Chinpo Shipping Co (Pte) Ltd v Public Prosecutor

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ; Chao Hick Tin JA
• Judgment Date: 12 May 2017
• Neutral Citation: [2017] SGHC 108
• Plaintiff Counsel: Edmond Pereira and Dharinni Kesavan (Edmond Pereira Law Corporation)
• Date: 12 May 2017
• Docket Number: Magistrate’s Appeal No 9016 of 2016
• Hearing Date: 23 February 2017
• Subject Matter: United Nations (Sanctions,Criminal Law,Statutory offences,Actus reus,Mens rea,General exceptions,Mistake of fact,Elements of crime,Money-changing and Remittance Businesses Act,Democratic People's Republic of Korea) Regulations 2010
• Published date: 17 May 2017
• Defendant Counsel: Tan Ken Hwee, G Kannan, Ang Feng Qian, and Randeep Singh (Attorney General's Chambers),Clara Tung (Allen & Gledhill LLP) as Young Amicus Curiae.
• Court: High Court (Singapore)
• Citation: [2017] SGHC 108
• Year: 2017

See Kee Oon J (delivering the judgment of the court):

Chinpo Shipping Company (Private) Limited (“Chinpo”) was convicted in the State Courts on one charge under the United Nations (Sanctions – Democratic People’s Republic of Korea) Regulations 2010 (S 570/2010) (the “DPRK Regulations”), and one charge under the Money-changing and Remittance Businesses Act (Cap 187, 2008 Rev Ed) (the “MCRBA”):

1st charge

that you, on 8 July 2013 in Singapore, did transfer financial assets or resources that may reasonably be used to contribute to the nuclear related programs or activities of the Democratic People’s Republic of Korea, to wit, by transferring US$72,016.76 from your Bank of China bank account number [xxx] to one C.B. Fenton and Co., S.A., and you have thereby committed an offence under Regulation 12(b) of the United Nations (Sanctions-Democratic People’s Republic of Korea) Regulations 2010) … which is punishable under section 5(1) of the United Nations Act, Cap. 339…

2nd charge

that you, between 2 April 2009 and 3 July 2013, had carried on a remittance business, when you were not in possession of a valid remittance licence, and you have thereby committed an offence under section 6(1) of the Money-changing and Remittance Businesses Act, Cap. 187 (2008 Rev. Ed.) (“the Act”) which is punishable under section 6(2) of the said Act.

Chinpo was fined S$80,000 on the 1st charge (the “DPRK Regulations Charge”) and S$100,000 on the 2nd charge (the “MCRBA Charge”). The total fine of S$180,000 has been paid. Chinpo now appeals against its convictions and sentences under both these charges.

The grounds of decision of the District Judge (the “DJ”) are reported at Public Prosecutor v Chinpo Shipping Company (Private) Limited [2016] SGDC 104 (the “GD”).

Undisputed Background

As set out in the Statement of Agreed Facts,¹ Chinpo was incorporated in Singapore on 11 August 1970 by Tan Cheng Hoe (“Tan”). It carries on the businesses of “ship agencies & ship chandlers” (ie, representing ships and supplying bunker, stores, and spare parts to them) and “general wholesale trade (including general importers and exporters).”

Tan was a director of Chinpo and its associated companies, Tonghae Shipping Agency (Private) Limited (“Tonghae”) and Great Best Trading (Private) Limited (“Great Best”) (collectively, the “Companies”). He was also a shareholder in Tonghae and Great Best, but not in Chinpo. There was no substantive separation between the Companies. They shared the same premises at 7500A Beach Road, #09-320/321 (the “Premises”), and the same set of employees. They used the same email account to communicate with entities from the Democratic People’s Republic of Korea (“DPRK”), and used the same Bank of China (“BOC”) account (the “BOC Account”) to receive and perform remittances.

Tan has two daughters, Tan Hui Tin (“Hui Tin”) and Tan Bee Tin (“Bee Tin”), both of whom were accounts executives in Chinpo as well as directors and/or shareholders in each of the Companies. Hui Tin and Bee Tin oversaw the day-to-day operations of the Companies, and all other staff reported to them. Still, Tan visited the Premises every day, and was consulted on “major matters” concerning the Companies.

Dealings with entities from DPRK

In the 1970s, Tan began interacting with DPRK entities while working as an employee in his brother’s company, which dealt with DPRK entities. Subsequently, Korea Tonghae Shipping Co (“Korea Tonghae”), one of the largest ship operators in the DPRK, appointed Chinpo as its shipping agent. In 1984, Tonghae was established to be the shipping agent for Korea Tonghae, and Chinpo provided its ship agency services to other DPRK entities. Nevertheless, Chinpo continued to provide goods and services to the vessels of Korea Tonghae, while Tonghae processed the documentation for the vessels to enter and depart Singapore.

After Korea Tonghae underwent a re-organisation in the late-1990s, Chinpo and Tonghae began providing their services to Ocean Maritime Management Company Limited (“OMM”) instead of Korea Tonghae. Tan characterised OMM as the “new name” of Korea Tonghae. Among the vessels administered by Korea Tonghae (and then OMM) was the DPRK-flagged MV Chong Chon Gang (the “Ship”), which was owned by Chongchongang Shipping Company Limited, a DPRK one-ship company.

In 2005, Tan partitioned off part of the Premises for the DPRK Embassy in Singapore (“the Embassy”) to use as its mailing address. Tan offered the partitioned area to the Embassy without cost to build goodwill with the DPRK entities. No one from the Embassy was based permanently at the Premises. At the suggestion of Tan, the Embassy listed Tan as its “security guard” with the Ministry for Foreign Affairs of Singapore so that he could enter the partitioned area and collect mail for it. These arrangements have continued since.

2 April 2009–3 July 2013 outward remittances totalling US$40,138,840.87

In the course of providing ship agency services to OMM, Chinpo received moneys from the sale of freight on behalf of OMM (via the BOC Account). With these funds, Chinpo paid for the costs of shipping the freight, the sums due to itself for ship agency services, and the salaries of the OMM staff stationed in Singapore. Thereafter, Chinpo remitted moneys left over to overseas entities in accordance with the instructions of OMM. Hui Tin and Bee Tin maintained the records of these remittances on behalf of OMM.

According to the Statement of Agreed Facts, between 2 April 2009 and 3 July 2013, Chinpo made 605 outward remittances on behalf of OMM and the other DPRK entities from the BOC Account (the “605 Remittances”), and charged a fee of at least US$50 per remittance on most occasions. The total value of the 605 Remittances was US$40,138,840.87.

By 2012, however, the demand for ship agency services from OMM had declined. Nevertheless, Chinpo maintained its office and kept its staff, hoping that business from OMM would pick up. Chinpo also continued remitting moneys for OMM to preserve its working relationship with OMM.

8 July 2013 outward remittance of US$72,016.76

On 11 April 2013, the Ship departed the DPRK for a voyage to Cuba and back (the “Voyage”). It called at the port of Vostochny, Russia, to re-fuel, and took on 10,201mt (ie, metric tonnes) of steel plates.

On 28 May 2013, Chinpo remitted US$54,269.76 to C.B. Fenton and Co., S.A. (“CB Fenton”), a shipping agent operating at the Panama Canal. This sum was payment for the transit expenses of the Ship in the Panama Canal (en route to Cuba), which the Ship passed through on 1 June 2013.

On 4 June 2013, the Ship discharged its cargo of steel plates at Havana, Cuba.

On 20 June 2013, the Ship docked at Mariel, Cuba, where it took on arms and related materiel (the “Materiel”) comprising: (a) six trailers of SA-2 and SA-3 surface-to-air missile systems (“SAMs”); (b) two MiG-21 aircraft and engines for them (“MiG-21s”); and (c) ammunition and miscellaneous arms-related materiel such as rifles and night-vision binoculars.

On 24 June 2013, the Ship docked at Puerto Padre, Cuba, where it took on 10,500mt of sugar. Thereafter, it commenced its journey back to the DPRK.

On 1 July 2013, Chinpo received €253,365.56 from Expedimar S.A. (“Expedimar”) for the cargo discharged at Havana. This inward remittance was received pursuant to an email instruction from OMM to Chinpo dated 23 June 2013, with Chinpo receiving the bill of lading of the Ship on 27 June 2013.

On 8 July 2013, Chinpo remitted US$72,016.76 to CB Fenton for the return passage of the Ship through the Panama Canal (the “Transfer”). This outward remittance was made pursuant to an email instruction from OMM to Chinpo dated 8 July 2013, which was silent on the purpose of the remittance.²

On 11 July 2013, the Ship was interdicted by the Panamanian authorities, who found the Materiel hidden under the 10,500mt of sugar.

Legislative frameworks

At the outset, it is worthwhile to set out the legislative frameworks within which the DPRK Regulations Charge and the MCRBA Charge operate.

Regulation 12(b) of the DPRK Regulations (“Reg 12(b)”) provides:

Prohibition against provision of financial services and other resources

12. No person in Singapore and no citizen of Singapore outside Singapore shall — … (b) transfer financial assets or resources, or other assets or 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 the Democratic People’s Republic of Korea.

We use “NRPA” (nuclear-related programs and activities) as shorthand for the nuclear-related, ballistic missile related, or other weapons of mass destruction related programs or activities of the DPRK.

In respect of the MCRBA Charge, s 6 provides that no person shall carry on “remittance business” without a valid remittance license. As for what constitutes “remittance business”, s 2 of the MCRBA provides:

Interpretation

2.—(1) In this Act, unless the context otherwise requires —

… “remittance business” means the business of accepting moneys for the purpose of transmitting them to persons resident in another country or a territory outside Singapore;

…

(2) For the purposes of this Act, a person shall be deemed to be carrying on — … (b) remittance business if he offers to transmit money on behalf of any person to another person resident in another country.

With these frameworks in mind, we turn to the decision of the DJ.

Decision below DPRK Regulations Charge

The DJ identified three legal issues in relation to the DPRK Regulations Charge: whether the Prosecution needed to prove that Chinpo knew that the Transfer that it made to CB Fenton (see [19] above) “may reasonably be used to contribute” to the NRPA of the DPRK (GD at [118]); whether the Materiel related, and whether the Transfer...