Pyongyang response to Washington Declaration; UN PoE turbulence; Iranian diplomacy with Syria, India, China, and Russia.
Prohibited Transactions for the week of 1 May 2023
North Korea
In response to the “Washington Declaration,” Kim Yo-Jong, the sister of North Korea’s leader, stated that the DPRK will respond by enhancing its “nuclear war deterrent” and bringing it “to further perfection.” //The bombast from Pyongyang isn’t surprising, and the DPRK could engage in military exercises in the near future to signal their displeasure. North Korea may also launch more cyberattacks and cyberthefts targeting US and South Korean banks and digital currency exchanges.
Though the UN Security Council agreed to extend the mandate of the UN Panel of Experts (PoE) on North Korea through April 2024, Russia and China have raised objections about the role of the PoE coordinator. The dispute has paused the work of the panel, and it is unclear if a resolution is forthcoming. //The PoE continues to produce the most authoritative report on DPRK sanctions evasion, but faces continual pressure – in particular from Beijing – to remove or downplay evidence which makes China look bad. Having read the reports for the past decade, the more recent ones do feel less detailed and with a lot more comments and refutations from Chinese representatives.
A South Korean economics think tank estimated that 2.88 million solar panels are in use by North Korea. The think tank identified 1.63 million panels bought from China between 2009 and 2018, with the other 1.25 million solar panels likely smuggled into North Korea. //A fair share of those are also probably from China.
Iran
The head of the Iran-China Friendship Association stated it is Tehran’s goal to further expand relations with China, including a “sisterhood” agreement between a province in Iran and one in China, which would create opportunities for Chinese investments into Iranian projects. //Perhaps under the auspices of China’s Belt and Road Initiative (BRI)?
After a five year delay, Saipa, an Iranian state-owned automaker, is beginning to import Chinese cars into the country. This is part of a broader plan by Tehran to import approximately 100,000 cars – all from Changan Automotive – to Iran by March 2024. //Iran is probably paying for these cars via a barter system that exchanges Iranian crude oil for Chinese products.
During a visit by Iran’s president to Syria, the two sides signed 15 long-term cooperation agreements in areas including oil, trade, and banking. Tehran and Damascus will also hold talks in the future about expanding “economic relations in the maritime and rail sectors, facilitate bank transactions and reduce free trade tariffs.”
Iran and Russia are looking to revise and extend an existing cooperation agreement between the two countries, to better reflect the current status of their relations. It would include cooperation in “political, regional, international, economic, security, intelligence, cyber, defense” and other affairs.
According to an Iranian government official, despite US sanctions, the country purchased and took delivery of approximately 50 used aircraft and helicopters for its civil aviation fleet over the past year and a half. //The article doesn’t say where the aircraft came from, but in an example from December 2022, four planes registered in Burkina Faso (previously part of Turkish Airline’s fleet) were bought by Iran. Tehran’s civil aviation fleet faces many challenges, as the average plane age is 28 years, and domestic airlines are unable to procure spare parts for repairs due to sanctions.
In a meeting between the national security advisors of Iran and India, the former suggested that the two nations increase use of the rial and rupee in bilateral trade transactions, as a way to help both sides meet their joint economic objectives. They also discussed the Chabahar port project. //According to Indian government statistics, bilateral trade between Tehran and New Delhi reached USD2.5 billion in 2022, a 48 percent increase from 2021, which was largely due to growth in Iranian oil exports to India. The desire by Tehran to switch to a rial-rupee trade mechanism is more about trying to overcome Indian concerns about payments and sanctions restrictions.
Iranian media confirmed a US Navy statement that Tehran seized a second oil tanker this week. //It appears that the first seizure, on 27 April, was in retaliation for the US having previously confiscated Iranian oil from a vessel near southern Africa. Unclear if the more recent seizure is related, or a separate issue.
Thousands of Iranians rallied in London, asking Britain to declare the Islamic Revolutionary Guard Corps (IRGC) a terrorist organization. //These protests reminded me about how disputes within the diaspora in the US are getting uglier, and impacting US policymaking towards Iran.
Other reads
A Russian procurement network – which was sanctioned by the US in March 2022 – continues to evade US and EU sanctions and acquire restricted goods from unwitting companies in Germany, Finland and Singapore. //As noted in the article, this type of network mirrors what North Korea and Iran have been doing for years to get around sanctions.