Two brand-new Mercedes limousines acquired by North Korea in late 2018 were sent by an Italian shipping firm with prior connections to Pyongyang, the 2020 United Nations Panel of Expert (PoE) report released Friday shows.

The new report reveals the involvement of Italian individuals and companies, witting or not, during the early stages of the Mercedes’ procurement in Europe and through their overseas voyage to the DPRK.

Unlike prior North Korean luxury vehicle acquisitions, the PoE identified the cars’ Vehicle Identification Numbers (VIN), which, building off a C4ADS investigation on the same case, enabled forensic analysis of much of the Mercedes’ entire journey.

Together, the investigations show how North Korea was able to tap networks inside a country famous for its fashion houses and fine art to source a pair of luxury German vehicles for Kim Jong Un himself.

START OF THE CHAIN

The Mercedes-Benz S-class 600 Long Guard sedans – first spotted by NK News‘s sister site NK Pro in North Korea in February 2019 – were manufactured in Germany by Daimler in February 2018.

“Daimler AG sold the vehicle to an Italian customer and received the payment for the vehicles from the Italian customer,” a Daimler spokesperson told NK News, noting that “sales of vehicles by third parties, especially of used vehicles, are beyond our control and responsibility.”

That customer was the Abruzzo-based “European Cars & More,” which took temporary delivery of the cars for special customizations, the UN PoE report says.

It was in the picturesque town of Lanciano that they underwent extensive armoring by European Cars & More’s Cianci Armoring service team, to armor the vehicles at a level suitable for “rulers and heads of state…(who) need to be protected from possible attacks”.

An “Italian client” with “diplomatic connections to China [and] other countries” requested the pair of vehicles, Cianci Armoring sales manager Sandro Cianci told the New York Times in March, a man he didn’t name but who “has an import-export business in Rome.”

Cianci Armoring did not reply to NK News‘s requests for comment.

The client apparently had enough liquidity to not only finance the armoring job, but to also cover the price of the cars, which were valued at over 420,000 Euros each.

That buyer is not named in the PoE report, nor mentioned in the C4ADS’ “Lux and Loaded” investigation, which first broke the story of the vehicles’ path to Pyongyang last year.

Nonetheless, Mercedes cut business ties with European Cars & More in December 2019 over the controversy, Cianci told the Times in March, even though he said his firm had no knowledge the cars would ever end up in North Korea.

“Due to the current allegations, we have stopped the deliveries to a customer who is possibly in connection with the deliveries to North Korea according to the UN investigations,” Daimler confirmed to NK Pro.

Less than four months later in June 2018, the PoE said the million-euro pair of newly-armored cars left Italy on a route coordinated in large part by local shipping firm LS Logistica & Spedizioni SRL.

A CIRCUITOUS ROUTE

In its investigative report, C4ADS began tracking the Mercedes’ journey from Rotterdam Port, highlighting the multi-pronged maritime network which was able to deliver the sanctioned luxury vehicles to the heart of the Kim family.

Building on that work, the PoE revealed key European companies in the supply chain and said LS Logistica was the primary actor in smoothing the cargos’ route to Asia.

After contracting Rotterdam-based Slavenberg & Huyser BV as the forwarder for the shipment, LS Logistica (acting as the shipper) requested a consignee change from a Chinese company, Dalian Shangen International Trade Co Ltd, to a Russian “Flot.DV-LLC” as the cars arrived in Dalian in early August.

When Dalian port authorities denied approval of the cars’ transshipment, LS Logistica – “at the request of the ‘receiving party’” – requested another consignee change to the Japanese Zuisyo Co, Ltd., the PoE report shows.

But the intention of the Japanese firm appears to be unclear.

A sales contract provided by LS Logistica displayed a seal “not identical with Zuisyo’s official seal,” and may have been a falsified document issued “without the authorization of Zuisyo.”

The cars then went from Dalian to Osaka in the name of Zuisyo and arrived in late August, effectively ending LS Logistica’s involvement.

In the care of Zuisyo, the shipment went on to Busan and was put on a cargo vessel – the DN5505 – with an intended destination of Nakhodka, Russia.

But the DN5505 disappeared from Automated Identification Systems (AIS) shortly after leaving Busan and the PoE says Russia reported that it never arrived on its shores.

How the Maybachs reached their final destination of Pyongyang is unknown, the PoE report suggests, despite evidence from C4ADS which suggests they may have been flown from Vladivostok aboard three specially-chartered Air Koryo flights.

LS LOGISTICA

Unlike Cianci Armoring, LS Logistica has documented ties with Pyongyang.

“This company and some of its top management are known to the Panel to have previous contacts with the DPRK,” the PoE report indicates.

Though it didn’t elaborate on the firm’s connection to North Korea, LS Logistica Sales Manager Marco Tupone was pictured alongside the late DPRK Ambassador to Italy Kim Chun Guk in September 2012.

“Good business lunch… hope you could join us in Rome one day Alejandro Cao de Benos,” Tupone wrote adjacent to his Facebook photo, posted publicly, referring to Alejandro Cao de Benos, the Spanish president of the Korea Friendship Association (KFA), a pro-Pyongyang group.

On LinkedIn, Tupone describes his experience as CEO of Itaca & Co, an entity which corporate records show is connected to LS Logistica and shared the same address for years.

Tupone’s responsibilities included handling “commercial negotiations with… government figures” and managing “visits by government figures, support and accompany (sic) the delegations.”

Corporate records also show that Tupone became a shareholder of LS Logistica in May 2015, a month before Itaca was incorporated using the same Viala Charles Lenormant address as LS Logistica.

Tupone is Itaca’s only shareholder and the company is currently running at a loss.

Itaca retains the Viale Charles Lenormant address as a “secondary office” on its paperwork, but moved its main office to Viale Africa in January 2019.

Significantly, the Viale Africa office is less than two kilometers from the North Korean embassy and can be easily reached via 20 minutes’ walk across the leafy Parco Centrale del Lago.

In previous cases, such as a Singaporean company behind DPRK luxury stores being “a stone’s throw” from the ambassador’s residence, physical proximity to a North Korean embassy resulted in more than mere coincidence.

Katsu Furukawa – Japan’s former member of the UN Panel of Experts – said the firm may have other connections to North Korea.

“According to a Chinese intermediary who arranged for the shipment of the two Mercedes Benz vehicles… she was introduced to (LS Logistica) by a Russian customer who was reportedly the consignee of the two vehicles in Vladivostok and also a representative of a Marshall Islands registered entity, Do Young Shipping Co., Ltd.,” he said.

Do Young Shipping Co. Ltd was named in C4ADS report as the owner of the DN5505 ship, detained by South Korea in February 2019 under suspicion of North Korea sanctions violations.

“At a minimum, LS Logistica appears to be connected to the DPRK illicit trading network,” Furukawa said.

Furthermore, LS Logistica’s company records show large changes in costs and revenues during the year it facilitated the Mercedes shipment.

The company reported an almost 2.5 million Euro gain in revenue in 2018 – up from 1.7 million in 2017 to 4.4 million in 2018. However, this was offset by a 2.8 million jump in raw material costs, while LS Logistica only reported a paltry 11,000 Euro in raw materials the year before.

When contacted on behalf of NK News, CEO of LS Logistica Roberto Azzari simply said: “I have no other documentation than that already forwarded to the competent authorities,” before blocking contact.

His colleague Tupone did not respond to multiple requests for comment sent over social media.

And LS Logistica would not provide comment about its activities to Furukawa, the former UN expert, who has for the past several months engaged in his own investigation of the firm’s connection to the intermediary buyer and North Korea, he told NK News.

“LS Logistica’s representative refused to cooperate with my investigation of this incident, on the ground of protecting the “privacy” of the Chinese intermediary and a few other excuses”.

The company’s silence, he suggested, is “not in line with a pattern of behaviors normally demonstrated by an innocent party involved in the shipment.”

SMALL TOWN, BIG CONNECTIONS

While Rome remains the origin of most Italy-DPRK relationships, the town of Lanciano – home of the firm which armored the two cars – has also shared headlines with “Corea del Nord” before.

While it may only be a coincidence, former Italian Senator Antonio Razzi led a visiting DPRK delegation through the town in July 2014, with an itinerary that included meeting regional entrepreneurs.

Representatives of Italian political parties and Abruzzese entrepreneurs, headed by Razzi and including Lega Nord party leader Matteo Salvini, were “feted” in Pyongyang the following August.

Born near Chieti, Abruzzo and an advocate of everything Abruzzese, Razzi has spoken of his intent to bring a “maestro” and musicians from Lanciano to play in Pyongyang as the “only western concert in the capital.”

As President of the Italy-DPRK Friendship Association, Razzi is famous in Italy for his relationship with Pyongyang, documenting frequent trips to the DPRK on Twitter and facilitating the signing of North Korean footballer Han Kwang Song to Cagliari Calcio.

Razzi is also known to have played a major role in facilitating Italian business interests in the DPRK in the mid-2010s.

But when contacted on behalf of NK News, he said: “I don’t know a Cianci Armor or LS Logistica, neither.”

“I recall a meeting in Lanciano with the [DPRK] ambassador and other businessmen, but I don’t know exactly who was there.”

He said that the last time he was in Pyongyang was in September 2019 with six other Italians –  paying customers to the Lux Italy package tour Razzi had advertised on Twitter.

Regardless of who exactly was responsible for the wheeling and dealing in Abruzzo and Rome in 2018, North Korea has had plenty of opportunity to establish a wide procurement network throughout Italy.

According to an Italian Transportation Authority source, the Mercedes procurement was done by a “small fish”, referring to LS Logistica, as “it must not have been difficult to transport the containers”.

But it appears this small fish may have had bigger backing.

“Italy has been one of the key operation bases for DPRK’s acquisition of luxurious items from Europe, [and] I suspect that the DPRK embassy in Italy may have played some role,” Furukawa said.

Referring to the infamous bureau tasked with procuring foreign currency for the Kim family, even “Office 39 used to have a subsidiary in Italy,” he said.

Additional reporting by Chad O’Carroll

Edited by Oliver Hotham