lost mitigation and you reduced that exposure, reduce the claims, reduce the disaster relief. a model has got to be let's spend federal dollars on lost mitigation as a way to make the insurance more affordable. instead of subsidizing the rates. that's not a long-term solution. subsidy is not a long-term solution. lost mitigation investments are. >> that would be a fema issue and not miss this one that we would have to deal with, the mitigation issued. >> they go together. you can't tell the nfip to offer subsidized rates and then say invest in lost mitigation. >> they do in the real world that this ain't the real world. i mean, i would like for it to be but that's just not the way it is. i understand exactly what you say and i agree with what you are saying if we were in the

real world. >> you have the power to create that real world. >> thank you. [laughter] mr. bradshaw? >> just very quickly, as you know, there's been a huge investment in the levee system in new orleans which we appreciate significantly. there's a huge modernization of the levee system in new orleans. so when you live behind a dam, you have to be always conscious and always vigilant if it starts leaking. so the national flood insurance program is very important program in order to help those folks that do need help to maintain affordable housing. we are very much in favor of that. >> thank you. >> gentleman yields back. with that i've got a couple of

follow-ups. mr. kelley, during the course of the discussion you indicated we got 1% of the policyholders that create 30% of the laws. mr. birnbaum has been talking about those guys come and how do you adequately rate those folks can help you fund them, how do not fund them? is just you and is through mitigation to take a 1% in which is about as much as you can't i guess. i question is, today we are talking about how we can shift what we have now to a more private market solution. do you believe if you take that one person out, the other 99% of the policies can actually relate be structured -- actuarially so that they can afford the coverage and take care of the 70% of the risks because i wish i could answer that question. i'm not the actuary in the river

i think there's a large percentage of that you can. what percentage i can't quote you spent it would seem to me that would be a key point. if you've got 1% causing 30% of the problems, that's the group that's your headaches, where your risk is. if you take the other 70% of the risk and divide it among the 99% of the poicyholders it would appear to me to be able to find a way to fund this that would be affordable. my next question would be absolutely represents the industry and seize opportunity, how long do you think it would take for the market to transition from where we are to where they would be willing to take this 99% of the policyholders risk on? >> let me start by saying it's going to take the transition to figure out how much the 99% can transition but that's going to take time. >> how long do think it would

take? is there a willingness within your company's and the capacity to take this on in a two-year, five year, 10 year, 20 year window? what you anticipate being something that will be reasonable for the companies to be able to do their due diligence, get their mapping correct, get their modeling correct so they can see where they could come in, make it a part of a homeowners policy as mr. birnbaum suggested which i quite frankly like. where would you think, how long do you think it would take? one of the concerns we have asked me if yo you can't go from your to their we need an id of timelines. testimony is important to us to go to do that. i'm not going to hold you to but it gives us a guideline to begin discussion. discussion. >> i would say there's capacity already there. asked the commissioner testified most of what we're seeing trsition out of the nfip is to surplus lines carriers now. so that is the capital. there's a lot of capital and

surplus lines that long-term our model, we would not expect that business with state and surplus lines for a very long time. many types of coverages the ball out of surplus lines into the standard market that's how the market should work. >> eventually would go to mr. birnbaum's model of being a part of the homeowner's policy to speak with eventually. as the standard or because of investment and expertise with a risk, i think you see many of them start to add that to the standard homeowners policy. is the time between now and then that our market acts as the residual market. >> okay thank you. let me yield to the gentleman from new jersey for five minutes. >> thanks. i will not use the whole time. we were following some of eurosr is back in office, just to play off your points. i guess i would go out to mr. kelley and in some sense putting on the spot is time to be actuary in the room. what it is about actuaries?

those people who found cpas just been too exciting? [laughter] in any event. the question deposit is what? if you get with 1%, 99%, what with the situation look like what's your answer was couldn't say exactly sure. but i'm guessing that if you did it that way that for the night at present, anyone else can chime in, and guessing for the 99% it would be more favorable rating structure for them than it is right now, right? in new jersey, if i meant that 99% right now, after last go around i'm seeing my rates go so hot i'm having to sell my place. if you went to this situation, theoretically, my premiums may be more reasonably -- reasonab

reasonable. >> here are the facts. to our 5.2 million nfip policies, and there's well over 1 million that are subsidized. the exact number is unknown because there's a bunch of policies that not only are pretty firm subsidized but also grandfather. you were talking 20, who knows what policy is subsidy. does suggest we take out the 1%, so now all of a sudden it becomes affordable to the 20 or 30% which is to subsidize, that's not going to happen. you cannot create affordability strictly to the insurance pricing mechanism. there's always going to be a situation where some consumers can't afford a risk-based price. you need some assistance from outside the system. >> that gets to the second point of the question because i get back button brought some of those people are living in areas that maybe are just not, or

overly risky place to be. that has to be taken into consideration as well. is there a difference, does anyone think it would be a difference if you go to that direction, either 100% or one to 99% as was the mitigation, i have taught before is a necessity for mitigation. would they be a change in the processes on the private sector versus the public weight we do it right now the? >> absolutely. >> for the better the? >> yeah. if the private sector were responsible for flood insurance as part of the homeowner's policy they would have an incentive for loss mitigation that they said they don't have right now. so you would see things like partnerships for loss mitigation. you may see multiple your homeowner's policies were the loss mitigation is financed with a loan that is paid for from the discount. there's opportunities for innovation that simply are not going to occur by saying until

the private sector gets involved in the surplus lines puts its toes in the water. >> i yield back i see i'm overtime. >> mr. branch i would like to respond. >> a quick response. we now experience 5% named storm deductibles on hazard insurance in our particular marketplace, and so we continue to have that risk. as a lender we accept part of that risk. that's typically what we are seeing. unless you buy down to 2% named storms. not flood insurance that's the hazard insurance. does not much loss mitigation on hurricanes. >> i thank the chair. >> just a follow-up comment. i think mr. birnbaum's point, if you wind up with a private insurers try to figure what to do with the 1% and say you can incentivize that crippled for mitigation by saying if you do these things we will drop your premium and, therefore, you can have an impact in the way of life as well. fantastic in passing conversation we had this morning

and i certainly want to thank all of the witnesses. if at a lot of the questions we've had. you've given us food for thought, kind of broaden our scope of what were confined and looked at you, trying to see how we've restructured the program, what we can do it with the private sector is willing to do, how different innovations can be a part of this. regulatory wise, how this can be overseen to make sure that consumers are protected yet there's adequate provisions and policies to provide coverage is a real and meaningful. thank all of you. without objection all members will five legislative days in which to submit additional written questions. which will be afforded to the witnesses for the spot and ask the witnesses to please respond as probably as you are able. without objection all members have five days in which to submit material to the chair for inclusion. without the hearing is adjourned. -- with that, the hearing is adjourned.

[inaudible conversations] >> said you know, we have college age kids covered here in alabama. but it's really they kids in elementary schools that are something. they are just not come the african-american kids are getting poor education from horrible buildings. it's just not anything separate and unequal. >> sunday night on q&a, documentary film maker aviva kempner talks about her latest film rosenwald about julie's rosenwald and his partnership with booker t. washington and african-american communities in the south to build schools in elementary education to children in rural america. >> first he said sears puts together these can't house a.

why don't we use of those? the best thing booker t. washington, no, just like we do in this peak. i want to communities to build it. so first these six schools were built and that's amazing your but found that it morphed into 5000 schools all over the south including maryland. >> sunday night at eight eastern on c-span's q&a. >> the house passed a bill yesterday that aims to punish north korea for conducting its latest nuclear tests. the "christian science monitor" reports that it proposes stronger sanctions that denying -- deny pyongyang money in his for developing miniaturized nuclear warheads and the long range missile to deliver them. here's a house foreign affairs subcommittee hearing now from today examining the recent nuclear tests and security in northeast asia. it is one hour 50 minutes.

>> the meeting will come to order. on the evening of january sticks north korea likely conducted its fourth nuclear weapons test. north korean leader kim jong-un claim that the test was a fusion reactor the hydrogen bomb. most experts are skeptical given seismic evidence and north korea's pension for overstatement but it's nonetheless incredibly concerning. we convened a string to do not to join the international community in condemning the test but to work to find a feasible lasting solution to address the north korean nuclear threat. for many in the united states if we think of north korea it's usually about of a joke in reference to either the interview our team america movie star despite repeated calls from both respectable southern thinkers and top military leadership citing north korea as a top threat in the pacific

theater, north korea seems to have been off the obama administration's radar. instead they dismiss the imminent threat by employing a so-called strategy of patience comics getting a strategic patience for our allies in the region. north korean provocation means so much more. and it should for the united states as well. history has proven that north korea has every intention to continue advancing its nuclear program it in an effort to strengthen both domestic and international position. the united states has shown a willingness to negotiate with north korea if it is simply willing to first take steps towards denuclearization. north korea has shown no interest in doing so. but it has successfully extracted food, assistance and other foreign assistance from us by threatening nuclear activity. this is an unacceptable cycle that cannot continue.

due to north korea's nuclear threat and proximity to our allies, south korea and japan, our response options are limited. but they largely fall into two categories. sanctions and information flow. some argue for united nations sanctions but other say that would exert a little pressure on north korea. largely due to china's lack of enforcement. some speak of north korea as the most heavily sanctioned state in the world, but that is not the case. for example, iran is subject to sanctions under 18 u.s. executive orders, and north korea is subject to six. i applaud chairman royce was work on the north korea sanctions legislation which passed the house yesterday. proud to vote for that and i think it's a good start, but i think much more to be done. that's why we are here today. chimes relationships with north korea continues to be a problem. china famous north korea's

status quo over the demise of the kim regime. which it fears could mean a unified united states outlawed korea as a neighbor and a sizable flood of refugees crossing the border. these vested interest are why china continues to prop up this pariah state with food, oil and assistant. i'm deeply this appointed that china continues to allow north korea to destabilize the region in this manner. china must tighten sanctions and will enforce the sanctions that are in place and apply the unique pressure that only it, north koreas patron, can provide. while in nuclear test quickly draws of the world's attention toward north korean leadership, we must remember that the arc 24 million people living in this close out the state starved of basic necessities. furthermore, citizens are brainwashed into believing that their leadership is actually

helping them. the north korea human rights act 2004 initiated radio broadcasting to provide basic knowledge of the outside world to the people of north korea. 12 years have since passed and technological advances have been made and our policy should reflect that reality. i intend to introduce legislation that would update this program to provide greater, more useful information to inform and empower their citizens. in 2006, north korea was removed from state sponsors of terrorism list in an attempt to bring it to the negotiating table and possibly halt its nuclear program. congress has debated this issue and many members believe it should be put back on the list. count me in that category. given the sony cyber attacks from the shelling of south korean ships, north koreas alleged ties to hamas, hezbollah and iran, and now this fourth nuclear test, perhaps, maybe perhaps nuclear should be placed

back on the list. the leaders of north korea as well as china should understand that every pyongyang provocation will induce the congressional response in an attempt to alter north korea's ways. it is calamity across the globe, but the obama administration's deployment of strategic patience comes i believe at our peril. let's be done with strategic patience. it's time for strategic clarity. we must be proactive in our efforts and i look forward to this important discussion of any recommendations this distinguished panel can offer. members present will be permitted to submit written statements to be included in the official hearing record. and without objection the hearing record will remain open for five calendar days to allow statements, questions and extremist matures for the record subject to the limitation in the role.

and i would like to turn the tide over to the ranking member for any comments he might make. >> thank you. north korea probably tested a hydrogen booster device, one that made use of hydrogen isotopes but did not get its power from the fusion of hydrogen atoms. that being said, it's perhaps have a decade or a decade before north korea tests a genuine thermonuclear weapon. i'm sure our witnesses will be able to clarify and give us a more precise estimate. we have throughout this century, which is now in its 16th year, had a policy which has completely failed us as foreign policy. but has achieved what some would argue is the guiding force behind foreign policy which is domestic political concerns. we have not come the last

administration notice administration has slowed down north korea's nuclear program for any significanttime. and continuing this policy or repeating what we've done but only in a louder voice is not going to yield a different result. but our policy has allowed us at times for various times seemed tough, and we've avoided offending wall street. these are important domestic political objectives which have been fully achieved. so if viewed from the standpoint of being popular domestically, our policy success is a success. if you want to protect the world go north korean nuclear weapons. it's been a complete failure. in terms of what we could do it

sounding top was an important we could make it clear to china that if there was a unified korea, american forces would not be north of the 38th parallel and might even be further south. they would be less reason for them to be there. we do not have any military forces defending any other china neighbor from china. our troops in south korea are there to defend south korea from north korea. we could offer north korea a package of aid. that's been done before but a nonaggression pact that they've asked for and we refused to provide. because dick cheney imagined invasion, please didn't want to give up that opportunity sometime in the future. but the most important thing we need to do everything we are least likely to do is to make it clear to china that the access to u.s. markets depends upon

them getting tough with north korea. wall street would be a cast if we actually did it, so we won't. the we are likely to continue with the current circumstance. china is indeed missed by what north korea has done but is unwilling to change its policy and, of course, china has been miffed by north korea many times in the past. china will not change its policy of is the policy changes. they prevailed is about we ask access to u.s. markets and that will not be changed if they choose to continue the policy that it continued throughout this century, which is to subsidize north korea. so if we want a policy that doesn't meet domestic political objectives, simply put, maximizes the carrots and sticks on north korea, it would be a

matter of nonaggression pact, 38th parallel, and the threat of tariffs on chinese goods if china continues while always questioning it but continues a policy of subsidizing north korea your so my guess is we will continue to pull our hair out, obviously -- in worry about north korea, but, and talk tough, do nothing that offends wall street. and if you keep doing the same thing, now a 16 year-old century, and expect a different result, that is the definition of insanity. if i think i will ask the witnesses to comment on is

whether we would ask to get somewhere if we agreed north korea could have a very limited number of atomic but not thermonuclear weapons. or is there a real prospect of getting into the a nuclear free state. i yield back. >> just wanted to comment for the ranking member. i think that many of the issues you've raised are thought-provoking and reasonable, and i would like to extend a hand across the partisan divide to work with you in any way, shape, or form cannot just pull our hair out but actually gets results. and if that offends some folks, so special interests, then so be it. i think the more important goal is to have success. i think all the world expects success. and so i just want to say that i think you've raised some legitimate issues that need to

be explored, and i intend to work with you to do that. look forward to it. >> mr. rohrabacher. >> thank you very much, mr. chairman, and thank you for holding this hearing at a very significant moment. our relations with both koreas go back a long way. and i have a long memory. i still remember sitting right here in this room when the clinton administration was proposing to us that we have, that we cut a deal basically with north korea, that we would be providing them food and fuel for an agreement not to do what they apparently have been doing, which is, i don't care if you want to call it a hydrogen booster device or hydrogen nuclear weapon. the fact is they obviously have been spending their money on developing ways of mass

murdering other people while we have been providing them the money for the food and fuel. to say that that is absolutely unacceptable is to put it mildly. and at that time i indicated, and several other republicans i might add, add a coupl couple of democrats as well as might add, pointed out that's what would happen. an utah's. surprise, surprise, they'v theye their resources to develop weapons of mass destruction. we have subsidizes them in using our money to provide them food and fuel. which they should be coming out of their how do you say hydrogen boosting device development budget. let me suggest that this nuclear explosion, and they continue to come obvious continued work that north korea is doing on nuclear and military devices, that

should at least put us into a mindset that we have to do something different than what we've been doing. and let me note that president hobby japan has made it very, very clear -- president hobby -- threats to the pacific and i would applaud him for reaching out to south korea at this moment. president abe of japan is going to ask about to address sensitivities in south korea battle left over from world war ii. and he needs to be applauded for that entity needs to also be encouraged to rebuild america's, japan's military strengths so we can work with the united states of america in preserving the peace in that part of the world instead of having the united states having to carry the entire load on our own.

so with that said, i would finish by saying the other factor is, which the chairman mentioned, china. just as it was obvious that the north korean regime come as corrupt, belligerent and as repressive as it is, we be using their money to develop weapons what we provided them food and fuel, it is just as evident that they have a relationship with beijing that puts beijing into a position of influence in north korea, if not dominance of north korea. so let us again, to the point that we applaud president abe for reaching out and policies that are going to openly bring more stability to that part of the world, let us condemn beijing for not using its influence in a way that would bring more stability and peace to that region. so we need to work together on

this, and try to think of a coexisting. looking forward to hearing for specifics and information from the witnesses that will help us develop our policy now as we start into this new era. thank you. >> thank the gentleman from california. >> thank you, mr. chairman. thank you for the timeliness of this hearing. a few weeks ago i the chance to visit the republic of korea, visit with our troops and spend a few days around christmas with our troops, also visiting with the korean foreign secretary's come national security folks, et cetera. also a chance to go up to the demilitarized zone and chat with our troops, see the republic of korea troops. the demilitarized zone is an oxymoron. is one of the most heavily militarized zones in the world. it is a constant reminder that we are in a cease-fire. we are not in a state of peace.

listening to remarks of my colleagues, i think it's important for us to learn from what we have tried in the past and so forth but the conundrum is north korea is not easy. ..

it can be done if we put our minds to it. we have to. there is a nerd urgency. the recent north korean nuclear tests are complicated. the president talked about the threats that we face in the middle east. those are not threats to our existence as a nation. north korea with a hydrogen bomb or ballistic missiles are a threat to world stability and we have to direct this. there is an urgency now. mr. chairman, i look forward to working with you to navigating this going forward. it's very important. >> thank you. >> thank you mr. chairman for holding this important hearing. there's no question that the

world has had a problem for a long time with respect to north korea. particularly their leadership, they are all equally as crazy. particularly the newest one. their own people continue to suffer and to start. they are the most politically isolated country on the globe, despite that they continue to have absolute contempt for most of the rest of the world including their neighbors. with this force now, in the last number of years, nuclear tests and we have reason to believe it's hydrogen although that hasn't been confirmed necessarily yet. nonetheless, it is terribly disturbing. i think every administration from the clinton administration to the bush administration to the obama administration has

failed with respect to north korea. that's most unfortunate, and now with the increasing sophistication of their missile systems, the united states is at risk as well. the two countries that are even more at risk are south korea and japan. as my colleague indicated, china is the key. china is the only country that has any real influence over north korea. the only thing that is going to get china's attention is if those two countries, japan and south korea seriously consider nuclear programs of their own. that's the only thing that will get china's attention. it's the last thing china wants. i would urge those two countries to think seriously about this. i'm not encouraging them to do it but even thinking about it and discussing it i think we'll get china's attention, and maybe china will finally act with the

pressure on north korea to get them to back off this insanity of one of the poorest countries on the world that in all their money on nuclear weaponry to threaten the rest of the world. >> i think the gentlemen. is there else who seeks recognition? >> thank you mr. chair for holding this hearing. i find this very interesting. i think the focus that we've heard a lot is china. what are we going to do to deal with china in terms of the pressure that china has? to me there are a couple of questions that i would like to understand before we get into what we need to do to pressure china to do anything else. what does china want? where is china? not because of our pressure. i have seen over the past year or so some articles, especially in the new york times, about

chinese officials, former military officials, retired, talking about the unsustainability of the kim regime. that is a real concern in china about instability in north korea. i'd like to hear that discussion. there is going to be pressure from the bottom up. people cannot live under those condition and the chinese know this. they know and there are real worries about the chinese, about what that instability is going to lead to in terms of them. that leads me to the third point, that is, when we talk about china, knowing that it's not getting china involved. china is very involved with the long consequences for they may have their own agenda about what they want to do with this.

the question is, besides pressure on china, and we've heard a lot, and i'm not saying that's not a potential, what are the ways of partnership with china? what do you see as opportunities? thank you very much. i yield back. >> thank you, that's that's very insightful questions. if there's no other opening statements, then then i will move to the pnel. first of all introducing three great experts on this dicey issue. first is doctor cha. it's good to see you again. mr. bruce klinger at the heritage foundation and ms. bonnie glaser who is a senior advisor for asia at the department of china.

we are thrilled to have all of you today. thank you for making the time available. first i'll introduce mr. cha, doctor cha, excuse me. >> thank you mr. chairman. members of the committee, it really is an honor to speak to you today about a very difficult topic and that is north korea. you mentioned urgency. i think there is a great deal of urgency. there are elements of deterrence and crisis instability relating to the north korean weapon plan that i don't think they fully understand. it could be that this young north korean leader views nuclear weapons as valuable weapons only in their nonuse. the urgency is that the result could be a disaster at the cost of tens of thousands of lives at which point the world is going to wonder why the united states did nothing to stop this before it was too late.

so what have we done? in the administration's own words, they had two objectives. the first was to break the cycle for negotiations and that was the flaw of past administration policy. second, the concept was that this idea of pressure and non-dialogue would eventually cause the north koreans to feel compelled to come back to negotiations, genuinely willing to cut a deal. when this did not work, the administration did try to reach out and engage, but all these offers had been burned by regime. we are in the worst of all worlds right now. there is no diplomacy, there's more tests and a growing program. we've had for nuclear test, three of them during the obama administration and two of them before the state of the union speech. at the way this is going this

will get punted to the next administration and it will be an exponentially worse problem. a new approach has to focus on what we described in the new york time as asymmetric pressure points. in my experience, being involved in negotiations in the previous administration, there were only two times where i felt the newer north koreans were truly caught off guard, uncertain how to respond. the first of these was in september 2005 and the treasury department took actions that led to the freezing of north korean assets in a bank in china. the second was in february 2014, the aftermath of the united nations commission inquiry report of which the major recommendation was referral of the north korean leadership to crimes against humanity. these are the only two times i felt the north koreans were frazzled.

i think we have to build on these pressure points. let me highlight a couple of these. first the sanctions. i know bruce will talk about this as well. as the chairman said, it is the policy that north korea is the most sanctioned country in the world. they cited some of the statistics for the sanctioning is much higher than north korea. there's more space to operate. secondary sanctioning should also be given positive consideration. this has been talked about within policies are circles. this will complicate our relationship with china, the european union, union, southeast asia, south america and africa. it's also certain that many of these entities will comply when given the choice of dealing with north korea or losing access to the u.s. financial system. we should also give serious consideration, as the chairman said, to put them back on the terrorism list. i know there will be lawyers that will dispute the legal criteria for putting them back on the list. i would only urge that

particular attention be given to their cyber capabilities. we did research at csi us that shows the activities, the cyber activities are instigated by the same agencies, entities within the north korean government that have been reported responsible in the past for terrorist attacks. human rights have to complement sanctions as part of an asymmetric policy. one would be slave labor. there are over 50,000 workers in africa, africa, the middle east, russia and china that are operating in on human conditions that are being paid nothing. the revenue is going back to the north korean government. they estimate between $250,002,000,000,000 of currency. this is something that should be targeted. this project provides 90 million in hard currency with little

wages going back to the factory workers. the south korean government will be opposed to something like this but even conservative governments have grown attached to the industrial complex. difficult times call for difficult measures. lastly, on information, north korea under came and is proven to be hyper sensitive to external criticism. with the human rights act, i entirely agree with the chairman on trying to increase funding and think about new ways to bring new information to the country. as some of the work we have done with the bush institute has shown, the united states can come up with a comprehensive strategy, breaking down north korean information barriers. in the end, we need to improve the human condition of the people in north korea. thank you very much. >> thank you mr. chairman and

other distinguished members of the panel. it truly is an honor to be asked to appear before you on such an important issue on our national security. north korea recent nuclear test has a again triggered widespread calls to do something tougher on north korea. we've been here many times before and each time administration claims talk of tough action were taken at face value and they pledged to be even tougher next time. interest was eventually diverted elsewhere. it was also hindered by widely accepted myths about north korean sanctions. the first myth is that sanctions can't affect an isolated country like north korea. targeted financial measures, which are a law enforcement method mechanism are directed against specific entities that violate u.s. laws. even the most isolated regime or terrorist group is tied into the noble financial order. the vast majority of all international transactions, including north korea, are, are denominated in dollars which means they must go through a

u.s. treasury department regulated bank in the united states. that gives the united states tremendous power and leverage to freeze and sees assets, to impose fines such as a $9 billion dollar fine imposed on a french bank for improper financial transactions with cuba, iran and sudan, and to deny access to the u.s. financial system. as you pointed out, a second method is that north korea is the most heavily sanctioned country in the world. president obama claims it's the most isolated, the most sanctioned, the most cut off nation on earth. that is not true. the us, the the european union and the un have more compelling measures against iran and north korea. unilaterally, the u.s. has targeted far fewer koreans entities and other countries. we've had sanctioned more

zimbabwe and entities then korean entities. they are counterfeiting our currency. we've sanctioned officials from many other countries for human right violations and sanctioned by name the president of zimbabwe and belarus but not yet sanctioned a single north korean entity for human rights violation nearly years after a report said they were completing such egregious crimes against humanity. the u.s. has also froze in the assets of sudan, iranian and syrian but not north korean officials and entities for sensors that censorship. he goes on and on. the final myth is that we have

already put pressure on them. that's not true. they were surprised that when he was in government he was surprised to find out that there were ten times as many sanctions on burma as there were on north korea. john kerry and other officials have made similar statements indicating that their arm other measures the u.s. could impose but haven't. the fourth myth is that sanctions don't work. as dr. cha pointed out, tougher measures were effective when applied. in 2000 to the u.s. designated the bank in asia as a monday money laundering institution. two dozen financial institutions voluntarily cut back or terminated their business with

north korea as a result. a north korean negotiator admitted to a white house official, you finally found a way to hurt us. instead, what the u.s. should be doing is implementing the iran model against north korea. strong international measures that will bring them back to the negotiating table. while implementing new sanctioned measures is important, fully implementing and enforcing already existing far-reaching measures is also critical. the u.s. has the tools, we just lack the resolve to fully use them. for years the obama administration has been hitting the snooze bar on sanctions. it's pursued a policy by holding some sanctions to be rolled out after the next violation or provocation. the u.s. instead needs to sharpen the choices by raising the risk and cost for those violating laws in un resolution not only in korea but those who facilitated action. in my written testimony, i've

provided a a link the list of very specific recommendations for u.s. and south korean actions that should be implemented against north korea. neither sanctions or diplomacy alone will be enough. both are essential. we need a comprehensive integrated strategy. i will conclude with the same question i propose two years ago, why has the united states hesitated to impose the same measures against north korea that it already used against other country for far less egregious violations of u.s. and international law. thank you for the privilege of appearing before you. >> thank you. miss glaser. >> ranking members, i'm honored to have the opportunity to testify today. as so many of you have pointed out, cooperation from china, north korea's main benefactor, is essential to achieving a

nuclear free peninsula. it accounts for 90% of their global trade, provides at least 70% of north korea's crude oil requirements. some 80%% of its consumer goods, approximately 45% of its food and didn't chinese investment accounts for almost 95%. the u.s. should not expect beijing to completely abandon its ally and forge a common strategy with washington to squeeze north korea until it gives up its nuclear weapons or collapses but it may be possible to persuade them to stricter comply with this existing international commitment to further tighten sanctions on north korea and to reduce its support or make continued support contingent on specific actions to kim yong.

cooperation needs to be a litmus test of a proposition that the united states and china can work together whether our china interests overlap. the u.s. should take the following steps. first we should call out china for the failure to enforce existing sanctions. they have deep networks with chinese companies and they use these relationships to put you are prohibited items from all over the i world, routing them through china before shipment to north korea. designated north korean entities continue to do business with chinese companies and visit chinese ports. north koreans are reportedly still able to conduct banking transactions in small tanks operating in northeast china along the border. china does not enforce the ban

on luxury goods. second the u.s. should pressure them to agree -- they should use their leverage over north korea and targeted ways to change their behavior. china could refuse to engage in new economic projects with north korea until the government returns to negotiations in good faith. they could reduce the flow of chinese tourist to north korea which has been a significant source of foreign exchange. fourth the united states should encourage china to leverage its resistance to north korea to influence its behavior. to deter north korean missile launches, they could agree to warn kim yong that future

provocations would be followed by a cutback in beijing. they could suggest that he returned to his commitments under the six party talks and substantial reductions in crude oil, kerosene and gasoline. they should be held accountable for their crimes on humanity and as you mentioned, they are already sensitive to this issue. this is a decisive and bold leader who has a clear vision of what is needed to achieve what he calls the chinese dream. the great rejuvenation of the chinese nation. under his leadership, they haven't embarked on an effort to end the special relationship of the past between beijing and kim yong and replace with a normal state to state relationship. widely viewed as the most powerful leader, china has had, he has sufficient clout to overrule opposition that would

resist a tough or stance towards north korea, especially in the party and military. beijing is not prepared to assume sole responsibility for addressing the north korea nuclear threat. they may be willing to do more along the lines that i have outlined if it believes the u.s. has an effective strategy, is prioritizing the goal of creating a non- nuclear peninsula and does not seek to use the korean peninsula to harm chinese interests. what does china want? a balance of power in northeast asia that is favorable to chinese interests and does not threaten chinese interests. i believe china does not adamantly oppose north korea but

it's less risky than it what it could bring for chinese interested i look forward to this discussion. i yield the floor. >> thank you. i'd like to thank the distinguish panel members to be here today. it's unnerving when seth rogen gets more reaction out of the north koreans than our american policies do. he certainly hit a nerve when he put that movie out. a lot more than any of the blustering that has been coming out of washington d.c. it's been a conundrum as pointed out by my colleague, that's not new. it's not an issue that was resolved at one time and has degraded. it's never been resolved. every time i've spoken with any expert, about how to get north korea to start living with accepted international norms, especially when it comes to

proliferation, every one of those conversations always involves china. they are the 800-pound gorilla when it comes to dealing with north korea because of north korea's dependence on them for food and energy. miss glaser, you've made some astute observations on what china could do. how we motivate them properly to get that done? there's been a lot of things talked about, maybe targeted sanctions that involve chinese banks that fund north korea. maybe that is something we can look at. i spoke to mr. sherman about that, may be looking at that in a bipartisan way. mr. klinger, you said that in your submitted speech, you are going to be talking about

several of the sanctions that may be could and should be on the table. i'd like to thoroughly look at entertaining those. i think the bill that was passed yesterday on the house floor was a good move. i think it moves the ball up the field, but i think think there is even more to be done. you pointed out, rightly so, mrt even considered or done similar things that we've done to far less egregious offenders in the world today. i think that's abominable. i think we should put all things on the table. i'd like to ask you, mr. klinger, why do you think there has been such restraint on dealing with north korea on the way that we've done with far less offenses. what's the rationale cast? it doesn't make any sense to me.

>> that's an excellent question serve, which i really don't have an answer to. it's really counterintuitive. if you just compare iran and north korea. iran claims its nuclear program is for civilian purposes and north korea says it's to incinerate the u.s. and its allies. iran has not exploded a nuclear device, north korea has done for and iran has done -- has oil. there are the concerns as to how north korea will impose if we apply additional measures. i don't think we should be hesitant to enforce our laws because of the concerns of what the criminal will do if we enforce them. similarly, as it's already been talked about, how will china respond? i've advocated additional measures against north korea, i said let the law-enforcement

people go where the evidence takes them. someone once commented to me so you want to sacrifice the all important china u.s. relationship over north korea? i said no, i don't want to give china immunity from u.s. law simply because there china. we should go over the evidence takes us. we should sanction whatever entities are violating u.s. and international law and un resolutions, not because they're chinese, but, but because they are violating our laws and resolutions. >> i think your answer dovetails with the opening statement of the ranking member. i think these comments have a lot of bearing going forward. i don't think there should be any sacred cows when it comes to enforcing our laws. protection of special interest or ongoing concerns of bilateral relationships of china, these are serious issues in china has not stood up for its

obligations. one thing that has been mentioned that might get china's attention, and i think it's also just good policy, is what about the u.s. bolstering our support for missile defense systems for south korea at the least, and maybe japan? what you think about that mr. klinger? >> i think that's a great idea. on the china piece of it, first as bruce said, when there is a section 311 against the chinese bank in 2005, that was law enforcement action. in the end, the u.s. china relationship survived. and it was a very effective measure. it actually may take things like that to actually motivate china.

were almost self deterring in that sense. with regard to measures with other countries in the region, i think absolutely. north koreans activity speaks to the need for an much more robust missile defense system in asia. that includes the united states, japan and south korea. the relationship between japan and korea has gone through some rough periods but it's on the mend and i think there are opportunities, particularly in south korea to talk about more missile defense as well is better intelligence and information sharing among the three countries. these have been on our agenda with our allies for quite some time but we haven't been able to push them forward. unfortunately, as it is, when we were working on the policy, every time north korea did something bad, the motto in the

office was let's make lemonade out of this lemon. one of the ways to make lemonade out of lemons is to consolidate our defense alliance. that also complicates the environment for china and may motivate them to do more. >> mr. klinger. >> last year i wrote a detailed research paper that south korea should allow the u.s. to deploy an air defense system. to date they have not wanted to publicly discuss it. as i point out in the paper, that fad program is better than anything the south koreans will have for decades to come. it's much more capable. i also point out that the chinese claims that it will impair their ability to assault the united states or our allies with missiles, their red herrings.

the fat is very effective against north korea but would have no constraint on chinese missiles so therefore chinese objectives are politically based. so i think the u.s. in consultation with the allies should deploy that. it will improve the defense of our forces there and of south korea. also as dr. cha said, to have south korea integrated system into the more comprehensive allied system with japan because we are all in this together. the same north korean missile could be aimed on the same trajectory toward south korea, u.s. forces or u.s. forces in japan which are critical for the defense of the republic of korea. >> it's no secret that the relationship between china and south korea has blossomed over the last several years and tried to do everything they can to improve trade and all aspects of that bilateral relationship. it's also no secret that china has lobbied, and i think that's

the understatement of the universe, south korea against that program. i think it's time for us, as leaders in the region, to step up our voices and our commitment to security in the region by support for things like the air program and try to get some support for those things because maybe, just just maybe, besides being good policy from our strategic interest, it might be a really good motivation factor for china to finally get up and do something about this global problem. the chair recognizes mr. sherman. >> usually it's the witnesses that answer questions but one question came up and that was why did we do it in iran and not north korea? i think i'll answer the question. when congress passed the

sanction laws, they provided secondary sanctions, which is the only way you go after these regimes, that if the law had been enforced would have made a rants trading partners very angry. administrations refuse to enforce those laws. they've allotted a ran more time to get closer to a nuclear weapon but they began to persuade a rants trading partners that they should go along with this pressure. only to the extent that we could carry out it the sanctions without upsetting their trading partners. we use persuasion. where we persuading? europe. we had sanctions on iran only to the extent that we could get

europe not to be terribly angry if we enforced the law. as to china, persuading them will be more difficult. the chairman and i are talking about sanction on chinese banks. that will make china angry. in dealing with a ran, the administration got as far as it did without making anybody really angry. , any of the aransas trading partners. i think this program is significant enough that we should be willing to make them angry.m8

enough but when you seize people and hold them for decades because you want somebody to teach you a t ceremony, one comment north korea is very status conscious. they want to prescribe and the biggest boost to your ego is to have a nuclear weapon the other way is to snuggle want smuggle one. a missile defense program isn't going to stop that. in addition you have the advantage of having plausible deniability or delay. retaliation doesn't occur in cold blood. it doesn't occur after a 90 day

investigation process. i want to go to one more question. alkali in syria, north korean technology. do any of our witnesses have any gas as to how much money north korea was given for cooperating? the estimates have been in the hundreds of millions of dollars. two things, around once a nuclear weapon and they are about to get a chance at $130 billion. would north. would north korea be willing to sell, they've already proven their willing to sell nuclear weapons kits, if you will, or equipment and plans. is, does north korea have enough weapons that they are willing to sell one or two of them and is the same multibillion-dollar cost for whoever wants to buy

them? do we know that, mr. klinger? >> i was going to address your comment about north korea as a terrorist nation, if i could could. in my written testimony, i have a long list of actions that north korea has taken that fulfill the legal obligation for relisting them as a terrorist nation. there are a number of u.s. statutes, perhaps the most relevant is the 18 u.s. code, 23312331 which defines international terrorism as involving violent acts that would be a violation of criminal laws of the u.s. and that appeared to be done to intimidate or coerce the population. i think the 911 type attack for citizens of the u.s. or inhabitants of the u.s. to go to theaters and watch that movie is trying to coerce the population. there have been a number of items that i've listed of north korean attempts of assassination, kidnapping and

others that have been recognized as south korean courts. i think any one of those should have put north korea back on the terrace lists and certainly cumulative to cumulatively. they have shared and sold nuclear missile technology with a list of rogue nations. i question whether they would sell a completed weapon. i think it might go beyond what they would be willing to do but i certainly could be very wrong on that. as they develop a larger arsenal they might be willing to do so. >> what i said in this room is they need their first 12 atomic weapons to defend themselves from us and the 13th doesn't go on ebay, but could be available for cell sale. doctor cha. >> there certainly a history

there. every weapon they've developed, they've sold. >> and they haven't drawn the line at nuclear. have things gone as planned, syria or iran operating would have a you tony him nuclear device and it's not that north korea says that so immoral we couldn't participate in that. >> definitely a concern in the case, as you know well, there missile sales, have certainly been the case. i think part of their effort is trying to develop longer range and more accurate missiles. you can't put it past them in terms of the nuclear side. aside from the overt proliferation, by virtue of the fact that they have a nuclear arsenal that's growing creates all sort of crisis instability problems for the united states. the notion that they can keep a

dozen or two dozen bombs and as long as we deter them, we are safe, is completely wrong. should any crisis develop on the peninsula, north korea is developing these nuclear capabilities and so what that means is if we are ever in a multi- crisis, they immediately have to shoot up the escalation and that forces us to consider preemption. it's a highly unstable situation i think it's lost among the general public. >> i've gone way over my time. i yelled back. >> i did too because i was looking the other way. >> i'll try not to go over. first of all, let let me think the witnesses. your testimony has been of great value to me and to this committee. the points that you have made, all of you, you have made some very serious points and given us

information that we will utilize in this coming year as we try to come up with a policy that can deal with this threat. it's ironic, i believe the united states and the world is entering a new era. the cold will or has been left behind a long way and even the post- cold war era has been left behind. what the new era will be, what the parameters of how we operate in the world is going to be different. ironically, the country that may be forcing us into a new definition of what our responsibilities are and what were going to do is one of the most accurate list of regimes in

the world. they don't even fit into the cold war, the way they handle themselves. i really appreciate the specifics that the north korean government is doing and the actual people who are running the government that they have to put up with in terms of the idea of slavery that they are actually engaged in slavery, which i think is an important, you made important part points today. that type of activity is intolerable. thousands of north korean workers that are sent overseas and all of their salary is given to the government, that is, i believe, virtual slavery. thank you for drawing our attention to that. that is something we should be able to deal with and something we should be able to work with

with our international organizations. let me note that i agree with and am very pleased with ranking member mr. sherman who pointed out that the north koreans are still holding japanese hostages after decades. i agree with him. that should not be overlooked as if that's a past issue. the fact that the north koreans are holding kidnapped and are holding japanese civilians in north korea is something that should be a matter that is not relegated to the past so long as they are holding these people. that should be part of what we are looking at. whatever we no, whatever era we are entering, we know we know it's going to be different and i think what may come of this is that we may find that reunification of korea becomes a

reality after all these decades and that reunification will create a new world that we have to deal with. were talking about historic moments in the world. that's where we are at in the world. this crazy regime in north korea is forcing these changes upon us. i would also like to mention that we are entering an era where our technology is not just being utilized for offense of weapon systems. thanks to ronald reagan we started down a path of building and focusing on defensive systems. that makes a lot more sense to me even in cases like this where , and let me know, there are several new technologies

that will be developed that will give us a greater ability to defend ourselves against a missile attack. we should certainly make that available to south korea and japan. that would certainly be a message there. let me ask for some more information from you folks. somewhere in the back of my mind, is an action that we took and maybe it's covert action or maybe i'm disclosing something, to prevent a transfer of money that was going to specific individuals in the north korean government. with all of the poverty and lack of food it hasn't prevented luxury cars and booze and other expensive consumer items going

to their very elite. i seem to remember that there were banking transactions that we challenge that have an impact on north korean policy. could you refresh my memory on that and is that a methodology that we should try to look at now to reestablish that policy toward the new challenge that we face? doctor cha. >> i think what you are referring to is the section 311 by by the treasury department in 2005. it advised u.s. financial institutions not to deal with a particular bank in macao because of money laundering concerns. we've always talked about how we sanction north korea financially. what we did was advised u.s. financial institutions of being

wary of business with a particular bank. that then created a ripple effect that you described where many other banks that had north korean accounts decided, well we are going to freeze these or investigate them. bank regulators started targeting these accounts and i have an effect of completely shutting north korea off from the financial system. they cannot do a wire transfer or access bank accounts through atms. it was quite a powerful and forceful thing. to answer your question, yes i think we can do that again. north korea has since tried to adjust but at the same time they are still able to operate in the financial system and there are things we can do to make that more difficult. >> are we talking about bank accounts for, that are being controlled and operate for the benefit of the leadership of specific leaders of north korea and decision-makers there?

>> i can't give you the answer to that question here. what i can say is that when that action happened, the the north korean negotiators, when they came back to the nose negotiation table had only one demand. that was to unfreeze the $25 million that was that was sitting in that bank in macao. they did not want to talk about anything else under the sun. they didn't want to talk about peace treaty or anything else. >> do the other witnesses have any comments on that? >> i think this also takes us back to the issue of china, where there are so many of these small banks that exist along the border and sometimes they shut down and they pop up someplace else. maybe even half a mile down the road.

there are some journalists who have gotten into some of these banks and pretended to make transactions just to demonstrate how easy it is to transfer money to north korea. this goes back to the issue you raised of setting --dash shutting down these banks. it is essential to get them to comply with these sanctions that are already on the books. when it comes to things like luxury goods, just inspections along the border. there are times that the chinese appeared to want to signal the north koreans that they are dissatisfied with something. then they go back to business as usual. >> if i could just add, we talk about chinese resistance to actions but we can actually get chinese banks to work in our

interest. the u.s. sent officials throughout asia to talk and point out that under section 311 they could face legal issues. even though the chinese government was urging the chinese banks to resist any pressure, the banks themselves had to worry about their own reputational risk. their own access to the system. they complied. the bank of china severed the relationship with north korea. even if the chinese government didn't want to, they they had to take those actions themselves to maintain the bank of china as an entity. >> thank you. thank you mr. chairman. mr. connolly. >> thank you and welcome to our panel. i begin by taking issue with the ranking members narrative with respect to iran and comparing it to north korea.

my narrative would be that this administration took up from the neglect of the previous administration with respect to iran, and whether you like it or not, the nuclear agreement is working. they are complying. if you want to remove an exponential threat to israel, that's the way we did it. in my view, it has the best probability of working of any solution offered on the table. maybe one doesn't like that. maybe one would have preferred a different alternative, but this is the one that the united states government pursued and i'm glad they did. i think in the long run it wi be the best alternative for peace in the region and for taking the nuclear option, with respect to iran, off the table. now one now one of the pieces of leverage that we had in addition

to sanctions was choking off iran's ability to sell the one product it really has and that is oil. when it comes to north korea, we we don't have that situation other than weapons. i'm not quite sure what it i the north koreans have to sell that we could choke off. would that be a fair statement, ms. glaser? >> yes. i would agree with you congressman. i don't know what north korea has to sell that we can choke off. >> that's a real big difference between, to analogize, i just think it's apples and oranges. if you start with the fact that iran has oil and north korea doesn't have anything but weapons. >> there are some very important differences between north korea and iran beginning with the fact that north korea has nuclear weapons and has tested them and

iran does not. i would agree with the points that were made by bruce klinger and doctor cha that there are mechanisms that we have used, sanctions that we have used, executive authorities that we have used against iran that we have not used against north korea. there are many more ways we could pressure north korea that week have applied to iran fairly successfully. >> let me assess question question and i welcome doctor cha and mr. klinger, if the devil's advocate question. i'm i'm not promoting it, but is that the best way to try to restrain and shape north korean behavior? tightness sanctions, tighten economic conditions. is that really what history tells us about north korea?

ms. glaser? and then both the other panels fill free to comment as well. >> my belief is that it must be part of any strategy. in itself, if we are not offering north korea some positive vision of the future, then pressure sanctions are unlikely to work. >> alone. >> alone. i believe the united states under this administration and prior administration have made it quite clear to north korea that there are many things that we can put on the table. security assurances, assistance, diplomatic relations. there is such a thing as a grand bargain. the north koreans are aware that there would be benefits from them, for them, if they give up their nuclear weapons. pressure by itself will not work but pressured sanctions must be part of any strategy. >> i agree. even though my comments have focused on sanctions when i talk

about these and others in the past, i always emphasize emphasize the context that it is one instrument. not always an effective one, just as diplomacy has not been effective. we often get into a binary debate of sanctions versus engagement and we need both. it's part of a comprehensive strategy. we need the conditions and the continued offers of conditional engagement and unfortunately we've had many agreements never to them to pursue nuclear weapons and to give up what they've built. those two tracks we hope will convince north korea to alter their behavior. then there's the third track of making sure you have sufficient defenses for yourself and your allies. when people say north korea doesn't work, diplomacy was

equally unable to do that. sanctions have a number of other purposes. one is to enforce u.s. law, to is to and pose a penalty or cause a pain when someone violates our law or un resolutions. three is to put into place mechanisms to impede the flow of prohibited items and the money from illicit activities. for two constrain proliferation and five is to reduce their program. >> what is to value of them? a couple things come to mind in addition to the things bruce already talked about. one of the things i talked about is this issue of slave labor. that is providing income to them at but it is certainly in

violation of human rights. it's not oil but it is something that is of value to them. the other is that there's a lot of raw materials in north korea and china. since 2008 they've affected a lot of that. when people are in the capital city, they feel things look good there and that's all because of chinese money. that's another area. on the diplomacy side, i don't think anybody on this panel is against diplomacy. we all think diplomacy is important. i have to say that having participated in negotiations for the last agreement and knowing a lot about the clinton administration agreements and president obama, as bonnie said, they know what they get. we put everything on the table. the issue right right now is that this young leader is not interested and he's looking to build his programs because he

wants to confront the next administration. >> if you'd a lot allow me one more question, talk a little bit more about, it seems to me the one point that we have, if we have the leverage it's through china. it's in our relationship with china and their relationship with north korean leaders. how much leverage do they actually have? from a distance it looks like they are in a conundrum themselves. they have relationships they don't want to walk away from. they don't want to destabilize the peninsula and have to deal with that mass and if we gave them truth serum they'd probably allow the peaceful organization of the south but they can't really do that. so how much leverage do the chinese have and how well are we pressuring them to try to

persuade better behavior from the north koreans? :

north korea would use a nuclear weapon for aggressive actions. >> i don't think they will use them purposely for aggressive purposes. having said that, one can imagine where a a country can miss calculate. i can draw some of those scenarios for you. that is what's so inherently destabilizing about the current situation. i just want to talk a little bit about perception. i've not been to south korea or japan. do south koreans and japanese feel the same threat from north korea to say what israel does to

a ran? i certainly think feels threatened by the developments in north korea. it's the clearest threat to japan today. with regard to south korea, they've always been under this fear of artillery attacks. they are only seconds away from the capital city of seoul. i think there is now a more growing concern about the broader nuclear question. again, if you've been under conventional military threat, biochemical or other all your life, you can get a little jaded. i think think there is a growing concern about the broader strategic implications. >> my senses, here in this country, we, we have a country, the only one in this century testing nuclear weapons a week ago. after the news comes out it's like oh well it wasn't a thermo

nuclear weapon, it was just a vision weapon. therefore, we don't need to worry about it. were all have a hearing today but i will tell you, every member of congress understands the threat is real. it is something that israel has done to raise that perception i think everyone has learned to respect that threat. i'm not sure that's the same with north korea. maybe our problem is we need to raise that perception. maybe that something japan and south korea and other nations who feel threatened in that area should do to increase that perception here in congress because honestly, right now, you hear the news about syria and isis and the iran deal and that

is what people are paying attention to. you all have a lot of great ideas about what to do, but, but how do we get action? that's why we are here today. in your opinion, what do we do to elevate the reality that this is a real threat. i've been setting here with my colleague talking about this problem should just be solved. it doesn't happen. what do you suggest? all give each of the panelists a chance to respond, 30 seconds each. >> i would entirely agree with you, i think outside of this chamber, more broadly broadly in the american public there is a tendency to downgrade or discount north korean activities as a crazy regime that blows up bombs in a cave near china. they think we don't have to worry about that but that is hopefully the wrong idea. i think sometimes in the past united states overreacted and played into their hand. i think we are now in a period

in which we are under reacting and that's very dangerous. north korea is easy to ridicule. it's easy to make the but of jokes. it is a very real threat. it runs the gamut. it's not only against our allies but increasingly to the united states. last year, three u.s. four-star commanders said that north korea has a nuclear weapon that could hit the united states today. they must know something. a year or so ago, south korean press had a lot of articles about defectors about a new war plan being implemented after he came into office so that north korea could take over the peninsula and seven days. that's before the u.s. could

send reinforcements there. it is a real threat. >> thank you. >> it is also disheartening to me that there is an under appreciation for how much of a threat north korea and this nuclear weapon poses. of course, israel does a terrific job in congress and in the american public at large. i think more can be done in the area of public education. i'm certainly hearing more of this and on north korea's humanity issues. we need to get more people involved in this discussion. help people understand that we need to dissect what the threat is, see that it is increasingly a threat and not just put this on the back burner. i completely agree with you and

share your concern. >> i think the panel. >> thank you mr. chairman, i appreciate you you bringing up this issue and each of you expressing your shared concern about this under appreciation and lack of understanding about the threat. i represent hawaii second district here and as you can imagine, being out there in the middle of the pacific, every time north korea starts making threats, launching these tests, this is something knowing, as you said mr. klinger, hawaii and the west coast at a minimum already are within range of north korea's capabilities, both with a ballistic missile and a nuclear weapon. this is something that really rings true and is deeply understood by folks in my state who recognize the need for stronger missile defense and recognize the need for taking this threat with the seriousness that it deserves. i have a few questions. the sanctions bill that we

passed yesterday in particular as it relates to hard currency. do you believe it will have the same effect as in 2005 when it was first put in place? that's for whomever would like to answer. >> i think the bill is great. i think the mechanism is still there to carry out the same source of financial targeted sanctioning. since 2005, they have tried to circumvent this. again, a lot of it depends on what entities we choose to sanction and who we choose to target. and chinese compliance to that. i can imagine things we can do that would not collapse the u.s. china relationship or not have a

major effect on wall street. there should be plenty of room to operate. >> but still what impact their pocketbook. when we look back on what happened on 2005 and what led to their agreement in 2007 when those sanctions were lifted, i just like to hear your thoughts on what you see is a viable path forward, should that and be reached. should the sanctions be so effective that we have an opportunity there. understanding really that north korea sees their nuclear program as an insurance policy against regime change. seeing what they learn from what happened in libya with gadhafi and really what caused that window frankly to close where they wouldn't trust that if there was an agreement to d nuclear eyes. that the united states wouldn't go after them and to try to implement the regime change. i like to hear your thought on the engagement with north korea and how understanding this climate is with regards to a path forward. >> just commenting on yesterday's bill, it closes a

number of loopholes. it elevates a number of existing executive orders of regulations to legislation giving it additional power. it makes a number of implementations mandatory rather than discretionary. i think it has a number of benefits to the u.s. effort. the bill as well as existing measures, it's a lot dependent upon the implementation and our willingness to use the powers we already have. this allows the u.s. to sanction north korean officials simply for being north korean officials. we don't even have evidence that they've conducted illegal activity. that gives us tremendous power. we sanction 16 officials for being russian officials after the crimea invasion. we haven't use that power as much as we could. the target has changed. it was very effective because it was a very large conduit.

it's sort of like the cockroach theory of law enforcement. you go into a kitchen and see where the cockroaches are and where they run off to. if you take out the first node of plan a in north korea you alert your intelligence and law enforcement so they watch where the money gets redirected and where the money goes. then you go after plan b. >> on the issue of engagement, congressman, we talked about that you have to have a strategy that deals with its composed engagement as well as coercive steps. as far as i understand, the united states engages with north korea. we have a channel in new york. we have talks with the north koreans. i think we have to be careful about agreeing to revise the six

party talk mechanism as the chinese often encourage us to do, in the absence of some return to the commitment that the north korean is made in the 2005 and other agreements. the north koreans want to engage in dialogue and a peace treaty and be recognized as a nuclear weapon state. i think that's a bad outcome. we have to engage north korea in a way that they understand that there are steps that they have to take. they have to go back to these commitments of giving up nuclear weapons. if they're willing to go ahead with a freeze as a first step,

with the understanding that the goal is that they eventually give them up. i think the united states is always going to want to work with that. i think there are sides that under king young that the north koreans are willing to engage in serious negotiations with the end goal of the d nuclear rising the peninsula. engagement, yes, but we have to be careful of how we use it. >> thank you for holding this hearing and for continuing to help increase awareness on north korea's threat. >> thank you very much. the chair recognizes congressman perry. >> a list of questions here, maybe maybe just all at once and then if you'd comment, understand that we are in talks with south korea regarding the reintroduction of nuclear weapons onto the peninsula. what is the status of that? why wouldn't south korea be interested? regarding the introduction of thad, why not? is south korea concerned that it

would be too provocative? why wouldn't they want that? how would that be done talking about conventional arms sales? why are we doing this. you folks are the experts and you don't know. maybe you can give me some insight into that. regarding increasing pressure on the human rights atrocities which are just unimaginable to me, what's the best way to do that? and from ice dam point, -- and from my standpoint that's my perception. what would be the response? :

>> >> i am of the the you we will not go with diplomacy

until the end of the administration. >> if i can interrupt you is there a downside risk? and then for the upside with expensive capital, what do we lose by doing this? >> it has to do with china and the relationship of china that is the perceived downside than the degree of inertia because it is an issue traditionally that you don't necessarily want to commit to solve it to. so if they do a provocation we slapped sanctions on them and everybody goes back to dealing with other issues. that is a rapidly deteriorating situation. >> to address in reverse order a number of cases to

impose sanctions on other countries for human rights violations and not north korea we have the authority to do so but also the executive order that gives us the authority to sanction a member of the government. the president could add entities as well as every agency named in the inquiry report as well as the heads of those agencies i don't know why we don't do that. the un resolutions not only cover the nuclear missile programs but also prevent trade on international arms. there have been least three interceptions from korea to other nations but from the resolution sanction with the hierarchy they are not worth

in forcing. so one thing we should be pushing for the un is chapter seven and clause 42 authority to allow enforcement of the resolutions so it provides the coast guard interception of ships. we didn't have the authority to board or inspect them. i can send you a report on that. the last night during a major speech for the first and the administration said they want to discuss with the united states of possible deployment of that at the peninsula in reintroducing nuclear-weapons in both south korean government said

they don't see this to put the u.s. nuclear weapons on the ground and would not provide the pre-emptive target for north korea or south korea. >> and have attaching a great deal a priority to china for the reunification also to put more pressure on china and i agree with my colleagues at helsinki is miserable on this issue and she may agree. but the chinese seek to weaken the u.s. alliances trying to deal with north korea problem to have a bigger strategy with the chinese and perhaps give the

reassurances that the congressman was talking about earlier to have very unified peninsula unnecessarily don't have troops on the border as the chinese are concerned that situation could be far more detrimental to day then in the future. there is the issue to give china credit for the very small steps it takes to support the u.n. security council resolution for economic sanctions. because the united states wants to isolate north korea that is a valuable coal. yes. but at the same time we should be be putting far greater pressure to do more. , they see us as having putting this to have little incentive as a tax

priorities. >> the chinese are doing a delicate dance with their economy. at the end of the day that serves a purpose to have of north korea remains a totalitarian. that is what they want to maintain with all due respect to south korea understand that their heart they are communists and that is today are. >> things to the panel members i think it has been an incredibly productive hearing. you asked a lot of questions oh lot -- is number three a less of a threat than several years ago when there was tons of media attention?

in three short years ago the presidential debate was front and center one of the most important issues of our time in the only thing that comes to mind is the old baggage if a tree falls nobody hears it doesn't make a sound? i don't think it has been a priority for the last three years but the question is what will this take? that is why we're here today because in the absence of leadership on this issue issue, it's false to was to have a responsibility to stand up to take matters into our hands with south korea on that or looking at the potential new sanctions at the very least to declare number three a terrorist state a lot of options on the table but that is the reason we did the hearing today.

third but the goal is to put together legislation several bills to try to move us in the right direction and my intention is to work with the panelist to kraft that legislation and mark it up for a full committee hearing. while other parts of the globe are in jeopardy but the threat that this part holds just because we're not paying attention does not mean it isn't a serious threat. we are focusing attentions on a serious issue that poses a threat not just to our national security or the allies national security but global national security with a threat of kim jong noone having possibilities of a weapon is frightening. >> what about the

possibility of the partnership between north korea and iran with all the money that it has now and nuclear capabilities what about the possibility to joining forces for everything we hold dear? this hearing is not the ending plays but a beginning place for our attention. >> a say in journalism if it believes it leads. the middle east gets the attention and it deserves some attention but the north korean problem is of a threat into the possible connection to north korea and iran, we need an

agreement with china that there are no nonstop flights between north korea and iran all over chinese aerospace. that if they fly over your airspace they have to stop in a chinese city for refueling it would not be safe to go that extra mile and if that happens i am sure the chinese will if the money is there a desire for nuclear weapons but i yield back. >> we have to break outside the existing paradigm. we have to be creative in with some new ideas. thank you very much to the

panelists and the ranking member. we are richard -- richard. [inaudible conversations] >> [inaudible conversations] [inaudible conversations]

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