individuals and entities for cyber attacks in the us and meddling in the 2016 election. next, the atlantic council holds a discussion on the trump administration use of economic sanctions as a foreign-policy tool. this is one hour 15 minutes. >> good morning everybody. welcome all. real people in virtual people and whoever may be listening in. you're falling the conversation on twitter please use # shaping sanctions. having last night's announcement on dpr case suggests sanctions are both a hot foreign-policy tool, much in the news, central to top grade issues like russia, iran, dpr k, sanctions are much usedft in talked about and often misunderstood.

given the importance of sanctions both symbolic and substantive the atlantic council hasti established a new sanctios program which aims to bring together key stakeholders from the administration, congress policy committee gays, businesses to improve the sanctions tool, developed best practices, address misunderstandings and clichés and avoid balls. i like to thank the sponsors hogan, price waterhouse coopers, david metzner and some of our partners in the sanctions programs and many things to you. also i'd like to thank georgetown university's institute of international economic law which has been a partner for this event. the atlantic council sanctions team includes some of the best in the business, professionals

with hands-on experience in designing stations programs, veterans of treasury, state and regional experts. brian o'toole, andrew keller, david [inaudible] they are part of the team here which aims to provide the best analysis and recommendations on sanctions available. i have been working with a business at the atlantic council and we are pleased to launch but today's event and this program. we got two panels today focused on policy perspectives from current and former practitioners including some of on our team but also andrea a former colleague and a friend and policy. there are others on our team in this panel and i think michael greenwald and the other panel will include businesspeople, richard, frederick and robert.

finally, undersecretary treasury, administrations senior person on sanctions will deliver what i suspect is a serious statement of this administration's approach to sanctions. i look forward to an in-depth, lively and who knows, more than lively discussion. at this point let's get started and i like the first panel to come to the state. >> good morning everyone. it is great to be here with you today. my name is andrea keller, a partner in the international

trade group at hogan levels and previously served as deputy assistant at the state department. it's a true privilege to have the opportunity to moderate this panel with five exceptional individuals who i am proud to call former colleagues and friends. i have to say i can't think of a time for this panel which is entitled, best practices, half heirs and the future of sanctions. given the incredible change that we have seen over the last year including, as a result of the change in administration, and clearly as a result of congressional action i have given these panelists the very small task of walking through

how these changes will impact the use of sanctions of the foreign-policy and national security tool and what those changes will mean for the private sector and for our allies going forward. of course they have to do all of this within an hour, easy task. i'd like to introduce each of our panelists and then i have asked them to give a brief opening statement. i will start with our government colleagues we are very pleased to have your today. sitting immediately to my left we have andrea. andrea is currently the deputy director at oh back and i think maybe we can sum up her experience by saying she has held almost every critical position at the agency and andrea previously served contemporaneously as the acting

deputy director of the agency and the associate director for compliance and enforcement from 2014-march 2070. she is also a fax from 2010 to and part of that served as a senior sanctions advisor for policy implementation. before ofac she was the attorney in the civil division at the department of justice and including as a senior member of the justice department's terrorism designation team. andrea, thank you for joining us. david tessler, david is currently the deputy director of policy planning at the state department. you can tell how important and valued work is because there has been a decade-long interagency

struggle between state and treasury for where he will work. he started his career in the heady times of the late '90s as a foreign service officer and he was stationed in progressed, baghdad, the us missions to deny nations and also various divisions in washington dc. subsequent to that, david spent several years at the treasury department first as a senior advisor to the director of ofac and then following that is the senior advisor to the undersecretary of terrorism finance intelligence. brian o'toole, glad you are here as well. [laughter] brian is currently a nonresident fellow at the atlantic council and prior to that he was serving as the senior advisor to the

director of ofac. brian is a recognized expert on economic sanctions andgn is focusing on his work on the intersection of economics, national security and economic and financial sanctions. i will narrate that, prior to his time at the treasury he als served as an analyst in treasuries excuse me, prior to his time at ofac he served in the international affairs office and he also served at the central intelligence agency. ambassador dan really needs no introduction but i will simply say that prior to joining the atlantic council in his current capacity he served in the foreign service for 40 years and played a key role in designing and implementing american policy in europe after the fall of the

soviet union and served as an assistant excuse me, assistant to the president and senior director for president clinton and bush. t he was the ambassador to poland and also was the assistant secretary for european affairs from 2,522,009 at the state department. last but not least, we have elizabeth rosenberg. she's a senior fellow at the center for a new american security and she is the director of the energy economic and security program they are and she publishes and speaks regularly and a recognized expert e on the intersection of energy, sanctions and economic statecraft. liz also has significant experience at senior levels of theve treasury department where she serves as assistant

secretary for terrorism and financial crimes and also senior advisor to the undersecretary for terrorism, financial intelligence. prior to joining the government liz was a correspondent, energy correspondent here in washington. i will stop talking now and i will ask andrea to kick things off and deliver a brief opening statement. andrea, you can speak from the program or stay in your chair because we are microphone up. >> thank you so much, andrew. thank you to everyone. it's a pleasure to help kick off today's exciting program and to be on the stage with so many friends and current or former colleagues. first and foremost, france.

also, it's great to see familiar faces in the audience. i think we all know because we all practice in this area that sanctions can be extremely powerful tools especially when you use them strategically and with decision. it's you can cut them off from the financial system and restrict their ability to interface the international financial system. in addition to protecting the financial system for abuse sanctions are intended to increase pressure with the goals of changing their behaviors. sanctions can be structured and soaked in ways to achieve the objectives and modulate that pressure. for example, we can lippert access to financing or prohibit certain transactions. without all transactions and assets. when deployed in support of this clearly defined objectives and utilizing conjunction with the country's other national

security tools and authorities including diplomacy sanctions can be key to achieving foreign policy goals. additionally our domestic sanctions can be even more effective when paired with multilateral action whether that is through the european union or the united nations to help increase pressure and change behavior. wewo always work to carefully evaluate how our sanctions can be implanted by the private sector. we seek as much is possible to provide clear guidance and respond to your questions through quickly asked questions, answers to frequently asked questions and guidance and opening up at ofac a variety of ways to approach the agency for guidance. in addition in places such as this we stand ready to listen to concerns and your issues as we continue to adapt and structure

sanctions to make them the most effective understandable and implementable tool that we can achieve to serve the very important foreign policy and national security aims that they are designed to accomplish. sanctions aren't the solution to every foreign policy d issue. dan alluded to they can have a significant impact. we are focused specifically on recent efforts on ofac to the dedicated threat from the north korean regime. we've restricted their ability to move money for the international financial system and penetrate aggressively ramped upen our action and by targeting certain schemes and sending a strong and clear message to partners and allies have seen the north korean regime wrote even more isolated and now indicate that they are ready to come to the table. we will continue to target other illicit activities in actors that are 13 our national

security. not only with respect to north korea but also threats like iran, russia and venezuela. looking to the future it is, i think, we can all agree here in this room that you will continue to see sanctions as a primary foreign tool of foreign policy and continue to be targeted excuse me, continue to besp employed in targeted it and employees. i'd like to turn it over to my colleague david and also say that i look forward to the discussion today. thank you. >> i'm going to speak from the chair because i was told that is what i should do. [laughter] i wanted to just use these five minutes to lay out a few principles for the effective use of sanctions and they keyed off

what much of what andrea just said because we worked together for a long time so that is not surprising and we think alike. the first principle and this seems obvious and both dan and andrea mentioned it several times that sanctions are a tool of foreign policy and the reason why this is an important people although it may seem obvious is with the proliferation of the use of sanctions i think it is important to remember that. it is designed to advance specific foreign policy goals andls defend our national security.l when looking at a foreign policy set of issues it is important to think holistically about what our and state and where we want to go and what are the strategic arc policies that are going to get us to thatto end state and w sanctions as a tool in the foreign-policy toolbox fit intoo that. that is principle number one. principle number two is if you're going to use sanctions really understand the target and how the target think and design the sanctions in a targeted and

creative way to affect the behavior change you want. two examples, andrea mentioned one of them is north korea. over the past year this and ministration has focused quite a bit of energy and time into energy sanctions and looking at call and oil and refined petroleum and ship to ship transfers and because of an analysis and assessment of how energy sanctions would impact the target and the calculus here the target is from john kuhn and his calculus. another example of the with energy sanctions is venezuela in the creative use of sanctions and also in an effort to impacti behavior changes. to look at sanctions and use them creatively and in a targeted way is possible number two ... leverage the

united states power in sanctions and to be a force multiplier. you've seen over the past year this administration highlight the importance of coalition and allies across the board. our" nations in >> are close coordination with europe through the russian activity. that is not only craning crimea but the broad-spectrum of the russian activity. we are working with gulf allies in our european partners to combat iran's destabilizing activities in the region. working with asian partners like japan and south korea to target north korea and to help augment turn maximum pressure campaign. you see that with this administration across the board.

that's where i spend a lot of my time. that is the third principle and looking at how to effectively implement sanctions programs. >> it's great to be here and see other folks in the audience. it's great to be up here at the bunch my friends as well. the focus remarks on the more of the mechanics of sanctions some of the policy from a mechanical standpoint one of the hallmarks of this administration is that you can see the work of the professionals and i think this is true when you have to cut through some of the noise in the

media. for better or worse this has a much more chaotic media presence. but if you look and see the actions it's kind of the same stuff i was doing and government. the obama administration and before there's a technical aspect to look at the north korean action from a few weeks ago that was billed for the biggest action never north korea. from a sweeping standpoint probably wasn't exactly accurate i think one thing it showed was that is the action that drives, you had an action going after the shipping networks of the north and there is a big focus on the shipping because of energy procurement. it was highly technical.

the administration should be applauded for that. one thing i have noticed more from the treasury said but i think it's from state as well, the senior officials letting the professionals and people who have been doing this for years they've given them the room to do their job correctly. that's encouraging when i think about how the stools tools are applied. >> i think there's some cracks in the implementation. and i think that's a lack of expertise or willingness, i think their resource related. sanctions are a tool that everybody turns to now. congress asked there hasn't been

a corresponding investment of these tools. i think this is a resource related issue for anyone in government you're going through a chaotic policy process but with the venezuelan e-mail that came out which impose some smart sanctions in general there is a provision that targeted venezuelan government the issue with implementation is it targeted all night at the same time they released the executive order it exempted effectively everything except one venezuelan. to have this target. i think it is caused a lot of reaction in the financial

industry. that didn't really need to happen in those resources both in the government that were answering these questions could have been better you utilize. it's critical that the administration and congress get together and find a way to do this appropriately. what they need is a 50% budget increase. i think the administration has taken a solid first step in the budget proposal. i think congress is taking it seriously but is similar and could really revolutionize the it infrastructure and the backbone they rest. similar effort here is needed to make this work to confront these

crises. finally, looking forward there are some things to touch on. i think we can expect the same level of professionalism and the action this administration will take especially where there's a consistent policy message on a focus with the united states and our allies. in certain programs i think it will as we think about how these challenges will play out i think

a lot of us in this room and the council to interview policy and national security at the highest level in an analytic rubric focus on what we learned in school and international relations is about relations. i think that's fine from an analytic perspective. i think we need to start thinking about these things from a predictive standpoint and more transactional manner. i think that's the hallmark of the president and the key decision-makers who surround him. i've given up trying to predict these things because i've had trouble with it. we need to start thinking about how to predict what a transactional model looks like

it's hard because you're not always get a know the inputs but i think it's the correct way to evaluate what these high-level things will come down to including the north korea negotiations that will start soon. >> by request with investor for europe next. >> i thought i would offer not to be redundant with some of the excellent comments but if you comments on congress and its role in sanctions. maybe this is the -- side of the conversation. think you tend to focus on sanctions and i think that's

with many of you here today. there's implementer enforcer it's really up to the administration with diplomatic initiatives to engage with counterparts and build a coalition and joint action that could come forward that have the greatest effect and leverage with their joined internationally. the administration has been creative and innovative in the way it's implemented the sanctions. there's ways to go after violators of human rights. i'm thinking of some of the initiative to more closely pair expert control measures was sanctions could amplify those

effects. of course it has news coverage and it's significant in this debate. i know some of you are key at that point. china make three quick points. specifically there are significant innovator and disruptor when it comes to sanctions. the originator concerned with specific authorities of course you know congress is the original lender on the architecture in which all of these initiatives that have been

mentioned to laugh. the mainsail was also have the authority and ability to change it and take it away. i don't think we focused on that too often. it's difficult with advance work. there's recent cases which have reminded people of the ultimate congressional authority. and not to forget the role of the originator and budget issues and given resources to the implementation which is an enabler or disable her of all the activity were talking about of course through congress as an innovator i would argue they are at least as important as the administration and innovating new approaches to sanctions

which may not ultimately take the form but in expanding the conversation sometimes that scary the innovation is both sensitive and strategic. think about what they did in putting together the area measures from 2012 and the energy framework with restrictions on petroleum included has been held then accounts the interesting and elaborative creative work that they have done. on strategy you're familiar with the good cop bad cop of the last 20 years up-and-down.

the signaling work they do. i think it is appropriate to consider some of those introduced in congress. initially at least more spark inferior than they ever plan to originally wind up which is to say that it could be more emotional or effective as a tool much more so than the efforts to legislate and create a guide with the administration does. we see that be incredibly effective if you are watching the precursor it was much more aggressive and that the detracts

now in the russia state i think you can consider that messy in the character. last is the issue been a disruptor. this is a way to characterize what they have done for the envelope and any pushing aside or to party we sought in the last administration on the major recent push to take a stronger role in foreign policy and have greater oversight of the administration this is the administration action were

looking forward to this where the president has asked congress maybe ultimatum is better than -- so congress has the opportunity to be a disruptor and change the policy course they set out which is to say they will not they will cancel the iran deal essentially unless and until he is satisfied with congress the policy action in this domain. >> congress maintaining control. >> they're the only body that can change them. >> last but not least four points.

first you have examples of the deep professional competence that this administration can draw on and designing and implementing sanction policy and to represent a skill bureaucracy it is a tremendous comfort to know that there's people that can do their job i think treasuries will organize to

fulfill this role. the state department full disclosure mild job david is the closest they have to the sanctions cord he's a good guy is only one guy's deputy director of policy planning. they should remember that sanctions work best when the legal analytic and policy skills

that needs to be fixed david mentioned that andrew mentioned effective the sanctions policy is not a unilateral action. then we go to the europeans or japanese about russia sanctions whether telling their businesses to take major heads we have to decide how much political capital to invest in sanctions policy this is not one if you

can be successful in the implementation of sanctions we need to do it in tandem with our allies are it's like when to work. they have their uses feel good is not interesting results are interesting and you need allies. a fourth one, sanctions are a tool to advance policy which leads to suspicion that you better know your policy is. you need to be clear up-and-down your line including to your allies. of the three big sanctions program, there are questions

about the policy. on iran, are we or are we not going to use sanctions within the framework of the jcpoa? if not, what are the alternatives sanctions are designed as we said earlier sometimes it can do it the way you prefer to some not knocking

the high states but the north korea have been down this road before they have been doing bait and switch for 20 years. when we look at what the strategic choices are what were looking for i'm not going to trash the announcement last night but we have been back and forth on whether or not we would talk to the north koreans at all. sanctions cannot be turned on and off instantly.

it requires a lot to pushing. so it's a? on russia, i think the gap between professional competence and the implementation of sanctions and questions about the policy is clear. the russia sanctions have been implemented by the trump administration in a competent, credible fashion. if you follow the details of treasury and maintenance and tinkering of the russian sanctions they been good. and sometimes clever the administration prepared section 241 of the kremlin report with a high degree of skill professionalism and judgment. there's a classified report that i haven't seen but people haven't seen it i agree it's an

exemplary job yet, and the rollout the administration first tried to hide the good work it had done. then a non- credible list and then retreated and said it was going to draw on the list for sanctions now, this could end well but sanction policy has to be integrated into the main policy. or else you have heat generated by friction that does no good this is to say all of these major issues, could be affected the element for effective policy

is there but the policy framework needs to be clear and understood. there's nothing wrong with tactical unpredictability. but operational unreliability is seldom useful. i hope the administration finds a way to use tactical unpredictability without falling into the trap of operational unreliability. finally, transparency with the business community is critical. this is lors point but i'm making it accrued summary because that's what i do for congress the way to keep them from going into crazy land is to stay ahead of them. p thinking of their objections and be able to answer it.

you will be pleased by the results. you can't do that unless you have the resources policy strategies and resources lined up. then congress can be held not disruptive. i hope some of the questions i laid out be answered and that's how their answering the deep competence who are skilled, smart strategic thinkers. hope to get some of these questions answered today and have more questions. >> thank you to all of you for thoughtful and interesting remarks that give a lot of thought to our conversation. i hate to be accused of

shamelessly chasing the headlines. i think dan mentioned president trump meeting with kim jong-un in the next few months everybody in this stage seems to agree that sanctions are a tool for behavior change into help achieve form policy and national security goals. wondering if we can think of the north koreans willingness to talk as at least the beginning of the sanctions success story i think this administration has taken a very strong and aggressive position in north korea. we've also seen a shift from

nonproliferation to broader base sanctions that target most if not all of north korea's revenue sources. and daniel have alluded to this to start off with whether or not this can be the beginning of a success story and how and whether sanctions can be effective with the regime that for so long i seem not to have any interest in being part of the international economy or legitimate commercial activity and hasn't shared any interest in being responsive to its citizens and their needs. if i have volunteers to kick

that off. >> it's too early to tell. what it shows is a shift from strategic patients to a new policy of maximum pressure is having an effect. it's important to underline that maximum pressure campaign will continue until the north koreans actually match these words. the maximum pressure campaign will continue but i think the announcement yesterday is a sign that it is starting to work and having an effect. that is through a lot of hard work, coalition building and working with the chinese.

you questioned whether the regime who doesn't care about its people could be impacted by sanctions, they care about their survival. when you target the economic lovers that can threaten the survival you adopt strong security resolutions and then recognizing china's critical to robustly implement those then you start to see that matter to the that were pushing on the levers that matter to the regime. . . e with everything david just said. we have shifted our resources. we heard from secretary men daca during her keynote read we have many urgent -- secretary mandelker. we have adapted to north korea.

we are building the right notes of pressure, and the right ways to affect the regime. that will continue. welcome, butnt is it's too early to say. the maximum pressure campaign is not going to let up yet. umm, i agree that the ministration deserves credit for ramping up the pressure. i think that the obama policies in the last six months, about of the obama administration they decided, this is not working and, oh, my god, the north korean timeline is developing strategically nuclear capability is shorter than the without, which is when some of us got the running room to do more. but the credit for implementing that, for making it happen at the u.n. and bilaterally goes to

this administration. they ran with it. the strategic assumption of a shift to maximum pressure, i think, is the creque one. i think the question will come now, what we do, when that moment arrives that the north korean regime is not negotiating in good faith, as i think it will. what do we do then. that's a better problem to have where we are. i'll credit the administration for this one, and one of the cliches of north korea was that sanctions are useless because the regime is so determined to have strategic nuclear weapons and so ruthless and vicious that no amount of pressure will work. so give it up. that was -- i can tell you how many north korea experts kept telling me, sanctions won't work, give it up. yeah, kim jong-un will never

give up nuclear -- his nuclear capacity willingly. the question is, as lenin used to say, have you sharpened the contradictions? how do you make it tougher for him? i think that's the strategic basis for maximum pressure. but again, we now have issues before us, a bilateral meeting at the level of president? that's a gift to kim. and he is going to -- there will come various moments of truth and you don't need me to tell you. y'all know it. but morning after, this is actually pretty good since it's the kind of signal we were hoping for. some sign of movement. >> just make a brief point on top of what every say and i agree, the administration deserves tremendous credit, the maximum pressure campaign has

been successful. we'll see whether we can call that's successful diplomatic engagement as david mentioned that was bolstered by sanctions, but i think one thing i would like to come back to, one thing that dan said in his opening remarks, everything is interrelated and this is not a novel point. it's worth saying, which is what happens on may 12th, with iran, jnpoa renewal is is instructive for the know, -- north koreans when the negotiate with us and the administration needs to remember the policies are intertwined, regardless of what was said on the campaign trail and whether the jcpoa is the worst deal ever. the communicates, russian will be watching and it's important for any success of negotiation with the north koreans to the extent the kim administration or regime is -- it's not an administration, it's a

dynasty -- to the extent the kim regime is serious about sitting down to make sure they have a serious partner on their side and we'll stand by any commitment we make. that's something that everybody should pay attention, to not only for iran and issue in that region but as they apply to northeast asia as well. >> you have already made my points. i agree with brian, context and history matters. context of the jcpoa will be significant for north korea and win concerned with nuclear arms control and multilateral cooperation. and remember, too, bda, banco delta asia, the heavy hammer that woke up north korea and was the model on which the successful robb pressure was modeled, subsequently we know

that the bureaucracy supporting sanctions and this economic leverage is well functioning and well staffed. what matters and the answer to the story is how the capacity and how carefully the administration is able to deliver on the diplomatic and negotiating side. i fear there are inadequate ranks, so david, don't get a cold -- to do with this economic pressure that has been cultivated, what must be done in order to really advance diplomatic two, successful negotiation. >> let's shift gears and talk about cafta and russia in particular, and i think it's fair to say that between 201 and 2016, one of the -- 2014 and 2016 the top priority of the

government in moving forward on the russia sanctions front was to move forward with the europeans, and to maintain transatlantic unity. that to a certain extent has been thrown offbalance. i think in large part by cafta, which obviously was not an administration effort but a congressional effort, and also to a certain extent by the current political dynamic, and i'm wondering -- maybe i'll ask david and andrea to start off -- sort of if you can talk about what efforts you have made to engage the europeans as far as while cafta was under consideration and the implementation phase, especially given i think the symbolic

importance of showing unity with the europeans over russia sanctions and sim sharely the importance with regard to the private -- similarly the importance with regard to the private sector. the original sanctions were rolled out in a way and implemented in a way that they were never going to be analogous between the united states and the european union but were sufficiently harmonious to at least make things somewhat easier on the private sector. perhaps if you could comment on that. >> sure. i'll kick it off. i think andrew there was a fear last summer that cafta might impact our close coordination or transatlantic unity, and i think we, through hard work and a lot of energy and time, have proven that fear wrong. i think andrea and i are leaving for europe next week. this will be my fifth time there to talk about russia sanctions since september, which is a lot

of time in europe. europeans have come here quite a bit, and i think they -- i mean, if you ask them, i think our -- when we first went in september, or even in august, started talking about the fact that we want to maintain and not only maintain but strengthen the close coordination, there was at skepticism on their side but the proof is in the pudding. in october we issued a joint guidance, and we took into view the europeans and the private sector and there's close coordination there. i think through the actual work we have shown that we can actually use cafta to strengthen our cooperation. it's important also to remember that cafta articulated the very serious threats that the russians pose vis-a-vis eastern ukraine and crimea but cafta

lays out the broad spectrum of russian threats, including undermining democratic processes, cyber, corruption, human rights, et cetera. so it's a broad are circulation and a strong one, and we have ex-think, shown that we are implementing it robustly and in close -- working close live with the europeans, and i think the europeans are happy with where we are today. >> i'd just like to echo everything david said. have been working with the accept department and end engage with the european governments and also with the private sector, here in the united states and worldwide. after the passage of cav tacoma many questions came into us how to interpret certain terms. we had not only an open door policy for those questions so we could broadly consider how to answer them, and also proposed

answers. folk may have heard me say this time and again but we welcome ex-welcome proposed questions and proposed answers. we may not agree with the answer and we'll decide what the answer is at the end of the day, about that is something we aggressively looked at in implementation. >> on the issue of management i think the administration has done a good job working with europe to -- the drafters know it's good and some not so good and i give the administration credit. but to stay ahead of the congressional politics and avoid being slammed, it's important for thed a norths show what it is going to do, and i hope that what david tessler is a hit that

when the treasury comes off we next sanctions, something that secretary mnuchin has already said, i hope it addresses this. i think you nailed it. i agree. there is considerable potential for cooperation with europe to use the sanctions tool in response to a different kind of russian threat thannian, which they're attacks on our western political systems and use of disinformation and cyber hacking. at the french, the spanish, the pols, they're all facing that. i don't think that those governments dish don't think the macron -- i don't think they've forgotten whan the russian tried to do in the last stage of the french election. there are a variety of tools,

including section 241, my personal favorite, and i think that the u.s. and europe have the potential to make it clear to the russians that there will be consequences for further interference, and the stars may be aligned because in washington terms, it may be imperative to be seen as doing this and it's the right policy. so go get 'em. >> i'll go to liz and then please get your questions ready. we'll turn to audience for q & a. >> this is the space to watch. this has been helpful -- i'm talking about the history of catsa development and implement indication but looking forward, the animating issue in the u.s. public discourse that really drives attention on russia-relate foreign policy is no longer ukraine, it isn't what

russia is doing in syria. is it more specifically concern about interference in the u.s. elections, and to a certain extent malicious cyber activity. europeans are concern. i see very little potential that they will join the united states in any sanctions activities in that space, not withstanning the fact there's final do so written into the katsa this is an area of debate and discussion and we'll see what happens. this the space to watch. >> 3 other catsa questions. >> i'm from the reagan

foundation. dan, you mention that the sanctions will not work without allies or their cooperation, which is true. regarding north korea, 90% of their trade is with china and you know that. for a fact, i do know there is pipeline going in to north korea from china. i'm talking about oil. so my question is, what can we do about china? what should we do with -- how can be deal with that? without that, the sanction may not be working, not as good as we designed to. so, that's just my natural question.

thank you. >> i'll give the trump administration credit for getting the chinese to do far more than they wanted to do two years ago. the chinese ban on imports of north korean coal is not complete but it's pretty good. it's hitting their money. so, coal, textiles, fishery exports, we have hit those hard and the chinese have moved a lot. they've moved partly because i think they believe the trump administration was serious in its threat to escalate even further, and go after chinese companies and banks. now, that potential is still there. that is target the chinese much more aggressively. i wouldn't race to it. because once you start doing that you get near -- you start approaching red zones of retaliation and unintended

consequences. you may have. to i'm not ruling it out. i tend to be on the push the envelope side, but right now, we have sanctions may have brought to us this moment where there's a direct dialogue. we'll see what happens. it will either work out, in my view most likely not, and we'll see. and then we may be back to these issues. but i think it's on the table and the administration, i think, has handled it pretty well, hinting they were willing to do more but not rushing to slam the chinese. i think they've done okay. >> i think on the kind of slamming the chinese part, too. you have to remember something about china. right? with respect to north korea, china is furious by all accounts with what the kim regime has done in trying to develop -- test instinct weapons and all the ballistic missile launched have pissed off chinese.

there are u.n. sanctions almost unprecedented in the world. spectacularly good and the trump administration deserves credit for pushing those in new york. when you come to implementation of those sanctions, there's a trick. so you have to look at china -- too many people look at china as an adversary in this and too many folks don't realize while there may she pockets within china of areas where they night be kind of trying to undercut the sanctions. china also has implementation issues of its own. they have a command economy but not as if they have this regulatory environment we have in the united states. we make the mistake of projecting our own kind of competence in having -- being able to enforce against u.s. financial institutions, exports and the confidence of our private sector in doing this and experience in doing that assume china can do that because they're china. that's a false assumption.

if you're going after the chinese, you really need, especially at any significant level, start going after banks and really need to have those smoking guns of comp -- complicity and that's hard to get that information and so the folks that might be thought saying, the only way to fix this is to start whacking chinese banks. to do that you need to have the top levels of the banks complicit in a conspiracy to undermine sanctions and that's the only way to justify that as a legitimate and prudent sanctions action against north korea. >> i think i saw another hand out there. if you could please mention your name and affiliation. >> thank you. thank you very much. sorry for my voice. i'm battling a cold. i'm the ambassador of mozambique and and i wanted to thank the council for organizing this

important discussion. one point i wanted to -- the panel to elaborate on is the multilateral framework for sanctions. sanctions will always be more effective if you have all countries buying into it, and implementing them, but for that they need to understand them. so, when you speak about partners and allies, in terms of sanctions, it would be very important to understand that when you are fighting something which is bad for the world, like north korean regime and nuclear proliferation, you have more friends than enemies who want to support you in that cause. so, i wanted an elaboration of the multilateral framework, u.n. and beyond. >> ambassador, thank you. that's an excellent question.

david? >> sure. we could not agree more, so in this administration, we have focused quite a bit -- not only on the three kind of main regimes we have been talking about, iran, russia, north korea and also on venezuela and other sanctions regimes, isis, counter-isis and counterterrorism at large and have been focused both in new york and also building coalitions, regional coalitions to explain, like you said, explain why we're using sanctions as a tool of foreign policy. what are our end states? where do we want to go? how is that in our common interests. it's not only explaining where we're coming from and where we want to go, but it's also explaining how this is in our common interest, and north korea's a great example. iran is another one, and we have been working in the past year to re-establish strong ringships

with our gulf part -- partners and also have can conversations in europe to talk about our common interests in combating support to hezbollah, combating proxy support -- iran's support to proxy, destabilizing activity in yemen, support of the assad regime. common interests we share with many partners around the world, and it's building the coalitions to find more leverage and to create force multipliers. >> if i can add to what david said. obviously david is -- so important -- the importance of multilateral cooperation but ofac is a singular agency worldwide and a domestic implementing agency. our sister components in the financial intelligence part of the treasury department works very hard to -- if there is

multilateral will to try to give the guidance expertise to make sure that's would to interdict transactions or take steps that are meaningful and implementable. >> time for one more question. >> thank you. diane perlman, george mason school of conflict analysis and resolution. i think that the point about -- i think we need be more complex about it than as you suggested it's not only about pressure and coercion but also diplomacy and other dimensions and not just have one cause that brought them to the table. there's also the olympics and some softening and some pride and moon's work and pence responding a little bit that led up to this, and also as you suggested, the fact they have their own nuclear deterrent that actually probably less dangerous

if they feel less insecure and people are more dangerous when they're afraid and feel like they have some leverage. so it's a few things. also we need to keep in mind that what kim jong-un said about the button was that he didn't intend to use it until he felt threatened. to me he ignored the last part of his statement and that's the legitimate goal they have, to not feel threatened. so i think we need also temper, like max -- also a study of 100 cases of sanctions and they failed 86 times. so they can break down. so i think along with maximum pressure, we need to have a face-saving way our, drastic tension reduction and there's an opportunity here and we need to look at their psychology, too. thank you. >> i'll ask if anybody on the panel wants to comment or agree, disagree? >> i'll just reiterate,

sanctions are one tool in the foreign policy tool kitt. nobody on this panel agree that sanctions are a silver bullet or applicable or appropriate for every case. it's one tool, powerful one, but in a whole toolbox of tools. >> why don't we take some -- i that that counts more as a comment than a question so i'll thank you. that means we get to work in one more question. there's another one, i see a hand up. >> witch the smithsonian american council with my baltic and central and eastern east european colleagues we're on the hill every week advocating for or policy priorities and implement indication of russia sanctions is always at the top of the list. i wonder if you have any sessions how to best refine our message to appeal to staffers and members of congress to advance things more effectively.

>> i have the highest regard for estonia's able to resist various forms of russian aggression. you're on the front lines like no kidding. i think that the way to explore -- the area to explore is what we have been discussing. what should be the content of a transatlantic response to russian political pressure, disinformation, cyber hacking, various forms of nonmilitary pressure, on all of us. there is a fertile field, and i found it dish thought it was terrific that mueller's indictment got -- just let the record show that we got him

first, as a -- for a violation of the ukraine sanctions, but we knew that he was involved at the -- we knew at the time he was involved in the st. petersburg troll farm. there's upside potential that shouldn't be just american. now, it may be that the europeans are not going to be willing to increase sanctions about i wonder. ask the bullets they're feel about to the russians these days and are they interested in options, or the spanish or french? in my experience, the way you work with europe is not to ask an abstract question but assemble a coalition of like-minded people and work with brussels and be honest. be clear what you're doing and why. and see what can be done. either we can have a transatlantic common approach or second best, get the americans with the eu's understanding and

some individual governments doing things. so definitely second best. like work with the e.u., but that is where -- i think that's the direction in which we can go. to the russian economy is stable on a macro sense put it is in a period stagnation, and the russian leadership, putin, doesn't act like a confident guy. he acts like he is worried about the future of his government and the power structure around him. if they were really confident, wouldn't be quite so nervous about threats to their money abroad. again, their anxiety could be our opportunity. they went after us. we should return the favor. that's my suggestion. but of course the estonian and the baltic americans don't need

me to tell them that. >> i think that's perfect note to end on. i have one housekeeping announcement which is that we'll take five-minute break and then the second panel will begin uncertainty and volatility. the trump administration's -- the private sector response and the way forward. thank you very much to our panelists. [applause]

"wall street >> arizona senator jeff flake on the state of u.s. politics. then veterans affairs secretary dr. david shulkin testifies on then 2019 budget request for his agency. after that, five cabinet secretaries testify on the trump administration's infrastructure strategy.

>> arizona senator jeff flake spoke at the national press club, focusing his remarks on the state of our politics. senator flake, who has been a frequent critic of the president, answered questions whether he could consider a run for the white house as well as immigration and gun control efforts. this is about an hour. >> today's speaker has a reputation for standing up for his convictions and making news. from the speech he gave on the senate floor, rebuking president donald trump's repeated attacks on the media, to the op-ed he wrote for the "washington post" in which he criticized congress for its failure to approve protections for young immigrants with daca status, arizona republican senator jeff flake has earned his reputation. more recently, senator flake announced in the wake of the parkland, florida, shootings, he is backing a bipartisan bill to raise the