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.
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

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.