would enable more than 5 million more borrowers to take part, or partake in the benefits than previously. and so i do think that that's very important, and it's important to make those opportunities attractive for borrowers. that said, i do think that borrowers who do qualify for these benefits are getting in these programs, and that actual is another big problem that i'd love to see lawmakers tackle. there's a major system failure were borrowers who qualify for these alternatives could be beneficial aren't getting in for these programs. so we have to get away to do with that look at the way the services are being compensated to ensure there's a smooth path for borrowers to build access the pay as you earn program now and an expansion, and some other

alternatives that are there. >> senator crapo. >> the private sector markets are contracting. i'm concerned that this reduces student bar options. could you describe the current state of the private student loan market and how that compares to the market and made a claim why we are seeing this dynamic? >> thank you very much for the question. we have gone from a $24 billion industry to about an $8 billion industry. and yet performance rating for -- many of her banks have exited student lending business. there are few others thinking about it. we have a 3% default rate. we flip the equation. we don't want to look at a refinancing option. we don't need to because we do all the work at the front end.

we make sure we have an ability to repay. there's nothing worse than telling a student at the very beginning of the crew we're not sure you can afford the loan we are about to give you. we do have self-segregation 90 some% of our loans are certified by the institution. when there is a time to repay the loan, we work with the student many, many ways including deferment and refinancing. that is why we are at 3%. just because we do the ability to repay doesn't mean it's a guarantee that the suits are more likely to repay at the very end. ..

over the compliance challenges for banks and supervision challenges for the banking regulators. can you share how th out the departments rule as it is proposed with impact bank accounts and what kind of compliance would be introduced for banks? >> at the department of education goes down there won't be much concern on the right to drestructure because most of the banks right now want to apply to the rules and requite remains of

the disbursement cash management program to banks and students that have nothing to do with the title for disbursement. there is other consumer groups to come to a consensus. i thought there was until the end they didn't give it. they want to apply the same rules and regulations that have nothing to do with title for. >> according to one measure or report come substantial performance exist between the federal and private loans and i think you mentioned that in your testimony as well according to the numbers i have private student loan borrowers only default on the single digits and

numbers posted 20% savings use at 14%. can you describe some of the features what is it about the federal ones that generate such a higher statistic? >> it was 3.3% and last year was down to less than 3% of 2.9. i think the biggest difference is the ability to pay. they do not take into consideration with ap africa situation is extensive underwriting standards and nothing worse we can do. everything you consider giving someone a loan unless we thought

they could repay the loan and you mentioned the number 20% there are some people just waiting on the federal site as high as 30%. >> we are talking about these bank products that essentially are used to take federal loans and the excess is moving to bank accounts. in your testimony you indicate there are arrangements between banks and colleges that would be determined with the students. >> on the campuses that they are a captive audience and the bank is getting an exclusive deal it

should be far superior through the students exposed to the deal being marketed to what is available on the open market but that is not the case. and quite a few instances the students that are driven into what is available right off campus. the reality is student aid is ending up in all types of banking and financial accounts that are offered to students on campus so the mainstream banking industry during the negotiations in the department of rule making at 20 to 40% of the places they had peels at the campus taking up those accounts, seven out of

ten are graduating with student loan debt and it's obvious it is ending up in those accounts as well as the others and therefore the department is right on point in terms of extending its protections to students. >> isn't the solution to require the school who is the intermediary to act as a fiduciary for the student? to ensure they do so for the benefit of the student and if there is in the range meant for the financial institution and benefits the student? >> they should act in the interest of the best students and that is a criteria that was put into place after the debate

in the marketing tactics that were in effect previous to the credit crisis and that was put into place there and it's helped make the marketplace more fair when it comes to steering that was occurring into the private loan products. and we would be thrilled if something similar for in-place when it comes to campus bank accounts and debit cards. >> do you think that you should act as a fiduciary for the students? all of th the disbursement or by check or deposit and so i can't comment. >> the choice is either let the

student decide. >> the student to does have options when they have the disbursement of pressure they can choose things. they can go to the bank that has to relationship with her own institution wherever that is what they can simplwhere they ce box and to say i would rather have a check. the student doesn't have to go to the affiliation whatsoever. we think this has provided a safe, transparent access for funds. >> some of these choices are harder than others. it's a suggestion there are preferential deals in the financial institutions which given the campus and incentives and they use the incentive to put people in the slums.

>> of the bureau has gathered quite a few contracts and taking a look at what is in those contracts and there are some reimbursements that schools are getting a bounty per student that takes up the account so the school has an interest to steer them into those accounts and the bazaar written into the contracts deliberately so there is that component and in terms of how that interfaces with the student consumer as i mentioned in my previous testimony, if you are mailed a card when you haven't made a choice yet and it has the campus logo into the lead or is telling you that you should do this right now as a function of receiving the financial aid refund of course you are going to log onto the computer and get started and

that is in some models where the rubber hits the road so it is a screen that is defined by the industry they are making the choice on the industry webpage and not on the campus website the choice to opt int in to the account is more prevalent and prominent and written in a way that steers the choice you might have to click through four or five screens to make the choice to your own bank account and in some instances you can't make that choice online you have to actually snail mail or fax information about your own bank account in order to get your aid to student interaction so it is harder and there are barriers and as a result students are

compelled. >> thanks for taking time and enlightening us on this particular issue. i have probably a better understanding on this particular issue i have four children and they are either attending school or just graduating so i have a pretty good idea of the financial burden the students are facing and on top of that the difficult job market that youth are currently facing. we have two issues and that is the financial burden of student loans and the jobless recovery the last five or six years. you talk to some of the students as i have and my own children back in the state of nevada and they will tell you you want to solve the problem, getting a j job.

they said we cancel the burden of our loans if there were jobs and they are disappointed this congress and they keep asking when is the congress going to do something to spur the economy and create jobs necessary so these young men and women can go into society to take care of themselves but this is the hearing only about student loa loans. i missed the opening statements, but the initiatives could you expand on what they are doing on this initiative? >> you sit down with a lender anthe lenderand fill out an appn providing your liabilities and income and so forth and it is approved it is sent to the financial institution for certification and they take a look at their request and

compare it to the cost of education at the specific university and then the lender hears the amount of money this person should receive. it is the ability to repay and if i may take a moment to respond to a couple things on the campus affiliation. it identified a single benefactor in the industry and they had enforcement action from the fdic. they are very low complaint rates received into the help stunt the tremendous growth of tuition and many provided scholarships based on this arrangement and higher in terms from the university and if they

provide a financial literacy on campus to the students so providing safe access to funds it has been well received from students and institutions could we have a lot of regulators in the banks if they thought we were unfair they would have the one bad player. >> do private lenders work with these students and share what alternative financing may be available outside of that institution? >> not only do we want to but we have to. it is required throughout the process we have to provide disclosures with them there's no question there are some benefits to having federal assistance before you have private assistance and after you exist

private matters you should go to the entity to do that and most students do those to the federal government assistance first but we have to and we want to. we have relationships already usually with parents and 97% of applications are cosigned by parents or another family member so if it is not just the first time we are meeting the student. >> if a student is having a repayment problems of the work with them? >> several opportunities. the last thing w we wanted wants somebody's credit destroyed at the beginning. we notify them when the first payment is due and work with them if they have hardship. don't have a high-paying job to extend payments and refinance the payment, either one. >> what is the average complaint rate for private loans? >> the cfp b. received

complaints from the public and disperse it to the public without verifying whether it is true or not and then it is up to us to disseminate whether it is true or not but even if you were to take every single complaint is valid if we look at the total number of loans about 8.5 million there were 2600 complaints in general so that is .03. >> thank you. >> senator warner. >> i appreciate you holding this hearing. a couple of comments and i want to make a few advertisements for some solutions and get a response from the panel and maybe again the alert of my colleagues. i.e. hear more about student debt than i do about obamacare.

people are concerned. we all know the numbers. i supported the approach on refinancing. we need to figure out other options. we ought to be doing something called no before you go. that would basically build on your code and feel to have a common accessible websites not just in terms of student debt that all the choices they. were student makes for a good college. rita generates coming graduation rates if you choose a field as one of my daughters did why

can't we make the same for the most expensive choice they are going to make in the cost of higher education and that would include the trade schools as well the remarkable thing is we have all of this data. this know before you go with one option.

it seems like there are certain partial no-brainer solutions. the current law allows an employer to $5,000 of an employee salary indirectly apply to the tuition. the young employee can opt in or out of this and the employee would see the benefit of going against the best.

whether this makes sense or not. the know before you go i think there is something that employers should be doing. they do allow that to go directly to pretax.

i will settle for gas. the potential tool for an employer not necessarily with some of these debt burdens makes sense. final and it's been touched upon we got that out there as an option right now why not allow income-based free payments to become the top default mechani mechanism. i know my time is expired. as i indicated in my testimony. >> i think we would prefer

ensuring that students go into or the borrowers move right into the repayment plan that's going to keep the cost as little as possible and it doesn't always work out that way. therefore i don't think it is the default that is necessarily the right thing. however it had been going on for three months, six months to protect their credit and get into something that is going to be more managing on the delinquency. if they are going to give them a program.

if you take the payment they are so high coming out of school and to the income-based would give more flexibility. >> borrowers are in serious financial trouble because they lost a job or serious medical problems and has a fresh start on pretty much every kind of death by declaring bankruptcy they can deal with credit card debt and mortgages to repay the loans. several loans have been excluded from bankruptcy since 1998 and until 2005 the banks successfully lobbied congress to end a bankruptc the bankruptcy n

for the student loans as well. the federal government offers the federal parlors programs for loan modifications for default rehabilitation and income-based repayment. it gives them a chance to get back on their feet. it's nothing like a fresh start in bankruptcy and the federal government is still making profits off these loans but at least it's something. thanks by comparison to the benefit of the bankruptcy exclusion and don't offer much of anything in exchange to help struggling borrowers. the federal regulators including the federal reserve made it crystal clear that private student lenders could offer loan modifications and interest rates and the borrowers without any penalty but according to the financial protection bureau banks still aren't offering that help so what's the impact of

that? three days ago cnn published a story about a woman who died leaving her appearance to care for three small children and also leaving them with $100,000 of student loan debt the couple had a cosigned. i think i heard mr. hunt say that they have about a 90% cosine rate. so the grandparents contacted the private lenders but they couldn't get much help to manage the huge monthly payment. the couple considered bankruptcy over their students that but it's not an option so here's my question. if struggling borrowers can't discharge their loans in bankruptcy and the banks won't give modifications what are they supposed to do? >> we share the same concern

that you do making sure we do everything we can to make sure students that is paid off in a timely manner especially when you have life circumstances that arise. a very tragic incident that happened. i saw that on cnn and read the report by senator reid. i do not agree when you say there's not many options for people to refinance. citizens bank is headquartered in rhode island does offer refinancing -- >> let's be careful when we are talking about refinancing. not talking about will give you more money, we will change your interest rate. i'm talking about modifications to reduce the interest rate cut would forgive interest, that reduce principal. you have any data suggesting banks are doing this because the protection bureau says they are not. >> when a person does restructure the loan for a lower

interest rate it is modificati modification. it is $126 per months in savings and in rhode island at 149 just by citizens bank. >> that's my question are you telling me that all banks today in america or even majority do you have data to suggest how many offer loan modifications that will reduce interest rates or principal? >> when it comes to refinancing, the amount is discovered. spanked you have any data to suggest the banks are offering the kind of loan modifications that will help people who are in financial trouble did a chance to get back on their feet.

on the nondischargeable student loan debt from a child died? >> there is loan forgiveness for a student passes away and many of the banks entered into the contract. >> are you telling me that this couple to tak could take advantf this since their daughter die of? spinnaker that is mostly right. >> is available or not? >> dot all banks but many more. >> what number is many more? more than five, more than zero? >> there are more than zero. i know of for better doing it right now. >> four out of 7,000?

when large institution has forgiven $26.8 million because the student has passed away and i think you are going to see more of the banks when the student does pass away. >> and ensure that he will announce you have seen a 100% increase. >> we are making progress i proa lot of them do it on a case-by-case scenario and there's nothing worse than the accident that happened. >> there is something worse and that is when something like this happens and they are left with $100,000 in debt that's worse. >> and i'm hoping they forget that loan. >> so far with the bank has said is no b. have not provided

adequate relief to the family and i don't know how many other families are in the circumstances. >> there is no substitute for the bankruptcy protection but they went out and lobbied to make sure they were going to be exempt and now they won't even provide the modest relief that is provided for people who end up in terrible financial circumstances. >> i want to begin with a discussion about the baseline problem which to me is that we don't have a financially literate population especially among the youth and a love of what we are talking about requires a level of sophistication in terms of understanding the obligations

and what the compound interest can do to you long-term making sure they are in the best position. the first line of defense is hoping the student himself. i have some questions number one when you look at this whole report you talk about transparency and i think senator warner made a great point let's let people know on the front end beyond student debt with recommendations would you have for us.

wouldn't you agree they make pretty bad decisions even if they have access to all of that information? >> i think financial education plays a role but it's not the primary way that you're going to clean up or make the marketplace fair for students. we can deal with credit card debt and the most important thing we can do in my opinion. since i was attorney general and representative was responsible for consumer protection. the consumers need to provide

themselves with a first line of protection. i can appreciate and understand what you're saying that things can be clouded and masked and we need to make sure it is as transparent as what it can but transitioning to a bigger discussion what are the campuses doing and what are you doing to provide better consumer education so they do exercise the political clout. we have run previous to the

passage of the act a campaign contribution. they dressed up like credit card marketers and they gave out free t-shirts and lollipops etc.. and how to navigate the deals that were being at the campus at the time. we have engaged in and we are considering an engaging in the education campaign around keeping your interest low. >> on the university of north dakota they created in the office a consumer protection division of consumer education but one other question from you as you look at not only the federal government responded

have you seen any states pass some kind of law that you think provides a pretty good example of the right kind of protection for consumers? >> the state of california has been considering legislation in the campus banking arena to provide more disclosure upfront as has the state of oregon. neither of those have passed but i know that i've spoken to legislators at the state level who are considering those types of things. >> there are a number of states that don't allow the newly use fees and i think north dakota is one of them. you can't discount from the card if you don't use the card. we need to have a broader understanding and way too often here we think that the only people that are concerned about these issues in the united states congress or the federal government or federal agency when in fact there is a whole campus involvement in a state

law involvement and local state regulatory involvement so we need to have a better understanding of what the effort is so that we can continue to provide students the opportunity to seek a broad array of funding options but also the opportunity to make choices and the education to help them make good choices. >> i just want to read it to do all and you can tell me if you agree or not but this is the information i received as of the fourth quarter nearly half of the 25-year-old age group of student debt and overall levels tripled between 204 to 2012. further nearly one third of the borrowers and the repayment or doubling federal student debt. one third are delinquent on student debt and the data shows the demographics would increase the proportions of borrowers in

the 40 to 49 age group, 50 to 59 and 60 plus age group. student loan debt has quadrupled between 2003 and 2014 while other have decreased or have seen little growth in th low gr. a lifetime. in the same pai paragraph tiny number of students increased by 70% to almost 40 million individuals. it'd be also increased by 70% to nearly 25,000. it seems like there's an awful lot of easy money being pushed in one direction. i'm simply looking at it witho without. there has to be a best team from the banking standpoint.

i know it's emotional and we all are but i talked to some of the people at the university and they told me it's a hard time dying anybody and you can't tell them they don't need all that money. we don't have any authority to tell them or advised him so they might be getting an apartment he can't afford or use the money to buy a car and using money from most everything except their education and this is what i'm being told by the university. when they are reaching out, something is wrong. when you look at the statistics when everything is going one way this continues to cause disproportionate to everything else so that's why we see the movement and pressure on this and something has to be done. >> you are correct something has to be done.

number one if we don't address the cost of college we are going to be back here every year. >> this seems to be pretty lucrative from the banking standpoint >> we wouldn't have gone from the industry to 6 billion or have the bank's exit. he would see more banks getting in and not getting out. what is your percentage of the denial? >> about half. >> did you have a hard time getting a loan it's almost

impossible not to get a federal loan. it's hard to get a private student loan. there is no wonder i can. underwriter. the federal government has no underwriting standards. if you get a loan if thomas is a reasonable expectation you're going to pay it back because you qualified that you have to keep in mind -- >> so you are saying we are waxed on our end. >> so it's us. we have to change it. you have to have a higher default rate in serious conversation. to reduce the amount if the financial aid to -- -- >> i'm not saying that you can't evaluate. is that true to the cost into the 1,200-dollar a month

apartment and 500-dollar a month car payment should that be part of your student loan? if they are going to a low-cost institution they may not need that even though they can qualify it. >> i would say that we don't want to be underwriting criteria for the student loans.

they are in access tool and keep the doors of college open. >> there shouldn't be federal rules -- >> for the undergraduate loans we absolutely need to and sure that stays so you are in disagreement completely? to give you an example they will run out of the eligibility before they can get a degree but if they can get the money before they've achieved a degree -- >> i enjoy your passion. >> at any rate, that's how i review that. i think when it comes to private

student loans, the reality is complaints are on the rise absolutely anything goodness they have a place to complain and the market is expanding once again previous to the credit crisis there were all sorts of coalitions and aggressive marketing tactics there is no indication some of the problems have been solved and others have not and we should be making sure there is a bankruptcy petition available for the private student loan borrowers >> you would agree we have to change the rules a little bit differently if you are going to be able to use bankruptcy to not pay the loan back -- i'm talking about the private student loan product and not the federal.

>> it's your tax dollars we are still spending your money or giving it away. if you're going to let me escape because of bankruptcy you want the federal government taxpayers to pick up another ratio. i think i understand where you're coming from and we have a lot of members that feel the same. >> i was making the point around the private student loan product in particular. >> i want to go back to the point earlier that it's important for us to do a better job helping students as they are leaving high school to make decisions where to go to college so they take the cost into consideration as they do that. cost, graduation rates.

they made sure those pieces of information as well as the default and the loan burden were taking into account but i do think on this issue of bankruptcy protection we wrote a paper where he said some federal student loans should be discharged of all bankruptcy but they are different, they are very specific where that economy changes and what people are prepared for and i use the example of closed captioning, real-time writing so i think there's a limited charge that should be applied to federal loans but i also think private funds should offer the kind of protection for federal programs do and i think there are commercial products that could

be developed that would address the concerns senator warren was raising. >> we know that education is the great equalizer and it will continue to keep us the country that we should be as long as we have the availability. the numbers are going in the wrong direction. you solve the problems we had to get it back down to 3.8. we have to get all of you together even though you might disagree on certain parts but how do we keep college affordable and how do we get kids more involved in what their responsibilities are and thank you so much for your time. >> i think that this is for

testifying about these issues. the hearing is adjourned.

in washington and at the oyster industry of olympia. the history of the music as well as the restoration of the super sabre s. 100 fighter. is he the laboratories of thomas edison and hear the voices of the tabernacle choir in salt lake city saturday at noon eastern on c-span2 book tv and a sunday afternoon on american history tv on c-span three. >> at a hearing on policy toward our three other state department officials discussed the country's nuclear program and human rights record. congressman steve chairs the house for affairs committee. this is one hour and 15 minutes >> welcome to the subcommittee hearing. i want to thank you for serving

his today's ranking member again and also the distinguished witnesses for being here this afternoon. it's taken six months for the schedules to align so we hope this hearing is a productive one. in march the subcommittee held a hearing to address the findings of the commission of the report. anyone who would be hard-pressed to deny the extent of human rights abuses being committed by the most repressive to tell us. regime on earth, the report the first of its kind was a shocking wake-up call for the community to take action, for the u.s. to take action. unfortunately it's been five months and we are still waiting for significant action. north korea is one of the greatest threats to the peace and stability of asia and one of the united states most vexing security challenges. it's also one of the greatest

policy failures in the past two decades. this marks the 20th anniversary since the united states and north korea signed a framework that called on north korea to freeze operations and construction of nuclear reactors suspected of being part of a covert weapons program. this agreement framed relations for devout eight years from the vantage point it was a ruse as the entire time pyongyang continued to develop its uranium enrichment capabilities. then in an effort to continue negotiations with north korea we took a multilateral approach and began the six party talks. once again concession after concession. this method of negotiation also failed and has been stalled since december of 2008. where are we today? north korea tested a three devices 2006. the most recent in 2013 and has declared itself a nuclear armed

state. the latourette and threatening rhetoric from beyond the end's leader has escalated since he took the throne in december of 2007. it's launched nearly 100 missiles, artillery and rockets combined since the beginning of the year and its web of illicit activities dealing with terrorist organizations has expanded. ultimately, north korea's proliferation of nuclear weapons and support to groups that oppose the interest continues unfettered and without limitation. most of the attention today is on places like ukraine where russia is supporting the adult ration of the troops in crimea and the middle east where hamas operatives are trying to wipe israel off the map but we must also look east. it should come as no surprise just the past week it was reported that hamas militants on thoninitiating a weapons deal wh hundreds of thousands of dollars with north korea for missiles and the quest at.

this relationship was first made public in 200-9135 tons of surface to surface rockets and rocket propelled grenades were destined and planned to be smuggled to hezbollah in lebanon and hamas last week the federal judge ruled north korea in concert with iran is serious was responsible for the assistance to the hezbollah terrorists who fired rockets during the offensive in 2006 but again nothing is being done to abstract the sales are the cargo ships. over the years north korea branded itself as a one-stop shop for missile and nuclear materials and technology. the ultimate facilitating bad guy providing whatever its friends want so long as it gets

the material it needs to maintain the regime. it's not a secret north korea long comforted with the likes of serious and helped build the nuclear facility destroyed by israel in 2007. the last nuclear test in iranian experts reportedly were present also underlined the harsh reality. north korea weapon capabilities for advanced and possibly more than iran further heightening the tremendous failure of efforts made by every administration since the early 1990s. as the evidence continues to be obama administration position is that north korea is not known to have sponsored any flight in 1987. on july 20 the secretary noted that he was quieter than in previous years and the u.s. is in the moving forward with the

efforts to denuclearize south korea. in the past few months have been one of the most historically active. north korea. i don't think the recent behavior can be called quiet. the administrations do nothing in the strategic patience policy waiting for its potential. outsourcing the policy to china the top trading partner and source of revenue has also yielded little progress but we are still sitting by waiting for the patients with pyongyang to wear thin. the restarting is futile and it's been six years at this point we are only wasting time as they augment its official

material stockpile and improve its missile and nuclear capabilities. the administration refuses more targeted sanctions on north korea like cuba, sudan, belarus because they believe doing so would unnecessarily hinder its ability to conduct foreign policy but it won't list of the world's most prolific money launder and state drug interstag trafficker as a country of primary money laundering concern into the current policy has done nothing to help the north korean people. i remain disappointed that so little has been done to hold the regime responsible for perfect human rights abuses detailed in the un commission of the report. it's a threat to the united states and our allies in asia. we cannot continue to wait for

north korea to decide if wants to negotiate. and nonnuclear north korea is an elusive goal of the administration maintains its current strategic trajectory. the regime is responsible for the deaths of people not only within north korea that around the world. it's time to put our resources together and act rewarding north korea for the steps on the pretense that these could pretense it will commit to denuclearize asian failed before so let's not bite the same course twice. i look forward to hearing from the witnesses and i will yield to the ranking member today for five minutes. >> thank you for calling this hearing and i also want to thank you for your service to the country and your patience in what has to be one of the biggest diplomatic challenges in terms of moving north korea

forward. this year marks the anniversary between the united states and north korea. our foreign policy is always challenging given the posture in the region is inconsistent at times. that said we have tried on numerous occasions to negotiate promoting the patients approach. however i continue to be very concerned with its aggression towards our allies in south korea and japan and its human rights record. the testing of ballistic missiles and nuclear tests in the last 15 years is unacceptable and poses serious concerns in the region. earlier this month they fired more than 100 rockets and shells towards south korea's border in protest of the joint bollettieri

exercises and even as they attempt to promote a dialogue with north korea they launched him into thlaunchthem into the n june. these types of actions towards the allies are deeply concerni concerning. the u.s. china relationship with our trilateral relations with south korea and japan is crucial in solving the conflict. .. partners in the region. the conflict has multi-lateral implications, and therefore is not only a u.s. interest. as the world's greatest democracy, we must take a tougher stance with the international community on north korea's threatening antics. north korea must view our partnership as a regional effort to support a peaceful and stable

pacific region. we have to put the pressure on the north korean government with stricter sanctions so we can engage in diplomatic dialogue and make positive steps towards denuclearization. we should also encourage north korea to enforce the 2005 six-party talk agreements. north korea should be sincere with its commitment to the 2005 joint statement and allow iaea inspectors to renew their activity in the country. i'm also concerned with north korea's deplorable human rights record. north koreans do not have freedom of speech, movement or religion, they're also subject to chronic starvation and a dismal public health system. the u.s., based on our values as americans, should remain a strong supporter and leader within the global community and promoting human rights. i look forward to reviewing our actions, positions and policies toward north korea as we work an denuclearization and their human rights record. mr. chairman, with that i'd like

to yield back. and thank you for calling this hearing. >> the gentleman from california is recognized for opening statement. >> thank you. mr. king, welcome home. mr. chairman, thank you for holding these hearings. it was just a few months ago that you and i were at the dmz and also discussing north korea with president park and with prime minister abe. north korea doesn't trade with us, doesn't need us. it needs china from which it obtains enormous subsidies. we should be trying to change the behavior of north korea directly and, more importantly, china with a combination of carrots and sticks, even though the north korean government is despicable and political we could all try to outdo each other and who could be more opposed to the government, both carrots and sticks are call for. on the carrot side, we ought to be discussing with north korea a non-aggression pact. they have asked for that in the

past. it isn't our usual way of conducting state department business, but it's something they want, something we can give them, and if they ever see that mr. cheney might be vice president again, they might appreciate an official u.s. position against invasion. second somebody we can tell the chinese that even if there is unification, no american military forces will be stationed north of 38th parallel. as to sticks, we have to look at the lopsided trade relationship with china. access to the u.s. markets is not guaranteed by the u.n. charter. north korea may not be quite as dangerous as other states because it is not as ambitious as iran. it seeks only to oppress its own people. but with a an erratic government, shown to be even more erratic in the last six months, and a growing nuclear

stockpile, we have every reason to try to trim the danger posed by north korea. yield back. >> thank you. gentleman yields back. i'd now like to introduce our distinguished panel here this afternoon. glen davis, the ambassador. special representative to secretary of state for north korea policy. he was appointed in january 2012 to facilitate high-level engagement with other -- our other six-party talk partners. he serves as a senior emissary for u.s. engagement with north korea. he also oversees u.s. involvement in the six-party talks process, as well as other aspects of our security, political, economic and human rights, and humanitarian assistance policy regarding north korea. special representative davies is a career member of the senior foreign service and served as the permanent representative of the united states to the international atomic energy agency and the united nations office in vienna. his prior assignments include

principal deputy assistant secretary of state, bureau of east asian and pacific affairs, and executive secretary of the national security council staff. we welcome you this afternoon, mr. ambassador. i'll next introduce robert king. ambassador king became the special envoy for north korean human rights issue in november 2009. ambassador king works under ambassador davies and has the lead on human rights and humanitarian affairs. prior to his appointment, ambassador king worked on capitol hill for 25 years. 24 of those years as chief of staff to congressman tom lantos. he was concurrently staff director of the foreign affairs committee of the u.s. house of representatives, democratic staff director of the committee and held various professional staff positions on the committee since 1993. ambassador king holds a ph.d in international relations from the fletcher school of law and diplomacy, tufts university. he has authored several books and numerous articles on

international relations and we welcome you here this afternoon as well, mr. ambassador. i'm sure you're both familiar with the five-minute rule so i won't take a lot of time, but the yellow light will come on. means you got a minute and we hope you wrap up as close as possible to when the red light comes on. we'll limit ourselves to five minutes as well. we'll begin with you, ambassador davies. you are recognized for >> i now live. chairman, thank you so much. representative bera, members of the committee, thanks so much for inviting me and my colleague, ambassador king, to testify today on u.s. policy towards the democratic people's republic of korea, dprk for sure, known as north korea. the regime is a global pariah. >> would you mind pulling the mic just a little bit closer? make sure everybody in the room can hear. >> is that better? >> better. >> and violates its obligations

by pursuing nuclear weapons and ballistic missiles posing a growing threat to the united states. our friends and allies in the global nonproliferation regime. it devotes an enormous amount of its scarce resources to weapons, to massive standing army, and to vanity projects, all while nine out of 10 north koreans suffer. we have no illusions about the nature of the regime. we have refused to reward its provocations with concessions. winstead tightened sanctions and told the dprk that neither its occasional charm offensive nor its more frequent aggressive you will lead us to accept a nuclear armed north korea. i call recent administrations, we're open to engagement when possible will apply pressure as needed. despite dprk backtracking we are remain committed to authentic and credible denuclearization talks. but talks will succeed until pyongyang recognizes and demonstrates that it will live up to its promises. regrettably the dprk increasingly rejects meaningful

negotiations. instead it has unleashed multiple provocations that on condemnation and increased its isolation. just in recent weeks is conducted repeated ballistic missile launches in violation of u.n. security council resolutions. these followed summer launches earlier this spring punctuated on march 30 with threats to conduct a new type of nuclear test. the dprk says it wants talks without preconditions. translation, it seeks open ended six-party talks to gain acceptance as a nuclear weapons state and to camouflage its secret weapons development. we are not interested in talks unless their primary order of business is implementing north korea's september 2005 promised to denuclearize. the republic of korea is scored at the center of our efforts. there is no daylight between us on what we expect from north korea. president obama, speaking in south korea in april, expressed

support for president parks vision of peaceful, progressive unification. the u.s.-rok alliance in the '60s year alliance stronger than ever. our day-to-day combined efforts to maintain peace and stability on the peninsula send a strong deterrent signal to north korea that the security it seeks is not to be found in nuclear weapons. our growing u.s. are okay japan trilateral cooperation sends a powerful message to deterrent to pyongyang. as north korea's last remaining protectorate patron, china has a key role to play in convincing north korea to denuclearize. that is why north korea remains a top of our bilateral agenda with the beijing. secretary kerry raised from there in early july. we welcome the steps the prc is taken to oppose pyongyang's nuclear weapons program. since 2012 china's voted for two new rounds of u.n. sanctions, and last year published a 900 item control list banning the

export to north korea. together with allies and partners we seek to show north korea its nuclear program stands in the way of a secure future it says it wants. we continue to increase the cost of its illicit activities by unilaterally tightening sanctions. we were close with the u.n. security council and like-minded partners to ensure full implementation of the four t. security council resolutions. at july 2013 seizure type animal of a huge cache of military gear demonstrates u.n. sanctions are effected. the welfare of north korea's people is an essential focus of u.s. policy. the vast majority suffer from their governments self and poverty military first policy. the u.n. commission of inquiry's sobering report detailed and systematic widespread and gross human rights violations being committed by the dprk. my colleague robert king's tireless effort for many years demonstrate that human rights is a constant focus for us. the three u.s. citizens are being held by north korea.

their continued detention is a serious stumbling block to approved u.s.-dprk relations. we will continue to advocate for the freedom and thank congress for its steadfast support in these efforts. mr. chairman, we aim to convince the dprk to comply with its obligations and its isolation and respect to rights of its people. each outrageous act discredited assertion is driven to act belligerently but others hostility. it is now more clear than ever that north korea is developing nuclear weapons and ballistic missiles merely to prolong the kim regime and to obtain benefits from the international community. north korea alone is responsible for north korean actions and resolving the dprk nuclear program as a multilateral task. just as north korea's original aggression against the south was met with a strong response from the united nations, standing up to north korea today requires concerted efforts by the entire

international community. thank you again for the opportunity to appear before you today and i'm happy to take your questions. >> the gipper much, ambassador davis. we will now turn to ambassador king. you're recognized for five minutes. >> thank you very much, mr. chairman, congressman berra, members of the committee. thank you for this invitation to testify with ambassador davies on u.s. policy on north korea. i will focus on human rights aspects of our policy on which there's been broad bipartisan cooperation. i want to thank you, mr. chairman, committee members, for your interest in north korean human rights issues for the hearings you held, for the meeting she held both here and in seoul and tokyo with victims and their families. north korea remains a totalitarian state which seeks to dominate all aspects of its citizens lives, including denial of basic freedoms and human rights. reports portray a vast network of political prison camps where

individuals are subjected to forced labor under horrific conditions, and the government commit human rights violations, including extrajudicial killing, enslavement, torture, prolonged arbitrary detention, abduction of foreign citizens as well as rate, forced abortion, and other sexual violence. this past year we've made significant progress in our efforts to increase international pressure on the north to improve its human rights. in march of this year, the u.n. human rights council -- in march of last year the u.n. human rights council established a landmark commission of inquiry to examine grave, widespread and systematic violation of human rights in north korea. refugees gave the commission firsthand accounts of abuse and violence, and leading international experts describe the government policies that oppressed their people. public hearings were held in seoul, tokyo, london and in washington, d.c. video and written transcripts of those hearings are available at

the u.n. website. the commission's final report was one of the strongest and finest reports that the u.n. has produced. the commission concluded that the gross violations of human rights have been and continue to be committed by the north korean government and its officials. and in many cases, those violations meet the high standard, the high threshold required for proof of crimes against humanity and international law. the commission formally presented its final report to the human rights council in march of this year. after hearing from the commission, the council overwhelmingly approved a resolution calling for accountability to those responsible for the abuses, and for the creation of a field office under the high commissioner for human rights to preserve and document evidence of these human rights abuses. south korea has agreed to host this office. building on this momentum in april, the united states, with

australia and france, convened the first ever u.n. security council discussion of human rights in north korea. the commission presented its report. to north korean refugees spoke of the personal expenses. 11 of the 13 security council members who attended that meeting expressed support for the report and called for accountability for the crimes that it outlined. as i participate in the various viewing meetings this past year, two things that struck me. first, he declared at the north is feeling the growing international pressure. the mounting condemnation of it human rights record has struck a chord in pyongyang. second, with a growing number of countries critical of north korean human rights, the only countries to defend the north are the world worst human rights violators, belarus, cuba, iran, syria, zimbabwe. mr. chairman, another key human

rights metadata want to raise is our effort to increase access to information by the north korean people. that country is one of the most closed societies on this planet. internet access is reserved for a tiny, tiny elite. it is illegal to own a radio or television set that can be tended to any channel other than the official government media. anyone caught listening to foreign radio or television will be sent to a reeducation camp. despite these consequences of listening to foreign media, 35% of north korean refugees and travelers listen to foreign radio broadcasts in north korea. for an dvds are now being seen by even larger numbers. 85% of those interviewed have seen foreign, primarily south korean, meaty. some 2 million cell phones permit north koreans to communicate with each other, although only domestic calls are permitted and phone use is carefully monitored.

because of the closed nature of north korea, our international media efforts are among the most effective we have of breaking the governments information monopoly. thank you for continuing congressional support for the broadcasting board support for the broadcasting board of governors and the media that it supports, including radio free asia and the voice of america. finally, mr. chairman, i want to reiterate one point that ambassador davies has made. we have no greater priority than the welfare and safety of u.s. citizens abroad. we continue actively to seek the release on humanitarian grounds of kenneth bae, matthew miller and jeffrey fowle so that they may be reunited with their families. just as important as is that north korea address the issues that ambassador davies has talked about in terms of security and nuclear issues, it also must address its egregious human rights violations. the choice is clear. if north korea does not take

this action, it will continue to face a greater isolation, condemnation and increasing pressure from the international community. thank you, mr. chairman. >> thank you very much, mr. ambassador. members will have five minutes to ask questions. i'll begin with myself. administrator davies, on july 20, secretary kerry was quoted as saying that north korea has been quieter. i wouldn't describe the historic number of missiles and rocket and artillery launches this year so far, nearly 100, as quiet. i also don't believe that solely because north korea hasn't staged another nuclear test this year that we would necessarily call pyongyang's gave your quiet. can you perhaps clarify why secretary kerry is describing north korea as such, and tell us how you can justify that clarification? >> mr. chairman, the secretary said a lot of things.

that was one thing he said, and i think that the kind of place back in context, the secretary was referring to the fact that we are now sometime on from the last major strategic provocation by north korea. it's been a while since the iphone launched a three stage intercontinental ballistic missile or tested a nuclear device. >> do you think you would want to rephrase that president li, or would you? >> i think in context it's easy to understand what the secretary was saying, which was the cooperation, collaboration, diplomacy that we been conducted with south korea, china and other partners in the process has gotten a message through to pyongyang, that when it acts strategically, when it test tesa nuclear device and is the only country on earth to have done in this century, when it launches a three stage intercontinental ballistic missile, the world will react. it will react strongly and unanimously. i think that's what the secretary is referring to. it's the case the secretary is also spoken to this, as have other senior officials, that

north korea's recent behavior is unacceptable. the fact that it continues time after time to launch these ballistic missiles, violate u.n. security council resolutions, that cannot be counted -- >> i would certainly agree with you and the administration that it is unacceptable. i wouldn't have called it quieter but that's okay. i'm going to turn to ambassador king, if i can. edenic commendable job represent the north korean human rights portfolio. i recognize the difficulties you face since the administration doesn't make the human rights issue in my view enough of a top priority. i think it is at best a second tier issue behind nuclear proliferation. even if it's given sometimes lip service by calling it a top priority and constant focus. as such i'm disappointed that following the race of the u.n. commission of inquiry report, in my view, little has been done. no human rights sanctions, no

executive orders and no move for a vote in the security council. ambassador king, can you tell us what is being done at this time told north korea accountable for the mass atrocity described in that report? it was a horrific thing to read. and why there's been so little movement since the reports released. and then also are you aware that there are three americans currently detained in pyongyang? i'm deeply concerned, particularly about their well being and safety, and one of those individuals, jeffrey fowle, he is from right outside my district in ohio. i'm told he's being brought to trial, accused of carrying out hostile acts against the country. can you provide us with an update about the situation, where in the process the message is to get these individuals released out of north korea? i understand in a forum like this yet to be careful because we don't want to jeopardize their situation or put them in any more jeopardy than they already are.

so i understand that but to the degree we can handle that in a forum like this, i would appreciate some comments. >> thank you very much for the question, mr. chairman. with regard to the attention we give the north korea human rights, i believe it was lyndon johnson who said you've got to build a walk and chew gum at the same time but i think that's were trying to do in terms of pushing on both the nuclear issue but also pushing on the human rights issue. i think as we talked earlier, there is a lot that has been done this year with the release of the report. we've been attempting use the u.n. report to continue to put pressure on north korea. in the u.n. security council we've already had an informal meeting where we've had 13 of the 15 members attend, discuss the report, and discuss its recommendations. we are also in the process of looking towards activity in geneva. we will continue our pressure in

geneva at the human rights council on the human rights report. we are also going to have discussions in the general estimate in october at which the commission of inquiry's report will be discussed. there will be a resolution that will be prepared and adopted in the general assembly by the end of this year. we are very active in terms of looking at how we might for the push this forward in terms of action by the security tells. with regard to sanctions can we are looking at sanctions. one of the issues that we need to do is try to do whatever we do in concert with other countries. sanctions by the united states alone are very limited effectiveness. we have very little relationship with north korea. we have very little trade, very little economic connection. to the extent we can work together with our allies and jointly adopt sanctions and look at actions that we can take together, i think the more effective those issues will be. a brief, quick comment.

the three americans were being held in north korea are a great concern to us. we communicate with the north koreans are concerned. we have requested repeatedly that they be released on humanitarian grounds. this includes mr. powell as well as kenneth bae and geoffrey miller. we are hoping to be able to have some progress on that. we continue to press the north koreans. we continue to work through the swedish government which takes care of our interests with regard to american citizens there. i've read your stuff on this. i know you're aware of that but if there's anything we can provide you directly, be happy to come up and talk with you about that. >> thank you for that. i'd like to continue to fall up with you at the staff level on mr. fowle in particular, but all of them. thank you very much. i now recognize the acting ranking member, gentlemen in california, mr. bera. >> thank you, chairman chabot. administrator davies, in your opening test and i think you laid the framework that said any

move afford really starts with the frame of those laid out in the six-party, the 2005, six-party talks. that is a starting point for us to move forward. also, ambassador king and administrator davies, in describing north korea, you described them as global pariah. we describe them, the crimes against humanity, the human rights violations. from this vantage point when you look at the kim regime, it's the regime that is less focused on his people and more focused on itself, and creating its place. so i empathize with the difficulty of these negotiations. we can continue to further isolate north korea, but we've also seen when we do that isolation have the kim regime responds in provocative manners. i think you accurately layout

that this is not a u.s. north korea negotiation. this is a u.s.-japan-korea-china-russia negotiation in a friend the of regional stability. and of those countries, we all have a vested interest in creating a stable region. but the key really in this case lies with an active engagement on china -- on china's behalf. i guess, administrator davies, i'd like you to comment on the talks we've had with china, how china is viewing the new north korean regime and, you know, comments on china's role in moving these conversations forward spent happy to do that. thanks so much. china and north korea are not at

their best historical moment right now. china was very vocal and active beginning over two years ago when the new third generation of leadership took over in pyongyang in signaling to the north korean regime that they would not support north korea taking provocative acts, north korea went ahead and did it. so in a sense north korea has not been a good partner of china's of late. and assist record, i think, a debate in china about the nature of its relationship with north korea. the chinese have begun to take acts that are somewhat remarkable in the historical scheme of things, publicly signaling and warning north korea not to engage in strategic

provocations, publishing this 900 item control list which is somewhat dramatic cutting off banking relations with the foreign trade bank, premier trade bank of north korea. also imposing stricturestricture s on some custom controls and so forth. so our role in this is to work with the chinese, try to figure out -- and this is top down. the president has been very engaged in this in a series of meetings with xi jinping, how can the united states and china in a bilateral diplomacy but also working with other partners with the five parties convince north korea that its future does not lie in pursuing these weapons of mass destruction but its future lies in living up to the promises that it made in the middle of the last decade, abandoning these weapons, coming back into the fold of the international community, getting better as an international

actor. and the chinese have done these unprecedented things. we've said to china that we appreciate it very much. we said there's only one problem, with acts that china has taken her and that is of course that they haven't yet worked to find a mood change the calculus of pyongyang. so this is a work in progress, but we've made progress. i think the new leadership in beijing understands they can continue the status quo forever. this is a case where think if we keep at it in a multilateral endeavor, with the rok at the core of our concerns and our diplomacy, china also quite central, and we can ultimately make progress. >> and if we look at this north korean regime that is provocative and potentially unstable thing in the region, injured trade and interdependence and increasing trade between korea and china, japan and china, ourselves on

china, our economies are increasingly interconnected in trade and we all benefit from a stable region that allows trade to occur. there's a real, you know, china has to recognize that an unstable region is not in china's interest, and really creates some problems. so we do have to move forward in a regional confrontation. we do have to move forward with partners and help china is there increasing the pressure and increasing -- and i say to north korea that they are on the wrong path. thank you. ideals back. >> the gentleman's time has expired. thank you very much. now recognize the gentleman from pennsylvania, mr. perry is recognized for five minutes. >> thank you, mr. chairman. gentlemen, thanks for being here. i was a little late so i missed your testimony but listened to some of the answers to some of the questions. it just made, gave me some new questions and some new things to think about. mr. davies, you talked about we

have made gains. when my questions is going to be this strategy of strategic patients, and many will contend it hasn't done anything. my question would be, what are the significant results of that? quite honestly, i feel like asking what are the significant or insignificant results from the context -- me i should first ask, this strategy of strategic patients, what's the timeframe of this of course i will -- i really get 1000 years or 100? is this my lifetime? convincing north korea's leadership that this isn't their pathway to the future. i mean, who are we kidding? does anybody in this room think that these people have the same mindset about their future that the people in here have? the leadership? maybe, maybe dozens, maybe the underclass, maybe the people cited in the human rights council report have that view of

some brighter future possibly and that it should change. what would motivate the people of the top to change anything? i'm really curious. let me give you a question. what are the significant or insignificant results? how long is the strategy supposed to go? what makes you think these folks would change their mindset whatsoever? >> a couple of things. strategic patients is like a bumper stick they get stuck on a car and doesn't get taken off even when the view of the drivers change. ibanez's job to the nephews. i've never described our policy as strategic patients. it predates me. is inaccurate. sector a stay when he was asked about waiver scheme and office said no, that's not our policy. our policy strategic in patients with north korea. we will continue to do of any we can not to we can not to sit down and every kaffeeklatsch and convince them of the logic of it but to use pressure in particular to point out to them that there's only one way

forward. it's living up to the obligations and commitments and promises they made freely 11 years ago and is going down this path of you to position. so i think what they care about most in pyongyang, this regime, it survived if they want to preserve the status quo. they don't want anything to rock their boat. they are now the world's only historical example of a dynastic communist system. they want to keep that party going on. what we're doing, what we're seeking to do with china, south korea, japan, russia and the rest of the international community is public the volume but that's the road to ruin for north korea. that's trying to pour scarce resources into the development of these expensive weapons system also trying to feed the

people which have not been able to do adequately for now almost a generation. isn't going to work. so what they need to do is give up these weapons, begin to play by the rules, begin to live up to their own promises, begin -- >> i'm trying to listen. i've got a limited amount of time, but pumping up the ball on rhetoric, yeah, they're hoping to keep it going. as far as the west or somebody in the west or a coalition partners telling them it's not going to work from their perspective, if the problem has worked for three generations, we're not going to rock the boat. with all due respect, folks, the human rights council includes the likes of cuba and the democratic republic of congo, you know, and some of these actors that abuse their own citizenry. and acting like that's going to be idea coal to shake north korea's leadership office to shut off its foundation, i'd like to have whatever it's -- what have you folks are eating and taking a day because you got some view of some rose-colored

future. to me we are the united states. listen, i'm not trying to post -- this is a 20 year-old failure in my opinion, or so it's not fair to impose all this upon y you. but taking the same actions of the past with -- okay, not just strategic, to meet its strategic apathy, or avoids or something. i don't know what it is by doing the same thing over and over again for the next 20, 30, 40 years and expecting a different outcome, if i were here in 40 years we will be having the same conversation. you can go ahead and comment. >> look, again, we're not just talk about diplomatic messaging and sending them nice letters. were talking about cutting off the input to their weapons program through sanctions, through interdiction and there's been great successes. when panama rolled up the largest shipment of north korean conventional weapons in july of last year on a korean freighter trying to go through the panama

canal, housing and get the rest of the world gets the message. wind 80 countries condemned north korea's decision to test a nuclear device at the beginning of last year, and took action to join with the sanctions regime internationally to impose costs on north korea, that's what we are talking about. no, we're not talking about some kind of attempt to convince them three high school debate society. were talking about taking action that reduces their running room, that cut off the resources that prevent them from selling the weapon systems that they need to sell in order to get the input for their weapons program. but we also talk about keeping a hand open to north korea if they have this change of mind. that's the diplomacy part of the. i was engaged in negotiate with him at the beginning of 2012. we cut a very modest deal with them that could give them a chance but to claim what they want which is security guarantees. they chose not to take it.

instead they launched a rocket in on the 100th anniversary of his grandfather's birth. that was his choice to me. the result was near universal condemnation and action taken by nation states. it's like watching paint dry. i understand that. the cold war took three generations. sometimes these problems are so pernicious that they simply take the patient application of increasing amounts of pressure accompanied by diplomacy in order to get these actors to realize that they're going down a path that's leading them nowhere. so that's our strategy. the alternative, we are all in years. >> i'm done. i would like to associate myself with the frustrations of the gentleman from pennsylvania. i think well said. the gentleman from virginia is recognized for five minutes. >> well, if we are associating ourselves with frustration, i'm frustrated, too, and i'm sure you are and i'm sure everyone in the audience is. i'm not quite sure what the

relevance of our frustration is to try to fashion and a facetious public policy that tries to great change. i would like to explore that with both of our witnesses. first of all as you know, or may know, we managed to build the other day on the floor, chairman royce and myself, that passed unanimously adding to the sanctions regime on north korea, and i assume you both probably were unaware of that and welcome your reaction. i mean, i assume you supported and hopefully if it becomes law we can use it as another tool in the kit bag. ambassador davies? >> for us it's a bit of a third rail to be commenting on pending legislation so i will stay clear of that. i think sanctions are a tool that's a value, anything we have demonstrated that through the action we've taken both unilaterally and working with our partners around the world. we remain very open to further

sanctions options. when and if they make sense to deploy them, to use them. i'm committed to find a multilateral way forward. i wish there was a silver bullet we could fire to solve this problem. smart people for me would've figured it out long ago. >> let's explore that a little bit. where do you think the pressure points are? i mean, i heard what you are saying about china, which was quite intriguing, but in some ways if china has lost leverage over the regime at pyongyang, then where are the pressure points that the west can turn to, or south korea can turn to, to try to rein in behavior or, you know, reward good behavior, punish bad behavior. where are those leverage points? >> china hasn't lost leverage. they've just decided there are limits to the leverage that they are willing to exercise. so when it comes to food and fuel for north korea, china is

absolutely critical in that respect. so there is more that china can do. but we think it works much better if the world in particular the neighbors in north korea act together on this, supported by the rest of the international community. this is the achilles' heel of north korea is the fact that it does have sufficient fossil fuels. it's unable to feed itself because it's broken its own economic system, hollowed it out over the years. and so in terms of ways to put pressure on them, these are some of the ways that we can use to do that. >> and i appreciate that, but i was thinking about the normal kinds of leverage when you look at sanctions regimes, you know, we're looking at it on russia right now. well, the ruble is exchanged. they have a stock market. they have external investment. they have trade flows. all of which can have influence

in the way they were not as influenced when they were the soviet union. so they are feeling some heat. we don't really have the kind of leverage with the north korea regime, do we? >> we have limited leverage because we have almost no trade with them, that's correct. >> they use their nuclear program as leverage over the west in terms of food supplies, emergency food supplies and the like. >> that's correct. but i should say one of the biggest point to leverage we have is the strength of our alliance relationship with the rok, but also with japan and staying strong and so did building up our allies and our ability to defend our friends and ourselves against north korean threats is a huge part of what we have. >> let me just in the last minute i've got explore the china relationship again. if i understood your testimony, in a sense there's been a reassessment in china about the nature of the relationship with the regime in pyongyang, is that

your testimony? >> they are debating it. >> they are debating it. do you believe that as part of that debate the new leadership in beijing -- first of all, the economic ties to south korea are far more important for beijing, frankly, the north korea, is that not to? >> many multiples. >> right. forgiven of their exposure and the fact that there stakeholders in the success of the capitalist korea economy, are they, do you believe, more open to pressuring the north for, say, market reforms similar to their own? >> they've been trying to convince north korea for years to engage in reform of the economy, and the north koreans have resisted that. >> went leverage on the chinese prepared to use to rein in belligerent behavior, try to achieve some of those market reforms? and are they prepared, do you

believe, in some kind of timetable to move eventually towards an accommodation with the south come if not outright reification? >> the gentleman's time has expired. but you can answer. >> i think this is one of the fascinating conversations that have occurred during the recent summit meeting between president xi jinping and part of south korea. it's fascinating beijing is voting with its feet, now the president hapresident of china t multiple times with his counterpart in south korea, has yet to meet with, traveled to, north korea. things are beginning to change. i wish they were faster but these are the changes we are observing. >> the gentleman from north carolina. >> thank you, mr. chairman. mr. davies, how has rouhani's regime altered the north korea-iran relationship? >> i'm not sure i'm qualified to describe what is happening between those two countries, other than that we watch very

closely any proliferation or signs of proliferation that might exist between north korea and his regime. >> does administration have any evidence or reason to suggest that north korea and iran have intentionally focus on different aspects of nuclear weapons capability to speed up the final results for both countries be? with great respect are starting to get me down deep in intelligence matters and this are the sorts of things would be very happy to brief you on in a closed hearing. again, it's a matter of serious concentration and strong study by the administration. >> to iran and north korea's cooperation in the past, do you think it's likely that north korea would share any future nuclear test data with iran's? >> that -- you are calling for speculation on the part of the witness. i just don't know. spent i don't think we are bound

by the federal rules of civil -- >> no. i'm sorry. i'm trying to be a little flip, but no. again, i mean, i think intelligence information -- >> the witness will answer the question. >> thank you, your honor,. [laughter] >> you may proceed. >> pardon me. would you like to restate that? [laughter] >> it's a concern. iran and north korea have cooperated in the past. >> i think is every incentive between them to cooperate in some aspect of it, that's correct. >> you don't think the rouhani regime coming in hasn't changed any of that dynamic there that would lead to that cooperation, that has led to the cooperation in the past? >> not that i'm aware of, but one would hope there would be changes. >> a report suggests that north korean energy needs have been met iran about iran's desire for armament has been met by north korea. that report suggested that

cooperation. what do we know about trends in oil consumption by north korea, and if they're stockpiling iranian oil? >> i'm not aware of the tradition of iranian oil to any great extent, i've got to succumb to north korea. i'm just not aware of that. >> switching to rush a little bit. how has increased tensions between russia and the west affected russia's relationship with north korean? >> well, russia's relationship with north korea fundamentally change in 1989-1990 when the soviet union disappeared and the client relationship that existed disappeared. so now they have a very, very small economic relationship, quite frankly. they have a political relationship but it's not known as important as that between beijing and pyongyang, between china and north korea. >> toledo blade the russians have intensified or accelerate any weapons sales to north korea in recent years be?

i'm not aware of anything significant in that regard, no, sir. >> north korea starts skirts international sanctions in a lot of different respects. you know, one thing i believe that one of the largest suppliers of counterfeit cigarettes in the world, billy budd or not, counterfeit currency as well. -- believe it or not. any current administration actions to close these loopholes more rigidly enforce the sanctions that you like to expound on for a minute and 10 seconds? >> sure. from the standpoint of counterfeit goods, there was a day when that was a booming business. i think that day has passed, to some extent that's something we watch very closely. but north korea will obviously stop at nothing to try to gain resources, to use, to develop its weapons programs.

that's where we concentrate so much energy on nonproliferation, not just unilaterally to with our friends and allies and partners. >> thank you, mr. chairman. >> the gentleman from georgia, mr. collins, is recognized for five minutes. >> thank you, mr. chairman your into listening to your testimony, i think it's rather interesting, again, with one of the, the key players with basically the row goodness of north korea and what they're doing with the relationship towards a rancher billy something study a little more, and i think using your words, and i may have gotten this a little bit wrong but it was something to the effect of study and watching what is going on. that committee -- and something in your testament, written and customer service ultimately, turn to our policy aim is to bring the realization that north korea must take steps mississippi and its isolation and respect human rights,

followed this obligation but in light of that, what we will call a desire this goal, many experts contend the administration dredges our best to watch and see how not yielded any in the results but assert only north korea by offering them more time, or afford it more time to pursue its own objectives. which the administration's assessment of its strategy, engagement and strategic patience? >> our assessment is that we've made progress not nearly enough. we've got -- >> what would you say your greatest a congressma college b? >> i think our greatest accomplishment is in achieving a just the last couple of years to united nations could council resolutions with teeth that had attached to some resolution. these were unanimously achieved. china and russia voted for the. and hezbollah, hamas, iran, this whole nexus of issues which i

know is very important to you, we are doing more than just studying and watching this to obviously what we're doing isn't seeking to disrupt illicit shipments, enforce these sanction. we're doing with our partners. we know that they would naturally like to do with each other but we're doing everything we can to prevent that from developing. >> i think in the end, what other things beyond to united nations resolutions, which may i may not have the keys and enforcement that some would like to see, beyond that what is the next step? what is the next big accomplishment? what is the next thing to ensure basic of which is that is your own goal, is to encourage north korea to become a model citizen, which under the current leadership, i'm not even sure it understands the definition of model citizenship. so it's a discussion here to have. what would be the next process? >> we would settle for north korea starting to deal with its -- to do what it promised to a long time ago and has candidly

started in the past, which is to take steps in the direction of being nuclearized. in other words, freezing their nuclear programs, inviting the iaea back in to inspect them. eventually leading to the dismantlement and elimination of the north korean nuclear weapons program. that's the foundation of the six-party process that we've been engaged in for many years, and we've made a great deal of progress in particular to china, keeping the solidarity of japan and the rok with us. there's no daylight between any of the three allies. in order to get north korea moving down that path of denuclearization. they are far away from it, and, therefore, we are in a pressure face. that's a we concentrate a lot of energy on is putting pressure on north korea so it understands it only has one option, and that is a peaceful diplomatic option of the nuclear session.

>> i understand that. but there seems to be at least somewhat along the line for north korea, at least some ways around what has been a quote put in place were strategic containment and isolation for them, because at this point some of that is just not, in fact, if anything there's been actual, i don't want to say regression, but there's not been a lot of progress shown. they seem to be happily going about the fact that they are isolated and would like to get back but they want to do so on their own terms. the concern and the good part and i appreciate the chairman having this discussion is just silly the fact of working to others which is a good thing, working with others, but somewhere there's a gap in the system. somewhere there seems to be, again, rogue nations, others who will have dealings with north

korea and not pursuing these assets. i think that's where maybe a situation which there's a much bigger stick along with a carrot that may be can influence it, especially for south korean partners, and this process as well. again i think it's not an easy situation to answer and appreciates your answer. thank you. >> the gentleman yields back to we will go to a second round which i think it would just be two of us here so we'll be wrapped up in 10 minutes or so and will have votes year shortly. i'll begin with myself. recently japan and north korea have reengaged on the issue of japanese nationals abducted by north korean agents back in the '70s and 80s, an issue that froze relations for the past number of years. in fact, i met with the unicode a family whose daughter was abducted by north korea and agents back in 1977 at the age of 13. i met with him and number of times over the years as well as a number of the other families

and it's truly a sad and outrageous story. pyongyang agreed to further investigate the fate of japanese abductees in the exchange of total listings sanctions apparently agreed to do. it's a pretty sad state of affairs when you can leverage kidnapped citizens for some relief in sanctions. my question is, what do you think is the likely outcome of this agreement with what's north korea's motivation for reopening the investigations? how much advanced notice gave the administration have before japan and north korea reached their agreement? do you have any concerns about these negotiations concerning north korea's long record of deception and deceit? >> well, we stand with japan in terms of their desire which we completely understand to try to resolve this humanitarian catastrophe. i met with the yokota to a number of times myself or i was

there with the ambassador kennedy when she first met with the yokota family and the abductees. so we instead why just out of government for the people of japan wants this resolved and we support them in their efforts to do this. the japanese have kept us very closely formed as they have taken these steps, limited steps with north korea. and we've indicated to japan and we said publicly that we are supportive of all of the efforts that japan is undertaking, as long as they are undertaken transparently. and, obviously, was very important for all of us and the shared concern of the japanese is that, that we have are not concerned of the north korean nuclear missile threat. and the japanese have been very explicit in indicating to us that they agree with that very much. so we will watch, we are supportive of it and we'll see where it heads.

north korea is now on the hook. they've got to conduct this investigation that they promised the japanese they would conduct. so we will be watching very closely to see what kind of results the north koreans come up with, whether not it meets the test that the japanese are imposing on them. >> thank you. also administrator davies, in your prepared statement you said that china is, quote, north korea's last remaining patron, unquote. considering its budding relationship with russia and illicit network with countries in the middle east, iran especially, i wonder if that's completely accurate? and the recent economic trade deal between russia and north korea comes at a very opportune time for pyongyang. provides pyongyang with economic boost. that it needs to counter the

sanctions, and also to counterbalance the chinese who have been putting some pressure on them but not nearly enough. and i think -- for russia this deal undermined u.s. efforts to cut off north korea's financial and economic well being while enhancing its own web of influence, vis-à-vis the u.s. end, for example, the ukrainian crisis. can you tell us what sort of goods russia is providing, weapons, oil or gas, food or whatever. how is the russian north korean relationship being considered as part of the administrations strategic calculus and efforts to effectively pressure north koreas in russia is also trying to bolster ties with china? is anything done -- being done to counter this trilateral cooperation between these nations? >> try to actually the russian-north korean ship is a very small in terms of trade, and some of the steps that

moscow announced basically a recognition of the existing state of affairs. they announced separately to north korea, i don't think anybody in moscow ever expected that they would get that debt to be repaid to begin with. that the trade is measured in a few hundreds of millions of dollars a year. they've been talking about some new projects that could be of interest, infrastructure projects. these are longer-term undertakings. and so far they are still a bit at the margins. so we stay in touch with the russians. i got to moscow and tried to talk to him about this problem. we have a shared interest in denuclearization, and this is serious. russia is a stakeholder in the nonproliferation treaty. they don't want north korea to develop nuclear weapons. i think they're serious about

that. we may have tactical differences there that we'll continue to work on. but right now i think it's fair to say that the agreement, the level of agreement we have on strategic issues with russia out ways some of these deals that you talking about of the margins right now. >> thank you for much. my time is expired. the gentleman from california is recognized. >> thank you, mr. chairman. my staff has given me an article from yesterday's paper that says north korea threatens nuclear strikes on the white house. now, i'm not going to take that seriously, other than maybe they're watching some dvds from hollywood as well better te getting smuggled into it but i do take seriously that they continue to try to develop longer-range missile technology and so forth. and as they acquire and develop that technology they really are a threat to not only our regional partners and allies, but then, you know, guam and some of our territories from all

the way to hawaii that we do have to take very should easily. and that does create a sense of urgency in moving things forward. .. urgency in moving things forward. you know, my colleague from virginia, kind of underscored the challenge here. sanctions with the regime that does not seem to care about what happens to its people are very difficult. and the kim regime is not taking the interest of the north korean people at stake here. so they are the ones that clearly are suffering. so we have a limited tool box here. just