Changing relations between North and South Korea; NK ballistic missiles in Russia; Iran joins BRICS; Offshore rial coming
Prohibited Transactions for the week of 1 Jan 2024 (#32)
North Korea
North Korean leader Kim Jong-un characterized relations between Pyongyang and Seoul as “two states hostile to each other and the relations between two belligerent states, not the consanguineous or homogeneous ones any more” and that “reunification can never be achieved with the ROK authorities that defined the ‘unification by absorption’ and ‘unification under liberal democracy’ as their state policy.” //This is a major rhetorical shift away from the Kim family’s historic position on reunification between the North and South. This could lead to increased provocations by the DPRK in 2024 — especially with legislative elections happening in South Korea, and the US facing a presidential election — including cyberattacks, or more missile tests and satellite launches. The pace of North Korean illicit financial activities — which are also disruptive by themselves — may also increase as Pyongyang continues to seek steady streams of cash to fund their various illicit programs.
South Korea’s Unification Ministry is officially closing down the Kaesong Industrial District Foundation, which is responsible for managing and operating the inter-Korean Kaesong Industrial Complex (KIC). The ministry citing the low chances of reopening the zone, and the costs of maintaining the foundation. //The hardening of positions isn’t just happening in Pyongyang.
A lawyer representing families of US citizens killed or injured during HAMAS’ October terrorist attacks against Israel is considering filing a lawsuit against the DPRK because weapons used in the attacks have been reported to have come from North Korea.
The US government says that short-range North Korean ballistic missiles have been used by Russia to attack Ukraine in recent days.
Iran
Iran joined BRICS and is already touting their push to de-dollarize trade, economic and financial transactions within the group. Separately, Iran and Russia have officially agreed to end use of US dollars in their mutual trade.
Russia’s Sberbank opened a USD70 million (RUB6.5 billion) line of credit with Iran, via Bank Melli Iran. It will be used to finance the import of basic goods needed by Iran.
US media is reporting that Russia is planning to buy short-range ballistic missiles from Iran, which could be delivered in the spring if a deal is completed soon.
Moscow has learned from Tehran’s experiences in evading Western sanctions, according to a Russian expert. //Always a fascinating issue, how illicit networks may exchange tacit knowledge or other “best practices” about how to evade Western sanctions. This type of cooperation shouldn’t be a surprise, but it would be interesting to know how much Iran would share about their tactics and techniques.
Iran is planning to launch an offshore rial by late March of this year. The offshore rial will be used for the settlement of exchanges of goods and services when trading with countries such as Iraq and Afghanistan.
Over the past two years, the US sanctioned more than 50 Hong Kong companies and individuals for their work with the Iranian Revolutionary Guard Corps-Quds Force (IRGC-QF). Though, the impact of the sanctions is somewhat limited as Hong Kong’s government only enforces sanctions imposed by the United Nations. Hong Kong-based front companies are also accused of laundering tens of millions of dollars related to Iranian oil sales to the PRC.
Iran and Azerbaijan inaugurated a cross-border bridge over the Astarachay River which will allow for the movement of goods from the two countries to Eastern Europe and the Commonwealth of Independent States.