Kiwi firm fined for N Korea breach
ANew Zealand aircraft manufacturer has been fined nearly $75,000 after indirectly, but knowingly, exporting plane parts to North Korea, breaking strict United Nations sanctions imposed against the rogue nuclear state.
New details about what the Hamilton company knew about its plane in North Korea can also now be revealed.
Pacific Aerospace pleaded guilty in August last year to three breaches of UN sanctions against North Korea and one charge under the Customs and Excise Act.
The charges stemmed from a Customs investigation after one of the company’s PAC P-750 XSTOL aircraft was seen and filmed at a North Korean airshow in the city of Wonson displaying the state’s colours during September 2016. A UN panel of experts also conducted an investigation.
Earlier this year, a sentencing hearing was heard for Pacific Aerospace before Judge John Bergseng in the Manukau District Court.
Judge Bergseng fined Pacific Aerospace $74,805 in his reserved judgment on May 29.
Customs prosecutor Jasper Rhodes asked Judge Bergseng to impose a denunciatory sentence “that goes above and beyond” to send a strong message of deterrence.
The UN laws against North Korea ban a wide range of exports and services to the nation in response to its nuclear weapons programme. Court documents obtained by the
show that in 2014 Pacific Aerospace started a joint venture enterprise in China with Beijing General Aviation Company (Beijing Aviation). ● ●
The P-750 was sold to Beijing Aviation on June 16, 2015, before being exported from New Zealand on September 12, 2015, and arriving in China on September 18, 2015.
However, the plane was on-sold to another company, Beijing Freesky Aviation Co Ltd (Freesky), in Novem- ber 2015. Then, on Christmas Day that year, the P-750 was the flown into North Korean airspace, where it has remained ever since.
But Pacific Aerospace later knew its plane was in the possession of the secretive state.
On January 6, 2016, Beijing Aviation notified Pacific Aerospace that its aircraft was now North Korea’s, court documents read.
Pacific Aerospace also installed tracking data to the plane and could locate the whereabouts of the P-750.
A UN Security Council report and a chain of emails further suggest the New Zealand company knew its plane was in North Korea and had been contacted by the Chinese company for parts and training.
Rhodes said during last week’s hearing that Pacific Aerospace’s offending came through a commercial motivation to honour a warranty.
The warranty provision in the contract with Beijing Aviation placed an obligation on Pacific Aerospace to repair or replace defective parts within 500 hours’ flying time or two years from the China delivery date.
On three occasions, Pacific Aerospace exported aircraft parts to Beijing Aviation, knowing the parts — including an ejector, flap parts, and a flight instrument which displays propeller speed — would then be sent to repair the plane in North Korea.
Pacific Aerospace’s counsel Emmeline Rushbrook said the company recognised the seriousness of the offence and negative affect on New Zealand’s trade reputation.
But, Rushbrook continued there was no “hidden scheme” to export the plane to North Korea through China.
Pacific Aerospace has implemented changes to ensure such a breach does not happen again.