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Japanese company key to Kim’s smuggling

July 19,2019
A Japanese company and a company in Busan played key roles in the smuggling network used to import North Korean leader Kim Jong-un’s luxury cars, according to a U.S.-based think tank.

In a report released Monday, the Center for Advanced Defense Studies, or C4ADS, said two armored Mercedes-Maybach S600 Guard vehicles were loaded onto a ship in Rotterdam, the Netherlands, in June 2018 and made their way through China, Japan, South Korea and Russia before reaching the North’s capital of Pyongyang.

The cars, valued at more than $500,000 each, were just some of the luxury goods banned by United Nations (UN) Security Council Resolution 1718 that North Korea has procured through its international smuggling network.

The Washington-based think tank estimated that the total value of UN-sanctioned luxury items imported illegally by Pyongyang from 2015 to 2017 - which included more than 800 vehicles - amounted to more than $191 million.

Both the C4ADS report and an investigation by The New York Times focused on the journey taken by the two Mercedes-Benzes across five different countries before their alleged delivery in Pyongyang. After reaching the port of Dalian in northeast China in August, the two cars were sent to Osaka, Japan, from which a Japanese company called Mino Logistics Japan consigned the shipment to a South Korean company with almost the same name - Mino Logistics - in Busan.

From there the cars are believed to have been loaded on a Togo-registered cargo ship, the DN5505, bound for Nakhodka, Russia, the same ship that was later impounded by South Korea authorities in Pohang, North Gyeongsang, following its return voyage from Russia laden with 2,599 metric tons of coal suspected to be from North Korea.

The report said the relationship between the two Mino Logistics in Japan and South Korea was unclear, as there was no evidence of a direct corporate connection between the two.

A spokesperson for South Korea’s Mino Logistics told the JoongAng Ilbo that there was no equity shared between the two companies, but that they were in a cooperative relationship.

In regard to the shipment of Kim’s luxury vehicles, the spokesperson remembered there were two Mercedes-Benzes cars listed among items the company received in September, but added that he thought the vehicles were “pre-owned cars brought in domestically” and did not imagine they would be sent to North Korea.

Jo Seiken, the director of Mino Logistics Japan, also denied knowledge of North Korea being the final destination for the vehicles in an email interview with Japan’s Jiji Press on Wednesday, adding that all his company did was transfer the cargo received from China to Busan.

But casting doubt on this explanation is the fact that Seiken and the CEO of another Japanese company that shipped the cars from Busan to Russia in October, called Zuisyo, had the same residential address in Amagasaki, a city next to Osaka. Zuisyo’s registered CEO, a man named Song Yang, was also registered as a director of Mino Logistics Japan according to the C4ADS report.

After the cars reached Russia, they are believed to have been loaded onto a cargo plane owned by Koryo Airlines, the North’s state carrier, and brought to Pyongyang. On Jan. 31 this year, state broadcaster Korean Central Television showed Kim riding the same model Mercedes-Benz that was designated in a UN Security Council Panel of Experts report last March as an example of an illegal luxury import by the country.

Amid Tokyo’s accusations that Seoul’s export controls may have overlooked the transfer of key industrial materials to the North employable in the manufacture of chemical and nuclear weapons, the central role played by its companies in the North’s smuggling network shows critical flaws in Japan’s own oversight over its trade channels.

“North Korea’s pathways for WMD [weapons of mass destruction] dual-use and luxury goods procurement are not necessarily mutually exclusive,” the C4ADS report read. “A network capable of smuggling high-value luxury goods through multiple jurisdictions - including countries like Japan and South Korea - is well-positioned to transport other illicit cargo.”

BY SHIM KYU-SEOK, KIM SANG-JIN AND OH WON-SEOK [shim.kyuseok@joongang.co.kr]