Pyongyang slips luxury limos past sanctions

Speculation is growing over how North Korea bypassed international sanctions to import luxury cars, as cited in a United Nations (UN) report published on Tuesday.

The 378-page report, authored by a panel of experts at the UN, said Pyongyang violated a ban on luxury goods stipulated in UN Security Council Resolutions 1718 and 2094, implemented in 2006 and 2013, by importing a fleet of Mercedes-Benz limousines, a number of vehicles from brands like Rolls-Royce and Lexus, and shipments of vodka.

The panel found that the luxury cars, all relatively recent models, were used by the North in a number of state occasions like the first U.S.-North Korea summit in June and the third inter-Korean summit in September, based on photographs from those events.

During the first summit with the United States, North Korea refused to comply with the Singaporean government’s request that it reveal the vehicles’ chassis and engine numbers “due to national security reasons,” according to the report.

The report did not, however, detail how these luxury goods were obtained by North Korea, given that international shipments into the country are strictly monitored under multiple sets of sanctions imposed due to its nuclear and missile programs.

In October, South Korean National Assembly Rep. Yoon Sang-hyun claimed the North imported at least $640 million worth of luxury goods from China in 2017 - which allegedly included fur coats, cars, and expensive alcohol and jewelry.

According to intelligence officials in South Korea, the items were likely brought in by the North through its smuggling network used for a host of illegal economic activities, which date back to the ’80s.

At the time, the country’s regime, strapped for foreign currency, allegedly began the manufacture and sale of illegal drugs, counterfeit goods and the trafficking of arms and humans at the behest of the ruling elite to finance their extravagant lifestyles.

Arms trafficking appears to be a continuing source of revenue for the North, according to the report, which said the regime shipped weapons to 27 countries, such as the Democratic Republic of the Congo, Algeria, Syria and Iran.

Analysts provided further details on the smuggling methods the North may have employed.

“One way is to ship these products into China through a paper company, then smuggle them into the North through a land route,” said Kim Jin-a, a researcher at the Korea Institute for Defense Analysis.

“Another is by falsifying records like the shipments’ HS code,” she said. The HS System - or Harmonized Commodity Description and Coding System - is a standardized international classification system for traded goods. The luxury goods going into the North could have been registered as ordinary goods by falsifying such codes, making it difficult for customs officials abroad to verify the contents of shipments, since it would be unfeasible to conduct physical inspections of all of them.

One former North Korean diplomat who defected to the South told the JoongAng Ilbo that he used his diplomatic luggage while abroad to engage in illegal economic activities. International law forbids countries from inspecting the luggage of foreign diplomats. This right extends from personal carry-on bags to entire shipping containers registered in the name of their embassies.

The likelihood that other countries may have facilitated, or at least turned a blind eye to Pyongyang’s smuggling has also been raised.

According to one diplomatic source, the publication of the UN report on Tuesday was delayed due to pushback from China, which apparently took issue with the original version that apparently cited Chinese involvement in these illegal imports.

BY PARK YONG-HAN, LEE KEUN-PYUNG and SHIM KYU-SEOK [shim.kyuseok@joongang.co.kr]