tv North Korea Sanctions CSPAN September 28, 2017 11:25pm-12:47am EDT
of candidates, but it is a story that has seared into my genetic makeup the idea that this nation is more than the sum of its parts. that out of many, we are truly one. >> for the past 30 years, the video library is your free resource for politics, congress and washington public affairs. whether it happened 30 years ago or 30 minutes ago, find it in c-span's video library at c-span.org. c-span, where history unfolds daily. coming up in the morning, secretary of the interior ryan zinke he will talk about the trump administration's domestic energy agenda. we will take you live to the heritage foundation for that at 11: 30 a.m. eastern. member of theng senate armed services committee will look at the president's approach dealing with north korea, russia and iran. that will be at 12:30 p.m. eastern.
capitol take you to hill where earlier today, state department officials talked about the effectiveness of sanctions on the north korean regime. this senate committee hearing is about one hour, 20 minutes. >> good morning. come to order. our witnesses needs to leave by 10:30 a.m. to join secretary tillerson in china, and we also have a vote. to allow time to ask questions
we will submit opening statements for the record, and we ask each witness to shorten their statements to a couple minutes so that we can get right to the questions. obviously i will ask the senators to be very careful to follow the five minute allocation. first we will receive testimony from the undersecretary of treasury for terrorism and financial crimes. following her, we'll have testimony from the acting assistant secretary of state for east asian and pacific affairs . without anything further, let's received. -- let us proceed. please proceed. >> chairman and distinguished members of the committee i am honored to appear to discuss the treasury departments strategy to combat the destabilizing and repressive actions of north korea. this administration is applying and theeconomic
dramatic pressure to counter the threat. sanctions are central to the campaign and are among the top tool of choice. today i will share with you aspects of our strategy, which we are executing at a rapid pace . we're focused on attacking the -- attacking north korea's key financial vulnerabilities. first, any revenue generated that could be used for the keyons programs, our -- a method is to target the regime's most profitable industries, including coal, labor and the sale of weapons and other goods. we have designated dozens of individuals and entities that support these lines of business and are also focused on the shipping networks that enable them. moved, the regime needs to funds through the international
financial system in order to acquire foreign currency, transfer funds and pay for goods. we are intent on stopping this and supporting ongoing efforts to evade sanctions through front companies and other deceptive means. last week, the president issued a new executive order to give greater ability and leverage to target foreign banks that support the kim we -- kim regime. on tuesday, we took action on the north korean banks and facilitators across the globe. my first week on the job. -- my ferc week -- my first week on the job, for the first time in over a decade for facilitating north korean financial activity through the u.s. financial system. of course close collaboration with international partners is critical and we are working very actively with partners around the globe.
time is not on our side. he have an incredibly dedicated team at treasury working around the clock on this urgent problem. curtailing north korea's revenue stream and severing its access to financial systems is successful to a peaceful resolution of the growing crisis. i look forward to working closely with this committee and other members of congress as we seek to fulfill our shared responsibility to keep america safe. >> thank you. ms. thornton. for the you very much opportunity to appear before you today to discuss the ever increasing threat that north korea poses. i will make a brief statement. today, we face a north korea that is showing unwavering determination to achieve an intercontinental ballistic missile to deliver a nuclear payload to our homeland.
in the face of this thread, -- this threat, we have the ability to defend ourselves and our allies from any attack as the president and secretary of defense have made clear. but we also have a clear and aggressive strategy to counter this threat to bring about a diplomatic resolution, applying all levers of pressure on north korea to change the kim regime's strategic calculus. our campaign is aimed to bring the dprk act the negotiating table where we hope to achieve the denuclearization of north korea. we recognize the success will depend on heavy cooperation from our international partners, especially beijing. we are working closely with china to execute this strategy and are clear eyed in viewing if i'mgress growing, even, that china has made on this front. our task is to hold china and others to these internationally
binding obligations and to convince china's leaders to more fully exert their decisive leverage over north korea. we do not seek accelerated unification of korea or an excuse to garrison troops north of the dmz. we seek a peaceful denuclearization of the peninsula at a north korea. 's belligerent actions and does not threaten the united states and our allies. we appreciate the strong interest in this issue from congress in we look forward to continuing our cooperation. vicki for inviting me to testify. i am pleased to answer any questions. >> i will start with you. executive order 1380 empowers treasury to go after -- excuse me, i should ask both of you this question. and powers treasury to go after north korean facilitators. it was suggested that united
nations was not able to impose stronger sanctions because of china and russia. our secondary financial and trade sanctions the answer? >> thank you for that question. we think, as you know, we have the ability now, and executive order, to impose secondary sanctions against financial institutions and we take that new authority very seriously. we believe that while the sanctions were the strongest pass by the u.n., we believe they were the floor and not the ceiling. so we have to constantly take additional measures to make sure that they are implemented with full force and we are holding all countries accountable to cut off any revenue stream going to north korea. we are doing that and will continue to do so. >> ms. thornton, do you want to
add anything to that? >> thank you. i think what i would say is we are looking hard now at implementation. what we have passed has covered a lot of morning trade. we are working very hard to implement the new executive tools it gives us greater to go ahead and work on implementing and trying to ferret out these illicit underground networks that north korea uses that have been much of the lifeblood of their proliferation networks. i think implementation is key. we are working with international partners, and i think continuing a full-court press with those international partners on implementation is going to be the key to really upping the pressure on the kim regime. quickly, ms. thornton, how successful do you believe we can be in getting that international cooperation? what i would tell you is we have been raising this issue with every single international
partner the we've been meeting with. and we've had international partners coming to us and volunteering their own national --sures the kobe on the u.n. measures that go beyond the u.n. security council resolution. what i have seen and i saw also that the high-level week in new york last week that all countries are seized with this matter and they are looking actively at what more they can do to choke off illicit trade and other kinds of diplomatic presence and labor presence in their country. so i think we will keep up the pressure and we need to keep it up. we need to keep a unified international coalition on this, but having countries and their partners raising it with other countries as well as it has proven to be very effective. >> thank you. president announced executive order 13810, he recognized a chinese bank with the directive sent to other chinese banks to sound like it instructed banks to cut off
business with north korea and wind down existing loans. there is less known about what will happen to china's current north korean business or future ability to deposit or transferred dprk funds. can you shed any light on this directive by the chinese central bank? basically the question is, is the policy of china truly changing? >> thank you. i think china is sending deliver messages to its banks and other companies in china. there was an announcement today that the chinese commerce department sent an announcement that all north korean firms and joint ventures with china had to be shut down. we are working closely with the chinese. we think they are taking this seriously but we will continue to monitor it. we will continue to share information with them on actions we think that they need to take. this is obviously a very serious
problem and the urgency with which china takes it is going to be key to any successful economic pressure campaign. >> thank you. senator brown. >> thank you, mr. chairman. thank you both for testifying and your service to our country. dig down date -- deeper on the sanctions issues. ms. thornton, you've testified to use strategic accountability describe our ongoing u.s. policy towards pyongyang but the essential elements of the strategy haven't changed in the push for further multi-lateral sanctions authorities, improve u.n. sentience, -- you and sanctions, enforcement globally and urging other nations to cut off normal political relations and trade with north korea. are you taking full advantage of the sanctions authorities you have, including those congress enacted last month.
have we seen quantifiable outcomes at this point? especially in terms of reduction of pyongyang's revenue streams and significant impacts on the regime's ability to advance its weapons programs? for you, ms. thornton garrett -- ms. thornton. >> i think we are taking maximum advantage of all the tools they've been given and taking maximum advantage of our diplomacy with countries all around the world. i believe that we have instituted a number of designations. we have had a series of designations and have been rolling out sanctions on various entities in china, in other countries. all of these designations target north korean trade and north korean entities and illicit proliferation, and it certainly has had an impact on the ease with which they are able to make transactions.
it has cut down on their ability to earn hard currency and it's having an effect of increasing pressure on the regime. >> thank you. this is a question for both of you and i will start with you , ms. mandelker. many of us here in this body and all of our allies are concerned about the president's statements about the jcpoa. the president indicates he plans to blow up the joint plan of action. many argue this will seriously undermine u.s. credibility on nuclear issues with north korea and others. are you concerned that the president's position undermines our diplomatic efforts with north korea? >> no, i am not concerned. i think his are two very different and distinct problems. north korea needs to understand that we are very serious when it comes to applying maximum authority to applying economic pressure. frankly, this is an area where the world is coming together.
we are seeing the strongest council resolutions we have ever seen good we are seeing countries taking steps over and above. news, butrely is good the world came together on the jcpoa, too and do the koreans think that while the u.s. is going to pull out this agreement which clearly is working to keep, to stop the nuclear program. why would we have that credibility and why would the world think we have that credibility in our dealings with the chinese and north koreans? >> again, i am personally involved in working closely with allies in europe, japan, south korea and elsewhere. the message that i'm hearing is that we are very unified in this ever. we are not equating one issue with the other. >> you are not equating one issue to the other but don't our allies see that when we and our -- when we as a nation renege on
one nuclear agreement, we are not as trustworthy as i thought we were as a nation for the next round? >> i can't tell you what our allies think. >> but you just did. >> what i can tell you is we are very unified and sending a joint message to north korea. the we are all using maximum economic pressure and diplomatic pressure to get them to change their behavior. >> do you disagree with our allies, virtually everyone, he says iran is complying? i would defer to the state department. >> ms. thornton, respond to that if you would. also, does it concern you that we are working with the chinese as we should and trying to work to get north korea to change his change his policy,
that some of our allies question whether we are reneging on something we already did when nuclear weapons, a year and a half or two years ago? >> thank you. i'm not the iran expert, but i know that we have certified continuation of the jcpoa in the most recent process. i think the connection between that and north korea, the thing that is important to remember is we have been down this road with north korea several times already and they have continually undermined, cheated and disregarded the agreements that we have entered into with them in an attempt to do what we are also attempting to do obviously with iran, which is to stop, freeze and rollback an illegal nuclear program. i think what we want to do with north korea is make it clear that we are not going to go down the road again of being you know
cheated or full, and we are going to enter into this agreement and expect that they would live up to their side of the bargain. that's what the maximum pressure campaign is about, to build that pressure and leverage which will convince them that they really need to engage seriously in a discussion about freezing and rolling back their program. >> thank you both. >> before we go to senator toomey, i wanted to make an announcement that i made at the beginning of the hearing and that is that ms. thornton has to leave at 10:30 to meet with secretary tillerson overseas and we have a vote at 10:30. senator brown and i have forgone opening statements. i'm going to ask the senate to play very close attention to the time allocations. senator toomey. >> thank you, mr. chairman, thank you to our witnesses. i want to draw different parallel with iran if i could. two backup just a second, i
don't think anybody questions how great of a threat north korea poses to us. we have seen a nuclear weapons program for over a decade with tremendous acceleration in their missile delivery capabilities. this threat is growing and it seems to be at an accelerating pace. despite the many sanctions that we have on north korea, our allies have joined us, the south korean government reports that north korea's economy grew at the fastest rate in 17 years last year. that their gdp managed to expand by 3.9%. admittedly a low level, but they are experiencing economic growth. it's hard to imagine that they are going to abandon these programs if they are discovering they have greater prosperity year in and year out. i want to commend the work you guys do. i'm grateful for it. i agree fully with the executive
order to further pursue sanctions, we've had witnesses who have reported to us, and i don't think our current witnesses will disagree, we are not yet at the maximum level of possible sanctions against north korea. for instance, we are told at past hearings that there are financial institutions conducting transactions with north korean entities that are not subject to the secondary sanctions. would you both agree with that? >> any financial institution would be subject to our authority. >> i understand that, that is it true that there are financial institutions, including chinese institutions, that are conducting financial transactions and have not had sanctions imposed directly on them? >> as you are probably aware, in june, we took action against -- >> i'm in favor of that and glad. my point is, there are many
other institutions that are conducting transactions and you have acknowledged today that there is one chinese bank that has had sanctions imposed directly. my point in all of this is we also have learned i think that the mandatory sanctions of the iran sanctions legislation probably played a big role in bringing iran to the table, and it is my belief, i think it is shared by my colleague, the senator from maryland with whom i'm working on legislation and we been working with treasury and we want to continue to work on this, but the threat of mandatory sanctions immediately passes,t legislation sends a very powerful message to financial institutions. i think that's the tool that we need. that is the tool that worked with iran. we have not adopted that yet and it's my hope that we will and i welcome your thoughts on it. >> of course we think that having the authority to go after financial institutions is
incredibly important. that's why we have the strongest executive order. the president just signed the strongest executive order that we have ever had, which gives us the authority on a going forward basis to impose secondary sanctions against financial institutions. we think banks are taking note. we are carefully monitoring their ongoing activity and behavior. the safety and the security of the american people comes first and we won't hesitate to act where we think it's warranted. >> i understand that, but having the authority to do something is not the same thing as being required to do something and the latter sends a stronger message. now, i think there should be a way for an institution that seizes and desist, for instance, to be subject to sanctions. i think we want to have a mechanism that does not permanently disqualifies a u.s. institution from the market if they have seized and desisted, by my own view is we have to
take the most aggressive steps possible and this is as serious a threat as i can plausibly imagine. i hope you will continue to work with us in the sector. i want to thank my colleague for the great work he has done on this, and i think i have come in 32nd sure. >> thank you, senator toomey. >> senator reed. >> thank you very much. i commend the chairman and the ranking member for the best statements they have ever given. [laughter] in the past, we have used the five party mechanism with south korea, japan, russia, china and the united states. at this point, it seems a lot of the diplomacy is one off. you got to china, you talk to them. someone presumably is talking to
russia. why do we convene the five party talks and show not only strength but a concerted effort? >> thank you. we are convening, i mean we don't have that specific mechanism in folks, but we are doing a lot in the un security council. we are doing a lot with various multilateral partners. we had a very strong statement out of asean at the recent ministerial in october in manila. we have gotten a lot of different actors to step up and help us with this effort. certainly we are doing a lot of consulting with the regional stakeholders and especially our very strong allies, south korea and japan. the president met with them both in a trilateral format new york. but we have also been consulting very closely and had long meetings and extended discussions with both russia and china. i think we are doing as much as
we can with those regional stakeholders but we don't want to be tied to one particular format, and we are certainly open to any formats or opportunities that would put pressure, more pressure on north korea. so i think we are open to it. we just haven't found it necessary to do it in that format. >> do you concur with ambassador haley that the united nations has exhausted its usefulness? >> well, i think she was referring to the issues of increasing the level of sanctions. i think we all agree almost all of north korea's external hard currency earning trade has been captured in one way or another through you and -- through u.n. security council resolution and i think there is probably some more that could be done there. mostly it's been incorporated so far. the main task going forward is
on implementation. >> i concur. regard, secretary mandelker, do have lots of after thiso go company, and second important is this shipping company? can you give us that strategy? >> we are constantly thinking about how we can exercise our authority, which means maximum strategic impact. we are looking at the biggest generators in north korea and taking action against revenue generators. we are focused on sanctions of -- sanctions and the reason we are where we are today is north korea has been incredibly adept at evading our sanctions and we want to cut that off at the pass. we are focusing on high revenue generators and focusing on going
after those financial facilitators all over the world. we just announced designations of 26 of those this week that were situated in different countries. again, always focused on the maximum impact. as an example, in august, we went after three coal companies that have generated a half a billion dollars worth of revenue to north korea. we designated them to cut them off again at the pass so they can no longer generate that sort of revenue. so focused on the high priority always. >> those three companies, you have effectively shut them down just indicated we are going after you? >> we've indicated that they cannot use the u.s. financial system and sent a strong message that no one should be dealing with any company that is continuing to trade with north korea. >> but companies are steel -- still dealing with those
companies? --i cannot tell you an open in an open setting, but the message is clear we will go after any company that does trade with north korea. >> a think that's a good message, but again, i think we need specific evidence that it's working. it was mentioned the growth in their economy was not unsubstantial last year and we have been messaging for two decades. >> and gray with you. that is why in this administration, we are taking the strongest mentions -- strongest measures we have ever taken. we have had many measures in the past and they have not worked. these are the strongest security council resolutions we have ever had. the executive order that the president signed last week is the strongest across-the-board executive order that we have ever had. we are taking this with the utmost seriousness and we are pushing countries all over the world to do the same. >> thank you very much. >> thank you.
senator corker. >> thank you and thank you both for being here. do we all agree that in essence north korea is a de facto nuclear state? >> is that for me? >> they have been able to proliferate at an unprecedented level. >> i don't want to get into a long debate but we do agree that it's a de facto nuclear state? is that correct? >> i don't think that's the position of the state department. there are number of different technologies involved and i don't think that we would be able to say with concrete certainty that is the case. >> i am going to state that they are de facto nuclear state. that would be my position. i applaud the efforts underway. you know i have worked closely with secretary tillerson and
others. every one of our intelligence agencies tells us, publicly even, that there is no amount of pressure that can be placed on the leader of north korea to get him to stop. he views this as his ticket to survival. he is changing the balance of the peninsula. i applaud the efforts, i really do. are there, is there any course of action, we have been doing this 25 years, this is the most robust effort. is there anything you see that is changing, possibly changing the dynamic that exists where in the short-term, they will deliverable to united states, a nuclear weapon, without a change in trajectory? i applaud with secretary tillerson is doing, but view of
our intelligence agencies is is no amount of pressure that can be put on them to stop. so i'm asking if there's some dynamic you see that is going to overwhelm that unified view to change the trajectory? >> i think that is the intelligence community's assessment or at least the assessment of many of them, but i think what we are doing is testing that assessment and i think what has changed is the growing level of international isolation and pressure, especially from the leading up tor of north korea this point, which is china. we do see china's policy shifting. we are trying to turn china's position from looking at north korea as some kind of asset to looking at them as a liability. secretary tillerson has made a lot of progress on that front. the pressure that is being regime isw to the kim
greater than at any time in the past. we need to test that. >> is the denuclearization of the peninsula the absolute objective? >> yes. >> congress has taken the lead on many things and there's no question that congress took the lead for years on iran. i don't think there's any way without the pressure of many people on this committee for a long time, and on the foreign relations committee, i don't think there's any way we would have ever gotten iran to a have place to negotiate. congress passed sanctions on russia recently, congress passed additional sanctions and congress took the lead on north korea. i'm at the point personally where i wonder whether additional congressional activity is helpful when we are on the brink of something that could become a catastrophe. i applaud all those people who
want to play a role and i'm not in any way being pretorius about that -- being pejorative to that effort, but in your perspective is that helpful for congress to pass additional legislation right now and i know no administration ever wants congress to do anything, but are there heightened concerns currently about congress taking additional steps as it relates to sanctions? >> what i would say is we all want this to be resolved diplomatically and peacefully. we think the maximum pressure campaign is the last best chance to resolve this peacefully, but that also means eventually we will need to get into some diplomacy and we will need flexibility when we get to that point. i think we want to keep in mind that we want to get to the diplomatic solution, and when we get there, secretary tillerson will want to have space to
negotiate. i think, you know, members of congress i have spoken to, i know many of them travel and many of them are going around the world and talking to people about these issues. i spoke to one last night who was just in beijing and met with chinese officials for an hour and a half on north korea alone. i think that kind of message coming in a unified way from every single government official in the united states is very helpful. and also we have been telling all of our local partners. >> you didn't address sanctions. i think you are avoiding that, that is fine. my time is up. >> i would be happy to quickly address it. we are grateful for the authority congress has given us and as i mentioned, the president has signed the strongest executive order that we have ever had. i think it's also incredibly important that we have the ability to remain flexible.
we have to move and strike with economic powers according to what intelligence is telling us will be the best targets to exact an enormous amount of economic pressure. when her hands are tied in different ways he keeps us from being agile in the way that you would want us to be agile and ordered to maximize economic pressures that we'd be happy to work with the congress on legislation. i would caution taking away her ability to be flexible because it could decrease our ability to assert maximum economic pressure. >> senator heitkamp. >> let me run through this quickly. can we be effective in any kind of sanctions policy without total cooperation from china, yes or no?
n from china, yes or no? >> i think total cooperation from china is the key. can we be effective? absolutely. >> that is what i'm saying and i'm going to get to the point. does the united states and the united states government and the chinese government have identical or at least similar goals in dealing with the korean peninsula? >> i think we do have similar goals. >> what would those be? >> the chinese government wants to see a denuclearized peninsula. they also want there not to be chaos war and war on the korean peninsula for these reasons. but their main goal for the current process is rid the korean peninsula of the program. >> if that is true why isn't the
chinese government doing everything they can to achieve that goal? >> well i think that they have done a lot. >> i'm talking about full on maximum at -- effort maximum restrictions on trade maximum restrictions on doing business with north korea. if that's true why isn't the chinese government exerted the kind of authority on a diplomatic and sanctions regime that would achieve that result? >> is hard for me to get exactly inside with their policy process is that what i would say is the calculus that they have about the line between war and chaos and getting to denuclearization might be slightly different than the line that we have and they seem to prioritize very much the
economy on china so they have said that they want to make sure the people of north korea are not adversely affected. of course we don't want that either but they seem to have a different calculation about that >> i think that's the ultimate challenge here going forward which is finding parallel purpose with the chinese in achieving this result and having a coalition of extreme willingness in doing everything we can to achieve that result and short of that i guess secretary, short of that kind of collaboration and cooperation how is this going to work to change behavior north korea? >> senator we are working closely with the chinese to make sure that they are likewise maximizing economic pressure.
we are in very regular discussions with them. we have seen some recent steps that they have taken that suggest they are increasing the economic pressure that's going to be brought to bear but we are monitoring it very carefully. i think the authorities that we now have in the executive order sends a message that if any country doesn't take this as seriously as we think they should we will not hesitate to act. it's partially working closely and collaborating as we are doing but also sending the message that the president has said and secretary mnuchin has said we will continue to up the pressure. >> is the chinese government doing everything possible economically and with the trade relationship? would have effectively achieve a deterrent from further
progression in north korea to acquire a nuclear weapon? >> will we are trying to do is change the strategic calculus of north korea and we have to do that in concert with all of our partners around the low. i can't tell you it's in the intelligence but that is her ultimate object if to achieve a denuclearized -- by changing a calculus. >> and you believe that's the chinese ultimate goal? >> i can't speak with for the chinese but i can tell you they are working with us on this urgent matter. >> thank you. senator scott. >> thank you both for being here. we struck an agreed framework under three with the goal of eliminating nuclear ambitions. in 2000 president clinton relaxed for sanctions under the assumption that north korea was upholding its end of the darden darden -- bargain. 2005 minutes each china japan north korea russia and south
korea signed a joint statement celebrating north korea to abandoning its nuclear weapons program again. 2006 north korea tested its first nuclear weapon. since then north korea has conducted five more nuclear weapons tests and dozens of missile tests. i will ask you both if an denuclearization agreement is reached how can we assure that the kim regime does not phóc us again like they have over the last couple of decades? >> senator i agree with you, that is the challenge. if an agreement is reached where going to have to be very carefully hold them to account. we cannot get to the place that we are in today and again we would maximize the pressure that we have put on in a calibrated way to a void the parilla
situation we are experiencing today. >> i think what we would have to do is make sure that they have the entire international community on board for the enforcement agreement and it's very clear what the stipulations are in the enforcement. it would be an intrusive inspection regime and we would have to lay all of that out in the process of agreeing to that. >> senator heitkamp started to talk about the chinese peninsula on north korea and my last question goes in that direction. the recent executive order allows treasury and state on financial cetaceans to continue to do business with north korea. the president gave her department the discretion as to how to implement such measures and who to go after. the latitude you have been given as a deterrent to north korea. case in point the same day the executive order was announced
the peoples bank of china told financial institutions to wash down the books of business with north korean clients. our deep economic economic dependence hurts our ability to incentivize action. does the simple threat of secondary sanctions bring about about. >> senator i can't tell you what has motivated the chinese. the various announcement we have seen from the chinese. i can only tell you we are continuing to work with them and put pressure on them to take the steps that they need to take and i think executive order sends a very important and careful message that if we see continued invasions of our sanctions regimes and we see banks not comply with their obligations to restrict this kind of activity we won't hesitate to act. that in and of itself is sending a very clear message to banks around the world.
>> this is a question on your opinion. my question is do you think the chinese have come to a similar conclusion about entering the dependence of their economic future on america? >> so you mean are they concluding because of the interdependence that they can stop short of fully implementing the sanctions? c part of their challenge is they have a lot to lose. >> i think that's right. i think they care a lot about the relationship of the united states. they are very concerned about what's going on in north korea in very concerned about what it implies for their strategic security picture in the region and further on national security. i think they also are complying
with the international sanctions regime that they voted for in the u.n. and said over and over again they will when i think they care about being seen as implementing the sanctions so that's what a lot of the recent efforts and initiatives have come from in concert with that. >> if compliance of the north korean regime blows through the actions of china which is delving into the relationship we have with china -- thank you. >> senator donnelly. >> i want to thank you both for being here. secretary mandelker i was wondering if you have met with adam szubin yet.
>> i have met without him several times. >> i would recommend you stay in touch with him. he is worked on the side of the street for a long time and his extraordinary talented worked for democratic and republican evisceration cindy is a patriot above all. whenever i have somebody who can help me as a resource i try to use them and he is a great resource for you to use. senator sachs and i held the subcommittee may point the key findings that are sanctioned efforts can't be effective unless they are within a clear conference of strategy and ms. thornton in your written testimony to the house foreign affairs committee in september 12 you wrote their guard to the strategy on north korea we are not seeking regime change or collapse nor do we seek accelerated unification of korea nor of the dmz. my question is this week there
was a statement from the commander-in-chief that the north korean regime will be along much longer. how do we put those two things together and how do we create a strategy when there appears to be two different programs rolling around here? >> thank you very much senator. i think our strategy as the primary goal of denuclearization and that is what we are working toward. the president's comments have been directed more at the issue of threats emanating from north korea from her homeland and what would the our very reasonable and likely response to an attack from north korea. i think these two things are a little bit different and i don't think the clear statement that we are trying to make in order to make sure that the north koreans understand what would happen if they made a
miscalculation and initiated an attack on us or our allies i don't think that undermines our declared a statement of her purpose in the negotiations and the diplomatic process of denuclearization and not the other things that you mentioned. >> secretary mandelker our sanctions efforts undermined if they don't follow with a clear message? are we making that clear message? >> yes senator i believe we are making that a clear message. >> then let me ask you with regards to china and north korea where are we with that and what are the opportunities with that? >> that is imparted to the chinese but we are also sending a message writ large that we will cut off or enabling the authority to target any industry
so that messages coming clear from united states. >> isn't the key sanction that is needed to get the attention of kim jong un bind their economy up to actually make a dent? >> i think the oil exports certainly are very important and we again, we are not limited in our ability to target any company. any oil company. >> i understand that but the oil continues to flow. >> my understanding is it that those continue to flow and i believe it should stop. >> and what are the plans over the next five months to drive that up completely? >> senator
can we hit them with as much as we can as fast as we can and as hard as we can? >> that is exactly what we exactly what we are doing. >> ms. thornton i want to return to something you said earlier that i disagree with and i think the fundamental disagreement undermines the what yogi berra said if you don't know where you were going you might not get their. few believe that china seeks denuclearization of the peninsula i know this with the chinese mouthpieces say to united states and western audiences but i just can't agree with it. they claim they have a refugee crisis on their border or unified pro american korean peninsula. i find it to be specious. say what you will about our country, china has proven they have a backup method to deal with the refugee crisis as well like they used at tiananmen
square. second if they were worried about a refugee crisis or a pro american unified -- on the border of their numerous diplomatic measures they could take pics i'm pretty sure the united states agrees for reunification as we did with germany and i'm sure we have troops nor the dmz. we set up refugee camps supported by the united nations inside of north korea. and finally i would just look at china's actions imposing those oil export sanctions at the u.n. security council a couple of weeks ago. north korea's economy has grown over the last six months. trade with north korea was up earlier this year so all of these things suggest to me when china says they want to denuclearize north korea they are -- their intentions.
north korea would become an isolated stalinist state the way east germany or romania was in the cold war but they wouldn't pose any real threat to the united states are allies in the region. we would be having hearings about chinese economic warfare and espionage against the united states. the armed services committee would have hearings about china building an island in the south china sea. the senate foreign relations committee might have committees on their embargo on taiwan. i would say it benefits china strategically in a competition against united states if north korea remained nuclearized and therefore they are not going to take steps to denuclearize north korea unless keeping the nuclear north korea talks benefit. that is my perspective on what china's motivations are. i would like to hear your
perspective. >> i think where i probably would not share exactly your assessment is what the chinese assessment is the security implications for them of the continued nuclear program in north korea. they are very clear that if there was a continued nuclear state in north korea there would be continued proliferation on their border and there would likely be a catastrophic acceleration in the breakdown of the nuclear nonproliferation regime around the globe and that has far-reaching security petitions for them. i think that is probably the place where i would have the most difference. >> i agree that a nuclear japan or south korea both which will probably achieve that aim in a year or two years of the most would be in their interest but
if that's the case where not doing the things that i just outlined? why are they not seeking the diplomatic agreements with the united states that would allay their concerns in advance of any effort to denuclearize north korea? >> i think we have seen them adopt the most far-reaching u.n. security council resolutions that we have ever seen in the quickest amount we have seen. i think they have change slowly and they are increasingly concerned about the behavior of north korea and they are increasingly, it's becoming clear to them the implications for them which they had maybe not fathomed clearly an offer earlier. >> my time is up. thank you for the testimony. i do not think they are a strategic competitor and the current status quo is benefiting
beer just as opposed to a denuclearize north korea and i think her committee is to take that into account before crafting measures. >> senator schatz. >> thank you very much. ms. thornton and i know you have to go at 10:30. first of all what is u.s. policy with respect to the korean peninsula specifically? he said the primary goal is denuclearization. is that u.s. policy? >> yes. >> when is a primary goal does that indicate should we infer from that that there is a secondary goal? >> that is our overarching goal in our current strategy bringing the maximum pressure be a cheat. >> following on what the chairman of the foreign relations committee said the intelligence community's assessment that is unlikely and i understand you have to do what you have to do and we appreciated but understanding
here we are with the state department representative of the treasure representative and you are only doing that which is strategically necessary in your own way and yet we have an objective that may not be achievable at all. i guess the question is are there short-term project is setting aside that goal whether or not we are going to argue about the extent which is realistic to denuclearize the peninsula, do we have a short-term objective we are trying to achieve? >> i think the objective is to change the calculus of the regime and balance their nuclear weapons program and indeed show them the cost of that program is high and they won't be able to maintain it. sad that sounds like a long-term objective of that goes to my second question which is it fair
to say we are in a crisis situation right now? >> i think almost every high-level official of the u.s. government has noted north korea is our most urgent and compelling national security challenge so it has been said a timetable that north korea is moving on to develop its weapons program is much more rapid than we had foreseen and we are working as fast as we can and as intensively as we can to get sanction regimes put in place and implemented. that is why we are engaging everybody in the world. >> i want to be respectful of your time so those don't sound like crisis management enterprises. i'm with you on the strategic objective of getting kim jong un to change his calculus but i don't see that happening in the next three to six months or in the next six to eight to 10
months and yet we are in a crisis right now so the question is is the department of defense the white house and the national security council and crisis management mode to integrate that which we are doing for a long-term objectives which by the way her intelligence community is saying may not even be realistic and the question becomes have these long-term objectives which have call it a 30% chance of success and many say zero but whatever the chances they have some low likelihood of success but they also may have the unintended consequence of escalating the short-term crisis. i think we need to know we are up to right now which is all of this sounds good and to chairman corker's point is incredibly satisfying for us to criticize china and pass the sanctions and to do our oversight that if we are in a crisis and the u.s. government's policy will do
something that most people think we can't do then i think we are in a dangerous situation and you compound that with the fact that you basically have few levers. you have the sanctions which i think you are doing an incredibly effective jobless, you have readiness and you have diplomacy with the new have this commander-in-chief who uses belligerent rhetoric and i don't want to ask you to comment on that because you work in the administration but it has to be recognized that your strategy may work at another time with another president. the extent that you have coercive diplomacy and you have amir's flying across the censor properly signal that we would be ready for any contingency. if that is concurrent with a threat via twitter that we are going to wipe them off the map. we can't view our strategy is
separate and apart from what the president of the united states says predators ask you to consider the possibility that we are in a crisis in the commander-in-chief says things that are not relevant to wait -- to what we have to do. i time is up to you. >> think you and ms. barton and senator warren has tested you can stay three minutes and she promises to stick to three minutes. >> i promise. thank you mr. chairman. president trump is facing a a nuclear crisis by engaging in name-calling with an unstable leader in north korea. the president's struggling to deal with north korea which already has nuclear weapons and is advancing its capability but he is has also created another crisis by suggesting that he may not certify to the congress that
i ran is complying with the nuclear agreement which so far has prevented i ran from getting a nuclear weapon. the president has certified twice that i ran is compliant with this deal and if he fails to certify again next month this could blow up the agreement and i ran may restart the development of nuclear weapons. i ran supports terrorism and engages in human rights abuses and works with ballistic missiles but i think it's easier to counter iran's destabilizing behavior that has no nuclear weapons. so ms. thornton if the united states causes the i ran nuclear deal to fall apart would it make it easier or harder for us to resolve north korea's nuclear crisis through diplomacy? >> i don't really want to speculate on the hypothetical but i do think it's very
important to hold countries with which we have agreements to account for the implementation of those agreements and in the case of north korea and in the case of past dealings with had with her three we have seen these agreements have been undercut by north korea. >> i understand your concern about their undercutting but the question is about our undercutting. so far the iranian nuclear deal is working and my question is, if we blow that up doesn't make it harder to get to an agreement that the north korea can believe in if we try to negotiate with them? >> our objective here is on denuclearization with the north floridians. we know that they are engaged in a lot of other nefarious behavior that is concerning but i think what we would want to focus on is that the agreement covers all agreements. >> i'm asking about the i ran deal and trying to get a
diplomatic solution with korea. >> i know there is speculation about what will happen with the i ran deal and i'm not the i ran person that we have the secretary has certify compliance for the last two times. i can't tell you how they look at it. >> i promised i would -- quoting adam szubin who says great nations not play games when it comes to their international agreements. doing so would be especially short-sighted when we are trying to convince the world to join us in a north korea sanctions campaign whose stated that this nuclear diplomacy. i think president trump would need to take his advice. >> misfortune you are excused and thank you for making the effort to be here when you have this problem come up. ..
it was a full range from the executive branch and the congress. we welcome working closely with the congress on these critical issues. >> but you made the point between authority and implementation and to both indicated that the question is whether we are fully implementing those powers the purpose of having sanctions is to make sure it is a constant driver. have you had a chance to look at the experts' report that has a bunch of chinese firms and banks to violate the u.n. sanctions?. >> sunday importance for us
to have the ability to remain agile to deploy the economic authorities. >> members demanded is another version but the question is whether we need to do more. if it was premature president trump said congratulations and i said we won the chinese to work with us. and that he was the leading in a blur of north korea and as of today there is a lot of chinese banks or firms that we believe continued to violate sanctions. what are you not identify them publicly even if there is no action? isn't there a
benefit to publicly shame those banks engaged in that type of activity?. >> we did name the one bank that was said the way to north korea. with we have a forward looking authority. and we will continue to deploy in a way but the executive order could have been issued. >> to put it in the of full list of ids -- identities the bank is one with over 58 and others that you have targeted but if we are
serious to cooperate in the stand the desire for maximum authority with maximum flexibility from the congress but i also think on a bipartisan basis most people agree with ultimate we the legislation that sent a message that we're very serious to make sure we implement these sanctions going forward. and then to be patterned after the airline sanctions legislation and hoping we can move in that direction. >> good to see you. is seen as one the senator was talking with you and you
wanted to respond. >> i think with the short term and long term objective is to cut off all revenue streams to keep that the ability of the wm deprogram. and going after the revenue stream or to map out their efforts in understanding how they use that stability around the world and to deploy those authorities and using intelligence that provides strategic impact. >> this is one of many hearings we have had.
so they argue that imposing secondary sanctions with the north korean regime is cause to collapse. could that cause that collapse?. >> we want to change the strategic calculus. so that they stop escalating >> so you talked about the president's executive order that you opposed any secondary sanctions. >> it was just signed last week so that particular section is the authority and
we will continue to monitor monitor, . >> what i will tell you is all options are on the table >> and just recently the chinese government issued a directive to stop certain financial transactions with north korean businesses do you have a copy of data or knows specifically can you share that with us?. >>. >> i appreciate you being here. >> i think you'd hear a lot
of frustration that maybe a contradiction of the intelligence community and with the secretary of state is trying to do and for the of members of the committee. >> and you said you have not seen the chinese order? in terms of your review are there any gaps? and the chinese of the north koreans. >> to issue that
announcement today with that joint venture that is a welcome step we're working very closely with the chinese. with the floor and not the ceiling. with the law's maximum efforts to enforce the obligation. >> you have seen testimony. and using different companies? and in terms of cooperation with the chinese on this point how good are the efforts so we can get those resources?. >> we are constantly working with the intelligence community to cut off those
front companies. and this week in fact, we designated with those financial facilitators around the globe and then to send a message nobody should be doing business but also sharing various information with the banks and what they should be looking out for to make sure they are not abusing that international financial system. and working closely with the intelligence community. >> we would be happy to.
>> the final point to echo the comments on this side of the aisle with the back-and-forth. and then to decrease the amount of the international support that the sanctions regime would have. and that this isn't a problem that suddenly emerged upon the stage from the trump administration and now we are reaping those results even dubbed a fresh
approach over the chinese with those congressional show actions -- sanctions with that international sanctions to put people through the challenges to maintain its control. said to have time for them to have real effect to have remarkable progress. >> what we are seeing now on the international stage with my partners around the globe that of president was in - - having constructconstruct ive dialogue.
that were in succession it would be critical to be successful with wide scale implementation of those sanctions and rethink countries need to go over and bob though -- over and above those obligations. with that diplomatic pressure with the strategic calculus and to put our maximum efforts. >> this would have been great if we had done this five for 10 years ago. >> that concludes our questioning. we just had the vote called so it turns out the timing works out pretty well so as
the senators indicated they give for the great work you're doing thank you for your work that is going on at the state we deeply appreciate your work. there will be further questions. and to submit those within one week because we are working on a timeframe with legislation that you need to respond within one week. >> if i could add, the ranking member to the appropriate committee that worked on the jpoa if there
was an issue of noncompliance that if you will let us know what that is specifically in the review that request to share with the treasury secretary and that deadline we ask for the answer by early october and we would like you to follow-up. >> we would be happy to do so. thank you for the hearing in our continued partnership. >> that hearing is adjourned. [inaudible conversations]
>> coming up, steve scalise returns to the house after being shot in july. an update on hurricane recovery efforts in puerto rico. a look at the republican tax proposal. next week the former chair and ceo of equifax, richard smith will be on capitol hill after a data breach that affected more .han 143 million people on tuesday he will testify before the house energy and committee. on wednesday, he will appear before the senate banking's committee. with live coverage each day on c-span3, online that committee. c-span.org and streaming on the free c-span radio app. >> for as long as i live, i will never forget that in no other country on earth is my story even possible. hasn't madey that me the