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Hamish Macdonald is an NK News contributor and has previously worked at The Korea Herald and for the Australia Centre for Independent Journalism in Sydney.
A Singaporean shipping company previously found guilty of providing financial services which contributed to North Korea’s nuclear-related programs and activities (NRPA) saw its conviction overturned by Singapore’s high court on Friday.
Chinpo Shipping Company Ltd. was found guilty by a District Judge (DJ) in 2015 of breaching Regulation 12(b) of Singapore’s United Nations Regulations in 2010.
Under the statute it is illegal to provide financial services and other resources “that may reasonably be used to contribute to the nuclear-related, ballistic missile-related, or other weapons of mass destruction-related programs or activities” of North Korea.
The company was subsequently fined SGD$80,000 after being found guilty of the breach but, following an appeal, the high court has ruled the conviction incorrect and ordered that the fine be refunded.
“We set aside Chinpo’s conviction and sentence on the DPRK regulations Charge…We accordingly order that the fine of S$80,000 paid by Chinpo in relation to the DPRK regulations Charge be refunded,” the court document reads.
Chinpo Shipping was found to have conducted remittances on behalf of North Korean entities to the tune of over USD$40 million between 2009 and 2013.
This included payments for the transit of a North Korean vessel – the Chong Chon Gang – through the Panama Canal in 2013 for a journey from the DPRK to Cuba and back.
It was during the second transit through the Panama Canal that the Chong Chon Gang was detained and searched, revealing a cache of weapons bound for North Korea under a consignment of sugar.
The find led to both unilateral and multilateral sanctions against the operating company, Ocean Maritime Management (OMM), and its affiliated fleet, as well as the eventual domestic conviction of Chinpo Shipping due to its involvement.
In obtaining the proliferation conviction against Chinpo, the prosecution successfully argued that the weapons on board the Chong Chon Gang could be used to protect North Korea’s nuclear weapons sites and therefore qualified as contributing to NRPA.
This was based on the testimony of one man, Dr. Ong-Webb, who stated that the MiG jets and Surface to Air Missiles (SAM) could be deployed for such a use.
Chinpo challenged this assessment, arguing that the cargo on board did not in fact contribute to the NRPA of North Korea.
In its decision, the high court ruled that the original finding that the weapons did contribute to the NRPA of North Korea was too broad, and that other goods could also be argued to do so under a similar reading provided by the DJ.
“If we accept this opinion as conclusive of what ‘could reasonably be used to contribute’ to the NRPA of the DPRK”, then it could mean that “even mundane logistics such as food and toiletries that facilitated the functioning of the NRPA of the DPRK” could potentially also be argued to contribute, the high court said.
“In our view, this is untenable, and it would exemplify the problem of over inclusiveness.”
The court also assessed that Chinpo could not have reasonably known what was on board the ship, and that even if it did inquire, it would likely have been told – as port authorities were – that the vessel was carrying a consignment of sugar.
The prosecution cited several “red flags” that should have alerted Chinpo to certain risks, however again, the high court ruled that even if Chinpo had inquired, few details would have been revealed to them.
Despite acknowledging Chinpo’s acquiescence to OMM instructions, the court said that it is a “large logical leap between transferring funds for the passage of a vessel through the Panama Canal (without knowing of the presence of the Material on the vessel) and concluding that the transfer could contribute to the NRPA of the DPRK.”
As such, the court said that the remittences transferred by Chinpo for the Chong Chon Gang’s transit through the Panama Canal “cannot fairly be described as a transfer that ‘may reasonably be used to contribute to the nuclear-related… programs or activities of the DPRK’”.
“The ultimate question remains of the contribution (or effect) of the transfer to the NRPA of the DPRK. With respect, the DJ appears to have glossed over this in her reasoning,” the court documents read.
Ultimately the high court ruled that the DPRK Regulations charge could not be sustained as the transfer of finances was purely for the passage of the ship, because Chinpo would not have reasonably known the transfer could have contributed to NRPA and that the weapons on board, only being conventional, did not contribute to such activities.
“As this was one of the very few prosecutions of a proliferation finance violation, it represents a major setback for efforts to counter proliferation finance,” Andrea Berger, Senior Research Associate at the James Martin Center for Nonproliferation Studies (CNS), told NK News on Friday.
“The lack of specificity in national laws prohibiting proliferation finance creates severe practical complications, as this case demonstrates. The problem extends far beyond Singapore,” she added.
Chinpo was found guilty of a breach of the Money-changing and Remittance Businesses Act (MCRBA) for not having a license for such transactions in 2015 and received an SGD$100,000 fine.
This conviction was upheld by the high court on Friday despite the appeal.
Featured Image: Marine Traffic