SINGAPORE - In the first case of its kind, a Singapore-registered company was prosecuted on Monday for facilitating payment for costs related to the shipment of arms and related material bound for North Korea from Cuba.
Chinpo Shipping Company is alleged to have transferred US$72,017 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 Mr 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 material weighing 474 tons.
This 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 them to hide the fact that the money was coming from a DPRK 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.
For 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.
Mr 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.