tv Effectiveness of Financial Sanctions CSPAN December 29, 2017 1:05pm-2:41pm EST
get contest details on our website at student camp.org. ♪ >> the health financial services subcommittee on monetary policy and trade subcommittee held a hearing on the effectiveness of us sanctions against hot-- countries like iran and north korea. to state department officials testified about how countries tried to get around to sanctions and potential legislative changes to boost the effectiveness of sanctions. >> committee will come to order and without objection the chair is authorized to declare recess at any time and members will
have five legislative days in which to submit material to the chair for inclusion in the record. this series-- hearing is entitled evaluating the effectiveness of us section programs and i recognize myself for a opening statement. i'm pleased to welcome our colleagues and witnesses to the subcommittee hearing on us sanctions. from iran to north korea to russia and venezuela got sanctions are used as the instrument in our foreign-policy toolkits and congress must ensure that they be held accountable for results. this hearing will examine major sanction program as we seek to evaluate their effectiveness. let me highlight three points that may provide context. first, sanctions are key to bringing about behavioral change abroad and in this committee it's designed accordingly. that means calibrating sanctions and the sanctions relief based on specific and achievable actions we wish to see from a
foreign actor. tailoring sanctions in this way is especially important for secondary sanctions given how banking restrictions tend to have broader and less predicable effects than primary measures work in october, financial services committee reported in the full house overwhelmingly passed north korea nuclear stations act from a piece of legislation i was proud to sponsor with our ranking member from wisconsin took the bill would impose financial sanctions targeting every area of north korea's economy including all petroleum imports at any deployment of labor abroad. this week test launch of an icbm that can reach a part of the us underlines the maximum pressure is needed. our bill outlines the principles that the majority and minority consider essential for the use of secondary sanctions, not only with respect to north korea, but other countries as well, namely
we should strike with as much strength as possible, provide the president with stability and determination of sanctions to a narrow set of realistic objectives. this kind of approach is distinguished from what way my call quote symbolic sanctions" that is devoting of scarce resources with no real impact on force-- objectives. for sanctions to retain their credibility we must guard against such half measures. is sanctions are antibiotics than we should ask what indiscriminate use will do for antibiotic resistance and at the same time if we want to preserve the trust that the world continues to hold in the us financial system, we must think clearly about what it means to restrict access to that system and communicate with equal clarity so others understand the rationale that governs about the imposition and lifting of our
sanctions work of the second .2_is the need for continuous engagement with congress when the executive chooses to wield it sanctions power and as we know that executive possesses broad authority under the international emergency economic power and maybe less well known is that it's laid out exclusively with provisions for regular congressional concentration and reports so that these authorities are exercised with appropriate oversight. the committee would encourage witnesses to examine whether the office is upholding the letter and spirit of these provisions see if i has been that recipient of goodwill and using emergency powers countably will help ensure that such goodwill is the same. this brings me to .3 and as our country becomes more relying on economic sanctions to carry out his foreign-policy the treasury
department will be called upon to make its voice heard on the substance of that policy. we have seen bureaucratic changes that reflect a shift, in august for instance the president signed into law that advocating through sanctions act including secretary of the treasury as a member of the national security council. in light of this trend we should expect congress to look more and more to the department in particular they to t a fight to implement sanctions and help shape their goals, scope and strategy and to answer for sanctions shortcoming if they fail to meet objections here treasury undertakes these things to a certain extent already, but it's accountability will only grow with these debates and i want to think i witnesses were testifying today and look forward to working with them so our sanctions program are coherent, realistic and impactful. the chair now recognizes the ranking member of the subcommittee the gentle lady from wisconsin for five minutes
for an opening statement. >> thank you. before i begin my comments let me thank our guests from the treasury department. i always look forward to hearing from these experts and information is a powerful tool. lets me begin by thanking our chairman for calling this hearing and as indicated before i'm a part of the bipartisan work on the north korea sanctions and proud to have worked on that in a bipartisan manner and i do believe that we passed a strong bill and i hope the administration does the hard work of implementing this bill. with that said, can pretend i'm not concerned about the general state of us foreign policy and this administration commitment
to implementing our sanctions program. i can tell you that as an american i think there are many other people who join me in feeling we are isolated and week and was the british even debating whether or not the president of the us is welcome and england, i mean, this is stunning. my constituents are very concerned about the extent and depth of the relationship with human rights violators, vladimir putin, a relationship that has the president and many of his cabinet incisors mired in the scandals related to: connection i'm concerned with reports that the department of state eliminated the coordinator for
sanctions policy and we did the hard work in this committee. i'm sure our witnesses are where the us currently is sanctioned and congress recently passed sanctions against russia so it's puzzling to me why the department of state would eliminates the office that would coordinate these sanction policies. i think you can catch my drift and perhaps even empathize with me, cutting out some people who could help you. i'm sure you are also aware that the administration seems not to be implementing these russian sanctions. forgive me, but i grew up in a time where as a public school student and a little girl we were diving under our desk we were so afraid of russia and so it's puzzling to me why we are not implementing those sanctions at this point.
i'm worried that the administration is more interested in implementing the goal of the kremlin to not have sanctions with the statutory mandate. i really am interested in hearing about the treasury efforts to make sure it's implementing congressional intent and vigorously enforcing sanctions against russia. i'm going to apologize in advance for bowing out of the meeting someone early because i have a conflict of another meeting that is extremely important as well, but it's to look forward to hearing your testimony and i will be here to hear your testimony and answer some of these questions. i yield back. >> the gentle lady yields a back. thank you. today we welcome the testimony of marshall billingslea,
assistant secretary of the treasury for terrorist financing. he helps oversee the ministration efforts in administering economic sanction programs globally and prior to joining he served as managing director for business intelligence services. he previously held positions at the department of defense where he served as deputy under secretary of the navy and principal secretary assistant secretary for special operations and low intensity conflict. he has also worked as a nato assistant secretary-general for defense investment and as a staff member on the senate floor relations committee he's a recipient of the defense medal for distinguished public service at john smith is the director of the treasury department office of foreign asset control which is responsible for administering economic and trade sanction to advance us national security and foreign-policy goals work he has previously served as the acting director.
prior to joining he served as an expert to the united nations al qaeda and taliban sanction committee from 2004 to may 2007 and is a trial that-- attorney in 1999 to may 2004. each of you will be recognized for five minutes to give an oral presentation of your testimony. without objection or written statements will be made part of the record. mr. billingsley you are recognized for five minutes. >> if you could pull your microphone closer that would be great. >> thank you for inviting me today to offer testimony on the effectiveness of sanctions and to talk about a number of the matters that you chairman and you ranking member have raised in your opening statements. the treasury department has pioneered the use of targeted sanctions as a tool of statecraft we continually refine how we employ financial pressure
in the interest of time we will skip to the bottom line up front which is that i believe there are several reasons why sanctions are effective tools. i do actually agree with the way you laid out the overall context of sanctions, but i believe i can name and will name numerous examples in which sanctions have been affected and i would like to provide for specific reasons or for specific matters which i think affect the effectiveness of sanctions when which is to employ them. this administration has aggressively targeted isis leaders and operatives for their operational and financial support around the world and the result has been that we have engaged in over 70 actions against isis leaders, facilitators, recruiters, affiliated money services and businesses worldwide. us and un designation along with close cooperation between the us and iraqi authorities in particular. i just came back from baghdad a little more than a week ago and
have effectively shutdown a number of exchange houses functioning and-- as key knowns for isis and daesh. separately we continue the effort against al qaeda and other terrorist groups through unilateral and multilateral actions and secretary of the new chin as you may know recently announced the opening of a rather significant and innovative breakthrough which is the creation of a multinational terrorist financing targeting center that is housed in saudi arabia and in conjunction with that announcement six council member states, so seven of us together seven nations impose sanctions on a network of al-- other isis financiers and weapons trafficker in yemen. this was one of the biggest multinational designations are outside the us. we have also targeted and i'm sure you will hear more about the way we have gone after
dozens of north korean individuals and entities including: a bank, banks financial facilitators and any revenue that could be used to support the various weapon programs that the regime has and will cut that off. finally and i know we want to talk more about iran, sanctions were the dominant factor in forcing iran to the negotiating table over their nuclear weapons program. we are committed-- the administration is committed to combating iran's behavior around the globe. their leader has admitted their donors are scared to remit funds as a result of sanctions. i mentioned for specific reasons i think sanctions are effective. first, we employ these against the backdrop of an international financial system that we continuously work to improve to create enforceability to create
standards through the financial action pass force to cause the us financial system to embrace anti- money laundering and encountering the financing of terrorism standards and to create regimes enforceable across the. it's been a patient and long-standing effort of the treasury department. is a bipartisan endeavor that has stretched across multiple generations and it's because of this backdrop of driving this regime that we are able to cause our partner nations to work with us and to embrace and enforce these measures. i would say in the interest of time a second reason sanctions are so effective is because of the financial diplomacy that goes with the actions we undertake, specific treasury action is often preceded by an almost always followed up with engagement by the treasury and state department with our allies, partners in the public and private sectors and i was a
general proposition sanctions are most effective as the ranking member indicated when they are implemented multilaterally. this administration and no administration would hesitate to take action and a lot-- unilaterally to defend the us people. when we do work with other nations travel five our message and we of course pursue financial diplomacy through multinational organizations such as the united nations and i also mentioned the tft seat as another example. i'm out of time, but to summarize the final two reasons which i can come back upon as you wish the third reason and 34 criteria that we have to be clear and consistent in her message when we sanction what is it we are thinking to achieve and i suggest how we approach as venezuela is a good example. mr. chairman, you mentioned the specifically that the extent to which the targeted individual
their finances do they touch that financial system and i would agree with you that symbolic sanctions probably are not worth the candle, so there are times and places where it's worthwhile trick again, appreciate the chance to appear before the committee. >> director smith, you are recognized for five minutes. >> thank you. thank you for inviting me to discuss the important role of sanctions and addressing some of our nation's most prominent national security and foreign-policy challenges to the director the treasury department , i will speak to the sanctions my office has imposed against the supporters of destabilizing and provocative action of government such as north korea, iran and russia as well as a range of other actors engaged in conduct of the ideals and interest. when deployed strategically and
with precision, sanctions are highly effective way of pressuring regimes and malign actors to change their behavior. of these regimes and actors ultimately rely on funding to operate and by freezing their assets, cutting them off from the us financial system and restricting their inability-- ability to interface in the international financial system the choice becomes clear, either modify your behavior or accept isolation and negative economic effects of our financial. what of our highest priorities is targeting the north korean regime and its key financial vulnerabilities. this year zero pack has issued a grounds of sanctions related to north korea adding 112 entities to our specially designated national block person list. the regime requires revenue to maintain and expand its nuclear and ballistic missile program and we focused our efforts on
areas where we can have the maximum disruptive impact. just last week we sanctioned several chinese trading companies read responsible for hundreds of millions of dollars of imports and exports to north korea over the last two years. earlier this year we designated chinese companies that have imported nearly half a billion dollars worth of north korean call between 2013 and 2016. that action combined with diplomatic pressure and multilateral sanctions helped pressure china to announce that it would hold all imports from north korea represented a blow to the regime's revenue-generating keep abilities. iran is another top priority and since january zero pack has issued a charges of sanctions involving iran designating 70 targets around the globe in connection with the islamic revolutionary guard and iran's ballistic missile program
support for terrorism, human rights abuses, cyber attacks, national criminal activity and other destabilizing regional activity. we recently designated the irg seat under the global terrorism executive order pursuant to the adversaries through sanctions act and pass legislation you mention. just last week we sanctioned and irg seat force countering that work to get advanced equipment and material to print counterfeit banknotes potentially worth hundreds of millions of dollars. another significant priority is addressing russia's destabilizing activity in ukraine. this summer we continued our regular pattern of sanctions and designated 38 individuals and entities involved in the ongoing conflict in ukraine and more recently we have an hard at work implementing requirement and publishing guidance relates to the legislation passed by congress or, to be clear and emphasizing the treasury is
fully implemented every requirement delegated to it within the statutory deadline. we have also used our sanctions this year to address the erosion of democracy in minnesota. disrupt major narcotic travelers in mexico,libya, peru and venezuela, increase pressure on the assad regime and antiterrorist groups like isis and hezbollah and shine a spotlight on various governments for serious human rights abuses. we have dedicated the of our resources and attention on the issues most pressing to our nation's security. we greatly appreciate congress' partnership in continued efforts to ensure opec and tf i are with adequate tools. i will note our existing powers are relatively broad and in order to achieve maximum impact
we need flexibility in administering and enforcing our sanctions. additionally, the increase in congressional reporting requirements with no expiration date ultimately draws resources away from our primary sanctions activity. thank you again for the opportunity to speak with you today and i look forward continuing to work with you and your staff as we try to maximize the impact of our sanctions. >> thank you. gentleman's time has expired and the chair recognizes himself for five minutes for questioning. let me first commend treasury and the trumpet administration for abandoning this policy of strategic patients that has led north korea to obtaining a nuclear arsenal including the hydrogen bomb and as we saw earlier this week a intercontinental ballistic missile capable of reaching the us and potentially reentry vehicle for that missile and i would commend the treasury for its sanctions in north korea. however, i do want to read into the record an op-ed you probably
saw this morning in the "wall street journal" entitled maximum pressure on north korea china and the us still have imposed sanctions and i will read" from the article quote the trumpet administration has done more than its predecessors to thwart north korea's progress, but it's far from using maximum pressure. it may not work in the end, but the alternatives are terrible. wednesdays icbm test shows kim is getting closer to his goal of spreading us cities, so why is the us not using all of the tools that has to stop him, so my question is this to both of you, in a hearing before the senate banking committee this fall treasury undersecretary state of the security council resolution pertaining to north korea represent quote before, not the ceiling and that's why under the bill we referred to earlier the north korean
sections bill that was bipartisan we go throughout-- be on the resolution to target all oil experts-- exports. the question is this, if the un resolutions are just the floor for us policy, what is treasury doing to eliminate the petroleum and labor loopholes left by the resolution and why should congress tolerate the same incremental strategy that's gotten the kim regime where it is today? we will start with you, mr. billingsley. >> thank you. so, obviously the un sanctions regime is multi- nationally crafted and it requires the chinese and russians to come along and we in fact investor haley at the un reengaged in wake of recent launch to drive again to further ratchet the pressure on north korea for its continuing behavior. i would say we have actively worked to try up all of the
different mechanisms by which the north korean regime retains petroleum and other petroleum products regardless of the fact that the un security council resolution that they ultimately did not create a position to shut off all accrued oil imports. they agreed to a reduction in the crude and to a cessation of oil products to the number of things we've done and again this is back to my point about everything-- not everything is a sanctioned and there are other things that the treasury does in a diplomatic world back zero beyond that individual discrete sanctions act, but john will be able to tell you about the sanctions we have engaged in to target the different exchange mechanisms by which people were illicitly blowing petroleum into north korea and on top of that we've identified the latest evasion technique that the north koreans use which involves north korea oil freighters pulling out the bill of the ocean and linking up commercial charter oil tankers to do ship to ship
transfers exposing these and had gone after their flagging authorities with the various nations to yank the fighting authority to cause the vessel to have difficulties and we further investigate the network of showing ownership structures that are created to hide the true ownership of these ships. on labor we have been-- i personally have engaged with a large number of countries overseas including the middle east to secure agreement to expel north korean slave labor from these countries and to identify the company used to exploit these people. those are two examples-- >> if i could jump in their. you did mention in the testimony about the designation of the four chinese trading companies that have conducted business in the designations, but i'm sure you are familiar with the recent report that indicate there are over 5000 such companies in china and we just want to know how treasury can make a dent in these chinese firms doing
business with north korea if you focus on individual designation as opposed to the secondary sanctions on these middlemen front companies. >> the challenge we have is when we see these press reports in these 5000 here in 3000 are the challenges that we need to meet evidentiary standards for the measures we take, legal standards, so we need more granular information so john can take his actions. when we get these leads, we follow them up aggressively. >> my time has expired and as my questioning points out and as our recently passed house bill makes clear we believe there is a need for treasury to exhaust all options available especially in light of this most recent listing missile test and at this time i would like to recognize the ranking member for five minutes of questioning. >> thank you so much mr. chairman. one of the most horrific acts occurring anywhere on the planet earth at this point is that
ethnic cleansing that's occurring-- ethnic cleansing occurring with the rolling up people that fled to bangladesh since late august and i was wondering is there any program under the global act that targets seniormost members of these security forces who likely ordered these rapes and murders and ask. have you identified any of these folks and wind we expect to see sanctions announced against firma? >> thank you, ranking member. i'm glad you mentioned the act we appreciate congress is giving us the authority to target human rights abusers and corrupt actors worldwide and as you mentioned that authority gives us the opportunity to target those that are responsible for such activity as human rights activity no matter where they
occur. congress has given a mandate in that legislation asking us to report certain period and take action by certain period when the next period comes up in december and i think the treasury department is working to make sure we implement this statute fully. >> have you identified any people in burma? >> we have not. its authority that's been just delegated to as. >> thank you for that. i was arrested hanging out with john lewis. warned to some of the freshman about him for protesting at the embassy for crimes that had been committed in sudan and the president, by the way, still remains under indictment of the international criminal court for war crimes including genocide. we impose sanctions for human rights violations and yet we have relaxed them under this administration. what did i miss?
>> well, not relaxed, we actually removed them. >> removed them? y? >> on the basis of criteria established by president obama. he, president obama established by the specific criteria against which they would be held accountable. >> thank you. my time is waning. i will continue on this theme of sanctions and human rights because i'm confused by what the policy of the administration is. we have seen him follow obama's agenda. he is re- imposing sanctions and structures against cuba. he has decided that venezuela has become enemy number one because of the government's role in undermining democratic processes and institutions and yet we see that he shows the
fondness for two tele terrien strongmen around the globe including philippine president, praising the authoritative-- authoritarian leader of egypt who had his political opponent gunned down and jailed about distance. the president thinks they had done a fantastic job in a difficult situation and of course, defended president vladimir putin against accusations that he has murdered journalist and distance. so, i'm wondering why there seems to be such a checkerboard approach to sanctions? can you help me sort of sort this out and also what i want to ask you, mr. smith, is a sometimes you can give the waivers and i went to know if
there are any waivers that we don't know about and if you do it without coming to congress for reducing or relinquishing waivers against russia. >> thank you for the question. with respect to the human rights related designations, we continue to target of the past year human rights related concerns and north korea, iran, south sudan in venezuela among other programs so we have continued our focus on human rights concerns in terms of waivers with respect to russia-- >> élan. >> most of the waivers that might exist in the statutory programs have been delegated to the state department under the various authorities. we can issue a particular license and under that cuts the legislation-- >> okay. quickly. my time has expired three magenta ladies time has expired
and the chair recognizes the vice-chairman of the the subcommittee and author of the strengthening oversight of iran's access to finance act, the german from texas. >> thank you for your conservation legislation most recently that the house passed to increase north korean sanctions and given the overwhelming increase under the kim regime this legislation could not be timelier. i would like to welcome assistant secretary mr. billingslea mr. smith and thank them for joining us. i appreciate your time and i appreciate your expert testimony america and some of her most important allies such as israel under the constant threat of those that wish to harm us and the work both of you doing the sanctions to keep the bad actors away. appreciate that. there are areas where we can improve and i'm specifically encouraged by the current administration path forward in dealing with the worlds most forward-- first date sponsored terrorism of the land. i'm encouraged by the direction. so, this is secretary, mr.
billingslea a queue for being here. karen continues to be concerning to me and this i represent. we must do all we can to ensure appropriate sanctions are enacted. to that end i recently sponsored a strengthening oversight act which was reported favorably out of this committee and it just yesterday was introduced by senator cruise and senator perdue and the senate. it will increase congressional oversight of aircraft sales to iran and their effect on financial institutions. mr. secretary, with similar steps can be taken further to prevent the abuse of the financial system by karen and away of human rights abuses for assistance to the reshot-- assad regime? >> as you said iran is the foremost sponsor of terrorism around the world and they have used their newfound access to financial resources to further
support terrorism across the middle east and globally. ironically-- iranian cuts in particular is heavily engaged in destabilization in syria, in a rock and are moving money to hezbollah, hamas and other terrorist organizations and obviously the rolling yemen in the civil war there is truly incredible. much more needs to be done to constrain iran's ability to obtain and move finances to terrorist organizations. that's why congressional action with regard to the iranian revolutionary guard corps as the parent organization of the cubs or is a major entity or set of entities it interwoven throughout the economy and one of the things we have cautioned our european allies and others is to be very careful as you look at doing business with iran because we has sanctioned the--
actually the europeans have sanctioned irgc as well and we expect that extreme caution should be exercised before entertaining a type of business in that country particularly when they have not only no safeguards or anti- money laundering regime to speak of, but when they are engaged in the outrageous counterfeiting behaviors that director smith mentioned which completely fly against all financial services sector. >> i would also like to further discuss the tools that the treasury utilizes and its fight against iran's destabilizing financial activity and in august congress passed his sanctions against iran's missile program and his men rights abuses and i believe iran will develop new ways to work around us and international sanctions to continue their campaign of terror. how do we maintain pressure on
iran's leadership and financial institutions assuring the irgc and financial institutions don't create loopholes to avoid these sanctions? >> quickly into waste. i will talk with one and then director smith on the other. with regard to pressure on the regime one of the things they have to do is they have to create a legal framework and be held accountable for stopping the finance of terrorist them. they don't have sufficient laws in iran. i don't know that they would honor those laws even if they had them. they don't have the regime in place and we should insist until they have an anti- money laundering set of laws that are enforced and countermeasures should be imposed on their financial sector. >> i was going to say i think we need to keep doing what we're doing and ramping up pressure and exposing bad activity across the board wherever we sit around the world no matter what country , no matter what type of company and we expose a different type including the counterfeiting ring i mentioned earlier. >> i yield my time back.
>> the chair recognizes the gentleman from north carolina for a five-minute. >> thank you, mr. chairman. thank you gentlemen for being with us today. director smith i would say to you as well mr. secretary would you please discuss with us the tools you believe are effective that are at your disposal that will allow us to address export controls? i would like you to discuss that as well and what modifications should be made if any and the relevance of that committee particularly as we deal with nations who have supported our adversaries and also seek to acquire assets in our own country. so, if you could respond to that
, i would be grateful. >> thank you for the question. i think it's been very helpful to have interest from congress and making sure we have the appropriate tools and you ask about the appropriate tools we can use. i think the power congress has given us in the oversight that congress plays has been unimportant role in success in being able to go after these types of activities of concern here to the fact we have the authority call out these activities, freeze their assets, prohibit us persons wherever they may be and engage them in this type of behavior and congress nudging us to add an additional designation or sanctioned for example with respect to the eye-- irgc. that's been a very helpful power for us to have your chi think zero yield to my colleague marshall on the question as opec plays a role in reviewing some of those, but it's not my
expertise. >> congressman, the issue i have is that this administration process belongs to a different part of the treasury so i'm hesitant. i will arrange the discussion. >> we need to ensure that our-- that their critical pieces of our economy are safeguarded from adversarial acquisition or influence. >> do you feel they are vulnerable today? >> i do. >> do you feel the expansion, the oversight is warranted today >> i'm not sure i understand exactly what's implied by that? >> greater capability for oversight for understanding the origin of fun, the structure of
acquiring entities to make sure we understand who is behind-- >> joint ventures and the like. >> absolute. >> when dealing with the support of terrorism, what should that standard be? >> i will defer to director smith because he has a team of lawyers and counsel to help them on that. it tends to vary. >> the standard is the basic administrative standard and it's a reason or cause to believe that it's a relatively low standard in terms of when you think of the overall standard of proof of beyond reasonable doubt in the criminal context or a preponderance of evidence. ours is a reasonable cost to believe it was basically are we
reasonable and believing and that's the standard we use in our designation program as well as our enforcement of sanction violation. >> given the actions of the various countries in the past, and knowing we have an mo you and cutter at this time obviously there have been concerns relative to ranch meant kidnapping and safe harbor, do you believe sanctions were warranted on qatar and other countries that have been exposed and to be expelled-- supportive of our adversaries. >> great question. talks about all the non- sanctions and financial diplomacy and one thing i emphasize was the importance
when sanction is a tool available to us at the threats as lying there on the table that we can use to great effect with various third parties. one of my very first trips in my capacity as confirmed was to qatar and i will tell you that we do have issues with qatar on the terrace in front. we have issues actually with many countries in the gulf on terrorist issues took a diverse country by country. kothari did recently engage in a series of arrests of very senior al qaeda financiers where we view that as crucial and watching the prosecution process that is now unfolding very very closely. see what the germans time has expired. mr. hill from arkansas. >> thank you, chairman. thank you for holding this hearing to assess how america is
doing on our sentient regime for some of the world's most rogue nations and i appreciate our witnesses a service to our country and tackling these tough issues because we will not be successful in countering illicit finance terrorism without every asset at our disposal, diplomatic, military and financial, economic, so thank you for leading the economic cause. i want to talk a minute, we have talked a bit about north korea. let's talk more about russia. i was particularly pleased that record-- rex tillerson appointed hour special envoy regarding trying to break the frozen conflict around minsk. i think this was something missing from the previous administration where america really partnered in the eu and heading in a different direction and i was intrigued by your comments and your testimony talking about russia's
destabilizing actions in the ukraine, but in addition to that it continues to metal in eastern europe, generally through cyber attacks, incursions, disinformation campaigns and even evidence that they interfered in montenegro's elections last october. it's for this reason back in june that mr. swayze of new york and i introduced fighting russian corruption act and one thing i would like you to do today is if you could take a look at that legislation and give me your thoughts about it officially from the treasury. it sets up a anticorruption office as a political matter to work particularly in the eu with our european partners about taking our knowledge and capability that we have both been cyber, illicit finance and
partnering with them to counter russian political meddling and i think it would be important because you do so much work in the technical assistance area where treasury would help train our us diplomatic efforts in that regard and make it part of our nato effort as well. we suggest that anticorruption become part of nato's readiness plan, so if you would just take a look at hr 2820 with 12 republicans and four democrats and i appreciate the work with mr. swayze on that. so, given this political interference you have established both in the ukraine and in montenegro and other balkan countries, what is the treasury prepared to do to punish and terror activities like this? >> congressman, i think you have highlighted a number of worrisome activities by the
russians. i would also add to that list actually the money laundering behaviors that we have seen them engaging in in some of the baltic nations as well as in cyprus and other places, which are fundamentally-- when you talk about corruption there is such a corrosive behavior that strikes at the heart of the financial integrity of these countries and so it is crucial and particularly that we go after russian organized crime. we've done a number of actions together with the secret service and others in combating russian organized crime. russian organized crime tracks right back to parts of the regime in various ways particularly when you talk cyber matters, so i think you are pointing in the direction we have to go to focus on the corruption. >> mr. chairman, i hope we can have a brand table or may be briefing on that matter. we have spent a lot of time as we should on north korea, but i
think it would be useful to learn more here. in the time i have remaining, a member of congress asked since then and your offices for reporting a lot of reporting and i think that's important to our oversight responsibility is critical here and you have that go to foreign affairs and some aspects and financial services committee. are these requirements becoming too burdensome, how can we consolidate our request to get the kind of information we want to have for oversight, but i know it seems like every measure we introduce as a treasury reporting obligation, could you reflect on. >> congressman, we are behind reasonable here. the reporting burden from north of 80, 90 different reports on that day back 20 years is crushing, absolutely crushing. in your opening comments you talked about how we needed to bring every asset to their and i
will tell you within a very small structure of tsi we are talking 700 people total of which half our boat-- focused on banking oversight, so when you talk about the undersecretary organization and our intel shop, we are consumed by reports and as a form at senate staffer i cannot tell you i know all these reports will be in red. >> thank you, sir and thank you, mr. chairman for the time and i hope we are more sensitive about our regulatory reporting burden on these important accurate-- actors. >> the chair recognizes the chair from west virginia. >> thank you. my question is for mr. billingslea. you mentioned that circumstances providing financial intelligence to a trusted foreign partner was all it takes to shutter or freeze a bank account. our to go back further because we have to get the intelligence first. we have to find it in the discussion today revolved around
the ways the us sanctions rogue nation, terrorist states and others that pose a threat to our people and our economic and financial systems and with the complex around the globe we have partners who hate the us in these fighting disinformation. some are countries or individuals or groups that wish to hate us and give us information on the certain activities of the funding of terrorist organizations, so my question is would it be helpful to our cause in general to get this information if your office could reward those individuals or groups that stepped forward with helpful information about where our adversaries are keeping their finances and if so what-- if the senate could be used to encourage such an idea. >> congressman, i would like to talk with you more about that and understand, but at first glance i think it's exactly that kind of innovative insightful support that through legislation congress could help us in the
mission we have to undertake up your queue are spot on in terms of the challenges we face in the information gaps we often have particularly when it comes 10-- down to that last tactical mile of getting to the adversary bank account so the idea of a rewards program i can tell you for my time and running a special operation in the conflict office for secretary rumsfeld, we use reward authority to great effect to elicit information in my time we used information paid rewards for the identification of where saddam hussein's two sons were. we deployed special forces to bring them to justice and that was highly effective, so i would like to explore that further, but i think you are onto something. >> i have some more time left, so changing questions and more specifically on a country, it's estimated in 2016 venezuelan economy contracted by 18% and saw inflation of over 250% with
further contraction of 12% in 2017 and inflation of six and%, so our understanding is the executive order the president issued in august which restricted dealings in venice whaling debt has further affected bond at liquidy and added to pressure on the president which i think is a great idea. the president is like a rhino running out of control in that area. so can you articulate with the endgame of the dwelling-- that is well again sanctioned is, what outcome are you aiming for and how appropriate our existing sanctions to achieving it in venezuela? >> venezuela is in-- is-- the economy is in a death spiral due to the kleptocratic policies as they have engaged in wholesale looting of the country of the state will enterprise and the
ensuing humanitarian crisis that is erupting around this and it's a major national security issue on top of a communitarian disaster mainly because it affects the: it's next-door. i am very concerned-- it looks like we are on the verge of a malarial epidemic now because madura is blocking bringing enough humanitarian assistance from the outside. he's preventing and for his own economic mismanagement they don't have the resources so we have a significant issue here and the president has made it clear that we won't purchase pay in the looting of that country's economy. sanctions have been imposed on any new debt or equity in those sections will only be removed if there is a return to the normal democratic process in that country. >> i for one appreciate the presence of aggressive report-- approach. my mother fled a communist country of cuba and america could have stopped that ended
and now, we have really bad actors trying to impose evil regimes on folks that don't care about human life and stealing and it's terrible so we would like to encourage you to keep that up and anything we could do to help i would appreciate it. i will yield back the met the chair recognizes the gentle men from california. >> does the venezuelan government owned major assets in the us? >> carsten, yes. 60 is a wholly-owned subsidiary -- >> how come we have not seized those assets for the benefit of the venezuelan people? as long as they remain under their control they will be looted. we could seize them, sell them and put the money in trust for the venezuelan in people. are you moving in that direction or are you just going to let maduro run the company into the ground looted? ..
working with the white house when the new executive order was issued. specific provision was included -- >> did you sell the company and keep the money? [talking over each other] >> could ask on by the stock tomorrow? >> could amazon buy the stock? >> so the ownership structure of how to get get back to you on but -- >> if they don't want to be after the barn doors closed, if you could fill the entire company tomorrow, and i don't think you need them to the invest in the united states. so anyway, more work for you when you get back. we require a lot of reports but
that's because we don't require reports, pathless and nothing happens. as to north korea, the strategy of the administration is to go after individual chinese companies. that may raise the cost of doing business for north korea a bit but if the top 25 chinese companies in an industry refuse to do business with north korea the 26th biggest may not care about doing business with the united states and they may decide to pick up the north korean business instead. the only way you're going to accomplish anything is if you at least threaten to section the whole country. it's got to be something that hits the government in beijing, not just the pocketbook of a few large companies because it is not a successful sanction if you for somebody to pay a higher atm fee because the banks with a lower atm fees won't do business with them. they go -- the goal here is not
to annoy pyongyang. if not to destroy pyongyang but it is to put them in a position where the deal their economy might be destroyed. let's turn to iran. designated as terrorist entity given his support for the assad regime, its involvement with terrorism. yet every day, airports in europe and every day the flag airline from that the country s from the big airport to the united states. why are we allowing european air carriers to start their flight at an infested airport and come to the united states? why are we not going after the airports, or are we serious? do you have an answer? >> is a great question, congressman. we are very serious.
it is the aviation arm of the quds force pic is what they use to traffic weapons, terrors, assassin -- >> so why are we doing business with airports that accommodate them? why are american planes still buying fuel from the same companies that sell fuel to them at european airports? >> two points on that. what is that we had been in a departure from previous ministrations broach with an incredibly aggressive with the european speeders heading a low bar for self but go on. >> at least weekly the bar, right? i think you make a good point and i think it would be very prudent for any company that transacts with mahan air to the exceptionally cautious going -- >> i don't think they should be cautious. i think you should nail them and they will know. let's talk about the irgc. there are about 800 irgc companies that are yet to be sanctioned. your sanctions about 80. your sanctions on individual planes. i'm not counting those.
likewise a handful of companies and individuals that then the invisible providing significant assistance irg is separate sanctions. is your standard of proof to high? is your staffing to low? how many farsi speaking individuals do you have working full-time on this? >> so congressman i would say answering a few questions, on mahan air wanted to say we have done some designations the last few months against european airlines, ukraine airlines that have been servicing mahan air and we actually took action, we're looking -- >> is there a flight that is been canceled as a result of that? >> there have been some routes that had been stopped over the previous months because of mahan air because of the us government outreach over the past year. on the questions you asked on making sure standard of proof,
it's the reasonable belief standard that we have big it's not a too high pickets sunday we could live with. in terms of overtime to do with irgc and other targets, trying to the maximum impact once. not try to do a numbers game where it would give you -- >> how many party speakers working full-time? >> i can get back to you. >> time has expired and may have enough time for second round. the chair now recognizes the german from indiana, mr. hollingsworth. >> i want to echo of what michael existed in thanking you for the work that you, your team is putting every single day. hoosiers back in a night district to unseat some of things they see around the world and i know you and your teams are working every day to enter the world become safer for americans at home and american interests abroad. i wanted to spin the globe back to venezuela for a moment, mr. billingslea. you had mentioned their jurisdiction on new debt with
regard to venezuela. i understand that. i know also that restriction is fairly broad in the summary of new debt as provided by the fact it is somewhat difficult understand with regard to her specifically i think there were a number of frequently asked questions that were also posted a people parse through what is new debt versus existing, et cetera. i wanted to find out whether this possibility or expectation that more clarity will be provided around the new debt definition for venezuela specifically? back and go to either of you, frankly. >> page for the question. we have been responding and we published additional faqs with respect to me these questions with respect to venezuela. we do put something at with respect to what the meaning of debt as well. we can refer you, those faqs do you or your constituents before getting a lot of calls on this trying to be responsive. >> fantastic. as mr. sherman and others imagine some clarity around understand what transactions are permissible with the cartoon
citgo as well. i know had some constituent companies concerned with any dealings with them or understand what level of dealings with them and don't want to be unnecessarily or unintentionally caught up in something that's larger than they are. >> if you can have your constituent reached out, we have compliance hotline that operates as well as the licensing division. we are taking calls on this and try to make sure we get the clarity. >> i know that i constituents and the companies they own and operate or manage want to do the right thing, understand the humanitarian crisis as well as the passion scooted crisis this presents but the want to do the right thing and understand where they are with regard to the law. following up on venezuela further, i know that one of the things a couple of us have talked about is a need to restructure the debt in venezuela. with new restrictions in place that can't have may happen only in some sort of gray zone of understanding.
is it your understanding that we are going to require the madura organization, , administration, government itself to change? or is incapacitated which of those officials themselves can get into compliant such that there can be a restructuring of the debt by imf or other external resources? >> on the imf question, this is a country, this is a regime that has failed to publicize any of the standard data that are expected by properly functioning economies. on top of that you were dealing with a regime were madura and his cronies, his vice president is a drug kingpin and he put him in charge of the debt discussions. the designated individual, on top of that, this is a country where its constitution specifies the national assembly is the
only organization that can authorize the issuance of new debt. what madura did was wiped out democracy. he overturned national civic these people and for their lives. he has now established this constituent assembly which is packed full of his people. >> the regime needs to change in order for us to be able to accomplish that. >> i don't think we are saying that. we need to return to the democratic order. >> understood. and then is there any feeling what the timeframe or timeline might occur? do you see any weakening in resistance by the administration, the cronies, et cetera or has it been -- >> to the extent the regime has been enriching themselves at the expense of the venezuela people, including through the wholesale theft from the stable company, it's clear that the gravy train is come to an end. they are out of money. they crash the economy.
presumably at some point people will look around and say wow, the united states is designate me, the canadians have designated me, the european union is starting to designate officials above me. maybe it's time to look at doing something different. >> i hope that come soon. again just in my closing i wanted to thank you both for the effort you undertake every single day. i will yield the back, mr. chairman. >> the time of the gentleman has expired and there's been an interest in a second round of questioning of witnesses are willing to take that responsible on. we appreciate your testimony today, and again appreciate your service in the interest of our national security and using every economic level we can to deter our adversaries. i do want to follow up on some of the questions regarding russia as we discussed earlier i had an opportunity earlier this year to travel to eastern europe and visit with some of our nato allies. we went to germany and poland,
lithuania, estonia and montenegro. the newest member of nato. and i can tell you that our allies and the foreign leaders in these countries were very consistent in the message they deliver to us. and that message was in addition to russia's illicit annexation of crimea and the pros and conflict in ukraine, that there is a whole range of malign activities at the russians are engaged in to destabilize our nato allies from disinformation campaigns to incursions into the baltic with their air force. the attempted coup in montenegro was a major topic of conversation and concern. the cyber attacks, the militarization of the leningrad was of great concern to the
baltic countries. and so it's been now i guess for months since the enactment of the counting america's adversaries sanctions act which was the sanctions legislation on russia, and want to just ask you all, what has treasury specifically done in implementing that sanctions legislation? secondly, what has been the response of the russians to that? and what if any behavioral change have seen from the russians? i have probably given you too much to answer so i will go ahead and leave both of you to consider both of those issues. >> i can start at and say we have been very busy to make sure we're implementing the requirements and doing it on time and per the legislation. just about every 30 days starting in day 60 congress in that statute required that we do some type of implementation of
the act with respect to russia as well as the other part. in day 60 we started modifying our directives or put it under the russia-ukraine sanctions program to tighten restrictions in their get would done that at day 60, the 90. we started a few months ago and, in fact, we earlier this week did additional modification to continue tightening and make sure we explain that to industry and to the rest of the world so they know what they are and are not allowed to do. >> what is been the russian response? >> the russians haven't been happy as you can imagine, they were concerned with the legislation. they probably and that publicly with you all at the time. i think we heard that as well. i haven't had any conversation s directly with the russians myself. >> have you seen major behavioral change? the disinformation campaigns, the destabilization efforts, the russian aggression continues, correct? >> i think it has continued in many other respects that --
>> so that brings to mind the question of how we can make sanctions more effective and better change behavior and deterring russian aggression. i want to focus on energy, the russian energy sector. many of our nato allies have expressed interest in the united states helping eastern europe achieve energy independence, certainly it depends from russia gas. i want, and also in the case of lithuania the nuclear facility is being constructed about 30 miles away. belarus. the question is should we consider sanctioning and getting more aggressive on the nord stream project, other energy projects that the russians are endeavoring interfere with nato and get nato countries dependent and reliant, reliant on russian
energy? >> i think you probably, i know you all heard up in congress as well and the administration on the views of the european partners and allies with respect to energy independence. i think in the legislation congress did impose additional restrictions, additional tightening of the sanctions with respect to many of those features. i think my understanding is that congress engage with the european partners as well as did the administration. from my perspective i think we're still very from europe as we have that those sanctions that i'm not sure there's anything that i've seen that we think is needed. >> if the russians do not respond to what we've done so far, we ought to send a message to the russians that if they continue their aggressive behavior, their energy exports to our nato allies should be in the crisis of our sanctions regime. that's the give one member of congress but i would say there
are other members who feel the same way as well. with that my time is expired and so i will never recognize for a segment of questioning the gentleman from california mr. sherman. >> okay. i'd like to go back first two venezuela. i hope, too interested you will be going back, your office, to make sure the venezuela can't just sell citgo and take the money back to caracas? do i have the right? >> is prohibited under law. >> so neither the dividends -- >> the dividends are not -- >> but what they can do is overpay for oil. one way to dividend if you the retailer is just have them pay $70 a barrel for oil that comes out of venezuela with the world prices closer to 50. 50. i would monitoring that? >> i will verify that -- >> please answer for the record. what you are saying they can't sell the stock of citgo
inactivate dividend. >> they cannot pay the dividends under the executive order. a wholesale sale of citgo would likely trigger a number of things. >> what would trigger? if they're going to buy a major american company, that would trigger sifis. >> my understanding -- >> and/or they could just sell some of the stock. >> so please enter for the record but more probably use get questions for the record. what are we doing to make sure that citgo is not overpaying its venezuela affiliate for either refined are not refined petroleum products, but second what are we doing to prevent them from selling some or a majority of all of the stock? now, as do mahan air, it seems like ukraine was low flying fruit because just so happens the ukrainian airline is also in the airline servicing business.
united doesn't refuel american airline flights, but in some airports the airline is also come but it's not just sanctioning in that circumstanc circumstance. mahan air is light into malan and into munich. of it going to continue to allow american planes to fly into malan and munich? will continue to allow the four planes to fly from malan and munich into the united states? >> i can't talk about what we would do in the future but what i can do is the treasury -- >> why haven't we done it already? this is mahan air. why should flights, why should american towns be connected by direct routes and to airports that are servicing mahan air? >> the treasury department is engaged -- >> we try to prevent american airplane travelers from coming close to terrorists. they are flying in, that
terrorist airlines are already on the ground. [inaudible] >> excuse me. please continue. >> the european -- >> just remind everyone in the audience, this is not an open forum for conversation, and we will enforce that rule and the witness may answer the question. >> we been engage extensively with our european partners who do not have mahan air on their sanctions listed we've been trying to make sure to provide them information on mahan air that the need to happen, and at the same time enforcing and implement the most major impactful sanctions designation -- >> i will ask you to answer for the record why we should allow americans to fly in and out of airports when, as the land there are the terrorists right there. sounds pretty dangerous. and i will go back to the question of staffing. do you have enough staff to do the job?
>> that's always a challenging question. you know, the formalistic views is that i would need to coordinate with omb and so and so forth and we put the budget request for. the practical reality is that when you look at the use treasury authorities, we are burning hot. i think we just submitted to the finance committee hour, the survey that is taken of our employees. if you parse through the survey data what you see is our people, maintaining a worklife balance for pubis of the were keeping a very close eye on. >> your people are working enough so that their spouses are complaining. sounds like we should get you some more people. and speedy i was in the taxpayers are getting -- >> and untold between the two of you you have may be to farsi speaking individuals. are you, can easily be confident that between, between the two
view of you you have more than two that a working on iran and actually speak farsi? you can't tell me your five or six you happen to know of? >> i can go back and ask. we do a list ever you to make sure update, we do have farsi speaking individuals and that is when we find the talent, language talent that we need -- >> i i got 30 people in my district. let me know. >> amos on the lookout for great resumes. >> gentleman's time has expired. mr. williams. >> the obama treasury department authorize u.s. banks to finance aircraft. where backup that now. for the world's foremost state-sponsored terrorism jurisdiction primary money-laundering concerns. this allows their deposits depe use for state owned airline, iran air, that was sanctioned in
2011 for providing support to the islamic revolutionary guard corps and the assad regime of syria. so any committee and last april wheeler iran air to at least 114 flights from iran to syria between the jcpoa fermentation day and march 30, 2017, likely as an airlift in support of the syrian governments atrocities. this is an easy question. a simple yes or no. can you certify today that iran air cease all sanctionable activities? >> i need to get back to you on that, chairman, a congressman. >> if you would. next question, which financial institutions, if any, have contacted treasury with respect to aircraft finance for iran? >> i'm not sure of the edge to that. i'm not aware that any have but we can get back to you. >> would you please. thirdly, can you assure us that a u.s. bank or a foreign bank would not be exposed to any
significant illicit finance risk if they did business with iran air? >> i'm not sure of the question if you're saying we can assure you that the u.s. bank engaged in this transaction, any transaction that was licensed, they would be part of a transaction that we authorized. but where the money goes in iran i can assure you or give you any guarantee of where that goes -- i can't. >> the agree congress has the right to do with aircraft finance for iran may benefit persons that engage in sanctions, sanctionable activities include support for terrorism, weapons proliferation, human rights abuses? >> absolutely. absolutely you should know that. and we commit to engage with you at any point that you want to the discussion. >> two questions if you can get back to us on that.
another question i have. as part of the omnibus package passed or do we request of the treasure publication on entities that were delisted under the jcpoa and whether such entities have engage in sanctionable activity since the jcpoa. we've not got that result yet. if you could help us there. what is the status of that report? d.phil. in in today's that heather sanctions lifted under the jcpoa at continue to engage in sexual activity since deal began to be enforced? >> we continue working on the reports. as he said with about 90 you will working on and most of those we get in on time. some are more difficult because they are time-consuming. if we see sanctionable activity, sanctionable conduct, we act against it. >> mr. chairman, i yield my time back. >> gentleman yields back. the chair now recognize a gentleman from michigan, the
chairman of the capital market securities and investment subcommittee. >> thank you, mr. chairman. appreciate your testimony today. the disease again. a couple quick question. i want to touch on china and then talk about north korea. in 2005 the use designated china's as a financial institution of quote primary money-laundering concern. treasury department did the same thing with china's bank. these banks relatively small institutions and are there larger for financial institutions that treasure is going after? >> thanks for the question. we as a matter of practice don't tip our hand in advance of any -- >> i don't want to know names. i want to know whether there are bigger, there are bigger fish to fry. i'm looking for some reassurance that treasury is looking at this and is looking to pursue the. >> the best reassurance i can give you because it's out there is that we put out an advisor to
all of our financial institutions which delineated, which show the kind of -- the type of bank of bandon wasn't asian and highlighted other various -- everywhere are banks need to be wary and point them right at a particular part of the china adjacent to north korea where we urge our banks to be vigilant. you can attribute directly from that we have a lot of concerns and we continue to evaluate. >> mr. chairman, we had a great classified briefing yesterday and maybe this would be an issue and a subject that we could, if need be, we need to go into classified bipartisan briefing, we might want to look at doing that. quickly, july 13 the "washington post" article high-level north korean defector who is part of routinely evading sanctions noted out even when north korean firms on the blacklist he said
quote, north korea is 100% state enterprise. these companies just change the names the day after their sanction. that way the company continues but with a different name. with a different name than the one on the sanctions list, end quote. without objection i like to internet article into the record as well. -- i would like to enter the article into the record here i assume without objection. >> of course. >> thank you. we've seen north korean entities designated by treasury, is there more energy being devoted to enablers in china or southeast asia and elsewhere rather than just play whack-a-mole with dprk entities? >> yes, sir. they key is not to play whack-a-mole. they key is to map these networks out and then to take the networks down simultaneously employing not just sanctions authorities from a fact forward
with a law-enforcement unities, partner nations and their communities, , intelligence community and so on, get medical endeavors. otherwise you are treating symptoms of problem, not the root cause. >> in treating the symptoms i wholeheartedly agree, this one stand me. there's media reports that there was a proposal circulating within the u.n. security council that would have frozen north korean leaders assets. i said to myself, i didn't know there wasn't an asset that was a frozen already. if it hasn't been frozen, why not? this is the six missile launch that a test, that they've been picked if we have begun to everybody, every significant korean, north korean leaders assets internationally, which reports are they are significant, we know that there's no problem starting
their own people for advancement of both the weapons as well as their own grand iceman. what is treasury doing? is treasury going after those banks that all those assets as? >> we are. >> okay. i look for to make we can unpack this a bit more in a slightly different setting but i think this is a significant significant issue in this is what of the fuel tools that we know has worked in the past and we need to continue to believe that. with that i yield back. >> the gentleman yields back in the chair recognizes gentleman from west virginia for five minutes. >> continue right along the north korea issue line of questioning. i think my first question is about the office of foreign assets control to correct his first went to mr. smith. on september 26 ofac announces
designating a north korean financial institution along with what he six representatives of north korea, banks abroad. how is it that as of september 2017 there is still any north korean banks that remained unsanctioned? how many more still have not been designated? >> when we identify make we specific terminology come when identified those banks we identify them for the ease of the public but the state-owned banks that already have been designated as a matter, the assets would been frozen in the united states because they were government of north korea. we use the term we identify those banks and then we sanctioned the additional financial representatives around the world because we are adding them to our list. it's important for us because our list is used around the world. we want to picture that's on every bank filter nomad in the united states it also around the world so that they get hit even if it's not in the united
states. >> so you've got it covered thin, one way or another, okay. secondly, what is the real impact of blocking north korean banks property in the united states? was a magnitude of the assets? i would have access to them under existing u.s. trade restrictions? >> the impact of sanctions can be different depending on the entity that is sanction. a north korean bank would likely not affect assets, would not affect assets in the united states because we already prohibited that activity. but when i set the impact of sanctions is is freezing the assets in the united states, putting them on a blacklist so no use person around the world can deal with it. it's also our list is used around the world by banks around the world by major companies and conglomerates around the world. that's the impact is making sure that not just in the united states for the rest of the world can follow suit. >> it's not just banks that use
the ofac liz blake are certain governments and we'll talk much about this but certain governments that actually will pursue parallel blocking actions on their own based on a ofac sanction. so we do get a magnifying effect am a number of key countries went ofac takes action. >> thank you. second questions on north korea, either one of you who has more information to try to answer this one. i'm going to cite a "new york times" article as a conservative i don't often cite "new york times" articles but in this case i think they've done some good work. september 8 it was reported in this article that north korea may now be exporting last to china but north korea may also be receiving trade credits from china to finance continued imports. these trade credits would help nullify the effect of sanctions even if north korea are having problems coming up with hard currency. so if chinese entities including banks are negotiated the impact of trade sanctions, shouldn't
the treasury be designating them? >> that's a a great point, andi think we are seeing as they evolve in response to a u.n. security council resolutions constant effort to evade sanctions and margaret is one of the ways, so trade credits or maybe just plain old barter is another way they are trying to evade the effect of the financial hammerlock that we are endeavoring to put on them. so we are tracking that and if you trade with north korea, i don't care whether you're traded in dollars or whatever, any barter relationship exposes you to u.s. sanctions. >> thank you, mr. chairman. i just back. >> the gentleman just back and there is one minute left remaining from the gentleman's time. if i could just ask one final question to our witnesses with respect to north korea. a lot of the questions they are
north korea focus on secondary sanctions on chinese entities. we talked a lot about the fact that the secondary sanctions may not yet have been fully exhausted. to the extent that is the case, is that because of u.s. fear or concerned that we may lose asian cooperation, or is it merely a resource issue for ofac and treasury? >> it's not a fear to any stretch of the imagination. we are engaged, we have a game plan, a strategy and were executing that strategy. that strategy involves a number of different prongs of activity of which treasury action is but one. we are maintaining synchronization with our activities in the united nations, with our ambassador, state department come with law enforcement, intelligence and department of defense.
we it sometimes seems that were not quite sure why we're synchronizing things the way we are, be happy to come up and explain because there is a method to this full on economic pressure campaign. >> well again i like to think our witnesses not only for your testimonies today but your service and work that you are putting into keep the american people safe and to advance the national security interests of her country. without objection all members were five legislative days within which to submit additional written question for the witnesses to the chair which will be forwarded to the witnesses for the response. i ask our witnesses to please respond if this is probably as you're able. this hearing is now adjourned. [inaudible conversations] >> we want to sell on the newark stock exchange. shouldn't we be boycotting saudi arabia, , whether doing in yeme? is just heartbreaking.
much more were present that i is a much more responsible for terrorism why to focus on iran and not saudi arabia? i don't understand that. also don't you worry about the sanctions of whether doing to the people in these countries like the people of cuba? are supposed be supporting private enterprise and yet and you sanctions now are hurting the very private families that have bed-and-breakfast, that have their own restaurant for those of the ones being hurt by the new sanctions that trump just imposter what you think the sanctions on iran are doing to normal, everyday iranian people? shouldn't iran be rewarded fight of a nuclear deal instead of being penalized? i think you got it all wrong, congresspeople and ofac. go after saudi arabia.
saudi arabia is a number one weapons purchaser in the united states. what they've done with those weapons is to destroy the people of yemen. that is -- >> coming up on c-span2, i sent hearing with the chair and other members of the nuclear regulatory commission. after that a look at fuel efficiency standards for cars with representatives of the auto industry and an environmental advocacy group. later california attorney general xavier becerra on lawsuits he is filed against the trump administration. >> tonight on c-span "the communicators", looking at business trends in the technology world. >> in your book you talk about at 2040 scenario and you say that google is not going to be that big company that everybody
talks about. >> there's always things of rise and fall. aol, still around but not nearly as important as it was at its peak and that's also the story of business past the two centuries. companies rise and fall, cities rise and fall. there's this natural evolution of things. so exactly the leaders of the pack are in 2030 is hard to predict but for sure some of them will be new brands that did exist 20 years ago like a google or facebook. we need to make sure we're trying to level the playing field so there really are on to produce putting these to companies everywhere not just in a few places. last year it's crazy last you almost 80% of venture capital to just three states, california, new york and massachusetts, a 47 states, just over 20% of venture capital. we need to figure out ways to support entrepreneurs.
we even saw that in this recent election. people were saying i can feel left out, left behind by globalization and by digitization. we need to make sure in the third way we have more inclusive innovation economy and we're really backing startups that a quick and jeff everywhere, not just doing that in few places like a silicon valley. >> when i read that statistic about 75% going to california, massachusetts and new york, two things, i'm surprised washington state wasn't included in thing you have another stat which is only 15% of venture capital went to the red states, the 30 states of the donald trump. >> what we are essentially doing is backing the entrepreneurs in places like san francisco or new york and boston. they are doing interesting innovative but also disrupted thinks. some of that distraction is destroying jobs in other parts of the country. that will accelerate in the next ten or 20 years with artificial intelligence and robotics and
drives cars and trucks and things like that. >> "the communicators" on business trends in the technology world is tonight on c-span at 8 p.m. eastern. >> this week "washington journal" features authors of key books published this past year. join us for our live conversation with authors about their popular books. coming up -- >> the chair and two commissioners from the nuclear regulatory commission recently testified before the senate environment and public works committee about a range of issues.