every day of the week or did they——

Mr. LEE. The half-brother. 

Mr. SHERMAN. The half-brother, excuse me. 

Mr. LEE. Well, I think the half-brother, Kim Jong-nam, was vulnerable. North Korean agents clearly would have access to his travel itinerary. But I think they saw it as the best time to do it, to 

carry out the act on the day of his return to China. I think they 

60

would have been reticent to do something like this on Chinese territory. That is why it was in Malaysia. 

Mr. SHERMAN. Did he travel often outside of China? 

Mr. LEE. Yes, sir, he did. 

Mr. SHERMAN. So they had other non-Chinese opportunities. 

I don’t know which of you is most qualified to answer this. But 

what are the estimated hard currency and gold reserves of the 

North Korean Government? Anybody have a guess? Dr. Lee? 

Mr. LEE. I am just a newspaper reader, but for years, there have 

been newspaper reports of $1 billion to $4 billion or $5 billion in 

offshore secret accounts in Europe and in China. 

Mr. SHERMAN. So they trust the international banking system, or 

at least they are partners in it. It is not like they have the currency 

or the gold in Pyongyang itself. They are relying on bank accounts. 

Mr. LEE. Well, according to the U.N. Panel of Experts report, 

most of North Korea’s international financial transactions were denominated in the U.S. dollar from foreign-based banks, transferred 

through corresponding accounts in the United States. 

Mr. SHERMAN. But their reserves they are willing to deposit with 

foreign-based banks rather than under their mattress? 

Mr. LEE. I think that gives us leverage. 

Mr. SHERMAN. It does, and I am surprised they are willing to do 

that. 

How much does North Korea earn from the export of coal or anything else that they can actually export from their own territory? 

And how does that compare to how much they generate by exporting labor, whether it be, you know, the workers that they have sent 

abroad? Can we put these two sources of foreign income in perspective? 

Mr. KLINGNER. That is a very good question, sir. I think the most 

prevalent estimates of the overseas labor is $200 million to $300 

million a year. The coal, I think the limit on it was going to reduce 

North Korean income by $800 million a year. 

Mr. RUGGIERO. Last year it was $1.2 billion. 

Mr. SHERMAN. One point two billion in coal. Do they export anything else other than coal from their territory that is worth talking 

about? 

Mr. KLINGNER. Other resources. Resources are a large part of 

their exports. 

Mr. SHERMAN. And so in addition to the coal, any idea what the 

other resources generate? 

Mr. KLINGNER. Some of the resources, minerals, have been precluded from export by the U.N. resolution. 

Mr. SHERMAN. How willing is North Korea to sell a nuclear 

bomb? How many nuclear weapons would they have to have for 

their own use before they would think, well, this one might be 

extra? Or at least something that we would sell if we could get a 

really good deal? I will ask Dr. Lee first. 

Mr. LEE. I think the risk is plausible. It is high, actually. We 

know North Korea has sold arms to terrorist organizations. We 

know North Korea has built a nuclear reactor in Syria, which the 

Israelis took out in September 2007. North Korea is one of the 

world’s——

61

Mr. SHERMAN. Are they to the point where, under their own military strategy, they are close to having an ‘‘extra or not absolutely 

essential nuclear device,’’ or do they need all the ones they can 

produce this year for their own defense strategy? 

Mr. LEE. Well, experts vary on what a second strike capability 

is, perhaps 40 or 50 bombs. Some people estimate that North Korea 

is very close to having 20 right now. And this will be accelerated 

in the years to come, their capability. 

Mr. SHERMAN. So you think they would want 40 for their own defense strategy before they might be willing to sell missile material. 

Though, of course, they have already shown the last decade a willingness to sell a technology kit, if you will, that was destroyed in 

Syria. Do you have any comment? 

Mr. RUGGIERO. I would just say I think they are far more likely 

to try and milk any nuclear technology in terms of the amount of 

money they can get. So they are far more likely to duplicate what 

they did in Syria. So selling the means to be able to produce missile material. I think North Korea values their nuclear weapons. I 

don’t think they will actually sell a device. But they are more than 

willing to sell UF6, like reportedly they sold to Libya. 

Mr. SHERMAN. UF6? 

Mr. RUGGIERO. I am sorry, the material they used for centrifuges. 

Mr. SHERMAN. So they will sell technology, equipment that can 

be used to refine uranium or otherwise meld a nuclear weapon. 

Mr. RUGGIERO. My point is there is more money—I mean, obviously they would get a lot of money if they sold one weapon. But 

they can get more money, like their ballistic missile program, if 

countries or other groups are interested in the full nuclear cycle. 

Mr. SHERMAN. While the chairman is being indulgent, I will also 

ask you, is this regime so vulnerable that a 20 percent decline, 30 

percent decline in the hard currency that they spend on their elites 

could actually be regime-endangering? This is back to the Johnnie 

Walker question. 

Mr. RUGGIERO. Right. So I think we have examples in the past, 

Banco Delta Asia in 2005 and other examples, that if we find the 

right levers that North Korea is very interested in, whether it is 

Johnnie Walker or——

Mr. SHERMAN. Yeah, we can make them mad. I know that. Can 

we endanger the regime? 

Mr. RUGGIERO. I think there is a way to get them to change their 

calculus. Whether we can get the Chinese on board for changing 

the regime, that would be the question. 

Mr. SHERMAN. Well, you may not quite change the regime, but 

until you are regime endangering, they are not going to give up the 

crown jewels. 

I will yield back. 

Mr. YOHO. I appreciate it. And those were great questions. 

If you will indulge me for a few more minutes. Again, if I look 

back over history, I was born in 1955, North Korea I think started 

around 1945. I am 62, so they are 72 years old. Has anybody tried 

to invade them in 72 years? 

I look from my standpoint where I am, as a Member of Congress, 

as a United States citizen, they don’t have anything really that I 

62

want. I would think they should know that, that in 72 years, nobody has really tried to invade them. They invaded the south. I 

would hope that the rest of the world would look at the threat that 

they pose getting a nuclear weapon, and the irresponsibility that 

we have seen with the VX nerve agent that we know, the stockpile, 

with the VX murder of his half-brother, and with the other murders that we have seen using the poison needles. Is there anybody 

else in the world kind of concerned about this outside of the AsiaPacific theater of South Korea and Japan? 

Mr. KLINGNER. Well, I think in the last year particularly, we 

have seen a growing international willingness to work against 

North Korea. One would have thought it would have been done 

after the first three nuclear tests, but it took the fourth test. And 

so what we have seen is a new willingness, not only on the sanctions and the targeted financial measures, but also going after even 

legitimate North Korean businesses. And it is a way of tightening 

the economic noose. 

So as we have tried to finally get stronger, more robust implementation of our laws and the resolutions, which is still lagging, 

but also South Korea and others have gone around the world talking to their legitimate business partners saying, do you really want 

to be doing business with someone who is involved in slave labor, 

crimes against humanity, and now using a chemical weapon of 

mass destruction in a civilian airport? We can try to wean away 

North Korea’s business partners. 

Mr. YOHO. Yeah, that is pretty bold, when you do that in a public 

space like that with a toxic substance that is the most lethal nerve 

gas that we know. 

Mr. SHERMAN. If I can interject, and holding Malaysians hostage 

in their country. 

Mr. YOHO. Right. So I guess what I am trying to get out of you 

is how do you involve the rest of the world? Like, this is a serious 

problem. Obviously, they don’t see it as serious as we do, or maybe 

Japan or South Korea, that we need to get the buy-in for the sanctions to work. How do you go to the U.N. and say we need world 

cooperation? Because this is not good for anybody, not just the region, but it would upset the whole applecart of the world, not just 

trade, but, you know, stability around the world. 

How do you get the rest of the world to buy into that and say 

we need you at the table to do this? Is this something we can put 

pressure on through our U.N. partners and just say, you know 

what, we cut off funds until you come to the table and—I am at 

a loss here, because I find it very disturbing that not everybody is 

standing behind us saying let’s go, let’s put these sanctions on and 

bring this regime—I don’t want to say to an end, but bring the destructive nature of what they are doing to an end. 

Dr. Lee, what is your thoughts on how we accomplish that? 

Mr. LEE. I believe the United States is in a unique position, 

uniquely well positioned to take that leadership role to make the 

point that tougher sanctions are necessary. 

Mr. YOHO. Where would you do that? At the U.N.? 

Mr. LEE. Well, through the respective U.S. Embassies in those 

nations. Give other nations the choice. 

Mr. YOHO. Is it an ultimatum? 

63

Mr. LEE. No. Trading with North Korea or with us. No one is 

calling for an all-out trade war with China, but U.S. sanctions 

against North Korea have been very, very weak, both in degree and 

kind. 

Mr. YOHO. And we are at a point where we can’t afford to be 

weak. 

Mr. LEE. There is no need to be weak, in my view. 

Mr. YOHO. I agree. 

Mr. LEE. The self-restraint exercise over the past 70 years with 

each North Korean lethal provocation probably has contributed to 

the de facto peace in the region, but we have spoiled North Korea. 

Mr. YOHO. Mr. Ruggiero, I am going to go to you and just ask, 

in addition to the sanctions following the reinstatement of the 

North Korean State Sponsor of Terrorism, Thae Yong-ho was noted 

as saying that the best thing that we can do—who is the highest 

ranking North Korean defector in decades—recently said that this 

was the best way to force change in North Korea by injecting outside information. And I don’t look at it as propaganda. I look at it 

as injecting truth to the North Korean people. Because you have 

got a society for 70 years who has only known repression. They 

don’t know what it is outside. And my wife and I watched a video 

the other day of the young girl that came through China and told 

a very compelling story that would bring tears to anybody’s eyes. 

How do you get that story into North Korea? What is the best 

way? Is it through the SIM cards, through broadcasting? All of the 

above? Leaflets? I would like to hear your thoughts on that. 

Mr. RUGGIERO. Well, I think all of the above is the right approach. I think there was a report earlier this week that North 

Korea had sent leaflets to South Korea talking about its own ballistic missile program. And so, you know, I think we should be 

meeting back and forth with leaflets. I think you said SIM cards. 

I know USB drives are another area that has been looked at. 

I would also, if you don’t mind on the prior question, that is why 

I would go back to the Iran sanctions model. The attitude there 

was to go to all these countries. And I would just say that, you 

know, I know the SWIFT financial messaging was a small amount, 

but the fact that Belgium thought it was a good idea to allow 

SWIFT to conduct transactions with U.N.-designated banks just 

shows you the attitude and the problem that we have. I wouldn’t 

go through the U.N. 

Mr. YOHO. I don’t understand how they did that or why they did 

that. 

Mr. RUGGIERO. I don’t either. I have written about how it is probably a violation of U.S.—excuse me, the POE, the Panel of Experts, 

has said it was a U.N. violation. The U.N.-designated banks using 

the service was probably a violation of the law that was passed last 

year. I think things like that are areas where we need to be increasing our efforts, our implementation efforts. 

Mr. YOHO. All right. One final comment from my friend from 

California. 

Mr. SHERMAN. I certainly agree on an all-out effort on information, an all-out effort on the sanctions regime that we have. But 

when you hold up the Iran model, keep in mind, that was a much 

more vulnerable country because it has to provide a higher standVerDate 0ct 09 2002 14:41 Apr 25, 2017 Jkt 000000 PO 00000 Frm 00067 Fmt 6633 Sfmt 6633 F:\WORK\_AP\032117\24751 SHIRL
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ard of living to its people and because it doesn’t have China in its 

corner. And in spite of that, we were only able to extract rather 

modest limits on its nuclear program. We are trying to do far more 

with regard to North Korea. 

And I yield back. 

Mr. YOHO. Thank you, sir. And I would like to thank my ranking 

member and my colleague, Mr. Sherman, as well as all the other 

members that were here too, to ask questions. And I would like to 

thank the witnesses for coming to share their expertise on this important hearing and this important issue. 

This meeting is adjourned. And thank you guys for your time. 

[Whereupon, at 2:33 p.m., the subcommittee was adjourned.] 

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