to agree on how much they will reduce the emissions of various things, actually, not only some. to be convinced, all you have to do is look at temperatures. they are rising. in 2014, it is the highest year in terms of temperature ever since the recording of temperature has begun. and it is also the year in which the highest number of natural catastrophes have taken place. natural disasters, more food and water scarcity, and generally fuel, conflicts, disputes, wars. again, we need great political courage to reach that political will, to cut carbon emissions. and that rings me back to the beginning, and is -- that brings me back to the beginning, and it is my conclusion.

while i was thinking, -- speaking, and thank you very much for listening, during that time, the rosetta spacecraft has continued to circle the dark icy object that is, 67 p. --comet 67 p. and we may yet learn more of its secrets as it gets closer to the sun. look at the mission that put together that unbelievable success. they were diverse. they came from different horizons. they did not grow up together. i think diversity had something to do with the success of that rosetta mission, and it is certainly a true testament to global cooperation. and policymakers should be inspired by that. you know, the real secret when

we i found rosetta a long time ago, what can engender growth, but to deliver on the three rosetta moments as i call them policymakers need to enhance cooperation. they need to enhance a new multilateralism, and they need to put it into practice. whether it applies toclop, ttp ttip, seg -- are you with me? it also requires new institutions that are efficient and credible and working in the changing global economy. this is why in 2010, the international community decided that the imf should be reformed, that it should better represent the global community, that it should be down -- endowed with more capital. and that some underrepresented countries, including some of the

big emerging market economies, should have a bigger voice around the table. the imf membership has called on the united states to ratify the 2010 reforms by the end of last year, 2014. this was a commitment made to the g-20 at the highest level. but it hasn't happened. and i've spoken much about leadership today. and i cannot but express some profound disappointment in the political powers who have so far failed to grasp the benefits of reform, both for their own benefit because maintaining stability around the world making sure there are

firefighters when something goes really wrong in any of those geopolitical areas that i have mentioned, but also for the world at large. we have seen so much fabulous leadership out of this country. i hope, i really hope that it is going to happen. absent that, we are now working on it intro solutions to address some of the concerns that the other 187 countries have because they have ratified already. but it cannot go unless the country who has the veto power on all major decisions actually goes along stop -- goes along. but given the challenges of 2015 and that the following years will bring, i don't think there is an alternative to completing the 2010 reform.

we will be trying to find intro solutions, trying to address some of these issues. but the real thing is the 2010 reform, that was actually very much engineered and located by the united states of america. i will continue to call on congress to reprove -- to a proof that reform without -- to approve that reform without delay. and i have faith in your country. i know it will happen. i would like to end with a quote that encapsulates my goals for leadership and cooperation in service of the global public good, and that is, a quote from -- i had to move away from egypt, you see. he knew something about architecture. he said, "what you leave behind is not only engraved in stone monuments, but what is woven into the lives of others. -- of others." i think we have a lot of reading

to do this year. thank you. [applause] >> thank you so much for that. a lot of food for thought. i want to come back to some of the things that you can -- that you start with. you talk about the meteor light, global economy, headwinds, deep-seated weaknesses particularly the hero and japan, -- euro and japan, and you talked about some of the downsides, but you did not talk about the risk of stagnation. at the committee meetings where some were saying this was the seminal issue of the day -- of course, by that we mean the lack of demand drives the lack of supply, which creates a vicious circle that reinforces itself over time.

is that one step too far in your point of view? do not believe in the stagnation story? >> at the financial levels, add thinking levels. i don't like to use one single concept. i think it oversimplifies the matter. there are different ways to look at the world. we at the imf are trying to drill down in each category. at the moment the price of oil

is creating new categories in many ways. you have oil importers. you have oil exporters. you have those who suffer the effects of the dollar because of where they are and whether they are hedged or not hedged. i think if you look at the euro area and japan, we have a clear risk of what i call below -- i don't want to be bound. >> said to blanket a statement. -- so too blanket a statement. >> there is more diversity. you have the vast interconnections that continue, and you have more diverse situations locally. you have political and geopolitical tensions operating

in a very different way with the temptation by some countries to actually retreat and retire and find your own business, while there is an absolute need for a more collect is approach. -- collective approach. >> let's turn to an area where there is more commonality. most of the concern people have with the aggressive actions the fed took had to do with the fear of inflation. how well are economies equipped to deal with low inflation maybe deflation? is the imf equipped? is that a real risk? the oil price exacerbates it to some degree. >> it exacerbates it.

it does have an impact at the nominal level. i think it's important to understand why despite the monetary policies we are seeing here or we might be seeing elsewhere, there is either very low at inflation relative to the targets, and it has to do with the output. there are still available capacity. there are still people looking for jobs and you have the ability -- who have the ability to join the markets. we are not seeing an uptick in inflation. the oil price is still keeping that down. i am not a central banker, but

if i was i would look carefully at core inflation and inflation expectations. and the two situations of entry into monetary policy. >> you raise so many issues. i am going to turn to the audience and ask you for any questions you may have. please introduce yourself, your affiliation, and your question. >> paula stern. i have my own group. bravo for a wonderful presentation. my question goes back to oil and the role of oil in our sector. it is the most traded commodity. it is not subject to any of the rules. are we at a place now where oil

should be more subject to the rules of the road when it comes to our trade policies? >> you are raising a really interesting question. the sleepy competition lawyer inside myself is waking up because while there are independent producers, there are a couple of other commodities that operate along those lines but it's a cocktail, and there are many legislations around the world were they do not exist. i am not giving you exactly the answer but i take your point.

there is a lot to be explored. there are other things that did appear because of market forces. that might be an interesting one. >> it's always a pleasure to hear you speak. first, i want to thank you for being such a strong advocate envoy for women's empowerment. i enjoyed your comments. i have a question for you because i think it's something we are struggling with. i think it's indisputable women are critical with helping to achieve not one or all -- but all eight of the millennial goals. when i think of the agenda and the 20th anniversary of beijing, we are not struggling with the awareness but with financing gender equality, and i wonder if you can talk about how we encourage multilateral

institutions and governments to take this more seriously because it is a strategy. it is not just a nice thing to do. >> i agree with you that the awareness has largely been achieved. i am not sure the economic opportunities have been identified sufficiently on a very precise basis, because at the end of the day there is so much you can say about moral imperative, but some people will turn those away. that's where we need to continue to demonstrate this makes imminent economic sense. i will share something with you. we started doing some discrete work about the role of women in the japanese economy. it's an economy that combines

two things, three things. what is not particularly women friendly in terms of access to the jobs market. it's not especially immigration prone, and its aging. something has got to give. we document it, and i presented on japanese television for an hour the value of women and how they can change the japanese economy over time because you can stimulate as much as you want. if you don't have people to do the work, it's not going to make any difference. prime minister abe has endorsed the project. he and his wife are taking leadership. he has tasked his finance minister to identify enough

budgets to create childcare centers and many more of them. i hope they are going to soft in the regulations on private childcare facilities, which is extremely rigid in japan. those are legal things and financial support that matters as well. we will soon be publishing a study in february about the legal issues that constitute obstacles to the implementation of better access better economic contributions by women. it's amazing. from the design of income tax to the inheritance laws to the ability to put a name on the property title.

there are lots of elements that contribute to that. you need a combination of a good policy framework, specific labor measures intended to facilitate financing, because they are not going to just mushroom like that. they will need to be funded. >> let's take the question. >> thank you. happy new year. the crisis seems to be coming back, and to what extent does it affect the euro at this moment do you think? to go back to your point about literacy, how do you think europe and the imf program relates to what is happening in greece?

>> first of all, we are all in the waiting of the election on january 25, and as soon as there is stability and much of the government is formed as a result of those elections, we will pursue the discussions we have had with the greek authorities in order to help create growth and have sustainable and inclusive growth. the relationship with europe i think has been better structured as a result of what the europeans have changed about the framework. the fact there is a european stability mechanism in place to avoid the contagion effect that could result from a major crisis in any country is one important factor. the current work being done

about the interpretation of the stability and growth in order to allow countries to pursue fiscal adjustment but at a pace that is reasonable considering the economic circumstances is also helping in that direction, but bottom line, greece is going to have to go through structural reforms that are needed in order to sustain growth in order to create conditions for investments and for employment creation. it's common destiny, if i may say. >> father andrew from st. paul's. madam chairman, i will give you another quote, because we pray and ancient greek. all good

things flow into the city because of the city's greatness. he was referring to the spiritual nature of athens. he wasn't referring to the temples and the gold. it was also a reference to sparta because of the utilitarian pottery, which was not decorated, because the city had great soul. whether it was greece, portugal, italy, i would like to know how you deal with the human cost. i have held the hands of widows, of old pensioners who committed suicide because all of a sudden their savings vanished overnight. how much does the imf care about these things? >> a lot. i can assure you. you have to bear in mind one thing. the imf is asked to come to a

country when the country has created circumstances where it is no longer handling its financial situation, where it does not take the measures that should have been taken in order to maintain stability in its economy. i am not trying to point fingers at the policymakers. i am just trying to say that one cannot associate the difficult efforts, the huge sacrifices that have been made by people within the institution. i wish i never had to go to greece and portugal. iceland, ireland, because of we didn't have to go there, it would mean the policies in place decided by policymakers were good and maintain stability in those economies. point number two, when we helped

design the various reforms we believe are necessary for the country, we are always mindful of the poor people, of the safety nets that are needed. i will give you a practical example. the pension system in greece -- the average pension increases the same as the average pension in germany. if you compare gdp not quite the same. compare cost of living, not quite the same, but when we suggested the reform of the pension system, we said, below the threshold you cannot change. you cannot people just put people in a situation where it is too hard. -- you cannot put people in a situation where it is too hard. we reinforced that point by saying the safety net is in need of reform. we are doing not with the reforms of the subsidy system.

if you take a country like egypt that is going through a reform of subsidies, they cannot remove it just like that because there are a lot of poor people who rely on fuel to actually go to work or do a little bit to get by. they need to use public spending, not in a subsidization of energy, but they have to use it to target those who need the money. >> i am looking at the time. we are just a couple minutes over. maybe i will have to step up. this has been a busy 12 or 18 months. if we think of the martin wolf

book, on what we have to learn if we think of the recent book, you will know them as well as i will. >> maybe you have time to read them. i don't read them all. >> fair enough. is there one you think is particularly important for people who care about these issues? >> back to your first question. is there one definition for the entire world? i think to be well-informed you have to read all of these books or a solid review of all of them, and you can choose where your inclination takes you and then the other one. you need to have dissenting views. you need different is. other what -- perspectives. otherwise you become narrow minded. i wish i had time to read them all. >> wonderful. thank you all.

there is a lunch at 5:00, which the council invites you to participate in. think you so much. -- thank you so much. >> last week north korea said it was willing to suspend nuclear test if the u.s. agreed to hold off military drills with south korea. house panel looks at the threat posed by north korea. then her marks from the new head of the national endowment for the human -- remarks from the new head of the national endowment for the humanities. and then a discussion of the fee for waiver program. live every morning at 7 a.m. british prime minister david cameron is in washington d.c., with meetings -- for meetings

with president obama. one of the items in the agenda is the terror attack. the president will hold a news conference with the prime minister at the white house. we will have live coverage at 12:20 eastern. the obama administration has approved 12 types of visits to cuba. this includes education and research, authorized exports religious activities, and humanitarian projects. the changes go into effect friday. you can read about the changes at our website. c-span.org. >> the c-span city tour takes book tv and american history tv on the road, traveling to u.s. cities to learn about their literary life. we took a visit to west virginia. >> i wrote these books.

they are two volumes. the reason i thought it was important to collect these histories is wheeling transformed into an industrial city in the latter part of the 19th century in the early part of the 20th century. it is uncommon in west virginia in that immigrants in search of jobs and opportunity. that immigrants generation is pretty much gone. i thought it was important to record their story, to get the memories of the generation and the ethnic community they form. it's part of our history. most people tend to focus on frontier history, civil war history. these are important. of equal importance is the industrial time and the immigration wheeling had.

>> wheeling starts as an outpost on the frontier. that river was the western extent of the united states. the first project funded by the federal government for production was the national road that extended from maryland to wheeling, virginia. when it comes here, that will give this community the real spurt in needs for growth. over the next 20 to 25 years the population of wheeling will almost triple. >> watch all of our event saturday at noon eastern on book tv and sunday afternoon on american history tv on c-span

three. >> officials testify about the threat posed by north korea. the house foreign affairs committee is chaired by congressman ed royce, who called for tougher sanctions on north korea. this is two and a half hours. >> this briefing will come to order. the members here know we're not going to be able to formally organize until next week, but i very much appreciate the ranking member, mr. engel, his cooperation in beginning this process of holding today a briefing, so that we can get started on the many pressing issues that we face. and i look forward to meeting next week to formally organize the committee, and discuss how all of us can work together in a bipartisan way in order to advance u.s. interests around the world, and one of the things i've enjoyed about working with

this committee is the way mr. engel and myself and the members here on the committee have been able to advance the idea that we work on a consensus, and then move that forward with one voice. overseas. and i think that amplifies the message from the united states. but the issue that we're discussing today, north korea, is one where for years the united states and our allies have been rightly concerned about the threat from north korea's nuclear and missile programs. mr. sherman and myself remember very vividly the situation of proliferation by north korea with respect to the -- the transfer of that capability. into syria and on the banks of the euphrates a weapons program being developed there as a consequence of north korea.

and for years we've watched that program grow and now this brutal regime has added a new weapon to its arsenal, which is cyber attacks. and the state sanked cyber attack on sony pictures underscored three unchanging facts about north korea. first this rogue regime has no interest in being a responsible state. second while kim jong-un continues to carry out human rights abuses around the world and by carrying out attacks for those of you who remember some of the exercises the north koreans have taken offshore, as well and most importantly of what they've done to their own people, the way in which a country treats itd own people will sometimes tell us how they'll treat others.

the current president of south korea, her mother, was assassinated by north korean agents. so we looked at that u.n. report that was recently filed after the evidence and interviews with many of the survivors, defectors out of north korea. this was the conclusion of the report. the united nations has found no parallel in the contemporary world for the treatment of people in north korea. that's quite a statement. in the mean time, of course, instead of assisting that population the resources that north korea gets its hands on continues to go in to its nuclear and missile systems, and of course, cyber weapon capability, as well. and third, the third point north korea's weapons are not nearly for show. we and our allies in northeast asia are facing a brutal and dangerous regime, one that not

only is trying to miniaturize nuclear weapons to put them on icbms. but also one, as i said earlier, that has been involved in the past in central asia, and in the middle east, in proliferating these weapons -- different types of weapons, missiles and other types of offensive capability, as well as nuclear weapons capability. so, north korea's growing cyber capability emerged most starkly in 2013. our allies, south korea, suffered a series of cyber attacks that temporarily brought down some of the commercial and media networks. it disrupted banking systems. the hackers called this dark soul but in particular what they were able to do was to shut down the banking systems in parts of the country, shut down the atm systems, and so forth. despite limited internet capability in north korea, the fact is that there is an elite

cyberwar fare unit the defectors have told us about, bureau 121 which was traced back as the source of these attacks on south korea. and some of the expertise was obtained overseas but sending them to other countries for training but certainly that capability was deployed against south korea. and last year's cyber attack is estimated to have cost sony hundreds of millions of dollars in damage. it was a state sanctioned attack

that has many americans asking if that is what north korea can do to a movie company, how vulnerable is our critical infrastructure? how vulnerable is our electric grid? you know, what if electricity was cut off? i mean that obviously could be a dark chapter. earlier this month, the administration announced long overdue sanctions targeting officials and front companies of the north korean government. and i'm glad the administration has described this as just the first aspect of its response because many of those north koreans blacklisted many of those individuals who were blacklisted had already been targeted by u.s. sanctions. but the significance of this new executive order may come from the broad power it gives the president to target anyone who

is a part of the north korean government, or is assisting them in any way. that is if the administration chooses to use it to its full advantage. we need to step up and target those financial institutions in asia and beyond that are supporting the brutal and dangerous north korean regime. such sanctions have crippled north korea in the past. for those of us that remember the consequences on banco delta asia being sanctioned, and left the regime unable to buy the loyalties of its generals at that time, and could not be paid.

this committee has been focused on the north korea threat for years, bringing attention to the regime's human rights abuses. its illicit criminal activities. its growing nuclear and missile programs and helpful scrutiny of north korean nuclear negotiations. indeed, last congress the house passed legislation that ranking member eliot engel and i offered to ramp up the financial pressure on north korea, pressing for north korea to be designated a primary money laundering concern, as has been done with iran, curtailing its sale of weapons and stepping up inspections of north korean ships, among other steps. unfortunately the senate failed to act on this critical legislation before it adjourned. but will soon try again, and give the senate a chance to join us in tackling this growing threat. and i'll now turn to the ranking member for his opening comments. >> thank you very much, chairman royce. thank you for calling this briefing on the threat that north korea's nuclear missile and cyber capabilities pose to our national security, and that of our friends and allies in the asia-pacific region. i want to, on a personal note, say that i commend your strong leadership on this issue. and it means a great deal that this briefing is the very first item on our committee's agenda in the 114th congress. i look forward to working with you and the rest of our colleagues to address this challenge and to continue working in a bipartisan and

productive way in the year ahead. and i want to second what you said. it is very important for us, whenever possible, to have one voice in international affairs. it strengthens us. it strengthens us around the world. and that's what we tried to do in this committee. so you and i, mr. chairman, have introduced joint legislation. we've written joint pieces, joint op-ed pieces. we've done joint letters to officials, and i believe that we've gotten the biggest bang for the buck because we've shown a unity on this committee. one of the things that i've noticed is when i go overseas, and we take a bipartisan delegation along, our differences really really narrow because we're all americans and we all love this country and i think it's very important i think this committee leads the way in terms of the way congress ought to govern in a bipartisan fashion. so, i want to thank you, mr. chairman, for all you do to ensure that that continues. i also want to thank our witnesses for their service, and for their testimony today. the recalcitrance, cruelty and unpredictability of the kim regime makes north korea one of the toughest challenges we face on the global stage. the last three administrations democratic and republican alike, have attempted to address the problem of north korea's nuclear program. unfortunately, very little progress has been made. despite a long list of sanctions, north korea is no closer to denuclearization today than it was several decades ago. rather, north korea has continued to develop its nuclear conventional and cyber capabilities at an alarming rate. already north korea has a cigars

-- significant arsenal nal of short-range missiles that could reach south korea and japan. most troubling to me is the continued development of north korea's medium and long-range missile capabilities. they may be unreliable today but some of these missiles could eventually pose a threat to guam, alaska or even the west coast of the continental united states. and some believe that north korea has aspirations to build submarines that could carry these missiles even closer to american shores. north korea appears to be working toward a miniaturized nuclear warhead that could be mounted on intermediate and long range missiles. i was concerned by comments made in october by the commander of u.s. forces in korea that at this moment north korea may process the ability to miniaturize a nuclear warhead. based on recent events it's clear north korea's aspirations do not stop with conventional or even nuclear weapons. the regime is wielding 21st century weapons and has developed cyber capability. like many others i was deeply disturbed by the cyber attack on sony that took place in

november, an attack that was not disruptive but destructive. agents working for the north korea regime vandalized, threatened and coerced a company operating in the united states. this attack and the pursuing threats of violence were a perverse and inexcusable act by the north korean government. as i said then no one especially an entity operating in the united states should feel that they must cede their rights to operate within the law because of veiled threats from rogue actors. i look forward to the witnesses and hearing how each of your departments is dealing with this threat. are you engaging with the private sector are you ramping up information sharing in collaboration across agencies are you putting safeguards in place to assure that these kinds of attacks will not be successful in the future i look forward to hearing about your progress in these areas. there is no international

agreement or clear definition of what constitutes cyberwar, or cyber terror. yet it is clear that cyber attacks can cause destruction of property, stroke fear, intimidate the public, or even bring about the loss of life, it could be as serious as conventional acts of war or terrorism. we must assure that north korea's cyber capabilities and the cyber capabilities of other state sponsored and rogue actors do not threaten our citizens our businesses, or our national security i'd like to hear the witnesses' asisments of these risks and the ability of our allies and partners to effective defend against them. let's remember the greatest threat the regime in pyongyang poses is to its own people. i have visited north korea twice myself. mr. wilson was with me on one of the trips. i remember the incredible uneasyness i felt being a place where absolute power is consolidated among a very few and where the rest of society is systematically and brutally repressed.

for years we've heard reports about the abuses endured by the people of north korea. torture, starvation, forced labor, and execution. a recent united nations commission of inquiry report confirmed these reports, calling the north korean regime responsible for systematic widespread, and gross human rights violations, including what they said was crimes against humanity. the chairman and i share a deep commitment to addressing the injustices endured by the north korean people. so we face a delicate balance, holding the korean leaders who perpetuate this violence accountable or recognizing the need for basic support for the north korean people. maintaining that balance makes our work on north korea all the more critical and all the more difficult. so i look forward to hearing your perspectives on this issue, and i thank you for joining us today. thank you, mr. chairman. >> thank you engel. this morning we're joined by representatives from the department of state, from treasury, and from homeland security. ambassador sung kim is the

special representative for the north korea policy, and the deputy assistant secretary for korea and japan. previously he served as u.s. ambassador to the republic of korea. and he was the special envoy for the six-party talks. honorable daniel glaser, prior to his confirmation as assistant secretary for terrorist finance in the office of terrorism and financial intelligence at department of treasury, he served as the first director of the treasury's executive office of terrorist financing. and financial crimes. brigadier general gregory touhill is deputy assistant secretary for cybersecurity operations and programs at the department of homeland security previously he served in the united states air force as the chief information officer and director of command, control communications, and cyber systems.

at u.s. transportation command. and so without objection, the briefers' full prepared statement will be made part of the record here. members will have five calendar days to submit any statements to you, or questions or put any extraneous material into the record. and ambassador kim, if you would like to begin, and if you could summarize your remarks and then we'll go to questions. >> thank you very much, mr. chairman. ranking member engel, and members of the committee. thank you very much for inviting me today. along with my colleagues from treasury and homeland security to testify about north korea. as we respond to north korea's destabilizing, provocative and repressive policies and actions, we appreciate the interest and attention you and the committee have given to this important issue. in recent weeks, mr. chairman, the american people and the international community have been deeply troubled by the destructive cyber attack on sony pictures entertainment. an extensive fbi investigation has concluded that the attack was conducted by the government of north korea. the administration is totally committed to defending the u.s.

citizens, u.s. businesses, and our nation's constitutionally protected right of free speech. that is why the president made clear that the united states would respond proportionally to the attack in a time and a manner of our choosing. our response to the attack on sony is consistent with our policy on the dprk across the board. one which seeks to work with our allies and partners to increase the cost to north korea of its irresponsible behavior, to sharpen the regime's choices, and to persuade the dprk peacefully to abandon its nuclear weapons program, respect the human rights of its people and abide by international norms and obligations. mr. chairman, as you stated eloquently in a recent interview we need to change the equilibrium in north korea and move the regime away from hostility. together with the international community, we're using the full range of tools at our disposal to make clear to the dprk that abandoning its nuclear weapons provocative actions and human rights abuses is the only way to end the political and economic

isolation. in our messages to the dprk, and to our partners, we made clear that we will respond to the dprk's misbehavior. the executive order signed by the president on january 2nd is an important new tool. it responds to the attack on sony pictures, but also provides a framework for addressing the full range of dprk illicit behavior. in applying this pressure, just as in our efforts at engagement, our work with allies is vital. the united states is very limited economic and other ties with the dprk, so our financial sanctions are much more effective when supported by our partners. we also work with our allies to deter dprk aggression. having left seoul as ambassador just a few months ago, i can tell you that our alliance with south korea is stronger than ever and our growing trilateral security cooperation with south korea and japan also sends a powerful message of deterrence to pyongyang.

if i may, mr. chairman, i would like to take this opportunity to thank you and the committee for the committee's strong support for our robust alliances with both japan and south korea. mr. chairman as we apply unilateral and multilateral pressure and strengthen our deterrence we will continue our principle diplomacy. we have made clear to the dprk that the door is open to meaningful engagement. close coordination with our partners in the six-party process is essential. thanks to our continued robust engagement with south korea, japan, china and russia, our unity has never been stronger. wherever pyongyang turns, it hears a strong unwavering message from all five parties that it will not be accepted as a nuclear power. our alliances with japan and the republic of korea are a bedrock of our six-party diplomacy. both allies are resolute in their commitment to the goal of the denuclearization of the korean peninsula and an end to north korea's illicit behavior. both governments have condemned the attack on sony pictures and expressed solidarity with the

united states in our response. to intensify our coordination our travel to tokyo for trilateral talks with my japanese and south korean counterparts later this month. on that trip i will also visit beijing to strengthen our cooperation with china. china has done a great deal on north korea. we believe it can do more. in the wake of the cyber attack against sony pictures china did condemn malicious behavior in cyberspace. although russia has recently pursued investment in north korea and invited kim jong-un to visit moscow later this year our alignment on the clear goal of denuclearization remains strong as ever. we also work actively with partners in the broader international community, especially on human rights. building on the important work of the u.n. commission of inquiry, this past year the u.n. human rights commission and general assembly adopted by overwhelming margins resolutions calling for accountability for north korea's human rights abuses.

just last month the u.n. security council took up the dprk's great human rights injustices on the standing agenda for the very first time. mr. chairman, standing up to north korea requires a sustained and concerted effort by all of the countries in the six-party process and indeed, by the entire international community. together we will, to borrow your words again, change the equilibrium in north korea and persuade pyongyang that north korea will not achieve security or economic prosperity while pursuing nuclear weapons tramping on international norms and abusing its own people. thank you again for the opportunity to appear before this committee. >> thank you, ambassador kim. dan? >> thank you chairman royce, ranking member engel and distinguished members of this committee. thank you for inviting me to speak today about the u.s. government's efforts to counter the threatni poseai by the malicious cyber attacks of the dprk. the dprk is a brazen and isolated deng i'm that has -- isolated regime that has

repeatedly shown flagrant disregard for international standards. this is evident in the dprk's development and proliferation of its nuclear and ballistic missile programs, its repeated violations of u.n. security council resolutions, its repression of its people through serious human rights abuses, and most recently, its cyber attack on a u.s. company, and attempts to stifle freedom of exbregs in our country. in response to the dprk's cyber attack on sony pictures, the president signed an executive order, executive order 13687 on january 6th, 2015, granting the treasury department the authority to impose sanctions against agencies instrumentalities, officials and entities, controlled by the government of north korea, and the workers party of korea. executive order 13687 represents a significant broadening of treasury's authority to increase financial pressure on the dprk and to further isolate it from the international financial system. for the first time, treasury has the authority to designate individuals and entities based solely on their status and officials, agencies, or controlled entities of the government of the dprk. treasury also now has the

authority to designate those providing material support to the government of the dprk. simultaneous to the issue of this executive order, treasury designated three entities and ten individuals from secretary jack lew described as quote critical north korean operatives. these include the reconnaissance general bureau known as rgb which is the dprk's primarily intelligence organization which is responsible for many of its cyber operations. the korea mining development trading corporation known as comitt which is the primary arms dealer and ten officials of the dprk government including eight comit officials placed throughout the world. secretary liu also made clear we'll continue to use this tool to expose north korean government owes fishes and entities. treasury has also used existing tools to raise the cost of the dprk of its provocative actions. since 2005, treasury has designated over 60 north korean

related entities and individuals under executive order 13386, 13382, which targets wmd proliferation related activities and executive order 13551 which targets north korean arm sales the procurement of luxury goods and illicit economic activities. under these authorities, treasury has exposed and cut off access to the u.s. financial system, entities and individuals such as the foreign trade bank and daedong credit bank, two of north korea's most important banks and have provided crucial financial support for a number of dprk illicit activities. we've also designated general kim young chal the head of the rgb who james clapper recently named as the official who likely ordered the cyber attack on sony. today, the dprk's financially isolated thanks in no small part to the actions i have described. over the years, treasury has ensured that the dprk has limited access to the u.s. financial system and worked with our allies to restrict pyongyang's access to the international financial system. as a result of sanctions, and other measures, targeting the

dprk's illicit conduct, financial institutions around the world began severing their ties with the dprk in order to avoid entanglement with north korea's illicit activities. these actions contributed to the dprk's estimate isolation and spurs positive change in the behavior of banks across the globe. while this increased isolation has made targeting the dprk more complex, treasury continues to deploy the tools that its disposal to raise the cost of the dprk's defined behavior and induce the government to abide by its international obligations. the u.s. government's response to the malashs sony cyber attack is a demonstration of our determination to hold the dprk responsible for its actions. but protecting the u.s. from cyber attacks isn't just about imelementing sanctions. it's also about working with the private sector to safeguard our economy and the infrastructure more broadly. beyond our response to the sony cyber attack safeguarding the u.s. financial system and its critical infrastructure from the threat posed by state sponsored malicious cyber activity is also part of treasury's mission.

treasury partners to share specific threat information and improve baseline security and enhance industry response and recovery and i go into much of this in my written testimony and in greater detail. as the united states confronts the destabilizing and destructive actions of the dprk, treasury is employing its authorities to isolate north korea from the international financial system. treasury will continue to use its arsenal of financial measures to combat the cyber threat by the dprk. thank you mr. chairman for your invitation to testify before the committee today. and i look forward to answering any questions. >> thank you secretary glaser. general? >> thank you very much, mr. chairman. ranking member engel and distinguished members of the committee thank you very much for having me today. i appreciate the opportunity to appear before you today, alongside my colleagues from the departments of state and treasury. the department of homeland

security leads the national effort to secure federal civilian networks and coordinates the overall national effort to protect critical infrastructure and enhanced cybersecurity. the dhs cybersecurity mission includes analysis, warning information sharing, vulnerability reduction, mitigation, and aid to national recovery efforts for critical infrastructure information systems. dhs ensures maximum coordination and partnership with federal and private sector stakeholders while working to safeguard the public's privacy, confidentiality, civil rights, and civil liberties. within dhs, the office of cybersecurity and communications focuses on managing risk to the communications and information technology infrastructures, and the sectors that depend upon them. as well as enabling timely response and recovery to incidents affecting critical infrastructure and government systems. our service executes its mission by supporting 24x7 information sharing, analysis, and incident response for private and public sector partners.

we provide tools, and capabilities to strengthen the security of federal civilian executive branch networks and engage in strategic level coordination with private sector organizations, on cybersecurity, and communications issues. dhs offers capabilities and services to assist federal agencies and stakeholders based upon their cybersecurity status and requirements. the department engages its stakeholders through a variety of mechanisms, including information sharing forums as well as through the national cybersecurity and communications integration center, which we call the ncic. the ncic a 24x7 cyber situational awareness incident response and management center is a national nexus of cyber and communications integrations for the federal government, the intelligence community, and law enforcement. our activities include first incident response. and during or following a cybersecurity incident, dhs may provide response capabilities

that can aid in mitigation and recovery. through our integration center dhs further disseminates information on potential or active cybersecurity threats to public and private sector partners. and when requested by an affected stakeholder, dhs provides incident response through the united states computer emergency readiness team, commonly referred to as the u.s. cert or the industrial control system cyber emergency response team, commonly referred to as the ics cert. our second activity is assessing security posture and recommending improvements. and upon request, dhs conducts risk and vulnerability assessments to identify potential risks to specific operational networks, systems, and applications. and then we provide recommendations for mitigation. our third activity is providing technical assistance. dhs may provide direct technical assistance upon request.

for instance, following attacks on the financial services sector in 2013, and 2014, our united states computer emergency readiness team went on site with major financial institutions and other critical infrastructures to provide direct technical assistance. u.s. cert's technical assistance and technical data include identifying 600,000 distributed denial of service related ip addresses, and contextual information about the source of the attacks, the identity of the attacker, and associated details behind the attack. we have had a long-term, consistent threat engagement discussion with the department of treasury, the fbi, and private sector partners in the financial services sector. regarding the sony pictures entertainment incident, in november of 2014, the ncic was made aware of a specific

significant breach in the private sector impacting sony pictures entertainment. cyber threat actors targeting sony used a sophisticated worm to conduct cyber exploitation activities. since that time dhs has initiated a series of pro-active steps designed to protect not only the dot-gov space from spill over but our private sector partners. we have worked extensively with our partners including the fbi and other agencies and international partners to share information and collaborate on incident analysis. dhs has published multiple products related to this incident incident, shared with other federal agencies our international partners, the private sector, and the general public. as a trusted information sharing partner to the private sector, the ncic does not have a regulatory role. our mission includes securing critical infrastructure and protecting the federal.gov space. as we conclude, evolving and

sophisticated cyber threats present a challenge to the cybersecurity of the nation's critical infrastructure and its civilian government systems. dhs remains committed to reducing risks of federal agencies and critical infrastructure. we will continue to leverage our partnerships, inside and outside of government, to enhance the security and resilience of our networks while incorporating privacy and civil liberty safeguards into all aspects of our work. thank you again for the opportunity to provide this information, and i look forward to your questions. >> thank you very much general. i was going to start with a question of the assistant secretary glaser, and ambassador kim made the point that increasingly, russia has stepped in where china has curtailed with respect to support for north korea. he's speaking about the issue of of -- of forgiving debt, and certainly the investments from

russia into the rail network. i've traveled in north korea and the functioning rail network just ends at the border. and once you're in north korea it's not operational. or at least none that i could see. and so the investment would seem to be critical coming from russia. the question i have is, does -- is that investment would then be sanctionable, right? under the interpretation that i just read? and on top of that, if we look at the section 311 sanctions which you were at the center of in 2005, i remember working with you on that at the time with respect to banco delta asia, there's a lot more that we could be doing here if we were to label north korea a primary money laundering concern, as we've done with iran. that would be possible. after all, we count -- caught

them, you know, with $100 u.s. currency. we saw that in macau. we had $100 bills there that were counterfeited out of north korea. so the question i have, then is let's go to that issue of financial sanctions on north korea, as kurt campbell, former top state department official for asia, noted recently. we could really move effectively with that and make life much more difficult for those who are making life difficult in south korea and here. >> thank you for the question. chairman royce. the -- i certainly agree with you. it is our goal and it has been our strategy. it's been our strategy at the treasury department for many years now to implement sanctions and other financial measures in a way that isolates north korea from the international financial system. and that would be from the international financial system everywhere. whether it's china, or russia, or the united states, or europe, or other places in

asia. the goal is to squeeze them financially as much as possible. with respect to the new executive order that you make reference to and that i discussed in my testimony, that's an important new tool that we have at our disposal precisely because it gives us a tremendous amount of flexibility in how we approach targeting. so, we could go -- we could target any north korean government agency. we could target any north korean government official, and then once targeted, we could apply sanctions with respect to any individual or entity who's providing them in turn material support or any individual entity that they, in turn, control. so that gives us a large -- >> and i think that's where we need to have the focus, because the foreign trade bank, that was a designation a long time coming. but just designating north korean institutions is not going to tur tail the kind of hard currency that the regime uses in order to continue to expand their icbm program for

example. >> right. and that's why we're trying to do, identify what their nodes are to the international financial system. you mentioned banco delta asia designation under 311 that we did ten years ago. why that was -- why that was so successful was not with respect to the specific action on banco delta asia, but that tied up about $25 million of money that north korea said was north korean money. but, the real impact of banco delta asia and that designation and that action was that it created a chilling effect throughout the financial system. banks around the world stopped doing business with north korea. we still live in that world today. that action and a lot of other actions we've taken have made it a lot harder. >> and that's why, mr. engel and i have our legislation that we have over in the senate. because, my observation at the time was that, as you said, it wasn't just banco delta asia it was a dozen banks all that were willingly doing business

in laundering, basically, or doing business with north korea, and once those accounts were frozen, not only could he not pay his generals but i later talked to defectors who'd worked on the missile program. he said that program came to a halt because we did not have the hard currency. we couldn't even buy the clandestine gyroscopes that we would buy on the black market for those missiles. we couldn't pay for anything. and that's the kind of pressure, i think, could cause a regime to recalibrate its thinking. there has to be consequences directly, and it has to impact you know, the family itself. that run that country. and the best way i can think of doing that is to not give them the hard currency so that those generals are not paid, the army is not paid, and at some point people turn and say there has to be a better way forward than the kind of repression that's going on.

and that's why we're trying to jump-start this beyond just sanctions within north korea to the financial sanctions that would truly, truly create additional pressure. do you think our legislation which we had passed in to the senate last year, if we get that out of the senate this year, do you think that would be a useful tool? >> we -- you know, you say chairman, that it was dozens of banks. it was more than dozens of banks. it was hundreds of banks making the decision at the time to not do business with north korea. so we've -- we had that impact. and that's an impact that we're still -- that's a world that we're still living in. so again, you say the goal is to identify financial institutions outside of the -- of north korea that provide these points of access. and that's exactly what we're trying to do. you mention chairman foreign trade bank. i thought that was an extremely significant action. that was north korea's primary source of access to the

international financial system. >> true enough. but i would just point out there's a number of small banks that we've been following that are doing business with north korea that, frankly, if we really wanted to squeeze, we could cut that off. and if we do cut that off, it becomes very problematic for them to get the resources, even to send these hackers, you know, to moscow. or in the past they sent them to beijing to get the kind of training. if you cut off the hard currency, these regimes like north korea, cannot carry out the kinds of offensive attacks that they're given to. >> right. and that's exactly what we're trying to do. foreign trade bank, daedong bank, these are banks that we have targeted with sanctions. we used section 311 on banco delta asia. the actions that we've taken have caused a chilling effect, even within the chinese financial system. even banks, major commercial

banks within china, have cut off their relationship with entities such as foreign trade banks. so i think, chairman, that that's exactly the right approach that we should be taking. >> we're on the right road. we just want to accelerate it. dan thanks for being here to testify today. we go now to mr. engel. >> thank you, mr. chairman. testify today. >> thank you. >> we go to mr. engle. >> the chairman said that it needs to have a direct impact on the family. when we went to pyongyang, i was there twice, and granted you are limited to what we could a situation where you have elites in the capital doing relatively well, and then we impose sanctions, the sanctions hurt all the people

that are starving around the country, but the elites basically are untouched. what might we do to make sure they're not caught up in it. >> thank you for the question, congressman, i don't think that

the misery that's been inflicted on the north korean people can be attributed to sanctions. i think the north korean government bears sole responsibility for the north korean people, but i do take your point that the goal is to try to put pressure on the elites. i think it's precisely but the banks system, because that's where they acquire the hard currency, the luxury goods, the other things that make their lives meened, that make the system run as far as the system actually runs. so that's what we are trying to do. we're trying to identify their sources of currency.

one of the important sources for example, is conventional arms sales. that's why we targeted eight officials in our recent round the sanctions a couple weeks ago. these are individuals who operate in places like africa, who are raising hard currency for the regime, and we're trying to cut off that as a source. as the chairman said, we tried to identify the points of action so they can't repatriate the funds or use the funds they do have. this goes an effort that's been ongoing for ten years. it's a hard target, their needs are relatively small, it make it effective when we put or finger on a node, we can have impact. so it's an ongoing effort. we're -- i think that gives you

the flex ability to really step that up. >> thank you. i'm wondering if any of you can talk about the -- obviously north korea is gaining additional conventional and nuclear capabilities. obviously it seems to us they have emboldened themselves with respect to belligerent activity such as cyberspace. i'm interested in hearing your perspective on that. they pose a great threat not to the region but to the united states directly. what we need to do is continue to strengthen our efforts on sanctions, pressure, but also continue to work on strengthening our current capability on all fronts.

i can assure you they have continued to improve their capabilities. we have fully capable of defending against any threat posed by the north koreans, and i point to one upcoming example, which is our military exercise with south koreans that will be coming up shortly. it's a very important exercise. defense oriented, but very effective exercise that we maintain the strongest possible combined capability, so we are prepared to deal with any threat posed by north korea. >> and don't the north korean usually react hostilely to joint maneuvers between south korea and the united states? we're saying this joint drill we are doing together is routine, and it's not related to a report that north korea is

trying to increase its submarine capabilities. whether it is or isn't, aren't we likely to see some acting out by north korea as a result of these joint maneuvers? >> sir, i don't want to speculate on what the north koreans are planning to do. you're quite correct, they don't like our exercises because i think they understand that our exercises strengthen our combined deterrent capability, but they are routine sfm exercises that we have carried out for 40 years. we've been quite open about it so north korea really has no right to complain about these exercises. >> you mention it had, ambassador, the six-party talks. when we were in, the north koreans seemed to be more interested in having two-party talks with the united states rather than the six-party talks. is that still what we find coming from them? >> unfortunately at the movement they don't seemed tore

interested in any constructive dialogue with anybody, including the united states. we believe the six-party talks framework still provides a viable forum for discussing this issue. one of the main reasons is the six-party process the north koreans made the most clear commitment to denuclearization and the six-party process also includes the key countries in the region that have a stake in this issue. this is an issue for the whole region, and we have the chinese who actually chair the process the jaapees, south korean and russians in the process. i think we need to try to work within the process to make some lasting progress. we find that the elites in north korea find creative ways around the existing sanctions s. obviously.

they work through chinese banks, and those banks are not exposed or integrated to the international market. what are we doing to go after these types of institutions? the chinese financial system is integrated into the international financial system. i think one good example of our ability to impact behavior in china was as i had the exchange with chairman royce was our designation of foreign trade bank, which is north korea's main commercial bank, the bank through this they do most of their conduct. they acted as you would expect any bank to ask and announced they should cutting foreign trade off from their banks. so we can have an impact on commercial banks in china. that said i think you're

exactly right, china does provide north korea the lion's share of access in the financial system. it's a subject i've had discussions with, the chinese many times on, and it's something that we need to continue to talk to the chinese about to try to get chinese assistance in making sure their financial system does not provide north korea the opportunity to exchange a proliferation or knit other listed economic at this time. sung and i were talking about it just before this hearing, and i know that sung plans on having this conversation with the chinese as well. so it is a significant issue. one we are focused on. >> we're going to mr. steve chabot. >> this committee has long recognized the growing capabilities of north

korea. last year i held two hearings specifically on north korea. it's one of the understandings mo vexing security challenges, so just a couple questions. ambassador kim, in june of last year, the cybill committee heard testimony from your predecessor, ambassador glen davies, and in his testimony he said china is north korea's, quote, last remaining patron unquote, however, as chairman royce already mentioned, pyongyang has a growing relationship with russia and illicit note works with cunning in the middle east, especially iran. we know that north korea

maintains a fairly robust illicit trading network with these rare nation states, and last year signed an economic trade deal with russia. this will provide pyongyang with an economic boost to counter sanctions and counterbalance the chinese who have been putting some pressure on them. there's a growing speculation about how big north korea's cyberarmy really is, and where it has received the training to orchestrate such an attack. could either of you first describe the cyber-capabilities and expertise and finally do you have a sense of how big that cyber-army is?

>> thank you very much. i would refer to the general on the cyberissue. i think franklynoic is running out of friends because of their is it abus. china has a -- i think what we have seen in our conversation with china, is china is working with us more effectively in trying to stifle north korea's dangerous activities. i think all of us need to do more, including china. there is been some contact some senior-level discussions, but i believe the bottom line is the russians remain committed to the shared goal

of, and they do want to make sure that the north koreans move in that direction, despite some of the contact we have seen recently. >> most of these tools are readily available through anyone around the world. many are of tactics techniques in cyberspace, predominantly criminals are openingly available through the marketplace and frequently posted online. so the acquisition of capables is readily available. >> thank you. i think i have time for one more question. north korea's cyber-capabilities were first

revealed back in march of 2013 as south korean financial services and media firms were attacked. at that time it was the latest attack from a malware development project called operation troy, which revealed pyongyang was attemptling to spy on and disrupt south korea's military and government activities. could you say whether north korea's focus on using the master boot record wipe functionality, if you have familiar with that, for its attack on south korea is similar to the attack launched by -- on sony, and what possible responses or protections do we have against this type of cyberattack? >> thank you very much for that question. at the attack using a wiper virus or capability to attack the master boot record in essence means that every computer has an instruction set

that's campaigned in part of the disk called the master boot record. it tells the computer what do do when it's turned on. it tells where the information is stored and the like. using an attack against that master boot record basically wipes out the record. the computer no longer knows how to turn itself on and to look for the information. it's a very devastating attack to the computer. as we look at the code, and we've done in mall ware forensics with the malicious code that was discovered as a result of this attack, it was a sophisticated, well-organized pieces of code that was specifically engineered to attack that master boot record. when it comes to detecting that type of malicious code, it's very difficult to do that for each and every piece of code. our current database of

malicious software numbers over 100 million different sample sizes. that said, we have taken the information we have done from our mall ware forensics, and we have loaded those indicators not only into the einstein system to help protect our federal systems, but we have also shared that with our international partners, with the private sector and the like. so the indicators that we have derived from our analysis we have shared, but this is very, very well-crafted code sir. >> we go back to mr. brad sherman. >> witnesses should relax for a few minutes, as i have an opening statement, but don't relax too long. obviously north korea is worthy of sanctions. but how do you have trade sanctions against a nation name and shame a country that is shameless?

the ranking member and the chairman have pointed out that we can have secondary sanctions. their bill does just that, and the secondary sanctions are where we threaten another country or a bank or other company in another country with sanctions if they do business with north korea. we would start with the government of china, which doesn't just do business with north korea, but gives them free money, free oil subsidies. and i notice the ambassador points out that the chinese have perhaps on occasion stifled north korean behavior by pushing them to be a bit less aggressive. but the fact is last month they threatened to blew up the members' district you have here.

for now, regardless of the annoyances they're backing north korea, every day they're giving them free oil. every day supporting them militarily and diplomatically. so we would have to do things that china disagrees with. do things to chinese companies do things to china's own trade relation-. wicket designate them a currency manipulator if they don't radically change their behavior. this has the additional advantage of being true, they are a currency manipulator. since we are probably unwilling to do that, i think we would target this or that bank to some success, at least to annoy north korea, but china seems to have made a strategic decision that north korea's success is

so important that they will give them free money. i can't imagine they will allow us to completely shut off their banks relationships. so i support all the efforts of the gentleman here and ranking member and the chairman to try to turn the spigot down a bit, but i don't think we can turn it off. there's one other thing we can do. first we all to reflect this is a unique attack. it wasn't an attack gentz a company, but against freedom of speech in united states. i would like to give north korea a double dose the free speech. we spend $8 million broadcasting into -- we could increase that. right now we're broadcasting into north korea only 11 hours a day.

the target is 12 hours a day. it ought to be 24 hours a day. and i believe that those broadcasts will undermine the regime both with the people and the elite. i can't think of anything we can do for $8 million that would better express our ked indication to the first amendment, and to posing difficulties for the north korean regime. i'd liked to explores satellite television into north korea, and other television broadcasting, because i particularly want to broadcast a particular movie t. and i hope we do the director's cut before they toned down the climactic scene. i commend to all of those on the xhitee the december 8th report, issued by the broadcasting board of governors, which of course

oversees voice of america and radio free asia. this report was issued pursuant to the north korean human rights reauthorization act that went through this committee. general how certain are you that north korea is the entity that both hacked sony and threatened terrorist action against our movie theaters? >> thank you very much for the question. just for clarification, i retired from active duty and reported to come on board as the deputy assistant secretary. >> thank you for that clarification clarification. >> attribution is not a function of my organization, but a function of the

intelligence and law enforcement communities. that said, i'm well sfoep familiar with the things that are done by the intelligence and law enforcement communities. based upon what i have seen and in consultation with my partners from both 9 intelligence communities and law enforcement communities, in this particular incident, i have trust and confidence in their conclusions. >> and you've seen more than some of these outside experts on 24-hour news channels that think they can second-guess? >> yes, i've seen more than ss@(@r(t&hahp &hc% of the colleague my colleagues in the private sector. >> mike mccall. >> i appreciate you being here. thank you. >> we just passed the big, five cybersfap bills, one codifying

the end kick, which is like the cybercommand within dhs, given it the congressional seal of approval. i see it as really the civilian portal to the private sector. when sony happened f. i had asked the question, well which of the 16 cry can infrastructures does this fall under? and it's a bit -- it's not clear. i know the president is announcing a i'mer plan this afternoon. i just got off the phone with the secretary. i think the vision is to make the department of homeland security the portal civilian interface to the private sector between the federal government and the private sector. sharing information from

various data points, whether it be nsa, fbi, through the to the private sectoor, to incentivize participation in this civil yags interface, safe harbor within the department. i just wanted -- after this, i can't to talk about the foreign affairs aspects and the cyber-jihad threat to centcom that we just saw. how do you view of role of the dhs broadening with respect to the event that happened with sony? >> thank you very much, sir, for the question, and thank you for your leadership in helping us with the legislation that just passed and your continued support of the department. thank you very much. as we take a look at the end kick, integration is part of our name, with the you see national cybersecurity and sfep -- the other departments and the agencies, and our private sector -- are part of coming

together with the ncik team, they have the ability where they are bringing in folks of all sorts of aspects, and the intelligence community, as well as representatives from the department of defense. so that we are sharing information. we're very transparent with each other. the information ranging from top c-grid sensitive compartmented information down to -- we're finding these partnerships is helping strengthen not only our situational awareness, but getting solutions to issues as they come in. we are working together to secure and make our

infrastructure more resilient by leverages the activities testify ncik. we have come a long way, as we look to the future, the legislation that's proposed and the activities that have already occurred are -- >> the division i would like to see is that it expands not just to the 16 critical infrastructures, to the sonys offed world could participate as well. because there is a broke bust privacy office at the department of homeland security. i want to just close with that. we had the sony attack, and then yesterday an attacked by cyber-jihadists reporting to be on behalf of isis at centcom. this is disturbing. iran is becoming more

sophisticated. now with these jihadists groups that we've seen attempting to get this type of technology, actually become successful as hacking hoo our centcom, into our military isis. this is severely disturbing to me. proportional response, what does that mean? and i would like to work on a cyber-aenda, because it's outside the lants of my committee. and in this case when a terrorist organization hits our military.

general? >> thank you very much sir. to address the points -- the first one about the attack and the attribution that it got into the centcom networks, first of all, this was a commercial space, a twitter account. there was no compromise and there's no evidence of any penetration into government, specifically the military computer systems. rather, it was a commercially facing bulletin board as it were, through the twitter account. certainly anytime there is compromise of any account, it's serious business. and in talking with my partners in the department of defense and the fbi last night, they were investigating it with all due vigor. i will be getting an update

from them later today. >> let me close, i think mr. chairman, we have an opportunity to work on this committee on legislation that could deal with defines what is proportional response, how other countries should respond with us. what is going to be the response of the united states of america when our companies are attacked and our departments are attacked and the military is under fire. with that, i yield back. >> thank you, by the way, mr. mccall, i would be happy to work with you. i was working with mike rogers on a piece of legislation, and maybe we can work together, and i appreciate you bringing it up, and look forward to working with mr. engledge engel as well. >> if you're looking for a democrat, i would be glad to work with on you that as well. >> balance in all things. >> cyber-security is a big issue on my district. we do a lot of work on it, so i would be dlibted to help in any

way, and i thank the chairman and ranking member for holdling this hearing. and welcome to the panel. the last comment, general, i think underscores something, though. i distinct between the private and public sector really isn't a helpful distinction. 5% of the critical infrastructure is controlled by the private sector. that doesn't mean we don't have a public sector interest in it. and the interface between social media and other things we may be doing in the public sector is often almost seamless. that seems to me why we ought to be concerned even on the attack the other day, and better understand where the boundaries are or even if we want to recognize the boundaries.

i think mr. mccall was pointing out that we need to be rethinking the codification of seibel of her security attacks and severe, and not only u.s. law, but frankly what it should mean in international law. if you have a cyber-pearl harbor, is that an act of war? at what point does the intensity and severity and magnitude constitute an acigarettesive act that has to be addressed? >> thank you, sir, for that question. the magnitude of the rubric of crossing that like, when did it become an act of war, and currently the administration is working to put together that a codified construct for the priorities and the prioritization, and taking a

look at it from a risk management and consequence management, but ultimately through our congressional processes and our constitutional processes rather, we will be making those determinations. >> i fully appreciate that will be a work in progress, but i think one of the tests or government faces is looking afresh at the legal codification of the subject, because we're really at a very early stage. we want to have it serve as a tool and ally in protecting. mr. ambassador, does my memory serve me well that a few years ago probably the north koreaacy help down shut down the bankic system for a day or two? >> there was a cyber-attack on the south korean financial

system. >> do we believe that was generated by the north? >> we believe so, more importantly the south korean authorities have indicated that it's such. >> think about it. virtually the entire banking system wen down? >> i don't recall the exact extent, but it was a serious attack. >> the south korean economy ranks where in the world? >> 10th or 11th. >> so the 10th or 11th banking system in the world had it -- it's a real warning in terms of the north's capability is, and the vulnerability of a whole sector of not just south korea's economy, but frankly our own as well. china, how -- how helpful do we think -- you mention indeed your opening statement that china has more forth coming, and we want them to be even

more forth coming, but the chinese themselves are engaged in a very systemic way sponsored by the pla. that state-sponsored cyber-security attacks, so how reliable do we think the chinese are going to be trying to rein in the north koreans in their cybersecurity? mall feesens? >> i'll defer to john for part of that question -- >> to whom? >> the democratic h-- dhs colleague. >> all dimensions of it hat improved in recent years. for passing a resolution act of the nuclear tests last year. as an example of how the cooperation has improved. i think can can improve much further. when they think about the streejic interests

unconditionally defending north korean behavior. >> but my question -- we're limited in time, mr. ambassador. i understand that in general but when it comes to this topic, cybersecurity, their hands are dirty. why would we count on them to help us rein in north korean cybersecurity attacks, when they're engaged in it with all four paws and snout? >> i think one of the reasons when they saw sony pictures entertainment attacked like this, it should have been a wake-up call to the chinese. they are also subject to irresponsible attacks from countries like north korea. >> i'm sorry. we're running out of time, but thank you. general, did you want to comment? >> as we take a look at information sharing, and the common threats and vulnerables that are out there, when we have a common threat and as the ambassador had mentioned, some of the things that were observed could just as easily

threaten the chinese, so it's in everyone's interest to address the issues and make sure that everyone is a responsible member of the community. >> just a final observation, that sounds very noble and boy scout-like, but the fact is the chinese have been stealing military secrets from us including weapons designs and bypassing, you know, the r&d stage for quite some time. the pentagon knows that, because the pentagon has been one of the biggest victims. it just seems to me -- i wouldn't rely on the chinese in that respect on this subject given their record. i -- it is a problematic aspect of what we are talking about today. thank you, mr. chairman. >> we go to mr. poe of texas. >> thank you, mr. chairman. globally there seems to be

among the many bad folks in the world three main countries. you've got syria, you've got iran, and you've got north korea. i call them the s.i.k. access, because they're in different parts of the world and they are a little sick. i understand that the official definition of nuclear weapons from our government is you have the bomb, but you also have delivery system. i want to divide that definition and just talk about the weapon, the bomb itself. does north korea have a bomb of some magnitude? ambassador? it's just yes or no. >> um, i wish i could give you a simple yes or no. >> can you say yes or no? i just need a yes or no. either they've got it or they don't have it. >> we know think continue to

work on the capabilities. >> do they have the bomb ambassador? i just need an answer. >> i'm not sure i can say that. >> mr. glazer, you got an answer? >> i would defer to the state department on that. >> so you don't know whether they have a bomb or not? >> as ambassador kim stated, north korea has -- well, north korea has conducted nuclear tests. >> and thefr sent satellites into orbit. >> do you have a paper horse? do they have a bomb or do they not? >> sir, i don't know. >> you don't know. all right. i personally think they have the capability to make one based on hearings we have had in this commit aye. looking on the other end, the delivery system, the president of north korea said he wants to develop the intercontinental ballistic missiles, and for some reason he wants the first to go to austin texas.

i take that a little personal since i'm from texas. what is the status of the delivery system, if you know? general? >> sir, i do not know. >> mr. glazer? do you know? >> it's really not a treasury department issue. >> how about you, mr. ambassador. >> we would be happy to provide you a full briefing on the capabilities. >> we've had some open meetings. they have the ability to produce a scud in a bucket, as they called it, a missile that can go from north korea to south korea? >> yes. >> do they have the capability to do that? >> yes. >> all right. is the united states used to have north korea on a state

sponsor of terror list that was removed in 2008. based on what you knowsh do you think it might be a good idea to put them back on that list? >> there's very clear criteria -- >> i'm just asking another yes or no question. >> my personal opinion i don't think is relevant. >> that's what i want to know, your personal opinion. >> there is a criteria, there is a process, and we're constantly evaluated all the information. >> how long is that evaluate going to take? after all they are hacking into our cybersecurity in the united states. do you all have a time limit? >> i understand your concern and frustration, but as a matter of law, the secretary of state must determine the government of that country has repeatedly provided supports for acts of t8!uj and in an ongoing process -- >> excuse me, mr. kim, i'm

re-claiming my time. do you think that hacking into our system is it is an act of terror or not? >> i believe that is beyond my -- >> general, you're in the military. peer are afraid to say it is. i'm just wanting your opinion. >> i think, sir, as we take a look at this, this should be part of the public debate and we should have a comfort, not necessarily constrained to this particular incident, but as we look to the future for any cyber-incidents. >> that's the diplomatic version, i assume, it seems to me that's an act of terror, we ought to strongly consider putting north korea, on state sponsor lists.

it seems like the right thing to do, the logical thing. i hope the state department makes up their mind before more of the attacks occur against the united states. i agree with mr. conley when he said that the line is very thin between an attack upon the government of the united states, and an attack on private industry in the united states. that seems to be an act, a terrorist act. i yield back, mr. chairman. >> mr. higgins? >> thank you, mr. chairman. the nuclear missile and cyber threat of north korea is -- is profound. the question is how does the united states respond to north korea's cyberattack on sony? an attack to punish sony for making a movie that humiliated

the supreme leader. the united states options are very few. counter attack to weaken north korea's military sflm assets highly infectual. number two, relisting north korea as a state sponsor of terror, and with that we don't have much diplomatic relationship with north korea, that too would be highly infectual. the serious threat posed by north korea far exceeds cyberattacks. normian cyberattacks -- intent backed by considerable capability. there is only wen gee on political option equal to north korea's threat. that is to work with our allies, both new and old to end north korea's existence been and reunifying the korean peninsula. north korea's nuclear threat.

north korea has 4 to 10 nuclear devices and hind hundreds of short and intermediate range missiles. they have an active uranium and plutonium program, and it's not inconceivable that north korea in time will have a puck lard capability to reach the united states. north korea regime is a proliferation threat. a decade ago it was helping to rebuild a nuclear reactor in syria, and it is a potential source of missiles and nuclear materials to rogue states, including terrorists. north korea has a serious conventional military, which is a threat, an existential threat to the region. it's a population of 25 millions people and the fourth largest arm in the world. north korea's army is two times that of south korea, with its population, which is half of south korea. there are 28,500 american

troops in south korea. further aggression by north korea would bring the united states into a major costly and dangerous war. north korea is a threat to their own people. 100,000 political prisoners held under horrendous conditions. north korean cyberattacks against sony are not new. north korea regularly attacks south korean banks and businesses. also, there's a changing view of north korea by its neighbors, and only economic sponsored. china and south korea changed their views. the south korean president used to be lukewarm to talk about a unified korea. today the south korean president speaks openly of reunification and of the

enormous economic benefits of that unification. china is frustrated that north korea ignores its request to freeze or dismantle its nuclear program, but the nuclear armed north korea, south korea and japan will want object need to develop a nuclear weapons program. china increasingly is viewing north korea as a strategic liability, not an asset. china views north korea as a growing threat to china's stability. and china's ties to south korea have flourished. and china's president, regular visits south korea and not north korea. so while the discussion here is centered on cyberattacks, i think there's a larger discussion that needs to take place.

your thoughts? >> thank you, congressman. i think you're absolutely right about china's evolves and improving relations. what china's strategic perspective? i don't think we can continue to assume that unconditionally defending north koreaial misbehavior is in china's strategic behavior. i think there's an ongoing serious debate on the future direction of the policy. one of the reasons is because they see the future of their relations with south korea. huge flow of traffic, students tourists, business people. i think that's where the future is for china on the grand peninsula. this is one of the reasons why we are starting to get more forth come inging cooperation. >> the gentleman's time has expired.

>> thank you. there's a wide range of other rogue regimes, including syria iran and cuba, though i guess it's not reply kale correct to say cuba is a rogue regime, but i believe that a tiger doesn't change its stripes that quickly. north korean ship was seized by panama in july of 2013. it was found to be carrying cuban and soviet era weapons from cuba. it sailed through the canal, to t. turned its transponder on, was loaded with air krafl parts, mig 21s, other covered with sugar, taken back through the panama canal, seized by panama discovered the weapons in the ship. 32 crew members were released,

the other three are still being held, i understand. so you have the cuba/north korean connection there. let's talk about venezuela. venezuela is cubaest and best ally, if i look back to i guess december of 2011, the top diplomat in miami was linked to a cyberattack -- there's another rogue connection with iran. there has been flights from drawn to havana to venezuela, i believe. so you have venezuela involved in cyberterrorism possibly against the united states, at least alleged. you have a cuba connection with north korea, and we've got now a north korean cyberattack on an american company. it continues a lot of rogue

nations involved in cyberterrorism and other things. so i've got to ask, ambassador how and to what extent does north korea engage in syria, cuba, and possibly maybe just by association venezuela, and the connection to cyberterrific there. >> generally speaking, we're obviously concerned -- i don't have any specific information but we do know that north koreans had relations with a number of the cunning you mentioned. it's something we monitor very closely. it's one example i how international cooperation with field -- and i think this is an important point, because of our limited dealings with north korea directly, we need international cooperation to make sure that sanctions actually can be effective.

the situation you mentioned is a perfect example of that. treasury. are you tracking any money? is there any evidence of money going from north korea to iran to cuba to venezuela? any of these connections? are you aware of any of that? >> yes. >> yes. we spent a lot of time obviously working closely with the intelligence community that does the real tracking, to try to identify north korean financial networks wherever they might be, whether it's with iran or asia. to be honest with you, i think when it comes to trying to apply financial pressure on north korea, we shouldn't take our eye off the ball, and the ball is asia. that's where north korea gets its primarily access to the international financial system. that's, as we devise strategies

to try to put pressure on north korea. >> they're spending some of that money in this hemisphere. they purchased weapons from cuba. >> and we responded -- >> i don't castro just gave them the weapons. >> right. and that's -- again, that's why we look at the primary arms dealing we targeted. we're trying to go after the arm dealers, trying to go after the financial networks that support the arms dealers. so what we are trying to do is make it more difficult if not impossible, but certainly to disrupt and dismantle their ability to move these function --