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North Korean leader Kim Jong-un stands for a photo with Russian President Vladimir Putin during their summit in the Russian Far East on Sept. 13, 2023. (Kremlin pool/AP/Yonhap)

Russia has reportedly permitted the release of US$9 million in frozen North Korean assets. With military cooperation between North Korea and Russia now spilling over into financial cooperation, some predict that Russian banks will be used to allow Pyongyang to circumvent UN sanctions.
 
“Russia has allowed the release of $9 million out of $30 million in frozen North Korean assets deposited in a Russian financial institution,” The New York Times wrote in a report on Tuesday, citing anonymous American-allied intelligence officials. 

The officials specified that Pyongyang would use the money to buy crude oil.
 
The article also revealed that a North Korean front company recently opened a new account at a Russian bank in South Ossetia. Located in the southern Caucasus region, South Ossetia proclaimed its independence in the early ’90s, around the collapse of the Soviet Union. However, its independence has not been recognized by Georgia, with Georgia claiming the region as part of its territory. 
 
Such actions on the part of North Korea and Russia are giving rise to concerns that North Korea will be able to use Russia as a base to flout economic sanctions. North Korea’s continued nuclear tests have led to severe UN sanctions, making it difficult for the country to legally make use of international financial institutions.
 
North Korea has gone to great lengths to evade sanctions to access international financial networks.
 
The financial cooperation between North Korea and Russia will make it easier for North Korea to make deals from within Russia. It will also allow North Korea to access international markets through Russia’s international trade network.
 
Despite the West leading a campaign of economic sanctions against Russia in response to its war of aggression in Ukraine, Moscow still has limited trading partners, including China, India, Türkiye and South Africa.
 
The New York Times quoted Juan C. Zarate, a former assistant US Treasury secretary, as saying that “the North Koreans welcome any alternative ways of accessing capital,” despite the US$9 million being a comparatively small sum to be unfrozen.
 
Despite this move, some experts say that Russia will lie low and move more cautiously, as it is well aware of its responsibilities as a permanent member of the UN Security Council —the very body that has slapped North Korea with sanctions.
 
James D.J. Brown, a professor of political science at the Tokyo campus of Temple University, told The New York Times, “They can always say, ‘Oh, well, this is a private bank and our investigators will look into it,’ and it will never go any further.”

By Park Byong-su, senior staff writer

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