Putin likely offering North Korea access to international funds in exchange for weapons – NYT

Russia may possibly be helping North Korea access international banking networks, the ability to do so being part of a "wishlist" of favours the nation would like Russia to grant in return for supplying it with armaments.

Source: The New York Times, with reference to members of the intelligence service, officials including a top official, as well as experts

Quote: "Russia has allowed the release of $9 million out of $30 million in frozen North Korean assets deposited in a Russian financial institution, according to the intelligence officials, money that they say the impoverished North will use to buy crude oil."

Details: According to NYT, the White House claimed last month to have evidence of North Korea supplying Russia with ballistic missiles in return for Russian military technology. The number of projectiles sent to Russia could total up to 2.5 million, according to the British Analytical Centre for Security.

NYT reports that a North Korean front company recently opened an account at another Russian bank, evidence that Moscow may be aiding Pyongyang in evading UN sanctions that enjoin most banks from doing business with North Korea. These sanctions have considerably hindered the North Korean economy and locked the country out of international financial networks.

Quote: "The new bank account is based in South Ossetia, a self-proclaimed independent state in the Caucasus region that has close ties with Russia," said officials, who divulged the intelligence-related details under the condition of anonymity.

American officials said that they could not confirm the specifics of the banking arrangements. But one senior official, also discussing intelligence matters under the condition of anonymity, said that the nature of the arrangements is essentially what the U.S. would expect to see if Russia granted North Korea’s wish as requested.

More details: Experts believe that access to financial networks is only one item on North Korea’s wishlist. It is especially interested in receiving advanced military technology from Russia, such as satellites and nuclear submarines, in return for arms.

NYT emphasises that banking connections may be especially important to North Korea, which relies on imports to sustain much of its economy. Access to international banking networks may facilitate transactions via Moscow with South Africa, Türkiye and other countries further afield that still conduct trade with Russia, in addition to Russia itself.

Juan C. Zarate, former assistant Treasury secretary and expert on financial crimes, stated that if Moscow allows North Korea to use Russian banks or unblocks frozen assets, the government would be "cross[ing] the Rubicon of willingness to deal with North Korea and to be a financial and commercial rogue."

He added that whilst Russia’s already-executed release of $9 million in frozen assets is relatively small, the North Koreans "welcome any alternative methods of accessing capital".

Financial favours may be more appealing to Russia than the transfer of military technology.

Even though the two countries "could be friends with benefits now," said Soo Kim, a former C.I.A. analyst with a focus on North Korea, "the level of trust is not strong enough for Russia to give away its most valued secrets."

The experts NYT consulted believe that Russia will act cautiously, since it is still mindful of U.N. sanctions as a permanent member of the Security Council. Russia, they said, may believe it can aid North Korea in a manner that will sidestep potential sanctions (such as with the help of private banks).

In addition to repayment in favours, Russia may also simply barter goods for weapons with North Korea.

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