Mercedes-Benz, the renowned German automaker, has initiated a formal investigation into the perplexing appearance of its high-end vehicles in North Korea. This probe comes amidst stringent international sanctions that explicitly prohibit the export of luxury goods to the isolated nation. Despite these bans, Mercedes-Benz vehicles, symbols of opulence and prestige, have been observed in North Korea, raising questions about sanctions evasion and the routes through which these vehicles are reaching the Hermit Kingdom.
Headquarters in Stuttgart, Germany, issued a statement to VOA Korean Service affirming their lack of business ties with North Korea for over 15 years. The company expressed bewilderment regarding how their vehicles ended up in the possession of the North Korean government. “To prevent deliveries to North Korea, Mercedes-Benz has implemented a comprehensive export control process” and “strictly complies with U.S. and E.U. embargoes,” the statement emphasized. This robust export control framework is designed to prevent diversions to sanctioned nations, yet the presence of Mercedes-Benz vehicles suggests potential loopholes or deliberate circumvention of these measures.
The company further stated its commitment to thoroughly investigating any media depictions of their vehicles in North Korea. However, they highlighted a significant challenge: “without the vehicle identification numbers, it is impossible to find a concrete trace.” This lack of VINs hinders their ability to definitively trace the vehicles’ journey and identify the parties involved in their potential illicit transfer.
Kim Jong Un’s Affinity for Mercedes-Benz
Adding fuel to the fire, North Korean state media KCNA disseminated footage in late December showcasing high-ranking officials arriving at a Workers’ Party meeting in Mercedes-Benz S-Class sedans. Premier Kim Tok Hun himself was seen arriving in a luxurious Mercedes-Benz S-Class limousine. The Mercedes-Benz S-Class sedan carries a starting price of $114,500, underscoring the significant value of these luxury imports.
North Korean leader Kim Jong Un is notorious for bestowing Mercedes-Benz vehicles upon loyal officials as tokens of appreciation. Kim’s own preference for the brand is well-documented. He has been frequently seen in a Mercedes Maybach, a model that can command prices ranging from $500,000 to over $1.5 million. Notably, a Maybach is believed to have accompanied Kim on his armored train during his meeting with Russian President Vladimir Putin in September, further highlighting his penchant for these ultra-luxury vehicles.
Joshua Stanton, a Washington-based attorney instrumental in drafting the Sanctions Enforcement and Policy Enforcement Act of 2016, believes North Korea’s public display of these vehicles is intentional. “They do like to flaunt” luxury vehicles and “to demonstrate that the sanctions don’t have effects on them,” Stanton asserted. This brazen display could be interpreted as a deliberate act of defiance, aimed at undermining the perceived effectiveness of international sanctions.
Stanton urged Mercedes-Benz to extend “full cooperation to the U.N. Panel of Experts” to facilitate the tracing of vehicle suppliers to North Korea. He further advocated for the imposition of sanctions on individuals and entities knowingly involved in violating UN sanctions, including adding them to the list of specially designated nationals and freezing their assets.
Decades-Old Mercedes Benz Ban and Sanctions Enforcement
The Mercedes benz ban and broader luxury goods embargo against North Korea are rooted in UN Security Council resolutions. Resolution 1718, passed in 2006, initially prohibited the export of luxury items, with further expansions implemented in Resolution 2094 in 2013. The UN Panel of Experts on North Korea is tasked with monitoring the enforcement of these sanctions.
Anthony Ruggiero, a sanctions expert at the Foundation for Defense of Democracies and former National Security Council senior director, contends that North Korea’s open flaunting of sanctions violations stems from a perceived lack of robust enforcement by the Biden administration. “Kim Jong Un does not hide North Korea’s sanctions violations because Kim knows that the Biden administration is not implementing U.N. and U.S. sanctions,” Ruggiero stated. He called for the immediate implementation of U.S. sanctions, targeting Chinese and Russian banks, companies, and individuals implicated in North Korea’s sanctions evasion schemes.
Echoing these concerns, a U.S. State Department spokesperson emphasized to VOA Korean Service the responsibility of all UN member states to enforce sanctions against North Korea, stating, “Under U.N. Security Council resolutions, all U.N. Member states are required to prohibit the supply, sale or transfer to the DPRK of transportation vehicles.”
Further illustrating the ongoing efforts to circumvent the Mercedes benz ban and related sanctions, Japanese authorities raided a car dealership in Chiba in December. The dealership is suspected of attempting to smuggle a Lexus, valued at approximately $70,000, into North Korea via Bangladesh, as reported by The Asahi Shimbun.
A 2019 report by the Center for Advanced Defense Studies (C4ADS) revealed the extensive network involved in luxury goods smuggling to North Korea. The report indicated that as many as 90 countries were implicated in facilitating the flow of luxury goods between 2015 and 2017. Specifically concerning automobiles, the report uncovered unreported shipments of over 800 luxury vehicles destined for North Korea. These vehicles originated from countries including Germany, the Netherlands, and Thailand, and were transshipped through China, Japan, South Korea, and Russia before ultimately reaching North Korea. This complex web of transit routes underscores the challenges in effectively enforcing the Mercedes benz ban and preventing luxury goods from reaching North Korea.
