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MOSCOW, Russia – After an explosive report claimed that Russia had been allowing thousands of fresh North Korean laborers into the country and granting them new work permits, Kremlin has now denied the report.

The report in Wall Street Journal pointing at potential violations of UN sanctions by Russia and cited records from Russia’s interior ministry which showed that since September, over 10,000 new North Korean workers have registered in Russia.

The report claimed to have obtained labour Ministry records, which showed that a minimum of 700 new work permits had been issued to North Koreans in Russia this year.

It further quoted sources as saying that UN officials are probing potential violations of the sanctions, which contain narrow exceptions.

U.S. officials were quoted as saying that Russia’s action potentially violates UN sanctions to reduce cash flows to North Korea and puts pressure on Pyongyang to give up its nuclear weapons.

A U.S. State Department spokesperson said in a statement, “It’s absolutely clear that Russia needs to do more. Russia says it wants better relations with the United States, so Moscow should prove that by cooperating with us, not working against us, on this urgent threat to all nations.”

The spokesperson added, “It is estimated that North Korean laborers in Russia send between $150-$300 million annually to Pyongyang. Now is the time for Russia to take action: Moscow should immediately and fully implement all the U.N. sanctions that it has signed on to.”

According to the Journal, the labor prohibition is a part of a broader array of sanctions that are aimed at eliminating an important revenue stream for North Korea. 

It stated that most of the money North Koreans earn abroad ends up in government coffers as workers toil in grueling conditions.

Separately, C4ADS, a non-profit research organization, released a report that said said initial restrictions in China and Russia appear to have loosened.

Around 80 percent of North Korean laborers are believed to work in Russia and China.

The report stated, “For a time, both Russia and China appeared to be expelling North Korean workers well before UN deadlines, but more recent reporting suggests that North Korea may have again begun to dispatch labor to both countries.”

Earlier this week, Seoul-based Asan Institute for Policy Studies too released a separate report, which said that between 2015 and 2017 the Moscow-based Independent Petroleum Company (IPC) sold far more oil to North Korea than what was officially reported.

According to the estimations drawn out in the report, “The amount of oil IPC sold to North Korea between 2015 and 2017 could be worth as much USD 238 million. This far exceeds Russia’s official report on its oil exports to North Korea during the same period, which amounted to USD 25 million.”

However, on Friday, in a statement issued to the Interfax news agency, Russia’s ambassador to North Korea, Alexander Matsegora, denied the allegations.

Matsegora said in the statement that fresh documents had been issued to laborers already based in Russia who were working on old contracts.

The ambassador further argued that the laborers were allowed to work in Russia until November 29, 2019 as their work contracts had been signed before sanctions came into force.

The statement added that 3,500 new work permits had been issued to workers who had signed contracts in Russia before November 29, 2017.

Matsegora also denied that Russia was flouting UN restrictions on oil supplies to North Korea.

In June 2017, Moscow’s Independent Petroleum Company (IPC) was sanctioned by the U.S. Treasury Department over its trade with North Korea.

Then, in December 2017, the UN imposed its strictest limits on North Korean imports to date.