In the first case of its kind, a Singapore-registered shipping firm is being prosecuted for facilitating payment for costs linked to the shipment of arms and related material to North Korea from Cuba.
Chinpo Shipping Company is alleged to have transferred US$72,017 (S$98,800) 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’ regulations, 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, faces a second charge of carrying on a remittance business without a valid licence between April 2, 2009 and July 3, 2013.
A North Korean 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 tonnes, the court heard.
The cargo included two MiG-21 jet fighters, 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, said the prosecution in its opening statement.
The company that managed the ship, Ocean Maritime Management (OMM), wanted someone to make payment for OMM to hide the fact that the money was coming from a North Korean entity. Chinpo, which had acted as a shipping agent for North Korean shipping companies, agreed to make the transfers.
On May 28 that year, it transferred US$54,270 to pay for the passage of the Chong Chon Gang through the Panama Canal on its way to Cuba.
Another payment of US$72,017 was made on July 8 that year for the ship’s passage back from Cuba through the canal to North Korea, with its load of arms.
Deputy Public Prosecutor Sandy Baggett said this was not the first time Chinpo had transferred money for North Korean firms or OMM.
Over four years, Chinpo allegedly remitted a total of more than US$40 million without a licence.
The prosecution’s first witness, Dr Graham Ong-Webb, a nuclear security expert, believed that the list of weapons could contribute to the development of nuclear-related, ballistic-related or other weapons of mass destruction for North Korea.
While the items found on the ship were not nuclear-related parts in themselves, he said they formed part of the conventional military capability that allowed North Korea to protect its nuclear activities.
The maximum penalty for the first charge is a $1 million fine, and for the second, a $100,000 fine.
Chinpo is represented by Mr Edmond Pereira.
The hearing before District Judge Jasvender Kaur continues.