It allegedly transferred $55 million

It allegedly transferred $55 million
DIRECTOR: Tan Cheng Hoe, 82, the director of Chinpo, which has been charged with transferring funds that may be used in North Korea’s nuclear efforts.
PHOTO: The New Paper

When the shipping business started drying up for Chinpo Shipping Company, a firm with long associations with North Korea, it decided to diversify.

The company started making money transfers for North Korean shipping companies.

One of these transactions was allegedly payment for a shipment of Soviet-era weapons which were said to be for use in North Korea's nuclear programme.

Chinpo was yesterday prosecuted for its alleged role in the shipment, marking the start of what is expected to be a nine-day trial in the State Courts.

It has been charged with transferring financial assets or resources that can be used to contribute to nuclear or ballistic missile-related activities of the Democratic People's Republic of North Korea (DPRK).

Another charge of operating a remittance business without a licence is also being directed against the company, which is being defended by lawyer Edmond Pereira.

In the prosecution's opening statement, Deputy Public Prosecutor Sandy Baggett said the ship Chong Chon Gang was travelling from Cuba to North Korea in June 2013 when it was stopped in the Panama Canal.

Hidden under 10,500 tonnes of sugar were two MiG-21 jet fighters, anti-tank rockets, SA-2 and SA-3 Russian surface-to-air missile systems and their components.

"The DPRK is known to use the SA-2 and SA3 systems specifically at nuclear missile sites," she said.

The ship was managed by DPRK company Ocean Maritime Management (OMM), a longtime client of Chinpo.

Chinpo had allegedly helped to pay for Chong Chon Gang's passage to and from Cuba through the Panama Canal.

On May 28, 2013, it transferred US$54,270 (S$75,000) for the first leg of the journey and on July 8 the same year, it transferred US$72,017 to C.B. Fenton and Co, a shipping agent operating in the Panama Canal.

Chinpo, knowing that the North Korean shipping company had electronic payment problems, agreed to help the company with the payment, making at least 605 remittances over a period of at least four years.

UNREGULATED

During this time, some US$40 million (S$55m) was transferred on behalf of the North Koreans without a licence and regulation by the Monetary Authority of Singapore (MAS). MAS requires companies to exercise due diligence when dealing with customers and to guard against money laundering.

In early 2013, Chinpo e-mailed OMM, saying that it had suffered a loss of $200,000 the year before because it kept all its staff and maintained the office despite no business from OMM. The prosecution is expected to call eight witnesses.

First to take the stand yesterday was Dr Graham Ong-Webb from the S. Rajaratnam School of International Studies, who told the court that the weapons found on board the Chong Chon Gang could be part of the air defence system used by North Korea to guard nuclear installations.

For now, while it is widely believed that the North Koreans have the ability to detonate a nuclear bomb, they are still working towards making the bomb smaller such that it can be put on a missile to be fired towards an intended target.

"It's not quite successful... There's a view that (the DPRK) will reach it eventually though it would be required to have a certain level of scientific competency," he said.

Chinpo can be fined up to $1 million if convicted under the United Nations Act. The penalty for operating a remittance business without a licence is a $100,000 fine.

The UN Act

This is the first time that the law under the United Nations (UN) Act has been invoked.

The Act ensures that all decisions made at the Security Council in the UN would have bearing in the Singapore context too.

In this case, Chinpo Shipping Company is being charged with violating Regulation 12(b) of the United Nations (Democratic People's Republic of Korea) Regulations 2010.

Put in effect on Nov 1, 2010, the regulations state a list of sanctions against the DPRK, including providing luxury goods, allowing the use of Singaporean ships or aircraft to supply items, as well as the provision of financial services.

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.

lawsm@sph.com.sg

 


This article was first published on Aug 04, 2015.
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