Banned luxury goods continue to be sold inside North Korea at department stores linked to Singapore-based OCN (S) Pte, according to new evidence obtained by NK Pro, which reveal previously unknown details about the supply network which imports the goods in apparent violation of UN sanctions.

High-end European brands barred from export to North Korea by United Nations Security Council sanctions are for sale in the country, as are Japanese brands prohibited from direct export to the DPRK by unilateral Japanese sanctions.

Two former North Korean officials previously told NK Pro that both stores are in business with Office 39, a secretive government entity tasked with generating hard currency thought to help support the country’s nuclear program.

NK Pro named OCN in a recent report as a key node in the operation of Pyongyang’s Bugsae Shop (transliterated previously by NK Pro as “Puksae”) and Pothonggang Ryugyong Store, and multiple sources identified OCN as a partner in a nearly-completed commercial development along the Taedong River.

Sources also described a link between OCN and Pyongyang’s Ryugyong Commercial Bank – despite the fact that even maintaining an account with a North Korean bank constitutes a violation of United Nations Security Council (UNSC) Resolution 2270. However, OCN director Leo Ng, who has since referred inquiries from NK Pro to his attorney, insisted to Singapore’s Straits Times that the investigation’s allegations were “all false” and that he hadn’t done business in North Korea for several years.

READ PART ONE OF THE INVESTIGATION HERE

Ng’s lawyers continue to deny any wrongdoing on their client’s part, telling NK Pro in an email that OCN and its related entities have complied with all applicable laws and regulations and unequivocally deny any allegations to the contrary. OCN is willing to address any questions the authorities may have, the attorneys said, but would not debate the issue in the media.

CONTEMPORARY CONNECTION

Ng repeatedly insisted to Singaporean media that he stopped all trade with the North in either 2011 or 2012 – accounts vary. Yet, products seen on the shelves at both stores less than a month ago, photographs of which were obtained exclusively by NK Pro, had OCN-branded labels affixed to many them, matching a logo used by the company on a business card obtained in Singapore last year.

Further, royal blue lettering on the Bugsae Shop shopping bags given to customers as recently as late July 2017 can be seen prominently billing the enterprise as “A member of OCN Group”:

Additional connections between the stores and Singapore are also visible. The reverse of the Bugsae Shop’s branded shopping bags advertise two other products spotted on offer inside: ‘Watari’ milk powder and a soft drink called ‘Fresh F’:

Records from the Intellectual Property Office of Singapore show the Watari brand was registered in 2006 by Watari Pte. It was run by OCN head Leo Ng until June 2017 and company filings now list Trina Ng, his daughter, as an owner and director. Its address in official documents is listed as the same office suite at the same Singapore address as OCN: 381 Joo Chiat Road.

The back of a container of Watari powdered milk produced in December 2015 and obtained in July 2017 in Pyongyang reads: “By Watari Pte, distributed by T Specialist.” T Specialist is headed by OCN’s Leo Ng and a partner named Chew Ng Sew, who is listed in corporate filings as the owner of a defunct Singapore-based company called “BCN Importer and Exporter.”

Meanwhile, Fresh F, per trademark filings, was registered in 2014 by Transvision Marketing, of which Trina Ng took over as director and majority shareholder from her father Leo in July 2017—Chew Ng Sew of T Specialist and BCN is the minority owner. This implies the shopping bags in the Bugsae Shop and Pothonggang Ryugyong Store date from at least 2014, at least two years after Ng said he pulled out of North Korea altogether.

The side seam of a can of Fresh F Brown Sugar Cider produced in 2015, bought at the Potonggang barbeque restaurant in Pyongyang and obtained by NK Pro, reads: “Packed for Transvision Marketing Pte Ltd; Distributed: by T Specialist International (S) Pte Ltd.” The address listed on the can is “OCN Building Singapore,” at 381 Joo Chiat Road:

Although “FOR EUROPE MARKET” is printed on the packaging of both Watari and Fresh F, NK Pro could find no evidence of either product for sale anywhere outside of North Korea. The barcodes connect back to a “Mr. Leo Ng Kheng Wah” at T Specialist, according to GS1, the international organization that maintains global UPC standards.

(UN sanctions prohibit luxury goods from being exported to North Korea and Japanese sanctions bar any trade whatsoever with the country. But although Singapore prohibits musical instruments, fine jewelry, perfumes and cosmetics, and alcoholic beverages, among other things, from being exported to North Korea, exporting nonalcoholic beverages from Singapore to the DPRK is, in fact, legal.)

The packaging has since changed slightly; a can of Fresh F manufactured in March 2017 only says “Packed for Transvision Marketing Pte Ltd,” and leaves off additional identifying details – such as the OCN building address in Singapore – seen previously.

The trademark on Fresh F seems to have now expired, and has been replaced with “Frezh F,” also registered to Transvision and Trina Ng. 

The recently manufactured Frezh F and Watari cans, as well as the OCN plastic bags, together show the contemporary nature of trading connections between North Korea and companies registered at the office address of OCN in Singapore.

The various entities further come together as one on an OCN business card obtained in 2016 by NK Pro which connects OCN, T Specialist, and Watari—represented by its logo, a cartoon boy—as well as a company called Ohayo International, a self-described wholesaler of electrical appliances, liquor, and tobacco serving China, Cyprus, Japan, and North Korea, according to the World Intellectual Property Organization’s 2006 Gazette of International Marks.

Online records indicate the Ohayo International brand was first registered nearly 13 years ago by T Specialist, whose most recent financial statement shows USD$107 million in revenue for the last year. (The filing claims over USD$104 million in sales costs; combined with other expenses, the company purports to have booked a relatively meager USD$960,000 profit in the end – less than 1 percent of total revenue.)

As of January/February 2017, Trina Ng, her sister Tania, and OCN Pte are Ohayo’s shareholders; they and Leo are listed as directors in corporate filings along with another Singaporean national by the name of Ko Fu Heng.

DESPITE THE DENIALS…

While Ng did concede to Straits Times that OCN was once the exclusive distributor of Pokka canned coffee in North Korea, he insisted that this trade ended entirely by 2012. Yet, tourist industry sources told NK Pro on condition of anonymity that they regularly see Pokka coffee from Singapore, in addition to cans of Fresh/Frezh F (and other imported Southeast Asian items) for sale throughout the country.

Additionally, representatives of three different brands spotted in photos of the two Pyongyang stores acknowledged to NK Pro that they had in fact dealt with T Specialist in the years since Leo Ng claims to have ceased doing business in North Korea. All said they had no idea their products were apparently being shipped there.

Noboru Miyadera of the Seiko Watch Corporation said the company has used Thong Sia Co (S) Pte, a Singaporean distributor, to sell its products in Singapore. Seiko, he told NK Pro, provides all foreign distributors “thorough instruction not to distribute our products outside their home country.” Miyadera said Thong Sia shipped Seiko watches to T Specialist on the basis that they were intended solely for the local market.

“Thong Sia recognizes T Specialist International as a company dealing with corporate gifts,” Miyadera explained, adding that Thong Sia’s last sale to T Specialist occurred in June 2016. But notably, both the OCN-linked Bugsae Shop and Pothonggang Shop in Pyongyang have dedicated Seiko sections carrying a range of the brand’s watches.

Luxury watches are banned for sale in the DPRK by UNSC sanctions; if they are so much as partially clad or plated with a precious metal, they are considered luxury goods and in violation of Singaporean law. Japanese law prohibits the sale of any Japanese products—Seiko is headquartered in Tokyo—to North Korea.

When NK Pro inquired about the Yamaha musical instruments for sale at the Potonggang Ryugyong Shop, a Yamaha Music (Asia) Pte Ltd spokesperson said Yamaha “was not aware of the sale of its instruments in North Korea. In fact Yamaha’s policy has always been to comply with the prohibitions and accordingly Yamaha has never intentionally directly or indirectly sold, supplied, or transferred any of its products to any person in North Korea.”

Musical instruments are prohibited from shipment to the DPRK under Singaporean law, and as a Japanese brand, Yamaha would be prohibited from sale to North Korea under Japanese law.

After searching internal sales records, Yamaha contacted NK Pro upon finding it had in fact dealt with T Specialist in the past. The last transaction was in 2015, and “the relationship was that of a seller and walk-in-customer,” a Yamaha spokesperson said in an email.

“We regret that we are unable to disclose details of sales to customers, including value and type of items. Save that we confirm that T Specialist was a customer of Yamaha Music (Asia) Pte Ltd, we are unable to provide any information as to the identity of the individuals involved.”

And Moh Seng Pte Ltd, a Singaporean snacks wholesaler that distributes brands including ones manufactured by Japan’s Calbee Inc., told NK Pro that it currently sells to T Specialist with an explicit understanding that those products be sold only in Singapore. However, photographs obtained by NK Pro show stocks of them in Pyongyang’s Potthonggang Ryugyong Shop. A Moh Seng spokesperson said the company has no control over the third countries to which T Specialist re-exports their goods.

Americaya, a Japanese shoe brand with a prominent presence in Singapore, previously confirmed doing business with T Specialist to NK Pro, as did Pokka Singapore, which was under the impression that T Specialist was distributing its products in China, not North Korea, according to a company spokesperson.

Singaporean-style electrical outlets are sold at the Bugsae Shop and Pothonggang Ryugyong Store; the “Safety Mark” certification, which is done under the aegis of the Singaporean government, can be seen on several of them.

And if T Specialist had conducted transactions in U.S. dollars for luxury items re-exported to North Korea, that could raise additional problems.

“Under U.S. law, the watches would be considered luxury goods if they’re clad or plated with a precious metal. So would the musical instruments,” said Joshua Stanton, a lawyer with expertise on DPRK sanctions and founder of the One Free Korea blog.

“Any dollar transaction for their export to North Korea would consequently fall within U.S. jurisdiction, and would violate Executive Order 13551 if it occurred after August 30, 2010. That makes the transaction a felony punishable by up to 20 years in prison, plus fines, penalties, and forfeitures.”

FRONT COMPANY CHARACTERISTICS

T Specialist and the various other entities under the OCN umbrella share an address, employees, owners, and directors, and have little to no online footprint.

Shipping everything to Pyongyang also occurs far beneath the radar. Sources with firsthand knowledge of DPRK shipping routes told NK Pro that goods rarely, if ever, go direct from Japan or Singapore: North Korea has agents in, among others, the Chinese ports of Tianjin and Hong Kong who ship them on to Pyongyang.

NK Pro previously identified OCN Shipping Hong Kong, a company formed in August 2016, as a probable node in the shipping network between Singapore and North Korea. Corporate filings list a director named Wang Zhi Guo, a Chinese national who is also a shareholder in Lagun Sari, a Malay wedding hall on the ground floor of the OCN Building which is owned by OCN and the Ng family.

For its part, OCN Shipping Hong Kong is managed by the Sea Star Ship Company Ltd., a Dalian-based link in North Korea’s illicit smuggling network identified by the UN Panel of Experts in 2014. (OCN Shipping Ltd, which owned and operated a cargo vessel called the M/V Blue Sky 1 and was registered in the British Virgin Islands, was voluntarily struck off two months after OCN Shipping Hong Kong was registered. There is also an OCN Shipping in Pyongyang, managed by Korea Poksong Shipping.)

Wang also heads a Hong Kong company called Pinnacle International, a namesake of which – Pinnacle International Pte Ltd – existed from 1993 until it was wound down in 2009. Notably, Pinnacle was co-directed by Wang and Leo Ng, further demonstrating the breadth of connections between the two men.

When questioned by Straits Times in July, Ng said that Wang “does go into North Korea. But he is in Lagun Sari as a partner. I don’t control him and I don’t think he’s doing anything illegal, as far as I know.”

NK Pro was unable to reach Wang, but managed to contact Zheng San Jiong, one of two other directors added to OCN Shipping’s board in September 2016, per regulatory filings with the Hong Kong Companies Registry.

Although Zheng confirmed that the Chinese identity card number listed in the filings was indeed his, he claimed not to know Wang or the third director listed in the documents, Huang Jin Hui. Zheng, whose signature is in the filing, also claimed never to have heard of OCN Shipping.

Continuing to insist that he had no awareness of the situation, Zheng said: “How can I declare I am innocent?”

RYUGYONG CONNECTION?

There also appear to be close connections between the OCN-linked Bugsae Shop and the presumably soon-to-be-opened Ryugyong Supermarket located nearby to Tongil Street in the southwest of Pyongyang.

A sign with the initials “BS,” which are used as a branding device on the Bugsae Shop’s shopping bags and receipts and were confirmed to stand for “Bugsae” by two former North Korean officials, can be seen on a construction elevator at the Ryugyong building site along the Taedong River:

Shortly after NK Pro’s investigation into OCN’s presence in Pyongyang was published in July, the OCN-branded shopping bags suddenly disappeared from the Bugsae Shop, in-country sources told NK Pro. They were replaced, at first, by blank white bags for foreign customers, while North Koreans continued to receive branded ones. A few weeks after that, new bags showed up, printed entirely in Korean, with an illustration of the upcoming Ryugyong Supermarket on the reverse and “Ryugyong” brand mark on the top.

As for the alleged connection between OCN and Ryugyong Commercial Bank, a source close to the situation who spoke to NK Pro on condition of anonymity said OCN has a branch office located across from the Koryo Hotel in central Pyongyang.

A May 2017 bill of lading from a confectionery company in Kiev, Ukraine to the Bugsae Shop and seen by NK Pro appears to confirm this, listing the buyer as “Ocn Pyongyang,” in “office 01-05” of the Changgwang House, Pyongyang, DPRK.

The Changgwang is indeed opposite the Koryo, and the Bugsae shopping bag seen by NK Pro lists OCN’s local address as the “Changgwang Foreign House,” suite 05-01.

Sources also linked OCN to the Pyongyang-based Ryugyong Commercial Bank, which offers a discount card for use at the two shops reportedly connected to OCN, and maintains an ATM at the Bugsae Shop.

Ryugyong Commercial Bank, which is suspected of having ties to OCN by sources with intimate knowledge of North Korea’s financial sector, has an office in suite 05-24 of the Changgwang, presumably just a few doors down from OCN’s, in suite 05-01.

“THE GOVERNMENT WOULD HAVE LOOKED FOR ME”

“Under the Regulation of Imports and Exports Regulations (RIER), the importation into, exportation from, transhipment in or transit through Singapore of any goods which contravene decisions made by the UNSC is prohibited,” a spokesperson for Singapore’s Ministry of Foreign Affairs (MFA) told NK Pro in an email.

The MFA also imposes “permit requirements” on all exports to and from the DPRK, as well as for transit and transshipment cargoes to or from the DPRK, the spokesperson said. But the Ministry said confidentiality laws prevented the disclosure of any visa or immigration information regarding Ri Ik, a North Korean national reportedly involved with OCN and who is said to have spent extended periods of time in Singapore.

When reached by telephone, Leo Ng’s daughter Trina told NK Pro, “I don’t know how any of our products get to North Korea, okay? Thank you.”

And when NK Pro asked OCN purchasing/distribution manager Sherly Muliawan about an eyewitness account placing her at the Pyongyang International Airport in 2015, she replied, “I’m not doing that anymore. I’m only doing Lagun Sari now. I can’t say anymore, okay? Bye.”

But given the details, William Newcomb, a former member of the UN Panel of Experts on North Korea, said the case raises questions as to why “is Singapore so obviously ineffective in enforcing UN sanctions on North Korea?”

“It has no excuse, it is not a capacity challenged jurisdiction. How is it that a few researchers … are able to identify potential DPRK overseas networks, yet governments in countries where they operate are blind to their activities? Or, don’t they care?”

“And what about the money flows?” Newcomb continued. “Is this another example of parallel banking using ledger accounts as described in reports by the UN Panel of Experts, possibly, or, more likely, is it another failure of banks and businesses to perform due diligence (& even more required when North Korean involvement is suspected) and know your customer?”

“A little forensic accounting could go a long way identifying who pays T Specialist,” he said.

Based on the past experience of other companies who have done business in North Korea, the possibility nevertheless exists that OCN could have been “hijacked” by partners in Pyongyang who continue to run it entirely without Leo Ng’s knowledge.

Earlier this year, a Reuters investigation revealed that the North Korean branch of Singapore-based Pan Systems, which director Louis Low thought had been wound down years earlier, had in fact used the Pan Systems name without his knowledge to set up foreign accounts in Pyongyang and Malaysia to create the Glocom brand of military communications equipment.

Further investigation and inquiry is needed in understanding the links between the associated legal entities, as the current investigation raises many questions that do not have answers from OCN, which has little to no web presence and shares personnel and an address with several other entities.

In an unrelated matter, a federal complaint was filed in August by the U.S. Attorney for the District of Columbia against TransAtlantic Partners Pte, a Singapore-registered company sanctioned by the United States for allegedly helping to launder money for blacklisted North Korean banks.

“TransAtlantic bears the hallmarks of a front company. That is, it lacks an official website and appears to have little to no web presence,” a footnote in the complaint reads. “Additionally, law enforcement is unaware of TransAtlantic having a true physical office space, as numerous companies are registered at their official location. In fact, the address for TransAtlantic is within the same building used by Company 2.”

While the matter concerning TransAtlantic is entirely unrelated, it suggests a legitimate interest in clarifying the links and the entities involved, regardless of compliance with sanctions and trade regulations.

Still, OCN’s Leo Ng believes that had he ever broken any rules, it surely would have been brought to his attention before now.

“I’m just a small company,” Ng told Straits Times. “If I ever did anything illegal over these years, the government would have looked for me.”

K. Takahashi and J. Dodgson contributed to this report