Otto Warmbier North Korea Nuclear Sanction Act

Floor Speech

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Mr. Speaker, I am pleased to sponsor H.R. 3898, the Otto Warmbier North Korea Nuclear Sanctions Act, which imposes the most far-reaching financial sanctions ever directed at North Korea.

Since 2006, North Korea has undertaken six nuclear tests and, earlier this summer, test-launched intercontinental ballistic missiles capable of reaching United States territory. The most recent nuclear device that the country detonated on September 3 had an estimated explosive power 10 times greater than the bomb dropped at Hiroshima. We must not allow the North to threaten a U.S. city with such weapons.

In short, Mr. Speaker, this bill would impose secondary sanctions on foreign financial institutions that do business with virtually anyone that trades with North Korea. In addition, H.R. 3898 would essentially cut off Pyongyang's ability to earn hard currency through North Korean laborers working abroad, and it would use our leverage at the IMF, the World Bank, and other international financial institutions to incentivize countries to crack down on North Korea's illicit activities.

As many of my colleagues know, North Korea is already subject to both U.S. and international sanctions, the latter deriving from a series of U.N. Security Council resolutions. These sanctions have fallen short, however, for two main reasons:

First, they have not given sufficient attention to North Korea's enablers in third countries, especially foreign banks and middlemen in China, Southeast Asia, and other parts of the world.

Second, even though U.N. Security Council resolutions are supposed to bind U.N. members to enforce them, implementation has been weak. As the U.N. Panel of Experts concluded earlier this year, member nations' compliance with sanctions has been so lax that North Korea retains access to the international financial system.

As the Trump administration has made clear, U.N. sanctions are a floor, not a ceiling, for U.S. action. H.R. 3898 embodies this principle through the use of secondary sanctions.

Here is how such sanctions would work, Mr. Speaker: The front companies and middlemen that North Korea relies on in third countries still need banks. Those banks, in turn, use correspondent or payable-through accounts held at U.S. financial institutions to process international transactions. It is counterproductive for U.S. policy to permit foreign banks to do business in America as well as business that ultimately helps North Korea. It is time for those banks to choose between aiding and abetting the North Korean Government or standing for peace with America and its allies.

H.R. 3898 forces foreign banks to make that choice. Foreign banks can either do business benefiting North Korea or business with the United States. They cannot do both.

Under an executive order issued in September, the President authorized the Treasury Department to levy sanctions on foreign banks that finance North Korean trade. While this was a crucial step forward, H.R. 3898 would widen the net still further.

Under this legislation, Congress would be codifying mandatory sanctions on foreign banks. If someone is dealing with North Korea, there is nowhere to run or hide: a foreign financial institution is subject to sanctions for doing business with you, even if that bank claims that it is not directly financing the trade.

H.R. 3898 also covers more economic activity than any previous sanctions on North Korea, including the current U.N. sanctions round.

That means this bill goes after banks involved with petroleum, labor, and virtually any kind of investment or North Korean use of shipping vessels.

In addition, H.R. 3898 targets the knowledge and technological support that North Korea needs for its weapons program and hacking activities. Pyongyang's threats against cybersecurity are critical for the regime to get its hands on financing.

The goal, Mr. Speaker, is to show North Korea that the path they are on has devastating costs and leads to nowhere regardless. H.R. 3898 provides an off-ramp for North Korea if the country wants sanctions relief, but it is up to Pyongyang to take it. Until then, the sanctions we will be passing today hold tremendous economic pain in store for the Kim Jong-un regime and its foreign enablers.

Finally, Mr. Speaker, we are honored to dedicate this bill to the memory of Otto Warmbier, a young man who traveled to North Korea to understand the country with his own eyes, and whose life was cut short by the regime's brutality. Otto was a student at the University of Virginia, my alma mater, and a special community that continues to mourn the loss of this special young man. Otto held out his hand in friendship to the people of North Korea, as we do. It is Pyongyang's nuclear ambitions, though, that threaten what Otto represented: a world of openness, understanding, and a desire for peaceful relations between our country and North Korea. It is fitting that this legislation bears Otto's name, and that its goals embody his spirit.

Mr. Speaker, I reserve the balance of my time.

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Mr. Speaker, I, too, appreciate the bipartisan work on this piece of legislation, but I just do have to respond to my friend, the gentlewoman from California, and her comments about the Trump administration and the shift in policy.

It is hard to dispute that President Trump's public statements and official actions on North Korea have gotten Beijing's attention in a way that previous American Presidents have not. President Trump's tough rhetoric and tough talk on North Korea matches a shift in policy away from strategic patience to one that uses enhanced pressure through sanctions and the credible threat of military force to give substance and meaning to our diplomacy.

Even the Democrat witness in our hearing on this legislation admitted that the President's strong language had made a difference in giving us additional leverage in our negotiations with China.

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