Before we gavel the hearing in, i would just like to remind audience members that disruption of Committee Proceedings is against the law and will not be tolerated. Although wearing themed shirts while seated in the hearing room is certainly permissible, holding up signs during the proceedings, that is not permissible. So any disruptions will result in a suspension of the proceedings until the Capital Police can restore order. With that, i would id like to call us to order here for our hearing this morning and ask all the members to take their seats if you could. On september 3rd north korea detonated a Nuclear Device that according to news reports was stronger than all of the previous tests combined. This Hydrogen Bomb represents the latest advancement in north koreas longrunning nuclear and Intercontinental Ballistic Missile programs which now pose an urge gents threat to the United States. Moreover, the apparent speed in which these north korean advancements have occurred are challenging the security structure across east asia creating dangerous instability in the region and that instability will likely be dealing with for decades to come. So today this committee is going to discuss the tools that must be deployed and fully utilized to address these threats. And i believe the response from the United States and our allies should be super charged. We need to use every ounce of leverage. When i had breakfast this morning with secretary tillerson we layed out these issues. That leverage includes sanctions, it includes diplomacy, it includes projecting information into north korea to put maximum pressure on this rogue regime. Time is running out. And lets be clear, sanctions can still have an important impact. North koreas advanced weapons programs rely on foreign sourced technology. Much of these programs are made outside the country. North korea pays an inordinate amount of money and it has to have hard currency to do it to run this very expensive icbm program and this Nuclear Weapons program. Since it requires hard currency, that is the achilles heel. Unfortunately, years have been wasted as sanctions have been weak allowing north korea to Access Financial resources and build its nuclear and missile programs. Any sanction that crimps north koreas access to technology is urgently needed. Congress has done its part to ramp up economic pressure. We passed a north korea sanctions act last february authored by myself and mr. Elliott angel, our Ranking Member. In july we increased the tools at the administrations disposal as part of the big sanctions package that we passed here including sanctions on north korea and russia and the iran missile program. Part of that included targeting north korean slave labor exports, part of it again refined some of the focus on banking and part of it also was was focused on exports to ports around the world from north korea. In august the administration secured a major victory with the u nnanimous adoption of u. N. Security Council Resolution 2371 which Ambassador Haley called the strongest sanctions ever imposed in response to a Ballistic Missile test. She is now hard at work on another resolution. To be effective, these tools need to be implemented aggressively. The administration deserves credit for increasing the pace of designations, and i appreciate treasury secretary mnuchins statements that more are coming. But we need to dramatically ramp up the number of north korea designations. These designations do not require beijings cooperation. We can designate chinese banks and companies unilaterally giving them a choice between doing business with north korea or the United States, and i would just observe that not doing business with the United States for many of these companies would risk bankruptcy for these institutions. Earlier this year treasury sanctioned the bank of dandong, a regional chinese bank, and thats a good start, but we must target Major Chinese banks doing business with north korea, such as China Merchants Bank and even big stateowned banks like the Agricultural Bank of china. They have a significant presence in the United States, and if they do not stop doing business with north korea, they should be sanctioned now. Its not just china. We should go after banks and companies in any countries that do business with north korea the same way. Just as we pressed china to enforce u. N. Sanctions banning imports of north korea coal and iron and seafood, we should press countries to end all trade with north korea. This Grave Nuclear risk demands it. Sanctions are not the only way to apply pressure on the regime. We must maintain a united front with our allies. I just returned from south korea where people are on edge. We were there when the missile was launched over japan. It doesnt matter if youre talking to government officials there or the Business Community or the average person on the street, they all understand the threat so im pleased that the t. H. A. A. D. Missile Defense System has been fully deployed. Im also pleased that the administration is strengthening regional deterrence through additional u. S. Arms sales to japan and south korea, which we discussed this morning. Time bely, we need to do much better at getting information into north korea so North Koreans can better understand the brutality and corruption of the selfserving kim regime. And these efforts are already pressuring the regime creating some unrest, increasing defections from north korea, but im afraid here our efforts grade poorly. International broadcasting and full my nating dissent have not been a priority and thats unacceptable in this situation. While we should take a diplomatic approach to north korea, the reality is that this regime will never be at peace with its people, its neighbors or us, and now is the time to apply that pressure. With that said, let me turn to the Ranking Member of our committee, mr. Elliott engel of new york. Mr. Chairman, thank you for calling this hearing. You and i have worked together for a long time on the korean situation. We had a hearing on this topic to start the year. This committees worked in a bipartisan manner to advance some of the toughest sanctions ever on north korea which are now u. S. Law. Yesterday the United NationsSecurity Council unanimously agreed to a sanction and we are revisiting a sanction today so we can hear directly from the administration. Mr. Chairman, im grateful for your unwavering leadership on this issue. To our witnesses, welcome to the Foreign Affairs committee and thank you for your service. Assistant acting assistant secretary thornthon, i have tremendous confidence in you and other career diplomats but its hard to believe nearly eight months into this administration there is no nominee for assistant secretary for east asian and pacific affairs. Same goes to our ambassador of south korea, under secretary of arms control, International Security and a range of other Senior State Department officials. This administration has said that north korea is its top Foreign Policy priority but between the president s dangerous and irresponsible communication on the manner and the inexplek cable reluctance to get personnel in place, he is in my opinion undercutting his own peaceful pressure strategy. I view the kim regimes Nuclear Program as the single greatest threat to American National security and to global security. Right now we need all hands on deck and focused on the same objective. We do that here in this committee, but that objective, of course, also gets to one of the main questions. While we all share the desire to rid north korea of Nuclear Weapons, some have said that kim will never give them up regardless of the pressure. Ive been to north korea twice, mr. Chairman, as you know, and i can tell you and everybody else that this is not a regime that looks at the world the way that any other government does. The kim regime is bent on selfpreservation above all else and is very willing to sacrifice their own people to achieve that end. That makes them obviously incredibly dangerous. The military options in our north korea contingency are incredibly grim and its hard to understate how devastating a conflict on the Korean Peninsula would be. If this escalates into a war we could be measuring the cost in millions of lives lost. Time is clearly running out. Once the regime in pyongyang possesses Nuclear Weapons that can strike the United States, it will immediately raise questions about the reliability of our security commitments to our alliance partners, japan, south korea, Nuclear Capabilities of its kind would likely embolden the North Koreans to engage in other bad behavior such as harassment of our allies and continued proliferation of nuclear technologies. Some say the kim regime might seek reunification on its own terms. We need a smart strategy and defendant a deft and consistent administration. Administrations of both parties were unable to put a stop to north koreas Nuclear Program. North korea detonated its First Nuclear weapon in 2006 and a few years later the Bush Administration removed north korea from the state sponsor of terrorism list as an inducement to join the six party talks. Since kim jongun assumed power bomb and missile tests have increased in frequency and this year since the start of the Trump Administration weve seen an alarming increase in the frequency and significance of tests and, of course, the detonation a few weeks ago of what appears to be a thermo Nuclear Device. So where do we go from here . Personally i agree with secretary of defense mattis that were, quote, never out of Diplomatic Solutions when it comes to north korea, although im not sure President Trump shares that view. Frankly, im not sure he enos what his views are on this. At present, however, kim jongun doesnt seem to be anywhere close to sitting down for talks of any kind much less sincere negotiations. The first order of business should be to have a moratorium on testing, to halt the progress of north koreas Nuclear Program. Our objective has long been a denuclearized north korea and we cannot lose sight of that aim. In my view we have not exhausted economic pressure through sanctions and we need to do all we can to keep pressure up on the kim regime, but at the same time we increase pressure, we must also ramp up coordination with our allies. We must demonstrate the defense of military measures are at the ready both to ensure our allies and deter the regime from any action that could lead to deadly escalation. Im interested in hearing from our Witnesses Today about how were going to pursue those aims. Under ordinary circumstances i would say this is a tall order, but i have to say again the president s behavior surrounding this crisis is making the situation even nor challenging. Outrageous red lines like fire and fury, shaming our allies through tweets, inconsistency about kim jongun, china, or our Economic Partnership with south korea, picking a fight with south korea right at this time, loose talk about expanding Americas Nuclear arsenal and the proliferation of these devastating weapons, all of these actions undermine the credibility of the office of the president and the credibility of the u. S. Government. Effectively undermining u. S. Leadership and driving a wedge between washington and our friends creating grave uncertainty with china whose cooperation we need and with north korea whose leader is, we know, singleminded and ruthless. Our country faces a serious National Security challenge and we need principled and visionary leadership. We need to stand with our allies, acting with integrity and reconfirming our commitments. The president needs to lead on the global stage and doesnt consent to a better path forward not waiting to see who does what next and then reacting with the first words that come to mind. So i look forward to hearing from our witnesses about what American Leadership should look like in this crisis and how we find the right path forward. I thank you again, mr. Chairman, and i yield back. Thank you. This morning were pleased to be joined by a distinguished panel. We have with us ms. Susan thornton, acting assistant secretary in the bureau of east Asian Affairs at the department of state. And as a career member of the Foreign Service she has spent the last 20 years working on u. S. Policy in europe and asia focused on the countries of the former soviet union and on east asia. Assistant secretary marshall billingsly is assistant secretary of terrorism and Financial Intelligence at the department of treasury. He previously served as managing director of Business Intelligence services for deloit where he focused on illicit finance so we welcome both our witnesses to the committee. Without objection, the witnesses full prepared statements are going to be made part of the record and all members here are going to have five calendar days to submit any statements or any additional questions of you or any extraneous material for the record and with that i would just suggest well begin with you, assistant secretary thornton. If you will summarize your remarks and then well go to mr. Billingsly and then well go to questions. Thank you very much, mr. Chairman. Chairman roy, Ranking Member engel, members of the committee, thank you so much for the opportunity to appear before you today to discuss the ever increasing challenge that north korea poses. The threat posed by north koreas Ballistic Missile and Nuclear Program is grave. North koreas sixth nuclear test on september 3rd is an unacceptable provocation that ignores repeated calls from the International Community for a change in their behavior. It followed the august 28th Ballistic Missile launch that over flew portions of hokkaido, japan, and two icbm launches in july. These provocations represent a tangible threat to the security of japan and south korea, our allies, and to the entire globe. We cannot allow such flagrant violations of International Law to continue. North korea has also made dramatic threats regarding its ability to hit guam and other parts of the United States. Secretary of defense mattis has made clear that we have the ability to defend ourselves and allies from any attack and that our commitments to our allies remain ironclad. This administration though has developed a Clear Strategy of applying International Pressure to hold pyongyang to account. First we continue to push for a strong for strong u. N. Sanctions. Last night the u. N. Security Council Passed another significant set of interNational Sanctions. The second set of sanctions in the last two months unanimously adopted by the u. N. Security council. Second, were using our domestic laws to impose sanctions on individuals and entities that enable the dprks illicit activities. Third, we are pressing countries to fully implement the u. N. Security councils resolutions and sanctions and to harmonize the sanctions regimes with those Security Council designations. Fourth, were urging the International Community to cease normal political interactions with the dprk and increase its diplomatic isolation. And you choke off Revenue Sources that finance the regimes weapons programs. Even as we pursued denuclearization on the Korean Peninsula, deter rents, as was mentioned by the Ranking Member, is a central part of our strategy. We have deployed the t. H. A. A. D. Antimissile system to the republic of korea and continue to take other measures whether on the United States, south korea, japan with overwhelming force. We have been clear we are not seeking regime change or collapse in north korea, we do not seek accelerated reunification or want to send troops north of the demilita