In recent developments, U.S.-allied intelligence officials have suggested that Moscow might be aiding Pyongyang in accessing the international financial system in exchange for North Korean missiles and ammunition.
This information comes amidst concerns over North Korea’s evasion of UN sanctions, detailed by Motoko Rich in a piece for The New York Times on February 6th, 2024.
Reports indicate that Russia has permitted the release of millions of dollars in frozen North Korean assets, potentially assisting its isolated ally in navigating international banking networks.
This assistance follows North Korea’s reported transfer of weapons to Moscow for potential use against Ukraine, as disclosed by American-allied intelligence officials.
The White House has also recently stated that it possesses evidence indicating North Korea’s provision of ballistic missiles to Russia, with Pyongyang allegedly seeking military hardware in return.
An analysis by a British security think tank further suggests that North Korea may have shipped up to 2.5 million rounds of ammunition to Russia, adding weight to concerns over their collaboration.
Although it remains unclear whether Russia has provided North Korea with the desired military technology, the emergence of new banking ties between the two nations is seen as another indicator of their deepening relationship.
This expanding partnership is believed to have emboldened North Korea, leading to a spate of belligerent threats, according to U.S. officials.
Specifically, Russia has allowed the release of $9 million out of $30 million in frozen North Korean assets deposited in a Russian financial institution.
Additionally, intelligence officials suggest that a North Korean front company has recently opened an account at another Russian bank, possibly indicating Moscow’s efforts to help Pyongyang bypass UN sanctions prohibiting most banks from doing business with North Korea.
Remarkably, the new bank account is reportedly held in South Ossetia, a self-proclaimed independent state in the Caucasus region controlled by Russia.
These revelations come from officials speaking anonymously, highlighting the sensitive nature of the intelligence matters being discussed.
While American officials cannot confirm the specifics of the banking arrangements, they assert that such arrangements align with their expectations of what North Korea would seek from Russia for its weapon transfers.
Experts note that access to financial networks is just one item on North Korea’s wish list; the country is also interested in acquiring advanced military hardware such as satellite technology and nuclear-powered submarines.
The growing ties between North Korea and Russia have already yielded diplomatic dividends, with high-level meetings between their leaders occurring recently.
This includes a potential visit by President Putin to Pyongyang, a significant development considering it would be his first trip to North Korea’s capital in nearly 25 years, as reported by the North’s state media.
From an economic perspective, the banking arrangements facilitated by Russia could significantly impact North Korea, which heavily relies on imports to sustain its economy.
These relationships could not only facilitate transactions within Russia but also extend outside the country, leveraging Moscow’s connections with countries such as Turkey and South Africa that still conduct trade with Russia despite international sanctions over the Ukraine war.
The potential ramifications of Russia’s involvement in North Korean financial manoeuvres are profound.
If Moscow is indeed enabling North Korea to use Russian banks or releasing frozen assets, it would represent a significant departure from international norms and a willingness to engage with a rogue state in defiance of UN sanctions.
Despite the risks involved, experts believe that Russia is likely to proceed cautiously, mindful of its status as a permanent member of the UN Security Council.
However, there are concerns that Russia may attempt to sidestep sanctions in a deniable manner, possibly by using private banks and deploying investigators to forestall further scrutiny.
Beyond banking relationships, Russia may engage in barter deals with North Korea, exchanging goods for weapons. However, given the precarious nature of the ruble and the negligible value of the North Korean won, it remains unclear how major transactions between the two countries would be conducted.
Ultimately, North Korea’s collaboration with Russia not only garners diplomatic perks but also strengthens its position on the global stage. Despite international condemnation, Pyongyang benefits from the perception of having the full support of Russia, bolstering its legitimacy and influence.
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Read also: Russia sanctions: “While the world is moving forwards technologically, Russia is going backwards”
“Pre-invasion Russia was a major exporter of arms. Instead, it is now having to turn to DPRK and Iran for unreliable equipment and to buy back parts it previously exported to other countries.
“While the world is moving forwards technologically, Russia is going backwards.”
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