July 19, 2017 | House Committee on Financial Services, Monetary Policy and Trade Subcommittee

Restricting North Korea’s Access to Finance

Download the full testimony here.


Chairman Barr, Ranking Member Moore, and distinguished members of this subcommittee, thank you for the opportunity to address you today on this important issue.

My testimony will examine why current sanctions on North Korea are insufficient to exert meaningful pressure while also explaining how the U.S. government and its foreign partners can implement sanctions that have a much better chance of restraining Pyongyang’s brutal dictatorship. Above all, the U.S. and its partners must apply the lessons learned from its successful effort to force Iran to the negotiating table via comprehensive sanctions.

Despite the common misperception that tough sanctions on North Korea are already in place, my testimony will illustrate how the current restraints on Pyongyang pale in comparison to the ones that compelled Tehran to negotiate. Above all, the U.S. and its partners must target the Chinese individuals, banks, and front companies who play a crucial role in enabling North Korea to evade current sanctions. Again, there is a common perception that China is immune to pressure from abroad, yet there are already strong indications that it will bend when facing the right kind of pressure.

In the course of my testimony, I will offer nine specific recommendations for how Congress and the Trump administration can implement an effective sanctions regime.

Before proceeding, it is essential to underscore the urgency of the threat from Pyongyang. Kim Jong Un is a despot who murdered an American citizen; tortures, starves, and kills his own people; and will spare no expense to achieve an intercontinental ballistic missile (ICBM) that can deliver a nuclear weapon to the United States. The July 4 ICBM test is a wakeup call to all of us, including those who once called Kim a “Swiss educated reformer” or believe North Korea has any interest in serious negotiations with the United States.[1]

Furthermore, one should not assume Kim will hold back from using his nuclear weapons on America and our allies. 

Thus, the U.S. finds itself in a rapidly deteriorating situation where counterproductive policy options like a freeze of North Korea’s nuclear and missile programs or a peace treaty are treated like real options. Advocates say North Korea is ready to accept a freeze and/or peace treaty and it will lead to denuclearization. Unfortunately, we have seen this movie before.

Not only has North Korea told us it is not interested in denuclearization, its actions reinforce it. Pyongyang showed us the “Map of Death” in 2013 suggesting its nuclear targets are Washington, DC; Hawaii, home to Pacific Command; possibly San Diego, home to the Pacific Fleet; and possibly San Antonio, home to U.S. Air Force Cyber Command.[2] Just after the July 4 ICBM test, North Korea’s state media said that the Kim regime would not negotiate its nuclear weapons or ballistic missiles or stop bolstering its nuclear force unless the United States ended its “hostile policy and nuclear threat” to North Korea.[3] Translation: When Washington abandons its allies in Tokyo and Seoul and removes all troops, North Korea might be willing to talk about its programs.

[1] Michael Moynihan, “Kim Jong Un & The Myth of the Reformer Dictator,” The Daily Beast, December 24, 2013. (http://www.thedailybeast.com/kim-jong-un-and-the-myth-of-the-reformer-dictator)

[2] Jeffrey Lewis, “The Map of Death,” Foreign Policy, April 3, 2013. (http://foreignpolicy.com/2013/04/03/the-map-of-death/)

[3] “Kim Jong Un Supervises Test-launch of Inter-continental Ballistic Rocket Hwasong-14,” Korean Central News Agency, July 5, 2017. (https://kcnawatch.co/newstream/276945/kim-jong-un-supervises-test-launch-of-inter-continental-ballistic-rocket-hwasong-14/)