The Singaporean legal system handed down a conviction to a local shipping agent who helped North Korea buy weapons despite an international arms embargo.
Singapore showed its tough stance against those doing business with Pyongyang after a court convicted Chinpo Shipping of helping North Korea despite United Nations sanctions. The case shows how officials in Pyongyang have used intermediaries to transfer vast amounts of money through the international banking system without detection, writes Anna Fifield for The Washington Post.
Case could have far reaching implications for illicit trade with North Korea
Chinpo Shipping transferred millions of dollars on behalf of North Korea, and there may be many other companies helping the secretive regime.
“This is a significant case in terms of prosecuting North Korean middlemen,” said Andrea Berger, a nonproliferation expert at the Royal United Services Institute in London. This is the first case in which Singapore has ruled that national companies cannot facilitate North Korean nuclear and missile programs.
“Now there is a possibility of using this case as a precedent for taking action against other middlemen in Singapore, and also potentially abroad, that provide assistance for North Korea’s weapons sales overseas or North Korea’s proliferation activities generally,” she said.
Singaporean shipping firm guilty of facilitating arms shipments
North Korea has continued to work on its nuclear program in defiance of international sanctions, and the United States has attempted to cut off finance to the country by denying it access to the international banking system. The conviction against Chinpo is exactly the kind of support that the U.S. is hoping for from the international community in the struggle to prevent Pyongyang from developing its nuclear program.
Chinpo is a small, family firm that has been involved with North Korean entities since 1972. Since founding the business it appears that the Tan family has developed something of a rapport with North Korea, and even let Pyongyang operate its Singaporean embassy from its offices.
One firm that enjoys a particularly close relationship with Chinpo is Ocean Maritime Management (OMM), a North Korean shipping company. In 2014 OMM was sanctioned by the U.S. Treasury Department after a 2013 episode in which an OMM ship passing through the Panama Canal was found to contain two disassembled MiG aircraft, 15 MiG engines, surface-to-air missile components, anti-tank rockets and other weapons.
“This constituted the largest amount of arms and related materiel interdicted to or from [North Korea] since the adoption of Resolution 1718,” Judge Jasvender Kaur said in her summation of the case against Chinpo. Resolution 1718 refers to the United Nations sanctions against North Korea imposed after its first nuclear test in 2006.
Arrangements helped maintain access to international banking system
Chinpo was found guilty of transferring $72,016.76 to a shipping agent operating at the Panama Canal in order to make sure that the ship passed safely on its way to North Korea from Cuba. The company made 605 transactions totaling $40 million on behalf of North Korea from 2009-2013, when the ship was detected.
“Chinpo believed that OMM was unable to get a bank account and make remittances because OMM was a [North Korean] entity, and so Chinpo readily agreed to make transfers for them,” the prosecutors said in their opening statement submitted to the court.
Chinpo was charged with breaching United Nations sanctions due to the fact that the money was linked to the North Korean nuclear program. Under the sanctions Pyongyang is forbidden from trading in large conventional weapons such as combat aircraft due to fears that profits could be invested in the nuclear program.
Judge charges shipping company in important ruling
Chinpo was found guilty and the judge said that Tan Cheng Hoe and his two daughters had transferred money through company accounts without scrutinizing it. They were also guilty of covering up the source of the funds.
“Since the second half of 2010, Chinpo stopped indicating the name of vessels in the outgoing remittance forms,” the judge wrote in her summation. “According to the statement of Tan Cheng Hoe, more questions were asked by the bank in the U.S. when the vessel name was included.”
The company also let OMM use its bank accounts to hold and transfer money even though its business relationship diminished to involve just 4 ships in 2013. “The reason behind the odd arrangement was obviously to assist [North Korean] entities as they did not have access to the banking system due to U.N. and U.S. sanctions,” the judge wrote.
Sentencing is due to take place in late January 2016. Under Singaporean law the two charges carry a maximum penalty of $71,000 each, with no prison sentence, due to the fact the company was charged rather than Tan or his daughters.