Sanctions Targeting North Korea Ripple Into Russia

Room 615 in Vladivostok's Hotel Gavan is a cramped, two-room "business suite" with green wallpaper and carpeting. Yet when former North Korean leader Kim Jong Il traveled to Russia's Pacific coast in 2002, the modest digs served as his presidential suite.

A commemorative plaque on the side of the boxy hotel is a lone reminder of the visit by Kim Jong Il, father of North Korea's current leader Kim Jong Un. Before his death in 2011, Kim Sr. made three trips to Russia in his famous, slow-moving armored train.

While North Korea's border with Russia is only 11 miles long, it has served as a vital link to the outside world since the end of World War II, when the Kremlin helped establish the reclusive Communist state. After coming into office in 2000, Russian President Vladimir Putin worked hard to build transportation and energy links across North Korea to the lucrative markets of South Korea.

"Russia currently has the best relationship with North Korea among the major powers," said Artyom Lukin, an international relations professor at the Far Eastern Federal University in Vladivostok. "Even China, which is North Korea's only formal ally, has frankly problematic relations. So probably Russia is the country which North Korea trusts the most — or to put it more correctly, distrusts the least."

But as Pyongyang continued to ignore warnings to give up its nuclear weapons program last year, Moscow had little choice but to join China in signing on to the latest round of United Nations sanctions in September.

At the same time, the Kremlin saw an opening to act as a mediator between North Korea and the United States, said Lukin. And that's why it went along with the sanctions, intended to hit North Korea's economy by limiting its oil imports, banning textile exports — and requiring Russia to expel some 30,000 North Korean migrant workers.

In his second-floor office in a shabby building a few steps away from the Hotel Gavan, Vladimir Baranov was fuming over the new restrictions.

In May, his company, InvestStroyTrest, started a ferry service between Vladivostok and the North Korean port of Rajin, a 12-hour ride along the coast.

"Of course I don't have any cargo volumes with these sanctions, which ban even wheelchairs," said Baranov. "I'm not working right now because there's no cargo."

His company's ferry, a North Korean vessel named the Man Gyong Bong, is now stuck in Rajin after Vladivostok port officials refused to let it dock under suspicion it was carrying sanctioned goods — a claim that Baranov is disputing in court.

Baranov is still hoping he'll find passengers among Russian and Chinese tourists, though he can soon forget about the region's thousands of North Korean migrant workers that Moscow says will have to leave.

Most of these laborers work on construction sites and farms in the Russian Far East, though some are employed at the North Korean restaurants that dot Vladivostok. At the Koryo restaurant next to city hall, young North Korean women in traditional costumes belt out sentimental Korean tunes over the karaoke system.

"They're great workers who'll work day and night," said Valentin Pak, a Russian entrepreneur and politician whose own ancestors emigrated from Korea five generations ago. "They will be sorely missed."

Pak said it will be hard to replace the North Koreans and is skeptical of statements by regional officials that they can be replaced with workers from India or Central Asia.

Ever since Russia began settling its remote Pacific territories in the mid-19th century, labor shortages have been a serious problem — and workers from neighboring Korea were a logical choice to help fill the gap. During Soviet times and into the 1990s, North Koreans toiled under brutal conditions in Siberian logging camps run by the North Korean government under an agreement between Moscow and Pyongyang.

Today the government in Pyongyang still profits from its citizens going to Russia for work, which is the whole idea behind the restrictions on North Korean workers.

"For North Korea, it's a business, because all the laborers who work here pay their government to be here," said Irina Tyan, a businesswoman who co-owns a farm with the North Korean consulate in Vladivostok. Like Pak, she is a member of Russia's ethnic Korean community, which is well-integrated into Russian society.

Tyan's North Korean partners invested $2 million into a 10,000-acre farm that grows soy, corn, wheat and oats. Until last year, the business employed 10 Russians and about 20 North Koreans.

The North Korean workers earned 20,000 rubles ($320) per month plus room, board and clothing, Tyan said, though she didn't pay them directly but via their North Korean government supervisor.

She disagrees with reports that North Koreans work in slave-like conditions in Russia. They just don't make the same demands as Russian workers — such as an eight-hour workday with lunch and smoking breaks — and are under the strict guidance of their North Korean minders, Tyan said.

"They're afraid, that's clear," she said. "But they'll still do anything to get here because they can go where they want, go shopping, buy whatever they want or need. They won't say it out loud, but it's clear that they want to continue living and working here."

After her quota of 30 North Korean workers was canceled because of the sanctions, Tyan's last eight North Koreans are due to go home this month. If the sanctions aren't lifted by next year's planting season, she said she would have to sell the business.

"Of course, nobody knows what will happen next," Tyan said. "Maybe they'll lift the sanctions tomorrow, maybe in a year, maybe never."

One Russian businessman who remains optimistic is Ivan Tonkikh, who runs RasonConTrans, a cargo terminal in Rajin, North Korea, jointly owned by Russian Railways and the North Korean state.

Although the venture is exempt from the latest U.N. sanctions, Tonkikh is having trouble finding partners who would be willing to export coal via Rajin. While business is at a standstill, he said that he wants to convince the U.N. to allow the delivery of humanitarian shipments to his port.

Tonkikh downplays the economic levers Moscow has over Pyongyang, though he adds that the cargo terminal is an investment in a brighter future.

"Rajin is only the beginning. It's the first segment of a restored trans-Korean railway," said Tonkikh. "We call Rajin the 'short track to consensus' on the Korean Peninsula."

If that dream ever comes true, one day goods from South Korea will travel by rail all the way to Europe across Russia.

Kim Jong Il's epic train journeys to Russia may have been a harbinger of what's to come.

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