Factsheet: Russia’s growing financial links with Iran and North Korea
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To tackle the growing risks:

  1. We call on the Financial Action Task Force (FATF) to blacklist Russia at its next plenary in June and protect the global financial system from Russia’s intensifying ties with Iran and North Korea.

  2. We call on national jurisdictions to designate Russia as a high-risk country to protect their businesses from the impacts of illicit financial activities, including trade between Russia, North Korea and Iran.


In the two years since launching its full-scale invasion of Ukraine, Russia has substantially intensified its relationships with countries under global sanctions, particularly Iran and North Korea. Both states have been blacklisted by the Financial Action Task Force (FATF), the leading international organisation founded by the G7 that is responsible for monitoring and combating money laundering and terrorism financing.

Russia has effectively provided Iran and North Korea with a back door into the global financial system. By undermining UN-imposed sanctions and assisting rogue states to disregard international rules and norms, Russia is endangering global financial security, facilitating terrorist financing, and posing a threat to nuclear non-proliferation and wider global security.

Illegal arms trade

Since 2022, Iran has been supplying Russia with Shahed kamikaze drones, with which Russia has used extensively against civilian targets in its ongoing bombing campaign against Ukrainian cities. Iran’s government has stated that it has finalised a deal to acquire fighter jets from Russia.

• The G7 has threatened to impose further coordinated sanctions against Iran if it supplies Russia with ballistic missiles. A Russian delegation visited Iranian military bases in December to observe missiles and related equipment. Russian defence minister, Sergei Shoigu, also visited Tehran several months before. Anonymous sources in the Iranian military have claimed that Iran has already supplied Russia with as many as 400 ballistic missiles.

Financial support

• Russia has set up a joint payment system, the SPFS, as an alternative to the SWIFT financial transfer system. Iran has connected to the SPFS and has linked its banking system with Russia’s according to senior officials, allowing it to evade international sanctions. Russia’s VTB bank opened a branch in Tehran last year.

• An Atlantic Council report has claimed that Russia and Iran are attempting to circumvent Western sanctions against their oil industries by redirecting shipments to China, creating an alternative covert market for oil that operates outside of international regulations.

• Working with Russian intelligence agencies, Iran has been accused of using British banks as part of a sanctions evasion scheme to raise money for its military proxies.

Illegal arms trade

• Debris recovered from missile strikes in Ukraine has revealed that Russia has been using North Korean ballistic missiles in Ukraine in direct violation of UN sanctions.

• North Korea has been conducting missile tests as de facto demonstrations ahead of planned sales of these missiles to Russia.

• Since autumn 2023, analysts have documented mounting evidence of a munitions pipeline from North Korea to Russia; according to a UN report, this involves the smuggling of arms through Syria via the Wagner Group. Sanctioned Russian cargo airplanes and ships have also made frequent trips to North Korea.

• On April 2nd, South Korea announced sanctions against two Russian ships implicated in an illegal arms trade with North Korea. Several Russian companies and individuals, purportedly assisting the North Korean regime financially, have also been targeted by these sanctions.

RUSI analysis has revealed that Russia has begun supplying oil to North Korea in violation of the UN Security Council resolutions. The evidence suggests that oil is being traded for North Korean weapons.

Violations of nuclear non-proliferation agreements

• On March 28th, Russia used its veto at the UN Security Council to abolish a UN panel that monitored enforcement of the UN sanctions regime against North Korea’s nuclear programme. Evidence suggests that the abolition of the UN panel will undermine the effectiveness of sanctions and embolden North Korea.

Financial support

• US intelligence officials have recently reported that Russia has released $9 million worth of frozen North Korean assets into Russian financial institutions and that a North Korean front company recently opened a Russian bank account.

• Russia continues to hold accounts for North Korea’s Foreign Trade Bank, an entity under UN sanctions.

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