NK border possibly open; Russian military plane visited Pyongyang; Sanctions against Iran UAV network; Raisi pushing for INSTC completion
Prohibited Transactions for the week of 25 Sep 2023 (#21)
North Korea
Unconfirmed reports from Chinese state media say that the DPRK has opened its borders to foreigners who complete a two-day quarantine period. This has yet to be confirmed by North Korean media, which has only noted that the city of Pyongyang has intensified its “epidemic prevention work.” //If shown not to be true, it would be part of the long string of wishful thinking when it comes to opening up the DPRK’s border.
Both Pyongyang and Moscow had their own motivations for the Kim-Putin summit. Russia’s desire to draw closer to the DPRK is in part as a response to South Korea’s support for Ukraine, and Seoul’s increased military cooperation with Warsaw. For Pyongyang, they know their conventional military forces are no match for the combined forces of the US and South Korea, and therefore need to step outside of their strategic isolation and move toward an alliance with Russia. Moscow also engaged in a fair amount of political stagecraft in an attempt to impress Kim Jong-un. //These two analyses provide some deeper context into the Russia-DPRK relationship, and how things may play out in the short to medium-term.
A Russian military plane visited Pyongyang for two days this week, flying back to Moscow on Thursday. Neither country acknowledged the flight, and some observers speculated that the plane was carrying officials to discuss weapons or technology transfers. Russian media also reports that North Korea’s foreign trade minister arrived in Moscow on Thursday for a working visit.
Iran
The US government sanctioned five entities and two individuals based in Iran, the PRC, Hong Kong, Türkiye, and the United Arab Emirates (UAE) for their roles the “procurement of sensitive parts for Iran’s one-way attack unmanned aerial vehicle (UAV) program.” The Iranian company is accused of procuring UAV parts — for an organization within the Islamic Revolutionary Guard Corps (IRGC) — from Hong Kong-based companies, and supported by Türkiye and UAE financial facilitators.
According to Ukraine, Iranian drones used by Russia are filled with European components.
Iranian officials stated that SWIFT was involved with the transfer of Iranian funds from South Korean banks to banks based in Qatar. Iranian officials are also discussing if Seoul should pay compensation because the funds held in the South Korean banks lost some value against the US dollar. //No surprise about SWIFT, not like South Korea and Qatar could have used CIPS to move the funds. Tehran must be hard up for money if they’re really going to spend time chasing after South Korea because of exchange rates.
An official from the Central Bank of Iran said the funds would be used to improve the value of the rial.
In a call between Russian President Vladimir Putin and Iranian President Ebrahim Raisi, the former stated that “Iran is a strategic partner of Russia” while Raisi pressed for the completion of the International North-South Transit Corridor (INSTC).
An Iranian official claimed that the INSTC will be 30 percent more efficient than the existing trade route which goes via the Suez Canal. //If this does turn out to be true, some companies may see the risk of sanctions worth a shorter, cheaper trade corridor for their goods.
Iran exported USD9.1 billion worth of goods to BRICS member countries (including the new members) between March and August 2023. The top five BRICS export destinations were the PRC, UAE, India, Russia and South Africa.
Annual trade between Iran and Indonesia is worth approximately USD1 billion.