Financial Times uncovers smuggling of oil to North Korea by 2 business partners of imprisoned ‘Macao junket king’ Alvin Chau

1790
Insert picture (left to right): Alvin Chau, Gary To Ka-him and Sun Tit Fan.

30th March 2023 – (Hong Kong) The Financial Times has revealed that Gary To Ka-hin, CEO of Sun Gold Holdings Limited, and Sun Tit Fan, director and shareholder of Sun International Automobile Company Limited, both business partners of imprisoned ‘Macao junket king’ Alvin Chau, have been implicated in a scheme to smuggle oil to North Korea in order to circumvent United Nations sanctions and to help the country develop ballistic missiles and nuclear technology.

Gary To Ka-him
Sun Tit Fan

To is the owner of the Unica oil tanker, which was found violating UN sanctions by smuggling oil to North Korea. In December of 2022, the European Union imposed fines on eight individuals and four entities, including North Korea’s Ministry of Missile Industry and its commercial agency. These entities were accused of providing support and funds to Pyongyang’s ballistic and nuclear programs. In addition to the individuals and entities that were fined, the EU also sanctioned two tankers, namely Unica and New Konk. These vessels were accused of participating in the transshipment of refined petroleum products on the high seas, which is in violation of UN Security Council resolution 2397 that was passed in December 2017.

Meanwhile, Sun Tit Fan is alleged to act as a middleman, procuring oil and paying shipping fees to Pyongyang.

UNICA. Source: MarineTraffic.com

To had founded an oil wholesale company in the UK in 2020, which was still active as of January 2023, despite applying for de-registration. Local media HK01 found that To serves as a director of more than ten Hong Kong registered companies, including Sun Gold Holdings Limited and EP GOLD LIMITED.

Meanwhile, To founded two companies, “Tech Oil Trading Pte Ltd” and “Golden Sunway Limited,” in the U.K. in late October 2020, involved in wholesale petroleum and its products, and To holds 75% or more of the shares. In June 2021, To resigned as director of Golden Sunway Limited and transferred the ownership to Siu Ho-lun, a Hong Kong woman.

Sun Tit Fan and Alvin Chau, shareholders of Sun International Automobile Company Limited, which is registered in Macao, are also involved in smuggling oil to North Korea, according to Macao’s business registry. They each hold a 30% stake in the company.

According to HK01, Sun Tit Fan has opened several companies in Hong Kong, including Rengo Commercial Company Limited, with shareholders Son Kon Hwa, Suen Chuen Pun, and Sun Tit Fan. Son Kon Hwa registered with a North Korean passport and an address in Pyongyang, while Suen Chuen Pun registered with a Hong Kong ID card, and Sun Tit Fan registered with Macao documents and a Hong Kong address.

North Korea has been subject to UN sanctions since its first nuclear test in 2006, and crude oil and refined petroleum products are among the prohibited items for import and export. The UN sanctions aim to limit North Korea’s access to fuel and other resources that could be used for its nuclear weapons program.

Source: Financial Times

The smuggling of oil to North Korea is a violation of these sanctions, which includes restrictions on the import and export of crude oil and refined petroleum products, as well as other goods and services such as luxury goods, arms, and financial transactions. The UN has been imposing these sanctions in an effort to deter North Korea’s nuclear weapons program.

Suen Chuen Pun and Son Kon Hwa have been accused of being special agents sent by North Korea to Macao. Sun Tit Fan’s wife admitted to doing business with North Korea but denied any violations of sanctions.

The allegations against To and his partners raise concerns about the effectiveness of UN sanctions and the need for greater international cooperation to enforce them.

Despite United Nations resolutions and the global pandemic, North Korea managed to acquire two new oil tankers in 2020, adding them to its oil smuggling fleet. These acquisitions come after a previous transfer in 2019, highlighting North Korea’s ability to continue expanding its oil smuggling capacity through various avenues, even with UN prohibitions in place since 2017.

Of the three new vessels, two were previously owned by South Korean companies, while the third came from North Korea’s established sanctions evasion networks. This transfer showcases the multi-faceted roles played by Pyongyang’s trusted third-party evaders working in foreign countries.

Furthermore, two of the three vessels have already been flagged by the UN Panel of Experts for conducting ship-to-ship transfers of petroleum products, indicating North Korea’s quick utilization of newly acquired tankers in its illicit oil import business.

North Korea’s maritime fleets have long been a crucial component of Pyongyang’s sanctions evasion tactics. In 2017, the UN Security Council targeted this evasion vector by prohibiting member states from supplying, selling, or transferring any new or used vessels to North Korea without prior approval.

This prohibition aims to hinder North Korea’s illicit programs by limiting its ability to replace its aging fleet, which is one of the oldest and least safe commercial fleets globally, and to prevent the expansion of illicit trade volumes via maritime routes. However, the recent additions to North Korea’s oil smuggling fleet demonstrate how Pyongyang has been able to circumvent UN restrictions on oil, essentially layering one set of sanctions breaches on another.

In October 2020, the United Nations’ International Maritime Organisation registered a new oil tanker named Sin Phyong 5, now owned by Pyongyang-based Korea Myongryu Trading. Although not much is known about such DPRK-domiciled companies, Myongryu Trading also owns the Myong Ru 1, a vessel noted for its oil smuggling activities by the U.S. Treasury Department’s Office of Foreign Assets Control and the UN Panel of Experts.

Meanwhile, on the 29th of March, the Financial Times reported that the Chinese government released a statement claiming to have executed the United Nations resolution and fulfilled its international obligations regarding the Korean Peninsula issue. However, the statement added that “political and diplomatic channels are the only viable way to solve the Korean Peninsula issue, rather than sanctions.” The Hong Kong government also made a similar response, but the governments of Macao and North Korea have not yet responded to requests for comment.

In February this year, the Supreme Court of Taiwan has upheld a one-year prison sentence for a Taiwanese businessman who violated the Counter-Terrorism Financing Act. The businessman, Huang Wang-ken, was found guilty of illegally selling nearly 3,000 metric tons of oil to North Korea in 2018 by arranging two illicit ship-to-ship fuel transfers in international waters. The Taiwan High Court Kaohsiung Branch originally handed down the sentence in October 2022, and the Supreme Court’s ruling on 2nd February affirmed the decision. This sale of oil to a country under international sanctions was a breach of the law and led to Huang Wang-ken’s conviction.