Image Credit: NINO JOSE HEREDIA/Gulf News

US President Barack Obama and Russian President Dmitry Medvedev just signed a major new nuclear arms control treaty in Prague. The world's great nuclear powers will meet this month in Washington and next month at the United Nations to discuss additional cuts. This is good news for everyone, everywhere. But neither the US-Russia agreement, nor the coming global nuclear arms talks, will have much impact on today's most perilous threat: the nuclear honeymoon between an Iran determined to acquire a nuclear weapons capacity and a North Korea willing to sell Iran much of that capacity for hard currency.

Today, more than 6,000 North Koreans work in Iran and neighbouring areas of the Middle East. Many are engaged in construction and the apparel business as low-wage workers. But in Iran and Syria, there are also a growing number of specialist workers.

Of the many North Koreans living in Iran, most are engaged in activities on behalf of the Korean Workers' Party. Their mission is to propagandise the party's ideology in the Islamic Republic. The daily life of these Koreans is constrained within a small community where the Party exercises total control over all personal exchanges.

But other North Koreans in Iran do not take their marching orders from the embassy, and they are of three types. Those from "Office 99" report to the Munitions Industry Department in Pyongyang. Those from "Office 39" report to the Finance and Accounting Department. A final group reports directly to the Secretarial Office of North Korea's "Dear Leader," Kim Jong-il.

In 2002, it was estimated that more than 120 North Korean nationals were working at more than 10 locations across Iran that were relevant to missile or nuclear development. The missile and nuclear business conducted by North Koreans in Iran serves as a cash cow, providing Kim's regime with a pile of hard currency while forging a virtual anti-American alliance. By enhancing nuclear proliferation and the transfer of essential nuclear and related technologies to Tehran, Kim hopes to shape fundamentalism as a bastion of pro-North Korean feeling.

Under Kim's watch

Until 2009, the Department of Finance and Accounting and the Secretarial Office in North Korea have been responsible for the export of missiles and missile technologies to Iran through the dummy companies managed by Office 99. All such transactions have been conducted under the direct orders of Kim.

This is how it works: the Second Economic Committee, which is under the command of the Party's central leadership, manufactures missiles with the help of North Korea's Second Academy of Natural Sciences. Companies under the control of Office 99 export the missiles to Iran. The foreign currency earned by the export of missiles and nuclear or other weapons goes either directly into Kim's pocket, or is used to fund further nuclear development.

Following the nuclear test conducted by North Korea in 2009, the United Nations imposed sanctions on Kim's regime through Security Council Resolution 1874, which shut down the flow of foreign currency into North Korea. The irony is that the sanctions have made Iran an even more important partner for North Korea than it was before. So the nuclear relationship has been hardened, not disrupted, by sanctions.

According to high-level internal Workers' Party documents brought to Japan by North Korean informants, a new front apparatus, the Lyongaksan General Trading Corporation, was created in 2010. This organisation, it appears, is now intended to play the central role in managing the export of missile and nuclear technologies to Iran.

Of course, this is simply a new wrinkle on an old practice, for North Korea has regularly used dummy companies to export missiles. Names, addresses, and phone numbers for such companies are all non-existent, as has been proved by the documents found when the UN confiscated illegally exported weapons under Resolution 1874.

So desperate is North Korea's financial position that, this past December, the Ministry of People's Security suspended the domestic use of foreign currency. Violations are punishable by death. Such a harsh measure suggests that, even though the sanctions have hardened North Korea's desire to export nuclear weapons and technology to Iran, the process is becoming more difficult and the regime is losing its key mechanism to earn foreign currency.

Kim will seek to maintain the relationship with Iran no matter what. If this trade is to be halted, China — through whose territory most shipments to and from North Korea pass — will need to play a more responsible role. But, given the scope of the Iranian-North Korean nuclear relationship, Asia's democracies must start to think seriously about co-operating on regional missile defence in the way that Nato Secretary General Anders Fogh Rasmussen has urged Nato and Russia to co-operate. When the stakes are so high, the response must be creative and bold.


Yuriko Koike, a former Japanese Minister of Defence and National Security Advisor, is a member of the opposition in Japan's Diet (bicameral legislature).