It is engaraved on the side of this gun. Sundays at 2 00 p. M. On cspan3 working as we explore america. Coming up next, a look at the effectiveness against countries like iran and north korea. Its about 90 minutes. Committee will come to order. All members will have five legislative days to submit materials for inclusion into the record. This is entitled evaluating the effectiveness of programs. I am pleased to welcome our colleagues to the hearing on u. S. Sanctions. From iran to north korea to russia and venezuela sanctions are used in our Foreign Policy tool kit. Congress must ensure they be held accountable for result. It may provide context for this discussion. Sap sanctions are key. They should be designed accordingly. That means calibrating sanctions relief based on achievable actions we wish to see from a foreign actor. Tailoring sanctions is important for secondary sanctions given how banking restrictions have less predictable effects. They reported and the full house overwe overwhelmingly passed a piece of legislation that i was proud to sponsor with the jept l lady from wisconsin. It would target every area of north koreas economy including any laborers abroad. This weeks test launch that can reach any part of the United States urnderlines why it is essential. We should strike with as much strength as possible, provide the president with flexibility and link it to a narrow set of realisticobjectives. It is devoting resources with no real impact on Foreign Policy on jekti objectives. We must guard against such half measures. We want to preserve the trust that the u. S. Holds in the Financial System. We must think about what it means to access to that system so that others understand the rational. The second point is the need for continue use engagement with congress when the executive chooses to wield powers. What may be less well known is it lays out regular consultations and reports so that these thauthorities are exercised with appropriate oversight. It is to examine whether it is upholding the letter and spirit of these provisions. Tfi has been the resip yecipien. It brings me to point number three, as our country becomes relier reliant it will be called upon to make its voice heard on the substance of that policy. We have seen the changes in the shift. The president signed into law the act. In light of this trend we should expect congress will look more and more to the department to help shape their goals, scope and strategy and to answer for sapg sap sanctions shortcomings. Its accountability will only grow with prominence in these debates. I look forward to working with them so that their programs are impactful. The chair now recognizes the Ranking Member gentle lady for five minutes for an opening statement. Thank you so much. Let me thank our againsts from the Treasury Department. I always look forward to hearing from the experts and, you know, information is a powerful tool. Just let me begin of course by thanking my chairman for calling this hearing. As he indicated before, im a part of the bipartisan work on the north korea sanctions, so prod proud to have worked on that. I believe we passed a strong bill. I hope the administration does the hard work of implementing this bill. With that said, i cant explain the commitment to implementing the programs. I can tell you, as an american there are many other people who join me in feeling we are isolated and weak with even the british debating whether or not the president of the United States is welcoming england. This is stunning. My constituents are very concerned about the extent with human rights violators, a relationship that of course has the president and on many of his cabinet and advisers scandals relating to connections. Im concerned with reports that the department of state eliminated the office of the coordinator for sapnctions policy. We did the hard work to draft this bill. Im sure that our wpitnesses ar aware that congress recreently passed further sanctions. It is amazing to me they would coordinate these policies. I think you can empathize with me. Cutting out some people that could help you all. Im sure youre also aware that the administration seems not to be implementing these russian sanctions. Forgive me. I grew up in a time and era where as a Public School student we were diveriing under our des we were so afraid of russia. Im worried that the administration is more interested in implementing the goals of the kremlin to not have sanctions and statutory mandates. I really am interested in hearing about the treasurys efforts to make sure it is ev y implementing things. I will apologize there advance for bowing out of the meeting some what early because i have a conflict of another meeting that is extremely important as well. I do look forward to hearing your testimony. I will be here to hear your testimony and answer some of these questions. Thank you so much. I yield back. The gentle lady yields back. In this role he helped oversee the administrations efforts in administering economic sanctions globally. He served as managing director for Business Intelligence services. He had previously held positions at the department of defense where he served as principal for low intensity conflict. He also worked as a staff member on the Senate Foreign relations committee. John smith is the director which is responsible to advance Foreign Policy goals. He served as the acting director. Prior to joining, mr. Smith served as an expert from 2004 to 2007. Each of you will be recognized for five minutes to give an oral presentation of your testimony. Without objection each of your written statements will be part of the record. If you could pull your microphone closer to you that would be great. Thank you for inviting me here today to talk about a number of matters that you have raised in your opening statements. The Treasury Department has in my view, pioneered the use of state craft. In the interest of time ill skip to the bottom line up front which is that i believe there are several reasons sanctions are quite effective tools. I do actually agree with the way you laid out the overall context of sapnctions. I will name numerous examples. I would like to provide four specific reasons or four specific matters which i think effect the effective ness. This has aggressively targeted the Operational Support around the world. It is facilitators and Money Services worldwide. Designations along with close cooperation from authorities have we if he c have effectively shut down the financial facilitating networks. We continue to effort against al qaeda and other terrorist groups through actions. As you plmay know there was the announcement of a multinational terrorist targeting scepter that is housed in saudi arabia. Seven nations imposed nations on weapons traffickers in yemen. It was one of the bilgest outside the United Nations. We also argumented and youll hear about how we included any revenue that is used to support the various weapons programs. We are determined to cut that off. Finally, sanctions were the dominant factor over the Nuclear Weapons program. We are committed to combatting irans behavior around the globe. They have knowledged their donors are scared as a result of u. S. Sanctions. I mentioned four specific reasons i think sanctions are effective. First is that we employee them against the backdrop of an International Financial system that we are continue usely working to improve to create standards through the Financial Action task force, to cause the s it has been a longstanding part of the environment. It is because of this backdrop of driving the creations of these regimes that we are able to cause our partner neighs ati embrace and enforce these measures. I would say a second reason sanctions are so effective is because of the financial deploem diplomacy that goes with it. It is almost always followed up with engagement by the treasury and state departments. I would say as a general proposition tapgss are most imply med unilaterally. But when and where possible duo work with other nations to amplify our messes and drive concerted action. And we pursue it through a variety of nations such as the United Nations but i also mentioned the tftc. Im out of time but to summarize the final two reasons, the third reason is that we have to be co messages. How we approached venezuela is a good example. Mr. Chairman, you mentioned this. Is the excuse, do you touch the financial part. There are times it is worth while. I appreciate the chance to appear before the committee. Thank you. Mr. Smith, youre recognized now for five minutes. Thank you for inviting me here to discuss the Important Role of sanctions and addressing some of the most prominent things. My office is opposed to the actions such as north korea, iran and russia as well as other actors engaged in conduct to our nations ideals a. The regimes and actors rely on funding to operate and by freezing their assets, cutting them off from the u. S. Financial system and restricting the ability the choice to them becomes clear, either modify your behaivior. One of our highest priorities is targeting the north korea reseem. This year they have issued eight rou rounds adding 112 to our list, what we call the sdn list. It requires revenue to expand. Just last week they sanctioned several Chinese Trading Companies that were respopsable f responsible to hundreds of millions of dollars. The action pressure and multilateral sanctions helped pressure china to announce it would halt all coal imports from north korea representing a blow to the regimes revenue. Iran is another top priority and since january, ofacs issues eight traunchs of sanctions involving iran designating 78 targets around the globe in connection with the irgc and irans Ballistic Missile program, support for terrorism, human rights abuses, cyberattacks, transnational criminal activity and other destabilizing regional activity. We recently designated the irgc under the global terrorism executive order pursuant to the countering americas adversaries through sanctions act. The legislation that you mentioned. And just last week we sanctioned an irgc quds force counterfeiting network that deceived european suppliers to procure advanced equipment to print yemen bank notes potentially worth hundreds of millions of dollars. Another significant priority for ofac is addressing russias destabilizing activities in ukraine. This summer we continued our regular pattern of sanctions and designated 38 individuals and entities involved in the ongoing conflict in ukraine and more recently weve been hard at work implementing requirements and publishing guidance related to the legislation passed by congress. I want to be clear and emphasize that treasury has fully implemented every requirement delegated to it within the statutory deadlines. Weve also used our sanctions this year to address the erosion of democracy in venezuela, disrupt major narcotics traffickers in mexico, colombia, peru and venezuela, increase pressure on the assad regime in syria, deny terrorist groups like isis and hezbollah the ability to access the u. S. Financial system and shine a spotlight on various governments for serious human rights abuses. We have dedicated the bulk of our resources and attention on the issues most pressing to our nations security. We greatly appreciate congresss partnership and continued efforts to ensure that ofac and tfi are equipped with adequate tools and authorities. However, ill note that our existing powers are relatively broad and in order to achieve maximum impact we need flexibility in administering and enforcing our sanctions. Additionally, the increase in congressional reporting requirements and statutes with no expiration dates ultimately draws resources away from our primary sanction activities. Thank you again for the opportunity to speak with you today and i look forward to continuing to work with you and your staff as we try to maximize the impact of our sanctions. Thank you. The gentlemans time is expired and the chair now recognizes himself for five minutes for questioning. Let me just first commend treasury and the Trump Administration for abandoning this policy of strategic patience that has led north korea to obtaining a Nuclear Arsenal including a Hydrogen Bomb and as we saw earlier this week an intercontinental Ballistic Missile capable of reaching the continental United States and a reentry vehicle for that missile. I would commend the treasury for its eight rounds of sanctions on north korea. However, i do want to read into the record an op ed that you probably saw this morning in the the wall street journal entitled maximum pressure on north korea, china and u. S. Still havent imposed tough sanctions. Ill just read and quote from the article. Quote, the Trump Administration has done more than its predecessors to thwart north Koreas Nuclear progress but it is still far from using maximum pressure. It may not work in the end but the alternatives are terrible. Acquiescence or war. Wednesdays icbm test shows kim is getting closer to his goal of threatening u. S. Cities so why is the u. S. Not using all the tools it has to stop him . So my question is this to both of you, in a hearing before the Senate BankingCommittee Earlier this fall, treasury under secretary mandelkur stated that the u. N. Pertaining to north korea represent quote the floor not the ceiling thats why under the house passed bill that we were referring to earlier the north korean sanctions bill that was bipartisan we go beyond those resolutions to target all oil exports to the dprk and all of its foreign labor. So the question is this. If the u. N. Resolutions are truly just the floor for u. S. Policy, what is treasury doing to eliminate the petroleum and labor loopholes left by the resolutions, and why should congress tolerate the same incremental strategy that has gotten the kim regime where it is today. Well start with you, mr. Billingslea. Thank you, mr. Chairman. So obviously the u. N. Sanctions regime is multinationally crafted and it requires the chinese and the russians to come along and we, in fact, reengaged in wake of the recent launch to drive again the need to further ratchet the pressure on north korea for its continuing behavior. I would say we have actively worked to dry up all of the different mechanisms by which the north korean regime obtains petroleum and other Petroleum Products regardless of the fact that the u. N. Security council resolution, that they ultimately did not agree to the u. S. Position to shut off all crude oil imports they agreed to a reduction in crude and to a cessation of oil products. The number of things along these lines, back to my point about not everything is a sanction. Theres a lot of other things the tfi does in the financial work that goes beyond the individual sanctions world. John will tell you about the specific sanctions weve engaged in to target the ways people were illicitly flowing petroleum into north korea. Weve identified the latest evasion technique that the north koreans are using which involves north korea oil freighters pulling out in the middle of ocean and linking up to do a ship to ship transfer. Weve exposed a number of these. Weve gone after their flagging authorities with various nations to yank the flagging authority of vessels that are causing difficulties. Were further investigating the network of shell and Ownership Structures that are created to hide the true ownership of these ships. On labor, we have been i personally have engaged with a large number of countries overseas particularly in the middle east to to secure agreement to expel north korean slave labor from these countries and to identify the companies that were being used to exploit these people. Those are just two examples if i could just jump in there, you did mention in the testimony about the designation of the four Chinese Trading Companies that have conducted business and the designations there. Im sure youre familiar with the recent report that indicated that there are over 5,000 such companies in china and we just want to know how treasury can make a dent in these chinese firms if youre focusing on individual designations as opposed to the secondary sanctions on these middleman front companies. The challenge we have is when we see these press reports and these 5,000 here, 3,000 there, the challenge is that we need we have to meet evidentiary standard for the measures that we take, legal standards, so we do need much more granular information so that john can take his actions. So i you know, when we get these leads we follow them up aggressively. My time has expired. As my questioning points out, and as our recently passed house bill makes clear we believe there is a need for treasury to exhaust all options available especially in light of this most recent Ballistic Missile test. At this time id like to recognize the Ranking Member for five minutes of questioning. Thank you so much, mr. Chairman. Thank you again. One of the most horrific acts occurring anywhere on the planet earth at this point is the ethnic cleansing thats occurring in the rohingya people who fled to bangladesh since late august and i was wondering is there any program under the global magnitsky act that targets the senior most members of these Burmese Security forces who likely ordered these rapes and murders and acts of arson . Have you identified any of these folks and when do we expect to see sanctions announced against burma . Thank you, Ranking Member. Im glad you mentioned the global magnitsky act. We appreciate Congress G