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<title> - COUNTERING THE NORTH KOREAN THREAT: NEW STEPS IN U.S. POLICY</title>
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[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]

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

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

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

__________

U.S. GOVERNMENT PUBLISHING OFFICE
24-032PDF WASHINGTON : 2017

_________________________________________________________________________________________
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COMMITTEE ON FOREIGN AFFAIRS

EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida BRAD SHERMAN, California
DANA ROHRABACHER, California GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio ALBIO SIRES, New Jersey
JOE WILSON, South Carolina GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas THEODORE E. DEUTCH, Florida
TED POE, Texas KAREN BASS, California
DARRELL E. ISSA, California WILLIAM R. KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID N. CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina AMI BERA, California
MO BROOKS, Alabama LOIS FRANKEL, Florida
PAUL COOK, California TULSI GABBARD, Hawaii
SCOTT PERRY, Pennsylvania JOAQUIN CASTRO, Texas
RON DeSANTIS, Florida ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina BRENDAN F. BOYLE, Pennsylvania
TED S. YOHO, Florida DINA TITUS, Nevada
ADAM KINZINGER, Illinois NORMA J. TORRES, California
LEE M. ZELDIN, New York BRADLEY SCOTT SCHNEIDER, Illinois
DANIEL M. DONOVAN, Jr., New York THOMAS R. SUOZZI, New York
F. JAMES SENSENBRENNER, Jr., ADRIANO ESPAILLAT, New York
Wisconsin TED LIEU, California
ANN WAGNER, Missouri
BRIAN J. MAST, Florida
FRANCIS ROONEY, Florida
BRIAN K. FITZPATRICK, Pennsylvania
THOMAS A. GARRETT, Jr., Virginia

Amy Porter, Chief of Staff Thomas Sheehy, Staff Director

Jason Steinbaum, Democratic Staff Director

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

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
administration 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 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 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.
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 program. 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 administration 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:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

----------

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.
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:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

----------

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:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

----------

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,'' 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 Non-Proliferation 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 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.
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.
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
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 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 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 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 psychological 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
currency. 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.
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?
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 unrest. 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?
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.
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.
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 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 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 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. Secretary-General 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 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 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 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 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 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?
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.
We are adjourned.
[Whereupon, at 12:07 p.m., the committee was adjourned.]

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