July 27, 2022
Sanctions, Cyber, and Crypto: How Pyongyang Can Exploit the War in Ukraine
According to North Korean state media, Foreign Minister Choe Son-hui recently acknowledged the People’s Republic of Donetsk (PRD) and the People’s Republic of Luhansk (PRL) in eastern Ukraine as independent states. As a result, Kyiv severed diplomatic ties with Pyongyang, citing North Korea’s efforts to undermine the sovereignty of Ukraine on behalf of Moscow.
Located in the Donbas region of eastern Ukraine, the two rebel-controlled territories have significantly contributed to Russian efforts to assert its ideological, political, and military influence over Ukraine for years, with a particularly important role in the ongoing Russian invasion starting in February 2022. Choe expressed Pyongyang’s intent to develop “state-to-state relations with those countries,” following a series of official government statements and convenings seemingly codifying diplomatic relations between the two breakaway states and North Korea.
If Russian forces completely isolate Donetsk and Luhansk from the rest of Ukraine, North Korea could expand its sanctions evasions campaigns in eastern Europe without potential pushback from the Ukrainian government.
Sanctions Evasion
If Russian forces completely isolate Donetsk and Luhansk from the rest of Ukraine, North Korea could expand its sanctions evasions campaigns in eastern Europe without potential pushback from the Ukrainian government. Traditionally, Russia and North Korea have a shared history of forced labor and migration dating back to the Cold War when banished Soviet-Koreans helped create political and social infrastructure in North Korea, as well as numerous industrial projects within both countries.
In the modern day, the U.S. government reports that Pyongyang continues to dispatch domestic laborers and IT workers into foreign countries like Russia to illicitly generate currency for Pyongyang. While the current number of overseas workers post-COVID-19 is difficult to confirm, CNN reported in 2018 that an estimated 50,000 North Korean laborers are stationed inside Russia to generate roughly $500 million a year for Pyongyang. Despite a U.N. resolution stipulating that all member states should repatriate North Korean laborers by December 2019, the U.N. Panel of Experts on North Korea indicated that both Russia and China have allowed North Korean laborers to overstay their visas in clear violation of U.N. sanctions.
Read the full article from The Diplomat.
More from CNAS
-
BONUS: Comparing China Sanctions Under Trump and Biden
Join Emily Kilcrease and researcher Eleanor Hume to discuss the latest edition of CNAS's Sanctions by the Numbers series, examining how the U.S.'s sanctions policy on China ha...
By Emily Kilcrease & Eleanor Hume
-
Sanctions by the Numbers: Comparing the Trump and Biden Administrations’ Sanctions and Export Controls on China
Executive Summary The Biden administration has exceeded the Trump administration in the number of financial sanctions and entity-based export controls placed on Chinese person...
By Eleanor Hume & Rowan Scarpino
-
A Fight Among China Hawks Could Imperil U.S. AI Dominance
Rolling the dice now on partnerships like the G42 deal could be critical to ensuring U.S. dominance....
By Daniel Silverberg & Elena McGovern
-
U.S. Chip Controls and the Future of AI Compute
That escalated quickly! Emily and Geoff discuss why the U.S. aim to deny China access to the computing power necessary for frontier AI capabilities has led to an ever expandin...
By Emily Kilcrease, Geoffrey Gertz & Pablo Chavez