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Colin Zwirko is an NK News correspondent based in Seoul.
Russia is keen to seek new ways to avoid sanctions violations while boosting trade with North Korea, Far East development ministry chief Alexander Kozlov was quoted as having said Wednesday during an annual bilateral trade and cooperation conference in Moscow.
The two sides are actively engaging on ways to settle transactions “of goods that are not prohibited” in rubles to avoid violating UN and U.S. sanctions, Kozlov said in comments carried by Russia’s Interfax News Agency.
“It is difficult to solve the issues of export-import operations due to the ban on bank transactions in the current conditions, but we are in a dialogue to discuss the mechanisms of increasing the turnover of goods,” he added.
The comments came during meetings held as part of the 9th DPRK-Russian Intergovernmental Committee (IGC) for Cooperation in Trade, Economics, Science, and Technology, headed by Kozlov and attended by a DPRK delegation led by Minister of External Economic Relations Kim Yong Jae.
Representatives for the North Korean side included members of the “ministries of economic affairs, fisheries, health, railways, communications, and others,” according to the Russian embassy in Pyongyang.
In additional comments at the meetings from Kozlov carried by Russian outlet FinMarket, the Far East development minister said he believed economic departments of the two countries would soon “agree on a protocol on the use of funds that can be sent for development projects” in the DPRK.
The projects will serve, he reportedly added, as “a tool for resolving the debt that arose between the two countries in previous periods.”
Kozlov’s comments imply that Russia may seek to use rubles to pay for materials and labor needed in such development projects in North Korea as modernizing the Rason-Khasan rail corridor and building a new cross-border road bridge.
As projects that are expected to benefit Russia financially once operational, Kozlov is likely referring to future profits from those projects that would serve as payment for North Korean debt to Russia – a topic which a source who attended the meetings told NK News was discussed at length on Wednesday.
The source said the issue of sanctions prohibiting North Korean laborers from working abroad was raised as well, with the two sides discussing the upcoming December 22 deadline for the workers to be sent home in line with UN Security Council Resolution 2397.
Minister Kim Yong Jae also reportedly highlighted on Wednesday the planned “trading house” in the meeting – another project which the developer has said will established as a wholly Russian entity, likely as a means of attempting to avoid sanctions issues.
Ahead of the North Korean delegation’s trip to Moscow, however, a statement released by the Russian embassy in Pyongyang said that “it is important to note that all our work in this context is in strict compliance with the commitments that the Russian Federation has accepted [within] the framework of the known resolutions of the UN Security Council.”
Also discussed Wednesday was the new road bridge set to be built near the existing Khasan-Tumangang rail bridge, though it appears an agreement is yet to be reached over the project.
Kozlov reportedly presented technical plans for the bridge prepared by the Russian side, according to RIA Novosti, but said the two sides would need to further “discuss issues related to the design and [cost] estimate documentation.”
“And in the future, decisions on the construction, on the conditions of this construction and issues related to the signing of the intergovernmental agreement should include those unknown parameters, which we do not have today,” he added.
Kozlov reportedly said the two sides agreed “in principle” over the next steps in the project, dashing hopes expressed last month to conclude the plans through the 9th IGC in Moscow this week.
Following meetings in Vladivostok on February 1 over the trading house and road bridge, North Korean Vice Minister of External Economic Relations Ri Kwang Gun “pointed out the importance of signing an intergovernmental agreement on the project’s implementation as soon as possible,” according to a press release from the Primorsky Krai government.
Alongside the delegation led by Kim Yong Jae was another led by vice department director of the Central Committee of the Workers’ Party of Korea (WPK) Han Man Hyok, who met with the leaders of two major political parties in Moscow on Monday, the Korean Central News Agency (KCNA) reported.
The visit is related to the 70th anniversary of the signing of “agreements on economic and cultural cooperation between the USSR and the DPRK” on March 17, 1949, a post on the Russian embassy in Pyongyang’s Facebook said.
Han also visited the State Duma on Tuesday to attend a photo exhibition hosted by the Communist Party of the Russian Federation on the history of inter-party relations.
Meanwhile, days before the IGC meetings, the two sides signed a memorandum of understanding (MOU) “on cooperation in tourism” on March 1, according to a KCNA report released Wednesday.
The 10th IGC meetings on Cooperation in Trade, Economics, Science, and Technology will be held in Pyongyang in 2020, Kim Yong Jae announced in Moscow this week, Sputnik reported.
Edited by Oliver Hotham
Featured image: File photo