Russia targets North Korea with financial sanctions

MOSCOW, May 20 (UPI) -- Russia's central bank is to ban North Korea-related financial transactions in order to implement United Nations Security Council sanctions.

The move comes after the European Union announced more sanctions targeting top North Korean military officials, Radio Free Asia reported.

The new law means all Russian banks are banned from Pyongyang-related activities. Any existing accounts found to be linked to transactions leading to the North Korean purchases of nuclear weapons or ballistic missiles are to be frozen immediately.

Some accounts, however, can stay open, but only with special permission from the U.N., according to the report.

By Russian President Vladimir Putin's decree, North Korean banks and joint ventures operating in Russia are to be shut down. Transactions deemed illicit are to end by a late May deadline.

Russian foreign ministry spokeswoman Maria Zakharova confirmed the sanctions are compliant with obligations Russia faces as a U.N. member, but added that Russia hopes North Korea pursues a policy that respects the responsibilities and obligations of U.N. member states.

The sanctions could cut deeply into Pyongyang's treasury. South Korean television network MBN reported Kim Jong Un could be keeping hundreds of millions of dollars in Russia, funds used for logistics businesses that bind the two economies together.

Cho Bong-hyun, a senior research fellow at Seoul's Industrial Bank of Korea, said the sanctions not only block North Korean transactions with Russia, but they also hinder North Korean activities with third-party countries that are done through Russian accounts.

Russian investments in North Korea could also be affected, Cho said.

Moscow, however, is retaining some key projects.

Far East Development Minister Alexander Galushka told Sputnik news agency Friday that Russia intends to continue the Rajin-Hasan railway project, which has previously been used to transport Russian coal into North Korea and other destinations.

In Brussels, the E.U. has expanded sanctions to 18 North Korean individuals heavily linked to weapons proliferation, The Wall Street Journal reported.