NK diplomats told to ignore PRC; More workers to Moscow; Rasht-Astara Railway challenges; Iran’s future with the East
Prohibited Transactions for the week of 29 July 2024 (#57)
This image was created in Microsoft Copilot Designer on 1 Aug 2024 using the prompt “Interior of a casino in a Pyongyang hotel, abstract”
North Korea
North Korean diplomatic outposts may become more involved in illicit activities such as smuggling, espionage, and procurement of luxury goods, as North Korean leader Kim Jong-un has reportedly told his PRC-based diplomats “not to mind” any concerns from Beijing. //If accurate, this is another sign of a growing rift between the two countries, and will impact how the DPRK’s illicit networks — heavily dependent on the PRC — operate. For geopolitical reasons, Moscow would likely welcome increased illegal activities by North Korean operatives, as it would force the West to take some focus off of Russia’s own illicit actions.
The US government believes that Beijing and Moscow are competing for influence over the DPRK and that the PRC is “anxious” about the North’s growing relationship with Russia.
According to covert reporting from inside North Korea, PRC customs officials have been conducting strict inspections of luggage of departing North Korean workers, looking for internationally sanctioned items, or cash over a RMB2000 (USD276) limit. The customs officials will seize the cash, forcing the North Korean workers to spend their money before leaving the PRC.
North Korea appointed new ambassadors to Vietnam and Singapore.
A professor of North Korean society and culture traveled to the Chinese side of the DPRK-PRC border and noted that the recent news reports of the PRC demanding the repatriation of all North Korean workers (see Issue #54) could actually have been spearheaded by Chinese businesses who don’t want to pay the North Koreans higher wages, and would prefer to replace them with new workers from across the border.
//I haven’t had the chance to read it yet, but RUSI released a new report by Daniel Salisbury on “Shopping for Mass Destruction: North Korea’s Illicit Procurement Networks.” Salisbury has always produced insightful work about illicit networks, and this looks to be no different.
--
According to covert reporting from inside North Korea, a government ministry is recruiting soldiers to be sent to Moscow-based Namgang Trading Company, to earn hard currency. The workers will be deployed for two years and be required to earn USD730 (RUB70,000). //It’s not clear in the article if they must earn this amount annually or over their two year stint in Russia.
North Korea has approximately 8,400 people engaged in cyberwarfare, according to South Korea’s National Intelligence Service. This is a 20 percent increase from 2022 estimates of 6,800 workers. There are also concerns that the DPRK is conducting joint research with Russian hackers.
The still unfinished Ryugyong Hotel in Pyongyang is planning to sell rights to operate a casino on the property to any foreign company which can complete construction of the building’s interior.
Choson Exchange, a Singapore-based nonprofit that provides entrepreneurial training for North Koreans, will resume face-to-face training in the DPRK at the end of 2024, which it has not done since 2019.
North Korea is possibly supplying an anti-tank guided missile combat vehicle to Russia for use on the front lines in Ukraine.
Iran
Critics are skeptical about the completion of the long-discussed Rasht-Astara Railway (see Issue #36), which is part of the International North-South Transport Corridor (INSTC). Though Moscow and Tehran have discussed the railway for over 20 years — with most recent discussions occurring at the start of 2024 — there has not been any progress on actually starting construction. Some observers think the railway will never be built, especially as Russia agreed to finance the majority of the project, though it’s unclear exactly where the funds would come from.
--
According to estimates, the PRC imported 1.450 million barrels per day (bpd) of Iranian oil in June 2024, primarily through Malaysia.
According to Iranian government officials, between March-July 2024, Iran imported USD18.5 billion worth of commodities, imported USD800 million of gold bars, and had USD15.7 billion worth of oil exports. The UAE, PRC, Türkiye, and India were the primary export destinations.
VTB Bank will be the first Russian bank to participate in Iran’s 14th International Exhibition of Exchange, Bank & Insurance (Iran Finex 2024), which will be held in mid-August in Iran.
Two new Iranian trading centers will be opened up in Shanghai, PRC and Minsk, Belarus, under the umbrella of Iran’s Trade Promotion Organization.
Iran’s supreme leader, Ali Khamenei, stated that Iran’s future lay with the PRC and Russia, and would only support better relations with Europe if they changed their attitude about Iran.