Mercedes-Maybach S 600 Guard

How North Korea Smuggles Luxury Cars and Evades Sanctions

North Korea is under the world’s most stringent set of international sanctions. This includes, since 2006, a ban on exporting of luxury goods to North Korea. So how is it that Kim Jong Un has amassed fleet of high-end cars?

A new report in the New York Times offers a glimpse into the complex ways that North Korea is able to evade international sanctions to import luxury cars — and perhaps also smuggle illicit goods and materiel into the country.

Reporters from the New York Times teamed up with researchers at the non profit Center for Advanced Defense Studies to track two Mercedes Maybachs from their manufacture in Germany to the streets of Pyongyang. The route was a circuitous one, involving multiple shipping vessels docking in at least five countries over the course of several months. But using open source data and satellite imagery, the reporters and researchers were able to paint a pretty clear picture of how those cars ended up in NorthKorea. And in so doing, they reveal how the North Korean regime is able to evade some sanctions.

On the line with me to discuss his reporting is one of the journalists on the story, Christoph Koettl. He is a visual investigations journalist with the New York Times video team, specializing in geospatial and open-source research.

We discuss the step-by-step journey of these cars and in so doing, the story he tells reveals a weakness in international sanctions in general and on North Korea in particular.

If you have 20 minutes and want to learn how North Korea evades sanctions, and what the international community can do to more robustly enforce those sanctions, have a listen.


Get the Global Dispatches Podcast

Apple Podcasts  |  Spotify  |  Stitcher  | Google Play Music​  | Radio Public


Can you describe these automobiles?

The most important feature is that these are bulletproof cars. They are expensive for the average customer, starting at half a million dollars. They are marketed to business leaders and world leaders. I do not think Mercedes is selling a lot of these. One of the questions we had for Daimler when investigating was, how many do you sell per year? They were not forthcoming.

You were unable to determine who the purchaser from Daimler was of these two Mercedes-Maybach S 600’s, right?

I looked into how this journey began. In Germany, who is Mercedes selling these to and who is buying them? How did they get to North Korea? We contacted Mercedes and they gave us the standard, five bullet response.

What do we know about how those two cars made it to their first stop?

We got two specific container numbers, which allow you to track their journey. The numbers belonged to Cosco Shipping, the fourth largest shipping company in the world. The tracking shows that the two containers were handed to Cosco on June 14th, 2018, were transported via a truck to a shipping terminal in Rotterdam, and on June 20th were loaded onto a ship called the Cosco Spain. That ship left the terminal on June 20th around 4 p.m. There was a satellite image from 2 p.m. that day, which was a pretty powerful visual.

What is the next step of their journey?

It then takes 41 days and the containers reached the port of Dalian in China. There was another satellite image of when the ship docked there. The containers were unloaded and stayed there for several weeks, which is a little unusual.

Why do these containers then go to Osaka, Japan?

It is not entirely clear how or why they got to Osaka, but it appears that something may have gone wrong. We talked to someone who stated they got pulled in last minute and the plan had changed to ship to Osaka and then try again to deliver in  China to Shanghai.

What is interesting is that I did some tracking of a ship that received the cargo at a later point and it was exactly at these locations. It seems to us that a few things went wrong, but it is helpful to ship through a few different countries. All you see on the shipping description is two Mercedes-Maybach S 600 Guard, which in itself is not suspicious or a crime.

Can you describe what you revealed in South Korea?

The research group we worked with figured out that the last ship that had these two containers was implicated in North Korean sanctions violations. So, why do these two guarded vehicles end up on this ship? This ship changed ownership in July, just a few days/weeks before the cars arrived in China. This ship was transferred to a new company that is registered in the Marshall Islands, which is a traditional secrecy jurisdiction. Additionally, the man behind this company is a Russian national. This company owns two ships, which both got seized by South Korean authorities for sanctions evasions. So, there is a clear connection to North Korean sanctions evasions. Furthermore, as soon as the ship picked up the cars, it turned off its transponder signal. All ships have this signal as a requirement under international law for safety reasons. However, the signal disappears and only comes back 18 days later, which is highly unusual.

And 18 days later, the signal is back on in South Korean waters full of coal, correct?

Yes. The cars are gone and it is carrying coal.

What do you think happened?

Well, we looked at the last signals the ship was transmitting and I talked to maritime experts. The last signal transmits the location and its last destination, which is a coal port in Vladivostok. It must have gone to Russia to pick up the coal and unloaded the cars on the way.

You also had evidence that Air Korea flights landed in Vladivostok and picked up these cars?

The theory is now that the container went to Vladivostok. On October 7th, several North Korean transport cargo planes made a landing in Vladivostok. Cargo planes had only flown from Pyongyang to Vladivostok once in the years before, so that is not a normal route for a cargo planes. Further, what cargo planes do very often, and we have seen this repeatedly, is when Kim Jong Un goes abroad, he brings his armoured motorcade. Four months after the cars to missing, North Korean News spotted the same model of cars in Pyongyang and Kim Jong Un was using them. The cars go missing in October and three/four months later he has one. One more thing, the Russian owner of the ship that picks up the cars in South Korea happens to be based in Vladivostok.

What has your reporting revealed about the breakdown in the ability to enforce these sanctions?

 I think there are a couple things to highlight. The UN resolutions that enact the ban on luxury goods to North Korea allow member states to define what a luxury good is, so there is no accepted definition. That means it is up to customs officials or shipping agents to figure out what qualifies as luxury. Once these cars get to South Korea and the local shippers realize these are two armoured vehicles that are going onto a ship connected to North Korean sanctions violations, that is a defining moment. My impression while interviewing people involved, was that many individuals were a bit careless. Some of them asked if this matter was North Korea related, which means they had some suspicions already. But, this is a business so they earn money from it.

Does your reporting suggest if there is South Korean corruption?

No, we don’t have information in this regard.

Is this just an opportunistic businessman?

Our reporting does not suggest that the Russian government is involved or that this Russian businessman is politically motivated. This businessman is registered as a co-owner of a car shop in Vladivostok. This is interesting because when you ship cars, you have to disconnect the batteries so you need specialists to reconnect the batteries before you can start using them. Further, there was a tax evasion case against him a couple years ago because he did not report his income or pay tax on his shop. So, it is more of a profiteering question.

The point is, it is a difficult and specialized operation to get these cars to North Korea. This requires skills, context, and a trusted network. The same techniques could be used to smuggle something else, like weapons.

Shownotes by Lydia DeFelice