On Thursday, the U.S. Department of the Treasury announced sanctions on a network consisting of five entities and one individual for assisting Russia and North Korea in circumventing international sanctions to facilitate trade payments in support of North Korea’s weapons program and Russia’s war against Ukraine.
According to a press release issued by the U.S. Treasury Department on Thursday, the network was based in Russia and South Ossetia, a territory occupied by Russia. It facilitated and supported illegal payment mechanisms between Russia and North Korea. The United States took action today to hold accountable those assisting North Korea (Democratic People’s Republic of Korea) and Russia in evading sanctions.
“With increasing losses on the battlefield and deepening international isolation, Russia is increasingly relying on North Korea for arms procurement and economic cooperation,” the press release stated. “Today’s sanctions demonstrate that the Putin regime has used illegal financial schemes to allow North Korea access to the international banking system, in violation of targeted financial sanctions provided in UN Security Council Resolution 1718 and the ban on establishing agency relationships with North Korean banks as set out in UN Security Council Resolution 2270.”
Bradley T. Smith, Acting Deputy Assistant Secretary of the Treasury for Terrorist Financing and Financial Crimes, stated in the press release, “Today’s action underscores our serious concerns about Russia and North Korea’s violations of UN Security Council resolutions and efforts to deepen financial cooperation. The United States remains firmly committed to using all available tools to disrupt this scheme and thwart other plans aimed at supporting Russia’s aggression against Ukraine and enabling North Korea’s unlawful access to the international financial system.”
According to Reuters, North Korean state media, KCNA, reported last Saturday that Kim Jong Un, the leader of North Korea, met with Sergei Shoigu, Russia’s top security official, a few days before the U.S. took action, to discuss enhancing strategic dialogue between the two countries.
The United States, Ukraine, and independent analysts have all indicated that North Korea is helping Russia, mired in a war, by providing rockets and missiles in exchange for economic aid from Moscow and certain military assistance.
The sanctions target a financial scheme orchestrated by the state-owned banks of North Korea, the Foreign Trade Bank and Korea Kwangson Banking Corporation. Both banks have previously been sanctioned by the United States.
The U.S. Treasury Department accused the Central Bank of Russia of another plot to use MRB Bank in South Ossetia, Georgia, as a designated Russian bank to establish a covert banking relationship with the North Korean Foreign Trade Bank.
Another scheme involved the Russian Financial Corporation Bank JSC, which has also been sanctioned by the U.S., cooperating with the North Korean Foreign Trade Bank to establish a company headquartered in Moscow to receive frozen North Korean funds, which were held in some defunct Russian banks.