Russia Unfreezes $9 Million for North Korea Despite UN Sanctions

On September 6, the New York Times (NYT) reported that Russia has partially unfrozen North Korean funds, despite UN sanctions against North Korea, and has allowed them to use their national banks.

Citing sources from US-allied intelligence, the NYT reported that Russia allowed the withdrawal of $9 million out of the $30 million (approximately 40 billion KRW) of North Korean funds tied up in their financial institutions. According to intelligence officials, this money is expected to be used by North Korea to purchase crude oil.

Claims have also been made that Russia has aided North Korea in returning to the international financial network, from which it had been expelled. These officials stated that North Korea’s shell companies have recently opened accounts in another Russian bank located in the pro-Russian autonomous republic of South Ossetia. This is evidence that Russia is helping North Korea evade UN sanctions, which have blocked North Korea’s access to the international financial network.

The circumstantial evidence that Russia has unfrozen North Korean funds and aided their access to the international financial network emerged after North Korea transferred weapons to Russia, which is currently at war with Ukraine. It is unclear whether Russia provided military technology to North Korea in return. Still, according to the NYT, such financial transactions are another signal of the ongoing development of relations between North Korea and Russia.

However, US authorities have stated that they cannot confirm the details.

Experts explain that access to the international financial network is one of the things North Korea has long desired. The UN has applied sanctions such as asset freezes and blocking off international financial transactions with North Korea, citing reasons such as nuclear tests and missile launches. In response to the report, former US Deputy Secretary of the Treasury, Juan Zarate, who isolated North Korea from the international financial network with the 2005 Banco Delta Asia (BDA) sanctions, interpreted that if the report is accurate, the Russian government is willing to cross the Rubicon to become a financial and commercial rogue that deals with North Korea.