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Shipping firm involved in North Korea dealings gets reduced fine of S$100,000

SINGAPORE — A Singapore-registered shipping firm, Chinpo Shipping Company, had its fine reduced from S$180,000 to S$100,000 after the High Court cleared the firm of transferring money that could have contributed to North Korea’s nuclear-related programmes or activities.

Aerial view of Singapore Skyline, Supreme Court. TODAY file photo

Aerial view of Singapore Skyline, Supreme Court. TODAY file photo

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SINGAPORE — A Singapore-registered shipping firm, Chinpo Shipping Company, had its fine reduced from S$180,000 to S$100,000 after the High Court cleared the firm of transferring money that could have contributed to North Korea’s nuclear-related programmes or activities.

The judges – made up of Chief Justice Sundaresh Menon, Judge of Appeal Chao Hick Tin and Justice See Kee Oon – had partially allowed Chinpo’s appeal against its convictions and sentences on two charges on Friday (May 12).

The firm’s earlier conviction and sentence of running a remittance business between April 2009 and July 2013 without a valid remittance licence remained.

The firm had begun remitting money when its shipping business started to dry up.

On July 8, 2013, Chinpo had transferred US$72,017 (about S$101,000) from its Bank of China account to CB Fenton and Co, a Panama shipping agent. The money was for the transit expenses for North Korean container ship, Chong Chon Gang, to pass through the Panama Canal from Cuba.

Three days later, an arms shipment, hidden under a cargo of sugar, was seized from the ship. The weapons found included two Cuban fighter-jets in perfect condition, missiles and live munitions.

Separately, between April 2009 and July 2013, Chinpo had also applied to its bank for 605 outward remittances, totalling about US$40 million, on behalf of North Korean entities.

Chinpo later claimed trial after being slapped with two charges, and the firm was convicted of both charges in December 2015.

For its charge under the United Nations (Sanctions – Democratic People’s Republic of Korea) Regulations, Chinpo was fined S$80,000. For the other charge under the Money-changing and Remittance Business Act, it was fined S$100,000.

Delivering the findings of the appeal on behalf of the judges on Friday, Justice See said the transfer of about US$72,000 fell outside the mischief of the regulations relating to North Korea.

“A reasonable person in the position of Chinpo would not have appreciated that the transfer could have had the effect of contributing to the (nuclear-related, ballistic missile related, or other weapons of mass destruction related programmes or activities of North Korea),” he said.

The transfer went purely to the payment of port fees and related charges for the ship to pass through the Panama Canal, said the judge.

And although a shipment of weapons was found on the ship, this was not known to the firm when it made the transfer. Hence, the transfer was “at least somewhat removed” from a transfer of funds in direct support of North Korea’s nuclear-related programmes, he added.

On the remittance offence, Justice See noted that Chinpo had blindly received money from North Korean entities. It then paid the money to the intended payees, which were for matters unconnected with the firm’s ship agency and ship chandelling services.

The firm also engaged Bank of China to facilitate the 605 remittances and did so in its own name, concealing the identity of the North Korean entities.

“This was the very mischief that the (Act) sought to avoid, and which Parliament sought to address through the licensing regime for remittance businesses under the (Act),” he said.

Adding that Chinpo had, without a valid licence, provided remittance services of an unprecedented volume and over an unprecedented duration in Singapore, Justice See noted that the maximum fine of S$100,000 that was initially imposed was warranted.

 

 

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