Jail for company director who obstructed investigations into alleged North Korean diesel supply

SINGAPORE: A company director was sentenced to 15 weeks in prison on Tuesday (June 7th) for obstructing investigations into his company’s alleged illegal supply of diesel fuel to a North Korean vessel.

Manfred Low Cheng Jing, 31, was the director of Yuk Tung Energy, an oil trading and bunkering company incorporated in Singapore.

In January or February 2018, he disposed of an iMac that he knew contained information relevant to police investigations into Yuk Tung Energy.

The Singaporean pleaded guilty to one charge of willfully obstructing the course of justice, with another similar charge being considered for sentencing.

Under international law, Singapore must implement United Nations Security Council (UNSC) sanctions and resolutions against North Korea to counter its nuclear weapons program.

Singapore has enacted national laws in the form of the United Nations Act and United Nations Regulations (Sanctions – Democratic People’s Republic of Korea) to do this.

The UNSC resolutions prohibit facilitating or engaging in ship-to-ship transfers of all refined petroleum products with North Korean-flagged vessels.

CASE BACKGROUND

In early 2018, local and international media reported an alleged ship-to-ship fuel transfer from MT Yuk Tung to the North Korean-flagged ship Rye Song Gang 1 on January 20, 2018.

There was a commercial agreement for Yuk Tung Energy to charter MT Yuk Tung. The vessel was owned by another company incorporated in the Cook Islands.

On or before January 25, 2018, Low became aware of the reports. He visited Kuala Lumpur on January 25, 2018.

A day later, the Commercial Affairs Department (CAD) of the Singapore police received information about Yuk Tung Energy’s alleged involvement and opened investigations.

Low’s job at the company was to print and post invoices related to his business dealings. He also reviewed the contracts and explained their content to Benito Aloria Yap, another director of the company.

Yap was the “key decision maker” for Yuk Tung Energy, assistant prosecutors Tan Ben Mathias, Regina Lim, Koh Mun Keong and Samuel Chew said. He is still on the run.

Shortly after the reports appeared, Yap went to the company’s offices to remove all the physical documents, which were packed in boxes and placed in a car.

He asked an employee to remove a computer used by a maritime executive to process bank documents, payment vouchers, invoices and claims.

Yap also demanded that Low’s iMac, which was used in the day-to-day operations of Yuk Tung Energy, be removed.

The iMac was taken to Low’s home and he later disposed of it in an unknown dumpster in Singapore. It has not been recovered.

The CAD raided the offices of Yuk Tung Energy on February 2, 2018. They did not find the iMac, nor the Expedition Manager’s computer.

A day after the raid, Low and other employees were in Johor Bahru with the owner of the Cook Islands-incorporated company that owned MT Yuk Tung. They met Yap there to discuss how to respond to the reports.

On February 13, 2018, the Government of Singapore received a request from the United Nations Panel of Experts for an explanation of the ship-to-ship transfer between MT Yuk Tung and Rye Song Gang 1.

The panel also requested other information, including the type and quantity of petroleum products transferred to Rye Song Gang 1, the identity of North Korean points of contact, and copies of documents related to the transaction.

OBSTRUCTION OF JUSTICE

When Low got rid of the iMac, he was aware of news reports reporting Yuk Tung Energy’s alleged role in the alleged ship-to-ship transfer and considered having the police investigate the company.

He also knew the iMac contained information about Yuk Tung Energy that would be relevant to police investigations, prosecutors said.

Low feared police would find incriminating evidence because he “knew Yuk Tung Energy’s business operations were shady”, they said.

CAD was able to obtain information and documents about Yuk Tung Energy’s operations, including spreadsheets detailing the company’s oil sales report.

However, Low’s disposal of the iMac frustrated CAD’s ability to fully investigate the company’s alleged sanctions violations and those criminally responsible, prosecutors said.

Low also lied to investigators by saying his cellphone and laptop were destroyed when a car ran over his bag in January 2018.

He later admitted that he threw away his phone, which contained information relevant to the investigations. This constituted the load taken into consideration.

IMPACT ON SINGAPORE’S REPUTATION

MT Yuk Tung and Yuk Tung Energy were added to the UN sanctions list on March 30, 2018, subjecting them to sanctions under Singapore’s domestic laws.

According to a Foreign Office impact statement cited in court documents, Low’s actions had a negative impact on Singapore’s international reputation.

“The breach frustrated the ability of the Singaporean authorities to complete their investigations into the potential violation of long-standing sanctions against the DPRK, as required by international law,” court documents said.

It also subjected Singapore to “international scrutiny and criticism” and “raised questions from our international partners” about the country’s commitment to meeting its international obligations.

The breach cast “a negative light on Singapore’s reputation as a clean, reliable and law-abiding jurisdiction for legitimate business activities”, according to court documents.

The designation of Yuk Tung Energy on the UN sanctions list has also heightened risks to Singapore’s economic and financial sectors by affecting how other local companies are perceived in the global market.

PROSECUTION ARGUMENTS

The prosecution asked for three months to five months in jail, arguing that Low shielded not only himself, but also Yuk Tung Energy and other company executives, from possible criminal liability.

Prosecutors pointed to the “substantial harm” caused to Singapore’s international standing and reputation by Low’s actions.

The DAC’s failure to fully investigate the alleged sanctions violation “increases the perception that Singapore has failed in its international obligations”, they said.

“There has been significant international attention to the launching of various missiles, projectiles, rockets and artillery shells by the DPRK, with at least 70 incidents reported between December 2010 and February 2018.

“The importance for Singapore to fully investigate and take action against alleged breaches of the UN DPRK Regulations – which are key to countering DPRK nuclear activities – cannot be overstated.”

Prosecutors also argued that Low’s actions were premeditated and that he continued to be evasive after disposing of his electronics.

Defense lawyer Diana Ngiam has asked for a sentence of around three months in prison, arguing that her client acted impulsively and got rid of the iMac before learning of a raid or an impending DAC investigation.

She said her client “did not know that Yuk Tung Energy’s operations were shady as the operations could involve potential breaches of DPRK regulations.”

“It must be emphasized that our client was a young adult who had joined Yuk Tung Energy to learn the ropes of oil trading from Benito Yap,” Ms Ngiam said.

Those guilty of obstructing the court of justice can be imprisoned for up to seven years, fined, or both.