We have a vote at 1030 a. M. In order to allow more centers time to ask their questions, agreed brown and i have to submit our Opening Statements for the record. Witnesses to shorten their Opening Statements to a couple minutes each. To ask theim going senators to be very careful to follow the fiveminute allocation for their questions. First we receive testimony from ,he honorable Sigal Mandelker and following her we will hear testimony from ms. Susan thorton. Without anything further, lets proceed. Please proceed. Mandelker i am honored to appear before you to discuss our strategy to combat the oppressive actions of north korea. This administration is applying maximum economic and diplomatic pressure to counter this threat. Are essentialls to this campaign and it become among the semester nations top kinetic tools of choice. Today i will share with you aspects of our strategy, which we are executing at a rapid pace. At a rapid pace were focused on attacking the Financial Vulnerability first and any revenue generated could be used to support directly or indirectly the Weapons Development program part of that strategy is to suffer financially by targeting the regime including coal and labor with the sale of weapons and other goods we have designated dozens of individuals that support these lines of business and and focusing on the shipping networks. Second, the regime used to fund to the International Financial system to acquire foreign currency and transfer funds so we are intent to stop this to elevated sanctions there other deceptive means last week the president issued a new executive order to give greater ability and leverage to target foreign banks. On tuesday we took action on the north korean banks across the of low ben my first week on the job for the first time in over a decade for facilitating north korean financial activity through the u. S. Financial system. Of course close collaboration other International Partners is critical of your working very actively with partners around the globe. Time is not on our side of an incredibly dedicated team working aroundtheclock. Our success to curtail the revenue stream and severing access is the central to a peaceful resolution of the growing crisis in mueller afford to working closely with this committee as we seek to fill the shared responsibility to keep america safe. Eight you to the chairman and the members of the committee to appear before you to discuss the ever increasing threat north korea opposes that will make a brief statement. Today we see north korea that is showing determination with the icbm to deliver a Nuclear Payload to our homeland in the face of this threat we have the ability to defend ourselves and our allies from any attack as the president and secretary of defense have made clear but we also have a clear and aggressive strategy to counter this threat to give bring about a resolution with all diplomatic pressure on north korea to change that calculus that diplomatic Pressure Campaign comes back to the denuclearization of north korea and we recognize the success will depend on heavy cooperation from our International Partners especially beijing. Were working with china to execute the strategy. Now to hold china and others to the internationally binding obligations to convince chinas leaders to exert their decisive leverage over north korea. We do not seek that accelerated action. Our secondary financial and trade sanctions the answer . Do you want to go to ahead . Mr. Chairman thank you for that question. As you know we have the ability now an executive order to impose sanctions against Financial Institutions and we take that new authority very seriously. Believe what they were the strongest measures that have ever been passed by the United Nations they represent the floor and not the ceiling so we have to constantly take additional measures to make sure that they are implemented with full force and we are holding all countries accountable to cut off any revenue stream going to north korea and we are doing that and will continue to do so. Thank you. Ms. Thornton do you want to add anything to that . Thank you. I think what i would say is we are looking hard now at implementation. What we are doing now is working very hard to implement the new executive order which gives us greater tools to go ahead and work on implementing and trying to ferret out these illicit underground networks that north korea accuses that have been much of the lifeblood of their proliferation networks. I think implementation is key. We are working with International Partners as the secretary mentioned and i think continuing a fullcourt press with those International Partners on implementation is going to be the key to really upping the pressure on the kim regime. Just quickly ms. Thornton how successful can we be in getting that International Cooperation . Well what i would tell you is we have been raising this issue with every Single International partner that we have been meeting with then we have had International Partners coming to us and volunteering their own National Measures that go on the u. N. Security Council Resolution so what i have seen and i saw also that the highlevel week in new york last week that all countries are seized with this matter and they are looking actively at what more they can do to choke off the listed trade and other kinds of diplomatic presence and labor presence in their country. So i think we will keep up the pressure and we need to keep it up. We need to keep unified International Coalition on this but having countries and their partners raising it with other countries as well as it has proven to be very effective. Thank you and when the president announced executive order 1310 he recognized a chinese bank with the directive sent to other chinese banks to sound like it instructed banks to cut off business with north korea. There is less known about what will happen to chinas current north korean business or future ability to deposit or transferred dprk funds. Can you shed any light on this directive by the chinese central blank and basically the question is is the policy of china truly changing . Thank you chairman cretul. I think china is sending deliberate messages to its bank and two other companies in china there was an announcement today in fact the Chinese Commerce department sent an announcement that all north korean firms and joint ventures with china had to be shut down. We are working closely with the chinese. We think they are taking this seriously and we will continue to monitor it. We will continue to share information with them on actions we think that they need to take. This is obviously a very serious problem and the urgency with which china takes it is going to be key to any successful economic Pressure Campaign. Thank you. Senator brown. Thank you both for testifying and your service to our country. I wanted it down deeper on the sanctions issues. Starting with you ms. Thornton. Youve testified to use strategic accountability describe our ongoing u. S. Policy towards pyongyang but the essential elements of the strategy havent changed in the push for further multilateral sanctions authorities improve u. N. Sanctions enforcement globally and urging other nations to cut off normal political relations and trade with north korea. Are you taking full advantage of the sanctions authorities to have including those congress enacted last month and have using quantifiable outcomes at this point, especially in terms of reduction of pyongyangs Revenue Streams and significant impacts on the regimes ability to advance its Weapons Programs . Starting with you ms. Thornton. I think we are taking maximum advantage of all the tools theyve been given and taking maximum advantage of our diplomacy with countries all around the world. I believe that we have instituted a number of designations. We have had a series of designations and have been rolling out sanctions on various entities in china, in other countries. All of these target north korean trade and north korean entities and illicit preparation and it certainly has had an impact on the keys with which they are able to make transactions is cut down on their ability earn hard currency and its having an effect of increasing pressure on the regime. Thank you. This is a question for both of you and i will start with you ms. Mandelker. Many of us here in this body and all of our allies are concerned about the president s statements about the jcpoa. A president indicates he plans to blow up the joint. Many argue this will seriously undermine u. S. Credibility on Nuclear Issues with north korea and others. Are you concerned that the president s position on divisor diplomatic efforts with north korea . No senator or im not concerned. These are two very different problems. North korea needs to understand that we are very serious when it comes to applying her maximum authority to applying economic pressure im frankly this is an area where the world is coming together. We are seeing the strongest Council Resolutions we have ever seen in seeing countries take steps over and above. That surely good news but the world came together on the jcpoa a too and do the koreans think that while the u. S. Is going to pull out this agreement which clearly is working to keep, to stop the Nuclear Program. Why would we have that credibility and why would the world think we have that credibility in our dealings with the chinese and north koreans . Against senator i am personally involved in working closely with our allies in europe japan and south korea and elsewhere and the message that im hearing is that we are very unified in a separate. We are not depleting one issue with the other. I cant tell you. You are not equating one issue to the other but dont our allies see that when we and our nation renege on one Nuclear Agreement we are not as trustworthy as i thought we were as a nation for the next round . Again i cant tell you what our allies think. You set her allies are on the same place and now you are telling us you dont know what they think. What i can tell you is we are very unified and sending a joint message to north korea that we are all using her maximum economic pressure and diplomatic pressure to get them to change their behavior. Do you disagree with their allies who virtually everyone says iran is complying. I know this isnt about iran but do you agree with our allies . Senator i would deferred to the ie ae with respect to the jcpoa. Ms. Thornton responded that if you would also does it concern you that we are working with the chinese as we should and trying to work to get north korea to change its policy, that our allies, some of our allies question whether we are reneging on something we did on Nuclear Weapons a year and a half or two years ago . Thank you. I know that we have certified continuation of the jcpoa in the most recent process. I think the connection between that and north korea the thing that is important to remember is we have been down this road with north korea several times already and they have continually undermined, cheated and disregarded the agreements that we have entered into with them in an attempt to do what we are also attempting to do obviously with iran which is stop the rollback of Illegal Nuclear programs. I think what we want to do with north koreas make it clear that we are not going to go down the road again of being you know cheated or fooled then we are going to enter into this agreement and expect that they would live up to their side of the bargain. Thats what the maximum Pressure Campaign is about to build that pressure and leverage which will convince them that they really need to engage seriously in a discussion about freezing in rolling back the program. Thank you both. Before go to senator toomey i wanted to make an announcement that i made at the beginning of the hearing and that is that ms. Thornton has to leave at 10 30 to meet with secretary tillerson overseas and we havent vote at 1030. Senator brown and i have forgone her Opening Statements and im going to ask the senate to play very close attention to the time allocations. Senator toomey. Thank you mr. Chairman and thank you tour witnesses. I want to draw different parallel with iran if i could. To back up just a second i dont think anybody questions how great of a threat north korea poses to us. We have seen a Nuclear Weapons program for over a decade with tremendous acceleration and their missile delivery capabilities. This threat is growing and it seems to be at an accelerating pace. Despite the many sanctions that we have on north korea our allies have joined us. The south korean government reports that north korea curt north koreas economy grew at the fastest rate in 17 years last year, the that they are g8 gdp expanded to 18 of the lowlevel but they are experiencing Economic Growth and its hard to imagine that they are going to abandon these programs if they are discovering they have greater prosperity year in and year out so i want to commence the work you do. Im grateful for it. I agree fully with the executive order to further pursue sanctions but we have witnesses who have reported to us and i dont think our current witnesses will disagree, we are not yet at the maximum level of possible sanctions against north korea. Her instance we are told at past hearings that there are Financial Institutions conducting transactions with north korean entities that are not subject to the same sanctions. Would you both agree with that . Senator any Financial Institution would be subject to our authority. I understand that but is it true that there are Financial Institutions including chinese institutions that are conducting Financial Transactions and have not had sanctions imposed directly on them . Senator as you are probably aware in june. Listen im in favor of that. My point is there are many other institutions that are conducting transactions and you have acknowledged today that there is one chinese bank that has had sanctions. My point in all of this is we also have learned i think that the mandatory sanctions of the iran sanctions legislation probably played a big role in bringing iran to the table and it is my belief and i think its shared by my colleague the senator from maryland with whom im working on legislation and we been working with treasury and we want to continue to work on this but the threat of mandatory sanctions immediately once that legislation passes sends a very powerful message to Financial Institutions. I think thats the tool that we need. That is the tool with iran. We have not adopted that yet and its my hope that we will and i welcome your thoughts on it. Senator having the authority to go after frances editions is incredibly important. Thats why we have the strongest executive order. The president just signed the strongest executive order that we have ever had which gives us the authority on a Going Forward basis to impose secondary sanctions against Financial Institutions and big banks are taking no. We are carefully monitoring their ongoing activity and behavior in the safety and the security of the American People comes first and we wont hesitate to act where we think its warranted. I understand that but having the authority to do something is not the same thing as being required to do something and the latter sends a stronger message. Now i think there should be a way for an institution that ceases and this is for example on the subject of sanctions. If we want to have a mechanism that permanently disqualifies a u. S. Institution from the market if they have ceased and assisted by my own view is we have to take the most aggressive steps possible and this is as serious a threat as i can possibly imagine. I hope you will continue to work with us in this effort to that want to thank my colleague colleagues for the great work he has done on this and mr. Chairman i think ive come in 30 seconds short. Thank you senator toomey. Senator reed. Thank you very much. I commend the chairman and the Ranking Member. Secretary thornton in the past we have used the five Party Mechanism with south korea japan russia china and the United States and at this point it seems a lot of the diplomacy, if you are going to china you talk to them someone presumably talking to russia etc. Why dont we up we are serious about this convened a five party talks and show not only strength but a concerted effort . Thank you. We are convening, i mean we dont have that specific mechanism but we are doing a lot on the u. N. Security council. We are doing a lot the various multilateral partners and we had a very strong statement out of asean at the recent ministerial in october in manila. We have gotten a lot of different act dares to step up and help us with this effort. Certainly we are doing a lot of consulting with the regional stakeholders and especially our very strong allies. The president met with them both and they trilateral format in new york last week but we have also been consulting very closely and had long meetings and extended discussions with both russia and china. I think we are doing as much as we can with those regional stakeh