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In the first case of its kind, a Singapore-registered company was prosecuted yesterday for facilitating payment for costs related to the shipment of arms and related materials bound for North Korea from Cuba.
Chinpo Shipping Company is alleged to have transferred US$72,017 (S$99,300) from its Bank of China account to that of a shipping agent in Panama - C. B. Fenton and Co - on July 8, 2013.
Under the United Nations (Democratic People's Republic of Korea) Regulations 2010, it is an offence to transfer financial assets that could help North Korea in its nuclear and ballistic programmes, or efforts to produce other weapons of mass destruction.
Chinpo, whose representative is Tan Cheng Hoe, 82, a director of the company, also faces a second charge of carrying on a remittance business without a valid licence between April 2, 2009 and July 3, 2013.
The court heard that a North Korean Cuba-bound cargo ship, the Chong Chon Gang, docked in Mariel, Cuba, on June 20, 2013, and loaded 25 containers and six trailers of arms and related materials weighing 474 tons.
These included two MiG-21 jet fighters, anti-tank rockets and SA-2 and SA-3 Russian surface-to-air missile systems and their parts.
All were bound for North Korea and hidden in the cargo hold under 10,500 metric tons of sugar, said the prosecution in its opening statement.
The company that managed the ship, Ocean Maritime Management (OMM), wanted someone to make payments for it to hide the fact that the money was coming from a North Korean entity.
Chinpo stepped in to help. On May 28 that year, it transferred US$54,270 to pay for the passage of Chong Chon Gang to and from Cuba through the Panama Canal. Another payment of US$72,017 was made on July 8 that year.
Deputy Public Prosecutor Sandy Baggett said that was not the first time Chinpo had transferred money for North Korean companies or OMM.
Over at least four years, Chinpo remitted a total of over US$40 million without a licence and without regulation by the Monetary Authority of Singapore.
MAS requires companies to exercise due diligence when dealing with customers and to guard against money laundering.
Edmond Pereria is defending the company, which can be fined up to $1 million if convicted under the UN Act. The penalty for operating a remittance business without a licence is a $100,000 fine.
A joint Ministry of Foreign Affairs and Ministry of Home Affairs statement last week said Singapore takes a serious view of its obligations to prevent the illicit trafficking of weapons of mass destruction, their means of delivery and related materials.
"We will not hesitate to take action against individuals and/or companies that fail to comply with the relevant Singapore legislation that we have put in place to give effect to measures prescribed by United Nations Security Council regulations," it said.
Singapore firm convicted of facilitating payment to ship arms and related material to N. Korea
Chinpo's director, Mr Tan Cheng Hoe, is also director of its associated companies Tonghee Shipping Agency and Great Best Trading. PHOTO: THE NEW PAPER FILE
Published Dec 14, 2015, 1:57 pm SGT
Elena Chong
Court Correspondent
SINGAPORE - A district judge has convicted a Singapore-registered shipping company of transferring money that could reasonably have been used to contribute to the nuclear-related programmes or activities of North Korea.
Chinpo Shipping Company was also found guilty of running a remittance business without a valid licence between April 2, 2009 and July 3, 2013.
The company sent US$72,017 (S$101,630) from its Bank of China account to that of a shipping agent in Panama - C.B. Fenton and Co - on July 8, 2013 for the return passage of the MV Chong Chon Gang through the Panama Canal.
The transfer was a necessary payment for the transportation of the arms and related material from Cuba to North Korea.
The ship was managed by North Korean company Ocean Maritime Management (OMM), a longtime client of Chinpo, which is in the ship agencies and ship chandlers business and general wholesale trade.
Chinpo's director, Mr Tan Cheng Hoe, 82, is also director of its associated companies Tonghee Shipping Agency and Great Best Trading.
The offences came to light after investigation was carried out into the interdiction by Panama of the Chong Chon Gang, loaded with 25 containers and six trailers of arms and related material weighing 474 tonnes, in July 2013.
The cargo included two MiG-21 jet fighters, anti-tank rockets as well as SA-2 and SA-3 Russian surface-to-air missile systems and their parts. All were bound for North Korea and hidden in the cargo hold under 10,500 tonnes of sugar.
District Judge Jasvender Kaur said in her oral judgment that this constituted the largest amount of arms and related material interdicted to or from North Korea.
She said people who engage in financial related transactions must take some trouble to find out what the remittance is for, by asking for the documentation and information before acting on behalf in respect of such transaction.
"Accordingly, the prosecution does not have the legal burden of proving that the defendant company knowingly transferred the sum of US$72,016.76,'' she said.
The judge found that Chinpo conducted no due diligence of any kind before transferring funds on July 8, 2013 to CB Fenton.
Chinpo, the court heard, applied for a total of 605 outward remittances totalling US$40 million between 2009 and 2013 on behalf of the North Korean entities.
Chinpo said in its defence that it did not carry out the remittance transactions for the purpose of gain, that the remittances were incidental to its main business as a general and special agent for OMM and ship owners and thus, did not fulfil the requirement of a "business''.
But Judge Kaur disagreed that the remittance business must be the core business in order to come within the scope of the section.
The case was adjourned to Jan 29 for Deputy Public Prosecutor Ang Feng Qian to make her submission on sentence and mitigation by defence lawyer Edmond Pereira.
The maximum punishment for violating Regulation 12(b) of the United Nations (Sanctions - Democratic People's Republic of Korea) Regulations 2010 is a $100,000 fine and five years' jail.
Chinpo fined $180K over illegal arms case and running remittance business without licence
Chinpo Shipping Company was convicted last month of transferring US$72,017 from its bank account to that of shipping agent CB Fenton and Co.PHOTO: ST FILE
Published 8 hours ago
Elena Chong
Court Correspondent
SINGAPORE - A local shipping company was fined a total of $180,000 on Friday (Jan 29) for transferring funds that could reasonably have been used to contribute to North Korea's nuclear programme and for running a remittance business without a valid licence.
Chinpo Shipping Company was convicted last month after an eight-day trial of transferring US$72,017 (S$103,000) from its bank account to that of shipping agent CB Fenton and Co operating at Panama Canal on July 8, 2013 for the return passage of the cargo ship Chong Chon Gang - owned by North Korea - through the Panama Canal. The transfer was a necessary payment to transport the arms and related material from Cuba to North Korea.
The ship was managed by North Korean company Ocean Maritime Management (OMM), a long-time client of Chinpo, which is in the ship agencies and chandlers business.
The Chong Chon Gang, intercepted by Panama, was found loaded with 25 containers and six trailers of arms and related material weighing 474 tonnes in July 2013.
The cargo included two MiG-21 jet fighters and anti-tank rockets, as well as SA-2 and SA-3 Russian surface-to-air missile systems and their parts. All were bound for North Korea and hidden in the cargo hold under 10,500 tonnes of sugar. The shipment constituted the largest amount of arms and related material interdicted on the way to or from North Korea.
The court heard that Chinpo agreed to help send funds and make transfers for OMM which wanted to hide the fact that the money was coming from a North Korean entity.
Chinpo transferred US$54,270 to pay for the passage of the ship through the Panama Canal on its way to Cuba on May 28 that year. On July 8 the same year, it made another transfer of US$72,017 to pay for the ship's passage back through the Panama Canal to North Korea.
The prosecution had asked the court to impose the maximum fine of $100,000 on each of the two charges.
In passing sentence, District Judge Jasvender Kaur said that there was a strong public interest in preventing breaching of United Nations sanctions.
For the second charge, she said the company's culpability fell within the "high'' category. When convicting the company, she had said there were circumstances which called for enquiry, but Chinpo took the position that it would pay whoever Democratic People's Republic of Korea (DPRK) entities that wanted them to pay.
"They conducted no due diligence. Such irresponsible conduct must be deterred,'' she said.
Chinpo's lawyers Edmond Pereira and Richard Kuek said in mitigation that Chinpo was not informed nor warned about representing OMM and DPRK shipowners.
There was no notice or notification from Maritime and Port Authority of Singapore or PSA on attending to the DPRK vessels when they come to Singapore.
They said Chinpo had no reason to doubt the authenticity of the business activities of OMM and DPRK shipowners, and it was far too presumptuous and onerous to assume that Chinpo should know about the activities of OMM and DPRK shipowners outside Singapore.
