[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
MAKING SANCTIONS EFFECTIVE: THE CASE OF NORTH KOREA
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HEARING
BEFORE THE
SUBCOMMITTEE ON ASIA, THE PACIFIC AND NONPROLIFERATION
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
MARCH 27, 2019
__________
Serial No. 116-21
__________
Printed for the use of the Committee on Foreign Affairs
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Available: http://www.foreignaffairs.house.gov/, http://
http://docs.house.gov,
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______
U.S. GOVERNMENT PUBLISHING OFFICE
35-787PDF WASHINGTON : 2019
COMMITTEE ON FOREIGN AFFAIRS
ELIOT L. ENGEL, New York, Chairman
BRAD SHERMAN, California MICHAEL T. McCAUL, Texas, Ranking
GREGORY W. MEEKS, New York Member
ALBIO SIRES, New Jersey CHRISTOPHER H. SMITH, New Jersey
GERALD E. CONNOLLY, Virginia STEVE CHABOT, Ohio
THEODORE E. DEUTCH, Florida JOE WILSON, South Carolina
KAREN BASS, California SCOTT PERRY, Pennsylvania
WILLIAM KEATING, Massachusetts TED S. YOHO, Florida
DAVID CICILLINE, Rhode Island ADAM KINZINGER, Illinois
AMI BERA, California LEE ZELDIN, New York
JOAQUIN CASTRO, Texas JIM SENSENBRENNER, Wisconsin
DINA TITUS, Nevada ANN WAGNER, Missouri
ADRIANO ESPAILLAT, New York BRIAN MAST, Florida
TED LIEU, California FRANCIS ROONEY, Florida
SUSAN WILD, Pennsylvania BRIAN FITZPATRICK, Pennsylvania
DEAN PHILLIPS, Minnesota JOHN CURTIS, Utah
ILHAN OMAR, Minnesota KEN BUCK, Colorado
COLIN ALLRED, Texas RON WRIGHT, Texas
ANDY LEVIN, Michigan GUY RESCHENTHALER, Pennsylvania
ABIGAIL SPANBERGER, Virginia TIM BURCHETT, Tennessee
CHRISSY HOULAHAN, Pennsylvania GREG PENCE, Indiana
TOM MALINOWSKI, New Jersey STEVE WATKINS, Kansas
DAVID TRONE, Maryland MIKE GUEST, Mississippi
JIM COSTA, California
JUAN VARGAS, California
VICENTE GONZALEZ, Texas
Jason Steinbaum, Staff Director
Brendan Shields, Republican Staff Director
------
Subcommittee on Asia, the Pacific and Nonproliferation
BRAD SHERMAN, Chairman, California
DINA TITUS, Nevada TED YOHO, Florida, Ranking Member
CHRISSY HOULAHAN, Pennsylvania SCOTT PERRY, Pennsylvania
GERALD CONNOLLY, Virginia ANN WAGNER, Missouri
AMI BERA, California BRIAN MAST, Florida
ANDY LEVIN. Michigan JOHN CURTIS, Utah
ABIGAIL SPANBERGER, Virginia
Don MacDonald, Staff Director
C O N T E N T S
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Page
WITNESSES
Griffiths, Hugh, Coordinator of the United Nations Panel of
Experts on North Korea......................................... 9
INFORMATION SUBMITTED FOR THE RECORD
Information submitted for the record from Representative Yoho.... 22
Information submitted for the record from Representative Sherman. 43
Information submitted for the record from Representative Sherman. 45
APPENDIX
Hearing Notice................................................... 55
Hearing Minutes.................................................. 56
Hearin Attendence................................................ 57
MAKING SANCTIONS EFFECTIVE: THE CASE OF NORTH KOREA
Wednesday, March 27, 2019
House of Representatives,
Subcommittee on Asia, the Pacific and
Nonproliferation,
Committee on Foreign Affairs,
Washington, DC
The subcommittee met, pursuant to notice, at 9:38 a.m., in
Room 2172, Rayburn House Office Building, Hon. Brad Sherman
(chairman of the subcommittee) presiding.
Mr. Sherman [presiding]. Thank you all for coming today.
We have a distinguished witness. Hugh Griffiths is the
outgoing Coordinator of the U.N. Panel of Experts on North
Korea, which just released its biennial report on the impact of
sanctions against North Korea.
Before discussing the U.N. report, we ought to review where
we stand with North Korea. The Trump administration expressed
optimism going into the Hanoi summit, but Kim Jong-un demanded
the lifting of the all-important U.N. Security Council economic
sanctions. In return, he did not offer complete, verifiable
denuclearization. He did not even offer a termination of the
creation of new fissile material and new nuclear bombs. He
offered only to dismantle the facilities at Yongbyon. North
Korea has other known, and perhaps unknown, facilities to
create fissile material, not to mention facilities where
warheads are constructed and missiles are developed.
After hearing this proposal, President Trump rejected it,
and for perhaps the first time in my career, I made the
statement, ``Donald Trump is right.'' Where President Trump and
I, where we apparently disagree is where we go from here. I
believe that North Korea has conclusively demonstrated that it
is not under enough pressure to agree to a deal acceptable to
the United States.
Now just about everyone in and around government in the
United States say that we should be demanding complete,
verifiable, irreversible denuclearization. That would leave
North Korea with no nuclear weapons of any sort, and that is a
regime that is paranoid, and given some discussions in
Washington from time to time, perhaps justifiably paranoid.
I think that we should be willing to accept a highly
intrusive verification system that would assure us that North
Korea was not making any more weapons, had a limited number of
weapons, and was not selling any fissile material. But whether
your objective is a highly monitored and very limited nuclear
North Korea or whether it is complete denuclearization, neither
was available to us in Hanoi.
I need think that, if you want a better outcome, you need
better sanctions. The Trump administration announced some
additional sanctions. Then, we learned the President had
withdrawn them. Now it appears that the President has withdrawn
his withdrawal. There was discussion that his withdrawal was
not of the new sanctions, but of additional sanctions that had
not been announced. I do not know if our distinguished witness
can shed some light on this. But the fact is that even the new
sanctions, if allowed to go in effect, will not be significant
enough to get Chairman Kim to change his bargaining position.
I am hopeful our witness today can help us understand what
more intense sanctions against North Korea would look like, and
it may be the case that new sanctions are needed. It may be the
case that we need more effective implementation of existing
sanctions.
The latest report of the U.N. Panel of Experts on North
Korea has said that existing U.N. Security Council sanctions
against the Kim regime are ineffective. The report specifically
singled out the financial sanctions, writing, ``Financial
sanctions remain some of most poorly implemented and actively
evaded measures of the sanctions regime.'' It is noted that
North Korea continues to have access to international financial
system through five countries, the most notably of those, of
course, is China. We know about 90 percent of North Korea's
trade is with China. So, getting Beijing to implement sanctions
against Kim Jong-un remains key to our efforts.
Now focusing on both financial sanctions and China, the
Trump administration did impose sanctions on one small Chinese
bank in July 2017. If it was not already clear, the latest
report confirms that sanctioning this small bank did not deter
China from continuing to serve as North Korea's financial
lifeline.
Both in 2017 and again in 2018, then-Chairman Yoho and
then-Ranking Member Sherman wrote the administration demanding
that it impose sanctions on one of the four large Chinese banks
that continue to do business with North Korea. And I think that
events have shown that this action is increasingly needed.
So, with that, I will turn it over to our ranking member,
Mr. Yoho.
Mr. Yoho. Thank you, Mr. Chairman, and I appreciate your
words.
Mr. Griffiths, thank you for being here to educate us on
this process and on the summary of the report.
I would like to welcome Mr. Hugh Griffiths, Coordinator for
the United Nations Panel of Experts on North Korea. Mr.
Griffiths has had firsthand experience monitoring the
implementation of the North Korean sanctions resolutions passed
by the United Nations Security Council, 15 members. As a body
that plays a leading role in crafting the U.S. sanctions
regime, his insight is invaluable to this committee.
The United Nations has imposed 10 sanctions resolutions
that require its member States to restrict trade and engagement
with North Korea in response to North Korea's relentless
development of nuclear weapons and ballistic missiles. However,
the Panel of Experts' last report, released this month, shows
that North Korea continues to defy these sanctions. Possibly
the most egregious violation revealed in the report is the
massive increase in ship-to-ship transfer of petroleum and
coal. This type of industrial-scale activity can significantly
undercut international sanctions programs, as was reported out
by the report.
But the report also reaffirms that North Korea is up to its
old tricks as well. North Korea sanctions evasions are made
possible through weak enforcement by individual States and
insufficient oversight measures. But there is also the usual
rogue galleries of pariah States that blatantly ignore U.N.
sanctions. They are glad to pursue to trade and defense
relations with North Korea.
As the United States continues to navigate our diplomacy
with North Korea and address the growing threat North Korea
poses globally, it is imperative that the multilateral
sanctions program overseen by the Panel of Experts remains
strong. You know, look, this problem has been going on since
the end of the Korean conflict. This is something that we have
seen an escalation of the development of nuclear weapons. And
as you can tell here, the size of this room, the importance of
this discussion. How long are we going to let this go on?
And I said that the U.N. Security Council voted
unanimously--there were 15 members in that beyond the five
permanent members--they voted unanimously to put sanctions on
North Korea. And I see things pretty black and white. If we
vote to do that, well, by God, we ought to follow through and
make sure everybody on the Security Council that voted this way
adheres to that.
So, I am especially interested today to hear an update on
the status of the U.N. sanction enforcement, how we can improve
implementation, and where the international community may be
falling short, especially regarding longstanding sanction
violators, including China and Russia, who have long provided
life support to North Korea's WMD programs and their weapons
programs, or I mean their chemical weapons in addition to
nuclear.
Ninety to 94 percent of the trade with North Korea goes
through China. China has a significant role to play in this.
And if they voted to uphold these sanctions, and yet, they are
one of the biggest cheaters, it raises the question, why bother
having U.N. Security Council resolutions? Or why bother having
members that are on a permanent committee for the United
Nations Security Council vote to put in sanctions, and then,
they pull away and they do not enforce these sanctions? So, I
guess the question is, why do we bother even doing this if we
are not going to adhere to it?
But, since we are here, what do we do with these nation
States that vote to put sanctions on, and then, they break
their commitment? Should we censor them, so that they cannot
vote for a period of time, maybe a year or 2 years? Or should
we look at removing them permanently because their actions do
not define the reason that they are on the Security Council in
the first place?
And I look forward to your testimony and the questions that
follow.
Thank you.
Mr. Sherman. It is our usual practice to welcome opening
statements from other members of the subcommittee of 1 minute,
but Mr. Connolly has asked for a longer period of time. I yield
3 minutes to the gentleman from Virginia.
Mr. Connolly. I thank the distinguished chairman and I
thank the ranking member for holding this important hearing
today.
I serve as the chairman of the Korea Caucus and also head
of the congressional delegation to the NATO Parliamentary
Assembly.
Following the Hanoi summit between President Trump and Mr.
Kim, we are not even close to the goal of a denuclearized North
Korea. On the contrary, the DPRK reportedly continues to
produce fissile material for weapons and to work on more
advanced long-range missiles. According to the 2019 Worldwide
Threat Assessment, the U.S. intelligence community finds that
North Korea will seek to retain its weapons of mass destruction
capability and is unlikely to completely give up its nuclear
weapons and production capability. The latest POE report stated
that North Korea's nuclear missile programs remain intact and
found that North Korea has been using civilian facilities and
infrastructure to assembly and test missiles.
In November of last year, I presented a white paper to the
NATO Parliamentary Assembly on North Korea's challenge to
international security and the implications for NATO itself. My
report noted the extensive sanctions evasion carried out by
North Korea and documented by the POE. It also made several
recommendations regarding actions NATO and NATO member States
could take to combat sanctions evasion, including the adoption
of comprehensive restrictions on maritime insurance for DPRK
vessels and vessels engaged in trade with the DPRK. I think
maritime insurance is something that has been overlooked and
could be a very potent tool in enforcing the sanctions Mr. Yoho
just talked about.
The world must remain clear-eyed about the DPRK's record of
violating previous nuclear agreements and stand ready to
continue the campaign to isolate Pyongyang in the absence of
verifiable progress toward denuclearization and the ceasing of
other destabilizing behavior. The United States should lead the
international community through the enforcement and expansion
of the DPRK sanctions regime, as well as increased maritime
interdiction efforts to counter the regime's sanctions evasion
efforts.
I look forward to hearing Mr. Griffiths' testimony this
morning. I think this remains a front-burner issue, and as I
said, I think we need to be very clear-eyed about the
intentions of the North Korean regime.
Thank you, Mr. Chairman, for your consideration.
Mr. Sherman. Thank you.
Are there other members seeking to make an opening
statement?
Let's hear from our witness, Mr. Griffiths.
STATEMENT OF HUGH GRIFFITHS, COORDINATOR OF THE UNITED NATIONS
PANEL OF EXPERTS ON NORTH KOREA
Mr. Griffiths. Thank you very much, Mr. Chairman, Ranking
Member, members of the committee. Thank you for the invitation
to testify today.
I have been asked to present on the U.N. Panel of Experts
2019 final report that was published earlier this month. I
believe that this document serves as a useful basis for any
discussion entitled ``How to Make U.N. Sanctions More
Effective: the Case of North Korea''.
Before this discussion, I would like to pay tribute to the
hard-working and dedicated U.N. experts and U.N. Secretariat
staff who work on the other panels, groups, and monitoring
teams in New York, but also those working in or from Africa,
Europe, and the Middle East. My colleagues deploy to, or are
based in, difficult and dangerous parts of the world. These
include Afghanistan; the Central African Republic; the
Democratic Republic of the Congo, DRC; Mali; Somalia; South
Sudan; the Sudan; Libya, and Yemen, as well as visits to
neighboring member States.
The experts come from a variety of backgrounds, law
enforcement, customs, humanitarian aid, former diplomats,
former members of the armed forces, defense, and intelligence
services. They also include field researchers, academics,
journalists, and former U.N. staff. Their reports provide the
gold standard for national and international policymakers
working on complex conflicts that include a U.N. sanctions
regime.
My colleagues investigate the groups, individuals, and
sometimes member States that are responsible for violating the
various Security Council resolutions. Their mandates include
investigating arms embargo violations, monitoring and reporting
on armed groups, transnational criminal organizations, various
al-Qaeda or ISIL affiliates, the Taliban, as well as other
individuals or entities that engage in the smuggling of arms
and other conflict-sensitive commodities such as diamonds. My
colleagues seek to identify those to be recommended for assets
freezes and travel bans to the U.N. Security Council.
As such, the U.N. panels and groups of experts have been
deliberately targeted by their adversaries in the past, and
sometimes this goes beyond surveillance and threats. I,
therefore, dedicate this testimony to the memory of Michael
Sharp and Zaida Catalan of the U.N. group of experts monitoring
the sanctions in the Democratic Republic of Congo who were
murdered in the Kasai region in March 2017.
Michael was from the United States of America. Zaida was
from Sweden and Chile. More than 2 years have passed, and no
one has yet been convicted for these serious crimes. Their
sacrifice is a reminder of the dangers my friends and
colleagues face in the field, and we honor their memory.
Turning to the sanctions on North Korea, or the Democratic
People's Republic of Korea, DPRK as it is known in U.N.
documents, I should stress that these sanctions are amongst the
most comprehensive, but also targeted measures applied as part
of any U.N. sanctions regime. The situation now is very
different to that of my last testimony before Congress in 2013.
The U.N. sanctions regime has been transformed by the five U.N.
Security Council resolutions adopted in response to the DPRK's
three illegal nuclear tests in 2016 and 2017, as well as an
unprecedented number of prohibited ballistic missile tests
during the same period.
The U.N. sanctions regime underwent a fundamental step
change beginning with Resolution 2270, 2016, adopted by the
Security Council on 2d March 2016. This was in response to the
DPRK's fourth nuclear test in January 2016 and a prohibited
rocket launch of February 2017 that used ballistic missile
technology. Until the 2d of March, 2016, the U.N. sanctions
regime on the DPRK had been a classic nonproliferation regime
prohibiting the acquisition by the DPRK of nuclear and
ballistic missile technology that would enable it to further
develop its illegal nuclear and ballistic weapons program.
There was also an arms embargo prohibiting the DPRK from
exporting or importing conventional arms and related military
equipment.
The fourth nuclear test in January and the rocket launch of
February 2016 led the Security Council to widen the sanctions
regime to include the inspection by member States of all cargo
on their territory originating from, transiting, or destined
for the DPRK. Key DPRK export commodities, such as coal, iron,
and iron ore, were prohibited for the first time, unless these
exports were determined to be solely for livelihood purposes
and unrelated to generating foreign currency revenue for the
DPRK's nuclear or ballistic missile programs or other
activities prohibited by the resolutions. These commodities
were mainly transported by ship, and Resolution 2270 contained
other new and important maritime prohibitions, including a ban
on approximately 13 North Korean ships that would preclude
these vessels from entering any foreign port.
North Korea ignored the Security Council's decisions
regarding its ballistic missile programs and continued tests of
various types during the remainder of 2016, as well as a
nuclear test in September of that year. In response to these
prohibited activities, the Security Council adopted Resolution
2321 on the 30th of November. This included additional or
expanded maritime and commodity sanctions, including a cap on
coal exports and a ban on the export by the DPRK of copper,
nickel, silver, and zinc, among other measures.
However, during the first half of 2017, the DPRK continued
its illegal ballistic missile tests. The Security Council then
adopted another resolution, 2356, that designated 14 North
Korean individuals. But North Korea continued to disobey the
Security Council by conducting its first successful test of an
intercontinental ballistic missile on the 4th of July. In
response, the Security Council adopted Resolution 2371 on 5th
September which completely prohibited the export of coal, iron,
iron ore, lead, and lead ore, and seafood. It expanded the
financial sanctions on the DPRK and banned the chartering of
North Korean ships by foreign companies.
North Korea had already disobeyed that resolution and its
predecessors by exploding its largest nuclear device to date on
3d September. In response, the Security Council adopted
Resolution 2375. This resolution introduced an annual cap on
petroleum imported to the DPRK annually of 2 million barrels.
It also set a cap on crude oil. A ban was placed on
condensates, natural gas imports, and textile exports from the
DPRK. Joint ventures and cooperative entities with DPRK
nationals and entities were also prohibited. Maritime
interdiction measures on DPRK-related vessels were introduced.
Further, work authorizations for DPRK nationals on the
territory of member States were also prohibited, with a number
of limited exemptions.
On 15th September, the DPRK launched another ICBM, and on
the 28th November, the DPRK launched yet another ICBM, its
largest to date, the Hwasong-15. In response to these launches,
the Security Council adopted Resolution 2397. This resolution
increased by fourfold the annual cap on petroleum products,
reducing to 500,000 barrels per year that might be legally
imported. In that resolution, the Security Council also decided
that, should the DPRK conduct any further nuclear or ballistic
missile tests, imports would be further reduced.
The resolution also explicitly acknowledged that, quote,
``The proceeds of the DPRK's trade in sectoral goods, including
but not limited to coal, iron, iron ore, lead, lead ore,
textiles, seafood, gold, silver, rare earth minerals, and other
prohibited metals, as well as the revenue generated from DPRK
workers overseas, among others, contribute to the DPRK's
nuclear weapons and ballistic missile programs.'' Resolution
2397 expanded sectoral sanctions by introducing a ban on the
DPRK's export of food and agricultural products, machinery,
electrical equipment, earth and stone, including magnesite,
magnesia, wood, and vessels.
The resolution also prohibited the DPRK from selling or
transferring fishing rights. The resolution also introduced the
ban on some very important imports, including the supply, sale,
or transfer to the DPRK of all industrial machinery,
transportation vehicles, iron, steel, and other metals, with
the exception of spare parts to maintain North Korean
commercial/civilian aircraft. 2397 also strengthened the ban on
providing work authorizations for DPRK nationals by requiring
member States to repatriate all such nationals earning income
abroad within their jurisdiction within 24 months from 22d
December 2017.
The above is a summarized version of events. However, the
pattern is clear. An illegal nuclear test or serious ballistic
missile launch is met with a response from the Security Council
in the form of additional sanctions.
I stress again, by Resolution 2397, adopted on 22d December
2017, the Security Council decided that further such illegal
tests or launches would result in further caps on North Korea's
petroleum imports. Since 22d December 2017, there have been no
further nuclear tests or serious ballistic missile launches.
Now turning to the issue of how North Korea is evading the
current sanctions regime, I would like to focus on the
executive summary of the panel's final report which provides
information on this subject. The nuclear and ballistic missiles
programs of the Democratic People's Republic of Korea remain
intact, and the country continues to defy Security Council
resolutions through a massive increase in illegal ship-to-ship
transfers of petroleum products and coal. These violations
render the latest U.N. security sanctions ineffective by
flouting the caps on the import of petroleum products and crude
oil by the DPRK, as well as the coal ban imposed in 2017 by the
Security Council in response----
Mr. Sherman. Mr. Griffiths, how much longer is your opening
statement? Our usual practice is 5 minutes as an opening
statement. I am told that we arranged for your opening
statement to be 10 minutes. About how much longer do you have?
Mr. Griffiths. Well, sir, I am guessing another 6-7
minutes.
Mr. Sherman. There are many panels where the opening
statements are that long. I wonder if you could summarize your
remarks, and then, respond to questions. And, of course, your
entire statement will be made part of the record. I realize you
have come a way to make this presentation, but the traditions
of the Foreign Affairs Committee are for 5-minute opening
statements.
Mr. Griffiths. Well, sir, since it is your venue, I will
bow to your traditions. But I will just stress that the report
is quite long and the subject is complex. So, I am happy to
stop here and take your questions.
Mr. Sherman. If there is a way for you to give us the high
points in another 2 minutes or so, that would be fine.
Mr. Griffiths. Well, I tell you what. I will just conclude
by--in conclusion, I should stress that the report also noted
the DPRK's use of civilian infrastructure for ballistic missile
assembly and testing. From previous panel reports, one may
observe that the DPRK has made widespread use of ostensibly
civilian, commercial, diplomatic, and trade entities and
personnel for past ballistic missile and nuclear-related
procurement from other member States. There are also many
examples of the use of the DPRK's merchant freighter vessels,
DPRK diplomats, trade representatives, and embassies, for arm
sales, illegal financial transactions, and other activities
prohibited under the resolutions.
I believe the Security Council imposed so many measures on
North Korea through U.N. sanctions, at least 26 measures
compared to the average of 3.5 for a U.N. sanctions regime, on
the DPRK for the above reasons: for the use of civilian
infrastructure, for the use of diplomats, for the use of
embassies. These comprehensive and targeted measures,
particularly beginning in March 2016, were in response to the
DPRK's single-minded pursuit of its nuclear weapons and
ballistic missile programs for which all the resources of the
State, civilian, diplomatic, and military, were deployed as
necessary.
I would like to conclude this written testimony by
recognizing the hard work and dedication of my panel
colleagues, past, present, and future. I would also like to
thank U.N. Secretariat colleagues, without whom our
investigations and reports would not have been possible.
My former and current panel members and U.N. staff
colleagues have made our reporting something to be rightly
proud of, and I would like to thank them for their service.
Thank you.
[The prepared statement of Mr. Griffiths follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Sherman. Thank you, Mr. Griffiths. I know that you did
not have a chance to deliver your entire opening statement. And
that is why I will give you time at the end of these hearings
to give us a concluding statement, to include any of the
material that was not elicited by questions.
At this point, I need to leave for just a few minutes. I am
going to recognize Mr. Connolly for 5 minutes, and then, he
will recognize Mr. Yoho for 5 minutes.
Mr. Connolly [presiding]. I thank the chair.
Before I begin, Mr. Griffiths, on behalf of all of us, we
want to honor your two lost colleagues in the service of
international peace, and we are so sorry for that loss. We,
like you, hope that the perpetrators of those grisly murders
will be brought to justice.
Thank you for your testimony this morning.
You know, one of the concerns I always have about raising
expectations too high is that results are often disappointing.
And maybe with the best of intentions, President Trump agreed,
in an unprecedented move, to meet with the leader of North
Korea, the first President ever to do that. He not only met
with him in Singapore, he met with him again in Hanoi.
Expectations were high. The South Korean President was
overjoyed at the prospect of perhaps reconciliation measures in
the peninsula and the dismantlement of the nuclear program in
North Korea.
Since those two summits, however, the status of the nuclear
development program, as your testimony indicates, and as the
report of the POE indicates, seems not to have changed at all.
Overt testing of missiles has ceased, but in terms of
proceeding with the nuclear development program, the evidence
would suggest we are going in the wrong direction.
Have I got that wrong? I mean, have we had concrete steps
toward denuclearization in your expert opinion?
Mr. Griffiths. So, the resolutions remain in force, and my
expertise is investigating North Korean evasion of the
sanctions measures.
Mr. Connolly. Yes, but, Mr. Griffiths, the purpose of the
sanctions is to deter the nuclear development program in North
Korea, is it not?
Mr. Griffiths. The resolutions talk about the need for
dialog within the six-party talks, and within that framework,
the resolutions talk about verifiable denuclearization.
Mr. Connolly. Right, and have you seen progress since the
two summits or since the adoption of those resolutions in terms
of verifiable measures toward denuclearization?
Mr. Griffiths. No, sir, I have not.
Mr. Connolly. We talked about sanction evasion, and you
talked about 26 measures imposed by the United Nations at
least. And you described those 26 as being comprehensive. I
mentioned in my testimony, and you shook your head yes I think,
but what about maritime insurance? Is there a way we can use
maritime insurance to deter offshore offloading of illegal
goods that evade sanctions? Can we do a better job of that
among both U.N. members and, as I advocated, NATO members?
Mr. Griffiths. Yes, sir, I think addressing maritime
insurance as part of a comprehensive approach that looks at
flag States, in particular, but also vessel owners, vessel
operators, commodity traders, the oil companies that contract
with vessels whose product is sometimes diverted to North
Korean tankers for these illegal ship-to-ship transfers--if you
look at the whole maritime ecosystem in that part of the world
and target every international actor involved, you will see
good results.
Mr. Connolly. How satisfied are you in terms of cooperation
among U.N. members with POE and with what you are trying to do
and the enforcement of sanctions? Is it widespread, the
evasion, or is it kind of limited to a select number?
Mr. Griffiths. It is difficult question to give a short
answer to. If we focus on the North Koreans because the North
Koreans have approached sanctions evasion in a very, very
intelligent manner, and they look at the global system, the
global financial system, how the maritime ecosystem works in
practice, and they look for the gaps. They look for the gaps in
banking security. That is how they conduct these massive
heists, $81 million in the case of Bank of Bangladesh. So, they
are so sophisticated.
And you only have to look at the cartels, the narco
traffickers, to see how they evade law enforcement mechanisms
to conduct their trade so successfully. And I would say that
the North Korean masterminds behind their illegal activities
approach it in the same way. They bank with respectable banks
one way or another. They use loopholes, particularly in the
offshore economy and international financial centers, to get
around security measures that are in place. So, that is where I
would start from.
Mr. Connolly. Thank you.
My time is up. I am going to give you a copy of the paper I
referenced that was presented to the annual meeting of the NATO
Parliamentary Assembly, which is the latest, sort of the
legislative arm of NATO. And the reason I am giving it to you
is, even though North Korea is not sort of an issue directly
related to European collective security or North Atlantic
collective security, we decided that it is an issue we have to
address. And this paper was adopted unanimously.
A lot of the work in this paper relied on the work you did
at POE. So, thank you for your work, and it continues to
reverberate in lots of other forms.
The chair now recognizes my friend, the distinguished
ranking member, Mr. Yoho of Florida.
Mr. Yoho. Thank you, Mr. Connolly.
I appreciate your testimony.
First, I want to just reiterate what Mr. Connolly said
about your colleagues, Michael Sharp and Zaida Catalan. Giving
up their life for monitoring sanctions, you know, they are out
there doing that inspection of what the U.N. and the people
that vote that way task them to do. And so, they have given up
their life, and I know that was an emotional time for you. And
I appreciate you dedicating this to them.
I think we need to keep that in mind as we move forward.
Sanctions are in place. So, the U.N.--and we just met with the
Secretary General, I think it was a week or 2 weeks ago. We
talked about when sanctions are put in place and member nations
or member States, they do not adhere to them, what can we do to
those. Because this is a serious issue in North Korea. It has
been going on. It has been escalating. They have perfected from
intermediate to long-range missiles, God knows what else, and
we know they have nuclear weapons. Left unchecked another 5 or
10 years, I am sure we would all agree it would be a worse
situation and it would be that much stronger.
When I look at North Korea, I see the epitome of the black
market, the epitome of the underground market, or the dark web.
They have learned how to navigate in a 21st century world
without being present. They can funnel money through different
shell corporations, whether it is in Hong Kong, Singapore, even
the United States, and they have become very astute at doing
that, as you brought up the $81 million.
I do not think we can ever block all of that, but when I
have a country, i.e., China, that does over 90 percent of the
trade with North Korea, that is a member of the permanent
Security Council, and Russia, that are evading the sanctions,
you know, we can go after the $81 million, but I think we need
to go after the bigger players.
In your recommendation--I know it has got to be
frustrating. The U.N. votes on it, on the sanctions. You guys
have to monitor it. Then, you have to report back. And
countries like Russia, or all of the 15 countries that were on
that unanimous decision, they can weigh in on this, on your
report, right? And they can kind of redact things, is that
true?
Mr. Griffiths. No, sir.
Mr. Yoho. They cannot redact it?
Mr. Griffiths. No, sir.
Mr. Yoho. They can challenge stuff in there, right?
Mr. Griffiths. There was one occasion where a member State
made public some form of displeasure. I mean, people have
conversations with me all the time, but no member State has
ever redacted a panel final report.
Mr. Yoho. Thank you for clarifying that.
Mr. Griffiths. I mean, annexes have been routinely in the
past made confidential, but everything has been published that
the panel has wanted to publish.
Mr. Yoho. So, your 378-page report is pure information?
Mr. Griffiths. Peer-reviewed.
Mr. Yoho. Well, it is pure information that your panel, the
POE, has come out with, right?
Mr. Griffiths. Yes, sir.
Mr. Yoho. OK. That is good to know, because I was told
earlier that it gets redacted by certain nation States. So, I
need to review that.
Mr. Griffiths. Well, the only people who have talked to me
about redaction is the panel members.
Mr. Yoho. OK.
Mr. Griffiths. And we certainly have not agreed to any
redactions of the report by member States. That would be wrong.
Mr. Yoho. I look forward to going through that.
What would be your recommendation on countries that do not
adhere--well, let's just focus on the 15 or the five permanent
member States on the NSC, the National Security Council. What
would be a recommendation for countries that vote to put
sanctions and, then, do not adhere to them? Do you have any
recommendations?
Mr. Griffiths. Well, sir, I mean, to be frank with you, on
the subjects that we have tackled within our 2019 final report,
it is more a case of individuals and companies seeking to make
money from sanctions evasion----
Mr. Yoho. Sure.
Mr. Griffiths [continuing]. By cooperating with the North
Koreans. In absolute honesty, there are only a few sanctions
violations by the North Koreans in certain African and Middle
Eastern States which were providing either ballistic missile or
conventional arms technology or services, whereby the senior
leadership of the ministry of defense of that country, and
thereby the office of the President or State security, would
have been aware of what these North Koreans were doing there.
Mr. Yoho. Well, let me ask you about the ship-to-ship
transfers that happen with China, because China, you know, the
controlling, ultimate entity there is the Chinese Communist
Party. So, I cannot imagine shipping entities under so-called
private registration are allowed to do ship-to-ship transfers
without the Chinese Communist Party. So, therefore, it would
indicate a nation State being complicit. Am I wrong on that?
Mr. Griffiths. Well, here is the technical thing, sir, and
it is actually a really important point. I mean, you might have
access to different and high levels of intelligence I am not
read into; I do not have U.S. security clearance.
Mr. Yoho. Right.
Mr. Griffiths. But if you look at even the U.S. document,
and it is a very useful document, it was issued on March 21st.
And it is from the U.S. Department of Treasury, together with
their colleagues in the State Department and the Coast Guard,
and it is called ``Updated Guidance on Addressing North Korea's
Illicit Shipping Practices''.
And that is a really important document that has become
kind of lost in all this, I suppose, media focus on the recent
sanctions cases, your country's sanctions cases, the two
companies. But if you look at this document, the Treasury
guidance, at the back you will see which vessels that the U.S.
Treasury, the U.S. Government, believe have engaged in ship-to-
ship transfers with North Korean tankers.
And while many of the flag States--and it is important
because the flag States have the jurisdiction over the vessels,
no matter who is crewing them, no matter where the companies
are. I will read you them. This is a U.S. document.
Mr. Yoho. You know, for brevity of time here and to get to
the other members----
Mr. Griffiths. Togo, Sierra Leone, Panama, Panama, Togo,
Republic of Korea, unknown, Panama, unknown, unknown, unknown,
Singapore, unknown, Togo, Russia, Sierra Leone, Russia,
unknown. I mean, the list goes on. This is just U.S.
information. It is not U.N.-approved information.
Mr. Yoho. What I would like to do is, with the chairman's
permission, have that entered into the record.
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Mr. Yoho. And we are going to get a copy of that, and we
will look at that. And then, we will follow through on the
recommendations we have already heard. I thought Mr. Connolly's
idea of looking at the insurance companies is a great way to do
this. And we look forward to working together in a bipartisan
manner.
Mr. Sherman [presiding]. Thank you.
Mr. Yoho. And with that, I yield back, and thank you.
Mr. Sherman. We now have the most comprehensive sanctions
on North Korea that we have ever had, but the ones we used to
have were not effective and the ones we have now are not
effective enough to get the North Koreans to take a good, a
fair bargaining position. Sanctions are hard because those
governments that deserve to be sanctioned are the very
governments that do not care if you reduce their GDP by 5
percentage points. Any administration that hurt our economy for
anything but the best possible reasons would be voted out of
office. That is not a risk that Chairman Kim faces.
This body has--and I mean the Foreign Affairs Committee
has--been troubled by the administration's lack of transparency
to Congress in withholding information on the diplomatic
negotiation process with Pyongyang and intelligence related to
North Korea's weapons systems.
Have you and the panel encountered challenges in working
with the State Department in getting information for your
report draft?
Mr. Griffiths. The main thing for the panel is we operate
to a very high standard of evidence, and you will see that in
the report. We try to make everything court-admissible.
Everybody on the panel knows who our sources are, even if we do
not say publicly.
So, we would be very appreciative of more imaging on ship-
to-ship transfers from everyone. And you can see in the report
that we have not had imagery for quite a long time on ship-to-
ship transfers, or it has been quite limited. The imagery is
the most important thing. Ships are big. If you get the images,
then you can drill down. Then, you can find out the brokers
involved, their bank accounts, trace back to the North Korean
brokers.
So, it is critical to get the ship-to-ship imagery as the
starting point, and then, you can take that to the flag States,
all of these flags of convenience who do not monitor the very
ships that sail under their jurisdiction, and hold them to
account. Unfortunately, the panel does not have the kind of
assets that allow us to get close-up imagery of these ships.
Mr. Sherman. Has the United States and the State Department
given you many images over the last year or two?
Mr. Griffiths. Well, I am an investigator, so I would
always like more. We could certainly do with more. There are a
whole range of----
Mr. Sherman. We will do whatever we can to hold the State
Department accountable----
Mr. Griffiths. Thank you.
Mr. Sherman [continuing]. For its decision not to give you
more, since this report, the whole purpose is sanctions
implementation, and the United Nations is critical to that.
There are a number or at least one African State that has
North Korean security personnel. That seems to be one of the
things that the North Korean government exports, is cadres of
thugs, armed men, whatever. Which States are those operating in
now?
Mr. Griffiths. Well, in our latest report, the panel noted
issues arising from Angola, not Angola. My apologies. Angola
are in the clear right now. Uganda.
Mr. Sherman. Yes, I believe that was featured in The Wall
Street Journal.
Mr. Griffiths. Yes, sir. Some troubling things going on
there.
On finance, we have real concerns about Libya. There were
attempted sales to Libya through a Syrian intermediary named
Hussein al-Ali who was working on behalf of the North Koreans.
We have had no answers back from the Libyan authorities on
this, either.
We hear troubling rumors about Namibia once again. We have
had no response from Tanzania on a variety of military
activities, military services, that North Korea certainly was
providing.
Mr. Sherman. If you could bring to the attention of the
committee those countries where you have asked a specific
question and not gotten an answer, we can amplify your request
and inquire of their Ambassador here as to why this U.N.
request for information has not been granted. And so, I would
ask you to furnish for the record a list of specific unanswered
questions and who you asked them to. And I cannot guarantee
anything, but we can certainly push people to answer those
questions that are still relevant. So, please, just provide
those questions that you have asked that are relevant to your
operation and have not been answered.
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Mr. Sherman. China has four of the largest banks in the
world by assets, the Industrial and Commercial Bank of China,
the China Construction Bank, the Agricultural Bank of China,
and simply the Bank of China. So, those are the big four in
China.
Have any of these four, directly or indirectly, through
front companies or directly, helped facilitate North Korea's
access to the international financial system?
Mr. Griffiths. Well, in our report we talk about global
banks, and that is big banks, but it does not matter their
nationality. Actually, if you drill down----
Mr. Sherman. Do you name the particular global banks that
are assisting North Korea?
Mr. Griffiths. Well, it is more complicated than that
because we find that they are unwitting. I mean, we do not have
the kind of----
Mr. Sherman. Unwitting, but negligent? Or unwitting and
deceived by such brilliant deception that we cannot blame them
for being deceived?
Mr. Griffiths. In one case, I was dealing with--I think
they can put measures that we recommend in our recommendations,
which are in my testimony, at least for ship-to-ship transfers,
that global banks can easily insert a clause, which is
basically a box tick, that will force all the oil companies,
all the global commodity trading companies who are leveraged
with loans and financial credit instruments to buy and sell the
fuel--the banks can introduce something to force their clients
to undertake more measures. So, that is a suggested measure.
Mr. Sherman. Do you have the proposed language that should
be in the contract?
Mr. Griffiths. We do not go that far because the----
Mr. Sherman. Well, I would ask you to supplement the
record. Say, when we say we want this, this is what we want.
Because this Congress could pass a law saying no bank can do
business in the United States unless they put this in all their
contracts. That would be an effective way to get it in all the
contracts.
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Mr. Sherman. And let's see. There have been changes--it is
one thing to announce sanctions. They are documents on a piece
of paper and lawyers can read the fine print. But business
people respond not only to the fine print, but the
atmospherics. That is the fine print; is it going to be
enforced or are they just joking? Is it going to be enforced
and tomorrow there is going to be even stricter sanctions? So,
why plan a business deal today that is even legal because
tomorrow it will be illegal versus, well, that is the sanction
that exists today; it is time to plan a business deal because
they will be waving that sanction tomorrow.
Has the Donald Trump rapprochement with Kim Jong-un as an
individual, going from ``Rocket Man'' or ``Little Rocket Man''
to I think the word ``love'' was used or ``love letter,'' or
something--has that change in atmospherics changed the attitude
of China, Russia, and the big shipping companies to whether
they really have to abide by the sanctions?
Mr. Griffiths. So, love letters are not subject to
sanctions, and therefore, the panel does not investigate that.
Mr. Sherman. No, what I am saying is, you are a company in
China. You are a shipping company. You are a bank. And in 2017,
you say, these are the written sanctions----
Mr. Griffiths. Yes.
Mr. Sherman [continuing]. And, by God, America is really
serious about it. They are angry at North Korea. They will be
angry at anybody who violates the sanctions.
Mr. Griffiths. OK. So, I can----
Mr. Sherman. And now, by late 2018, it is, gee whiz, a
bromance here going. So, has the change in atmosphere between
the two leaders changed the seriousness by which companies
enforce the sanctions?
And I have gone over time.
Mr. Griffiths. What I would point to is, in terms of our
investigations, that is what I can speak to. During the
Singapore and Hanoi summits and meetings elsewhere, I noticed
that these armored Mercedes-Benz that the panel has been
investigating for a long time were being driven around the
streets of Singapore without car license plates, driven around
the streets of Hanoi.
These are serious sanctions violations. I saw Chairman Kim
showing off his new Rolls-Royce Phantom to Secretary of State
Pompeo when Secretary of State Pompeo was in Pyongyang for
negotiations. It is these kinds of activities by the North
Koreans--and these Mercedes-Benz are actually important because
they were illegally and clandestinely exported from the United
States, from New Jersey, from Long Beach, by a Chinese
businessman called George Ma, whose company Seajet was involved
in illegal military equipment deliveries to the Republic of
Congo.
Mr. Sherman. I am going to cut you off here.
Mr. Griffiths. Yes.
Mr. Sherman. My colleagues have been very patient.
Mr. Griffiths. My apologies.
Mr. Sherman. Well, one of them has been very patient; one
of them has left the room. I am sure his patience will cause
him to come back.
And my colleague is recognized.
Ms. Spanberger. Thank you, Mr. Chairman.
And thank you very much for being here today, sir. I would
like to start by thanking you for acknowledging the sacrifice
of your colleagues Michael and Zaida, and I hope that we will
keep them in mind as we continue our conversations, and the
incredible work of the U.N. individuals across the world.
My question refers to cyberattacks. The U.N. Panel of
Experts' latest report outlines North Korea's use of
cyberattacks against financial institutions and the
exploitation of Bitcoin and other cryptocurrencies to illegally
access and transfer funds. According to your report, this
included cyberattacks not just against small banks or in
countries with limited financial infrastructure, but also
against commercial and financial entities here in the United
States, in South Korea, Europe, and in other key U.S. partners,
as well as against the SWIFT messaging system that most of the
international banking community relies on to transfer money
from one bank to another.
My concerns are twofold. First, how sophisticated are North
Korea's offensive cyberattack capabilities, and what more can
the U.S., the United Nations, member States as well, do to
guard against these types of intrusions? And second, do you see
any indications that North Korea might use these cyberattack
capabilities to put international banking, the entire system
itself or any of its components, at risk?
Mr. Griffiths. Yes, I do, and the nearly 5 years I have
worked on the panel causes me great concern regarding the
security of the international banking system and the level of
due diligence and various banks' genuine anti-money-laundering
capacity. Thirteen point five million dollars were transferred
from the Cosmos Bank via 28 countries in 14,000 simultaneous
ATM withdrawals, 10,000 separate transactions over a weekend.
So, the North Korean hacking of banks is not only sophisticated
in terms of how they are breaching banking security software
and systems, but they are also organizing small armies of
people around the world to withdraw very quickly from ATM
machines. This is extremely well organized.
Follow the money. With Chairman Kim at every level, if you
follow the money, you will be able to address this problem more
effectively.
Ms. Spanberger. And, sir, you mentioned that there were the
simultaneous withdrawals coordinated across the world. Do you
have an understanding of how it is that they find individuals
or find the infrastructure to be able to create that type of
offensive engagement of those simultaneous withdrawals?
Mr. Griffiths. No, ma'am, I do not, but I think it is a
very important area to pursue rapidly investigating that.
Ms. Spanberger. And do you have any indication of whether
there might be other actors involved in those sorts of large-
scale attacks and where those actors may be coming from? And
when I say ``actors,'' I mean non-North Korean individuals. Who
else might be coordinating on behalf of these efforts?
Mr. Griffiths. No, I do not. I will only note that the
panel itself has been subject to multiple systemic hacking
attempts, and we have put that in our report.
Ms. Spanberger. Excellent. Thank you very much.
My second question relates to human rights. According to
the United Nations, 11 million people in North Korea are not
getting enough nutritious food, clean drinking water, or access
to basic services like health and sanitation. Given the concern
over the drop in domestic North Korean food production last
year about 10 percent, it seems that the humanitarian aid is
more important than ever to prevent widespread suffering.
My question for you is, how can we balance enforcing U.N.
and U.S. sanctions with a humanitarian imperative to ensure
that the people in North Korea do not suffer due to the
misguided policies of their government? And do you have any
recommendations for ensuring humanitarian assistance actually
reaches the North Korean people?
Mr. Griffiths. Yes, we do have recommendations for the
humanitarian sector, and we have put them in our report, too, a
bit of housekeeping on the U.N. exemption system which is now
in effect. All I will say is this: that the humanitarian
agencies, by coming to the Security Council, play the game.
They ask for exemptions. The smugglers, they do not, and
somehow they are able to import into North Korea very large
Rolls-Royce Phantoms in shipping containers. And if they can
bring in the Phantoms and Mercedes in shipping containers, that
means they can import the smaller items for the nuclear and
ballistic missile programs.
Ms. Spanberger. Yes.
Mr. Griffiths. The humanitarian agencies are playing the
game. But I would caution we should be careful with
humanitarian discourse on North Korea because we see what the
elite there is prioritizing in terms of imports, and it is not
necessarily for the benefit of all these hungry people you are
talking about.
Ms. Spanberger. Thank you, sir, for your time.
And I yield back.
Mr. Sherman. The gentleman from Michigan is recognized.
Mr. Levin. Thank you, Mr. Chairman.
And thanks so much, Mr. Griffiths, for coming in and
testifying before us.
I wanted to explore a little bit further the humanitarian
organizations and the situation there. In January, The Atlantic
magazine reported that the State Department would relax certain
restrictions on humanitarian assistance to North Korea in
response to feedback that such constraints were hindering the
delivery of lifesaving aid. Would you talk a little bit about
what kind of humanitarian assistance is typically provided to
the North Korean people? For example, I know that, globally,
North Korean has among the highest rates of tuberculosis, which
kills more people than any other infectious disease on the
planet. Besides TB relief, would you describe the kind of aid
that is typically delivered in North Korea?
Mr. Griffiths. Well, I cannot really talk about the
exemption notices themselves because they are submitted to the
committee and confidential. But, broadly speaking, where the
problems have been is with equipment rather than, say, food aid
for hungry people. It is because the sanctions are quite
comprehensive and the commodity codes are not always in
alignment. So, you have had problems with things like importing
nail clippers, items made of metal, things like that.
Yes, TB is a big issue in terms of what the humanitarian
agencies want to do. And that is why the panel has recommended
the introduction of a so-called white list of goods that would
be automatically subject to exemption to help facilitate this
process.
Mr. Levin. Thank you.
So, The Atlantic also reported that the Trump
administration's move to facilitate humanitarian aid, and I am
quoting, ``does not appear to apply to steps taken last year by
the Treasury and Commerce Departments to tighten financial
sanctions on North Korea, according to diplomatic sources.
Those efforts, which include restrictions on banking
transactions, have also impeded deliveries of humanitarian
goods.''
Is further U.S. action needed to ensure that these
particular sanctions do not impede humanitarian assistance for
the North Korean people? How do you strike that balance?
Mr. Griffiths. Well, I think that is more a question for
somebody from the member State, in this case the United States.
I really focus on North Korean sanctions, sanctions evasion,
and the policies of individual member States are really, where
humanitarian aid is concerned, that is their business. It is
not for me to say.
Mr. Levin. Right. Well, but you are here representing the
Panel of Experts, right?
Mr. Griffiths. Yes, sir, I am.
Mr. Levin. And the Panel of Experts' report made numerous
recommendations to remove some of the roadblocks to
humanitarian assistance. So, I was wondering if you could
explain how you came up with those recommendations. Did you
consult with humanitarian aid organizations working with North
Korea? That was really what I was wondering.
Mr. Griffiths. Yes, sir, we did. A couple of my colleagues
did that.
Mr. Levin. And so, how would you prioritize what we could
do to reduce those roadblocks without taking the heat off of
North Korea, which we very much do not want to do?
Mr. Griffiths. Well, I think, if it is possible, the idea
of--so, it is the U.N. Security Council 1718 Committee that is
making, that is agreeing to these exemptions, and that is
sometimes where the delay may occur. So, if I was to point to
anything at all, it would be perhaps the creation of a white
list. I am told such a thing is possible to do. That would give
you a simplified list of goods, which could be automatically
subject to some form of exemption, thus speeding up the process
within the Security Council's 1718 Committee to clear the
items.
And our other recommendation was that the U.N. more
generally should look into this problem.
Mr. Levin. So, in other sanctions situations, white lists
have existed, and in this situation there is no white list at
all? Is that the situation right now?
Mr. Griffiths. Well, most sanctions regimes are not nearly
as comprehensive or complex. So, it is much easier in terms of
an arms embargo to spell out, you know, flak jackets and
bulletproof vehicles for civilians, for humanitarian aid use,
for example, can be imported into, say, Libya or Yemen. It is
much easier in those cases.
Here it is more difficult. Within the space of a year, a
little more, you have had this absolute block on certain types
of machinery being imported, including trucks. All trucks are
now prohibited from import to North Korea. Why? Because we have
consistently seen the import of trucks for civilian purposes,
such as forestry, and then, they convert these trucks, these
eight-axle vehicles, into ballistic missile launchers. You will
find it in the panel's report.
So, one does have to be careful of what is imported. And
you bring down all these measures, and then, there is a
consequence because the humanitarian aid agencies, instead of
paying bribes or trying to circumvent the measures like the
North Koreans do, approach the U.N. in good faith to go about
it the proper way. And that is why my colleagues came up with
this white list idea, after consulting very thoroughly with the
humanitarian aid, the U.N. agencies, and the NGO's, who are
trying to do a good job in difficult circumstances.
Mr. Levin. Thank you very much. I yield back, Mr. Chairman.
Mr. Sherman. I will now recognize the ranking member.
Mr. Yoho. Thank you, Mr. Chairman.
And again, thank you for your diligence.
The report States that a member State informed the panel
that the Islamic Republic of Iran was one of the two most
lucrative markets for the DPRK military-related cooperation.
What can you tell us about illicit activities between North
Korea and Iran, especially trade in arms?
Mr. Griffiths. Well, not much more than what we wrote right
now. In the past, if you read past panel reports, you will see
that United Nations Security Council designated individuals
from KOMID, North Korea's principal ballistic missile and
conventional military equipment trading and sales company, were
based at the North Korean Embassy in Tehran. And so, I wrote
Tehran many letters about this, 2015, 2016. And after
Resolution 2270, when these North Koreans were designated,
these North Korean diplomats were designated by the Security
Council, Iran eventually expelled them.
Unfortunately, what we were told by a member State that
provides very reliable information to the panel, and often
shows us documentation, is that, since 2016, both Green Pine,
another major North Korean conventional arms military
supplier--sells submarines, military patrol boats, small arms,
light weapons, across the Middle East--both Green Pine and
KOMID were back in North Korea--sorry--were back in Iran and
were providing North Korean, Iran was providing North Korea
with one of its two most lucrative markets, the other being
Syria.
Mr. Yoho. I was going to ask you about Syria. What are the
most concerning types of defense cooperations and arms trade
between North Korea and Syria? Is it small arms? Is it
ballistics or?
Mr. Griffiths. In 2017-2018, it seemed to be ballistic
missiles. We had had reports from member States. We went to
visit interdicted goods, container shipments, around the
Mediterranean that had been stopped from going to Syria. The
bills of lading clearly said Syria Scientific, the SSRC, the
Scientific Studies and Research Center, which is responsible
for Syria's ballistic missile and chemical weapons development
program. And these sites were later bombed by other member
States after our report had been submitted.
Mr. Yoho. Well, I was going to ask you about that. Has the
panel uncovered any evidence indicating North Korean
involvement in Syria's chemical weapons program?
Mr. Griffiths. We have not got direct evidence of their
involvement in Syria's chemical weapons program, but, as we
highlight in our reports, there were things like acid-resistant
tiles, huge quantities of them----
Mr. Yoho. Wow.
Mr. Griffiths [continuing]. That were intersected by
various member States. We inspected them. These acid-resistant
tiles, you could build a laboratory from them or you could use
them for a facility for ballistic missiles, because ballistic
fuel is also highly corrosive.
But the level and intensity of North Korean military
technicians and ballistic missile technicians and surface-to-
air missile technicians visiting Damascus over the past few
years, you will see it in our reports. We list their names,
their passport numbers, who they met with, and where they
stayed. And it is interesting reading. It takes me a long time
to explain it, but it is all there in black and white in the
report.
Mr. Yoho. I believe we are going to read that report and
follow through on it.
I am out of questions. Mr. Griffiths, I appreciate your
diligence, your service, and I look forward to, hopefully,
bringing these sanctions to where they really bring an end to
this problem.
Thank you, Mr. Chairman. I yield back.
Mr. Sherman. I will have a question or two, and then, I
will have you make the concluding part of your opening
statement.
North Korea exports coal. It gets hard currency. But at
least the coal does not do any extreme damage. Obviously, it is
a greenhouse gas-producing fossil fuel. But when it exports
weapons of mass destruction or relevant technologies, that is a
bigger problem.
In September 2007, the Israelis bombed Al Kibar, a nuclear
weapons development site in Syria that appears to be almost
entirely North Korean technology. What are the examples of
North Korea exporting over the last 10 years weapons of mass
destruction and technologies relevant to creation of weapons of
mass destruction, especially nuclear, but also bio and
chemical?
Mr. Griffiths. Well, on bio, I have to say that the most
recent thing the panel has been looking at is this
assassination at Kuala Lumpur Airport----
Mr. Sherman. Oh, yes.
Mr. Griffiths [continuing]. Involving VX and the half-
brother of Chairman Kim.
Mr. Sherman. That is well-known and I guess only
technically constitutes an export. But the potency of that
chemical has been demonstrated. Are they exporting that
chemical for cash anywhere around the world?
Mr. Griffiths. We have no knowledge of that, sir. It is not
in our report.
Mr. Sherman. And what about the export of either fissile
material or the technology to create fissile material?
Mr. Griffiths. We have nothing in our reports on that. What
we have is evidence of North Korean procurement of technology
for fissile development and evidence of North Korea exporting
dual-use goods to other States in the region, but nothing
relating to a nascent nuclear program. We have no evidence of
that, but, then, the panel does not get so much from member----
Mr. Sherman. When it comes to material useful for creating
fissile material, North Korea is an importer, but not an
exporter?
Mr. Griffiths. That is what we----
Mr. Sherman. As far as we know?
Mr. Griffiths. As far as the panel knows, that is correct,
sir, yes.
Mr. Sherman. Thank you.
Well, at this point, I would like to hear whatever portions
of your opening statement we have not elicited through
questioning.
Mr. Griffiths. Well, I will try not to send you to sleep
and I will keep it short.
But the main area is the sea, international waters, where
nothing is really being monitored except when there are
surveillance aircraft or satellites or other aerial assets in
place. And that is because these flag-of-convenience States,
they do not monitor the vessels that sail under their
jurisdiction. Many of the petroleum companies that are
transferring the product, they do not monitor, either. Neither
do the insurers; neither do the operators of the vessel, the
charterers, the owners.
And if you take the time to read the----
Mr. Sherman. If I can interrupt you?
Mr. Griffiths. Yes.
Mr. Sherman. What if we provided that, if you had insurance
for your ship, but you deliberately turned off the AIS, the
automatic identification system, the insurance was void?
Mr. Griffiths. That, sir, sounds like an eminently sensible
suggestion.
Mr. Sherman. And another contract provision that we could
require be included, obviously, only if it was done
intentionally for the purpose of evading sanctions. But what
that would mean is, you pay money for insurance, and then, the
captain of your ship turns this off, and there is some evidence
that it is to evade sanctions. And you happen to be located
only a few hundred miles off the shores of North Korea. Now you
do not have insurance. That is another thing that we would want
to explore.
Why do not you continue?
Mr. Griffiths. Yes, and the other issue is that North Korea
is really systemically violating the U.N. Convention on the
Laws of the Sea and IMO regulations. And neither the IMO
regulations, the Safety of Life at Sea, SOLAS, all the UNCLOS,
were ever devised with this kind of situation in mind where
vessels could be hijacked and, then, provided with the North
Korean flag and safe harbor, and just operate between North
Korea and international waters to transfer fuel.
So, North Korean ships often carry North Korean papers, but
also Sierra Leone, or another flag-of-convenience papers. You
see this in the case of the Wise Honest. That is a very
interesting case in our report where a North Korean ship
delivering coal sails to Indonesia with its AIS switched off.
Coal is worth $3 million, according to the contract. The idea
is to transship it, call it ``Russian coal'' or something, and
then, sell it to a company in South Korea.
Mr. Sherman. So, the coal has to be transported all the way
to Indonesia, and then, comes back to South Korea----
Mr. Griffiths. Yes, sir.
Mr. Sherman [continuing]. Labeled ``Russian coal''? And the
dead giveaway in this is, if you have a ship transporting,
quote, ``Russian coal'' to South Korea from Indonesia--oh, I
guess if that was produced, shipped out of European Russia,
that would make sense. But if it shipped out of the Russian
Pacific--and I do not know where this coal is purportedly
coming from--the fact that it is coming from Indonesia shows
that something is fishy.
I mean, when they purport that this is Russian coal, are
they basically claiming that this is coal being shipped out of
Russian ports on the Atlantic or on the Pacific?
Mr. Griffiths. So, there was no documentation provided to
us. What we can tell you, and it is worth noting, is that the
whole deal was organized by, facilitated by North Korean
diplomats in Indonesia, and there are all these North Korean
bankers who are traveling around Indonesia, Vietnam, and China
trying to facilitate these deals in a clandestine fashion by
providing false paperwork.
The Wise Honest is currently seized and it is in Indonesian
waters right now. But, somewhat shockingly, if you look in the
panel's final report in the annexes, you will see that a U.S.
bank was, I am sure unwittingly, involved in the payment
system. And it happens to be the bank I use in New York.
So, it is a very good case study. The Wise Honest, it is a
fantastic name for a vessel involved in prohibited and illegal
activities. But you will really get a sense of how the North
Koreans are doing this and the relatively simple measures that
could be taken to stop them earning this illegal income.
Mr. Sherman. I am going to ask for a whole annex of--
because I know you have not created a wish list. But what
clause--and, you know, we can get lawyers to finetune this
stuff--but what clause there should be in maritime insurance;
what clause there should be in bank financing of ships; what
else we can require of substantial companies that usually do
business in the United States include in their documents.
I know I interrupted you. I do not know if you have a
further portion of your concluding statement.
Mr. Griffiths. Why is this problem with the Law of the Sea
important? Why is it necessary to monitor vessels? Because it
is not happening in so many different regions, and it is not
just about North Korean sanctions. This is about narcotics
trafficking. The same flags of convenience are used. Illegal
and undocumented fishing. Also, transnational criminal groups
use such vessels which are not being monitored by the flag
States, to sail all these poor, economic migrants from African
and Middle Eastern shores to Europe and other places. And these
vessels are typically unsafe as well.
So, really it is a global issue. I think it is high time
that there is more maritime governance on the high seas.
Otherwise, Chairman Kim is going to have room for maneuver for
some time to come. And it is just very important to follow the
money. Maritime transport is what makes a lot of it possible
right now, that and the cyber issues.
Mr. Sherman. I want to thank you for delivering both an
opening and closing statement, and, more importantly, answers
to all of the subcommittee's questions. Thank you for your
report, and thank you for reminding us of the perils and
difficulties that you and observers and investigators face
around the world. Thank you very much.
Mr. Griffiths. Thank you, sir.
[Whereupon, at 11 a.m., the subcommittee was adjourned.]
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