High level meetings on NK; Remittance slowdown to the North; Iran and Russia to pick up the pace on INSTC railway; Iran being sued for USD1 billion
Prohibited Transactions for the week of 29 Jan 2024 (#36)
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And now, back to the show…
North Korea
Two sets of high-level bilateral meetings occurred over the past weekend with Chinese diplomats meeting counterparts from Pyongyang and Washington. Representatives from the PRC’s Ministry of Foreign Affairs visited the DPRK and the two countries agreed to “expand and develop the friendly exchange and practical cooperation.” The PRC’s foreign minister also met with the US national security advisor, who expressed Washington’s concerns about the growing relationship between Moscow and Pyongyang, and hoped that the PRC could bring the DPRK “back to the path of denuclearization.” //Though there is some guesswork as to the PRC’s actual position on the deepening ties between Russia and the DPRK, it’s unlikely that Beijing will do anything to rein in North Korea’s illicit financial activities that have a PRC nexus, such as illicit ship-to-ship transfer activity occurring in Chinese territorial waters.
Russia reports it supplied approximately 100,000 barrels of refined petroleum to the DPRK last year. //The UN Security Council capped shipments of refined petroleum to the North at 500,000 barrels per year, so Moscow is well within the limits. This, of course, doesn’t account for any barrels illicitly making their way from Russia to the DPRK.
A South Korean think tank claims that at least one North Korean government official was killed by protesting North Korean workers in the PRC’s northeastern Jilin province. The protesters were reportedly angered that their wages were sent directly to Pyongyang without their consent or knowledge. //If this really did occur, one would expect a harsh reaction from North Korean authorities that would possibly disrupt the daily routines of other North Korean workers in the PRC, if there has to be additional ideological trainings or other control measures.
According to covert reporting from inside North Korea, Moscow and Pyongyang are working closer together to prevent defections of Russia-based North Korean workers.
Both Pyongyang and Seoul are cracking down on remittances going to North Koreans from family who defected and are living in South Korea. Brokers typically arrange calls between the defector and their family, and then the defector makes a deposit into a PRC bank account, and then the Chinese broker will physically bring the money into North Korea, sometimes disguising the funds as a transaction between PRC and DPRK trading companies. Then couriers will deliver the money to the family. //The US technically allows up to USD5,000 per year to be sent to an “individual ordinarily resident in North Korea” provided it is “non-commercial, personal remittances.” US banks and money transmitters are allowed to process those funds, but it’s hard to imagine one willing to take the risk.
Iran
According to an Iranian customs official, Iran exported USD29.9 billion worth of crude oil, and 113 million tons of non-oil goods worth USD40 billion, between March 2023 and January 2024. The PRC, Iraq, the United Arab Emirates (UAE), Türkiye, and India were the primary export destinations. //As noted in Issue #33, 80 percent of Iranian products go to these five countries. Iran imported USD54.8 billion worth goods during this time, with gold, car parts and accessories, and smartphones as the top items. //Reflecting the needs of Iranian consumers.
During this time period, 14.2 million tons of goods transited through Iran, a 29 percent increase over the same period in the previous year. //If the increase is accurate, it indicates that Iran’s infrastructure integration push in the region is paying off.
Iranian and Russian officials met to discuss accelerating the construction of the Rasht-Astara Railway, which will complete the International North-South Transport Corridor (INSTC). //As discussed in Issue #3, the two countries signed a USD1.6 billion agreement in May 2023 to complete the railway by 2026. If they’re looking to advance completion of the railway, it’s likely in part due to continued sanctions pressure being put on both countries.
Iranian and Uzbek officials met and agreed to activate a “banking exchange mechanism” between the two countries, as well as allow Iranian companies to oversee iron ore, copper, and gold mining in some parts of Uzbekistan.
Iran’s oil minister is in Venezuela to discuss the export of Iran’s technical and engineering services, refining operations, and investments in oil and energy industries, among other topics.
The US and UK designated members of an Iranian transnational assassinations network, led by an Iranian narcotics trafficker, that is accused of engaging in murder-for-hire schemes in the US. The trafficker works under the direction of Iran’s Ministry of Intelligence and Security (MOIS), is protected by Iran’s security forces, and allowed to operate in the country’s drug market.
Four Chinese nationals have been indicted by the US government for smuggling US export controlled items though the PRC and Hong Kong, for the benefit of entities associated with the Islamic Revolutionary Guard Corps (IRGC) and Ministry of Defense and Armed Forces Logistics (MODAFL). The goods — procured between May 2007 and July 2020 — were likely used for weapons, missiles and military equipment such as Unmanned Aerial Vehicles (UAVs).
Iran — along with Syria and the Binance virtual currency exchange — are being sued for USD1 billion by three families of American victims of HAMAS’ 7 October 2023 terrorist attack against Israel. The suit claims that Iran and the others provided financing and other support to HAMAS that was used in the attack. //Iran technically owes at least USD62 billion in lawsuit judgements awarded by US courts to individuals who have sued Tehran.