A Singapore-registered company was convicted yesterday of transferring funds that could reasonably have been used to contribute to North Korea's nuclear programme.
Chinpo Shipping Company was also convicted, after an eight-day trial, of running a remittance business without a valid licence for four years. The case involved shipping arms-related material, bound for North Korea, from Cuba.
The company, represented by its director Tan Cheng Hoe, 82, faces a fine of up to $100,000 for each of the two offences. It transferred US$72,017 from its Bank of China account to 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.
OMM wanted to hide the fact that the money was coming from a North Korean entity and wanted someone to send funds and make transfers for them. Chinpo agreed to help.
As part of the Chong Chon Gang's trip to and from Cuba to transport arms, on May 28 that year, Chinpo transferred US$54,270 to pay for the passage of the ship through the Panama Canal on its way to Cuba.
Again on July 8, the company transferred US$72,017 to pay for the ship's passage back through the Panama Canal to North Korea.
District Judge Jasvender Kaur said people who engage in financial transactions must take some trouble to find out what the remittance is for, by asking for the documentation and information before acting on someone's behalf.
She said the prosecution did not have the legal burden of proving that Chinpo knowingly transferred the sum of US$72,016.76.
She found that Chinpo conducted no due diligence of any kind before transferring the money to CB Fenton. This led to it facilitating the shipment of arms and related material on the Chong Chon Gang.
The court heard that, between April 2009 and July 2013, Chinpo applied for a total of 605 outward remittances totalling US$40 million on behalf of North Korean entities.
The case was adjourned to Jan 29 for the prosecution to make its submissions on sentencing and for the defence to offer its mitigation plea.