S’pore embroiled in sanctions breach

Leaked UN draft report claims two firms sold luxury goods to N. Korea

NEW YORK: A leaked draft of a United Nations report claims that two Singapore companies have violated its sanctions by supplying luxury goods to North Korea, reported BBC.

The final report has been submitted to the UN Security Council, and is likely to be published later this week, it said.

According to the BBC, Singapore’s government said it was aware of the cases and had begun investigating where there was “credible information” of possible offences.

The two Singapore-based firms under investigation are OCN and T Specialist. They are sister compa- nies and share the same director.

Both the companies have denied any wrongdoing, BBC said.

They are among firms in Asia highlighted in the leaked UN report.

The report alleges the two firms supplied a range of luxury goods to North Korea, including wines and spirits, until as recently as July 2017.

Under the sanctions, it is illegal to sell luxury items to North Korea since 2006. Singapore’s laws have also banned the sale of these items to North Korea for several years.

The UN report also claims between 2011 and 2014 “transactions valued at more than US$2mil” flowed from an account that OCN and T Specialist set up in a North Korean bank, Daedong Credit Bank, to T Specialist’s bank accounts in Singapore.

T Specialist has testified to the UN that the funds did not come from North Korea but a company registered in Hong Kong, and related to sales before 2012.

The two companies are also accused by the UN of having “long-standing, close ties” – including ownership ties – with Ryugyong Commercial Bank, a bank the US put on its sanctions list in 2017.

The Singaporean companies said they have no interests in the bank, according to BBC.

Their lawyer, Edmond Pereira, has confirmed they are under investigation by Singapore authorities, but insisted they did not have any current financial links, interests, or any sort of relationship with entities in North Korea, BBC said.

Pereira acknowledged that his clients “have done business with North Korean entities ... before the UN sanctions came into force”.

He added the companies had “reduced their involvement” in North Korea but that “these things take a bit of time”.

BBC added that lawyers have said part of the problem is these sanctions are expected to be enforced by companies who are often unaware of the changes in the law.

It also said it was the responsibility of member countries to make sure their banks had a more “robust scrutiny” of individuals and companies opening accounts with them.

The BBC contacted the two Singapore banks mentioned in the report but both banks declined to comment, citing Singapore’s banking confidentiality laws.

Global sanctions against North Korea have tightened considerably over the last two years as Pyongyang has continued to conduct nuclear tests and launch missiles.