The Singaporean company behind a major new commercial development in Pyongyang has ties to North Korea’s Office 39 and has provided banned luxury goods for sale in the country in violation of international sanctions, according to multiple sources and photos obtained by NK Pro.

NK Pro first reported on OCN (S) Pte Ltd, a Singapore-based trading company, in 2016 after it was linked to a 24-story, gold-clad tower under construction along the banks of Pyongyang’s Taedong River. Following the publication of NK Pro’s article about the property, OCN denied any link to the building, and later threatened NK Pro with legal action.

“This service is only for royal class people,” a former North Korean official with intimate knowledge of Office 39’s trading activities told NK Pro. “North Korea doesn’t care if commoners get problems. But if someone exposes it, and the royal class can’t import, then that’s a problem.”

Now, further interviews with former North Korean officials, foreign residents of Pyongyang, and extensive analysis of publicly-available corporate filings reveal a close relationship between OCN and DPRK entities and individuals linked to the regime. Many of their reported activities constitute direct violations of Japanese and Singaporean law, as well as United Nations Security Council Resolution 1718 which, in 2006, banned the export of luxury goods to North Korea, including many of the ones found in the two high-end Pyongyang department stores said to be North Korean joint ventures with OCN.

Recent pictures taken at both locations – numerous “No Photography” signs notwithstanding – reveal imported items ranging from canned coffee to luxury handbags with prominent signage featuring well-known international brand names throughout.

These include, among many others, Gucci, Chanel, Prada, Burberry, and Montblanc. Japanese brands for sale include Sony, Panasonic, Yamaha, Seiko, and Pokka. There are flat screen TVs, laptops, jewelry, and cameras on display, as well as cosmetics and hair products from Lancôme, L’Oreal, and Vidal Sassoon.

The former North Korean official, who recently defected to the South and wished to remain anonymous, had direct knowledge of OCN’s operations in Pyongyang. He said the company has close connections to the Central Committee Bureau 39 of the Workers’ Party of Korea (WPK), known colloquially as “Office 39,” a secretive organ of the ruling party apparatus which keeps the North Korean elite in fine cognac, among other luxury goods, and earns hard currency for the regime. Office 39 – which was designated by the United Nations Security Council (UNSC) in March 2016 –  takes a substantial cut of OCN’s North Korea earnings, the former official said.

Overseas networks have helped the North Korean regime evade international sanctions for at least 10 years, according to a recent report from the nonprofit Center for Advanced Defense Studies (C4ADS), and OCN is the latest in a string of North Korea-linked entities to operate out of Singapore.

In 2015, Singapore-based Chinpo Shipping was charged with helping facilitate an arms shipment from Cuba to North Korea aboard the M/V Chong Chon Gang, and earlier this year the Pyongyang branch of the Singapore-based Pan Systems was found to be operating Glocom, a Malaysian front company run by North Korea’s Reconnaissance General Bureau. In the case of OCN, two sources told NK Pro the company has been active in North Korea since the mid-1990s, while North Korean state media places the company in the country since at least 2006.

“After watching a Korean film ‘Highest Honor and Greatest Happiness of the Nation,’ the director of the Singaporean O.C.N. Trade Private Co., Ltd. extended most heartfelt congratulations to Kim Jong Il on the 13th anniversary of his election as NDC chairman,” reported KCNA in April of that year, just six months before North Korea’s first nuclear test. “The director wholeheartedly wished (Kim Jong Il) good health, noting that the Korean people are the happiest and most proud people as they are under his wise leadership.”

THE SINGAPORE SHOPS

According to multiple sources, OCN runs two small, high-end department stores in Pyongyang: the Puksae Shop, hidden along a backstreet behind the city’s Arch of Triumph monument, and the Pothonggang Ryugyong Store, located near the 105-story Ryugyong hotel, that have for years been known to the city’s expats as the “Singapore Shops.”

Neither location appears on the strictly-controlled tourist route, and the name OCN was not familiar to several Western guides who regularly take foreign travelers to North Korea. The Pothonggang Ryugyong Store, however, is reportedly clustered with other businesses that generate revenue for Office 39 and just a short walk from Pyongyang’s secretive “Forbidden City” where the country’s inner circle lives.

The North Korean “royal class” has a particular taste for Japanese products, and the hard currency shops connected to OCN exist to “suck money up” from them, said the former official.

“We were there several times a week,” a European diplomat formerly posted to Pyongyang said of the Puksae Shop. “The offer[ing] in this department store was well beyond any other dollar shop in Pyongyang.”

But the Puksae shop and Pothonggang Ryugyong Store also had something not seen elsewhere in Pyongyang by people interviewed by NK Pro: labels with the letters “OCN” printed on or affixed to the packaging of many of the products for sale. Three separate sources independently described seeing OCN labels at both the Puksae Shop and the Pothonggang Ryugyong Store.

Contacted numerous times by NK Pro, OCN declined to answer questions about its corporate structure or the nature of its links to Pyongyang by phone or email.

A list of 10 detailed questions sent to OCN at the conclusion of NK Pro’s investigation went unacknowledged, which combined meant it was not clear if OCN or its Directors had any direct knowledge of what sources claimed to NK Pro about the organization’s ongoing activities in North Korea.

Because of the circuitous route imports must take to get there, retail prices at the Puksae and Pothonggang Ryugyong can be as much as double what they are outside the DPRK. This being North Korea, counterfeit currency is always a concern.

“I often saw happy North Korean customers paying the cashiers with $100 notes,” said the European diplomat. “And the cashiers had special ultraviolet lamps to recognize fake notes. Me and my wife, we witnessed repeatedly the moments when fake notes were rejected by cashiers.”

Pictures taken inside the Puksae Shop show several European and Japanese luxury liquor brands on offer, all prohibited from direct export to North Korea under UN sanctions. And a photo taken in the Pothonggang Ryugyong Store shows British-style three-pin outlet fixtures – also the type used in Singapore – for sale.

“(North Korea) don’t use three pin plugs and yet they sell these three pin wall sockets,” a source familiar with the shops said. With imported electronics from Singapore having three pin plugs, the source said it made sense, therefore, for the “rich to have Singaporean wall sockets.”

Between the sanctions imposed by the United Nations, Singapore Customs having listed 14 categories of luxury goods prohibited from export or transit since 2010, and a unilateral Japanese embargo barring all trade with the country, many of the items spotted in the Puksae Shop and Pothonggang Ryugyong Store are likely to raise eyebrows.

But OCN’s reach extends beyond those two locations. Three sources with direct knowledge of the situation said OCN also acts as an importer for other vendors in the DPRK, with one claiming it supplies Pyongyang’s Koryo and Yanggakdo hotels with high-end alcohol and goods for sale at shops and bars within the properties.

On top of the banned luxury goods, OCN’s reported ties to Office 39 are also highly problematic, according to William Newcomb, a former member of the UN Panel of Experts on North Korea.

“If an existing relationship with Office 39 is confirmed, it would constitute a serious violation of UNSCR 1718 (2006) OP 8(d) that provided for an assets freeze on designated entities and individuals, and should be prosecutable on multiple grounds, possibly including sanctions evasion,” Newcomb told NK Pro.

The former North Korean official interviewed by NK Pro said OCN shipments are first delivered to a warehouse from overseas before going out to stores.

A second North Korean source who used to shop at both stores regularly and has direct knowledge of the country’s trading networks told NK Pro that goods coming into the country to be delivered to the OCN stores arrive with less interference than normal from North Korean customs.

THE SINGAPORE CONNECTION

Singapore has long been known for its tight banking secrecy laws, and was once even described in a leaked email as a “money laundering center” by Morgan Stanley’s chief Asia economist. The country has had diplomatic relations with North Korea since the 1970s, and only recently announced plans to require companies to disclose beneficial ownership in an attempt to crack down on illicit finance.

“Designated entities and banks have continued to operate in the sanctioned environment by using agents who are highly experienced and well trained in moving money, people and goods, including arms and related materiel, across borders,” the UN Panel of Experts said in its latest report. “These agents use non-nationals of the Democratic People’s Republic of Korea as facilitators, and rely on numerous front companies.”

Operating out of a squat, dun-colored building on Singapore’s Joo Chiat Road, OCN (S) Pte Ltd, which has virtually zero online presence and little apparent staff, appears to be part of a byzantine matrix of trusted outside entities used by Pyongyang to access international markets.

After NK Pro first reported on OCN’s North Korean business dealings last year, follow-up visits to their offices on Joo Chiat Road found all OCN signage had been removed from the building’s facade.

Although North Korea recently moved its embassy to a nearby neighborhood, the North Korean ambassador still lives right around the corner on Joo Chiat Lane, a stone’s throw from the OCN building on Joo Chiat Road. OCN’s location is also less than 400 meters from Myohyang Honghwa Food Co., Ltd, a recently shuttered North Korea-linked firm whose director has been tied to Chinpo Shipping and the M/V Chong Chon Gang arms smuggling case.

WHO’S WHO

Registration documents filed with Singapore’s Accounting and Regulatory Authority (ACRA) describe OCN’s primary purpose as an investment holding company, with a secondary focus described as “general wholesale trade.”

Company records further reveal an additional web of businesses sharing directors, shareholders, and an address with OCN. These include wholesale trading companies by the names of T Specialist International, Transvision Marketing, Ohayo International, Watari and OCN International Distribution, a liquor and tobacco distributor called Lubritrade & OCN Marketing, and TTAT Investment, which is listed as T Specialist’s sole shareholder.

OCN is also listed as a shareholder in Lagun Sari Wedding & Catering Services, a Malay wedding hall on the ground floor of OCN’s headquarters. Last year, a former staffer was accused of stealing thousands of dollars in deposits from as many as 100 brides-to-be.

The common thread throughout the entities is one Ng Kheng Wah, who goes by “Leo.”

Among the listed shareholders in Lagun Sari are Leo’s twin daughters, Tania and Trina; and a Chinese national named Wang Zhi Guo. According to corporate filings, Wang is linked to members of North Korea’s overseas shipping network.

When NK Pro contacted Lagun Sari for comment on its relationship with OCN, Trina Ng—whose LinkedIn profile says she graduated from the University of Southern California and now works at Lagun Sari as a digital marketing executive—at first denied OCN existed.

This was despite calls to numbers that were listed as points of contact for OCN staff in email signatures seen by NK Pro, OCN email addresses used by at least three Lagun Sari employees, a clear link to OCN observed during an April visit to the building, and ACRA documents listing an OCN (S) Pte Ltd at the very same address, as a live company.

She then denied having anything to do with OCN, claiming to be a new employee at Lagun Sari who didn’t know anyone named Leo Ng—her father and a director of OCN. When confronted with details establishing their relationship, Ms. Ng admitted that Leo Ng was indeed her father. She then accused NK Pro of having illegally obtained OCN’s publicly available ACRA filings.

And after claiming her father was “semi-retired,” NK Pro wrote to both Leo and Trina Ng that “it is indeed possible he might not be aware of some of the things that have been shown or said to be taking place linked to OCN in the DPRK over the past year.” An email offer was made to share information about the source claims ahead of publication but not replied to, and attempts to communicate by phone or email were rejected.

Corporate documents filed last year by T Specialist, an associated company also sharing an address with OCN and owned by Leo Ng, reveal at least one small part of the larger financial picture.

In 2015, T Specialist reported a little over $170 million (all figures in Singapore dollars) in revenue. After expenses and costs, the company, which was incorporated in 2000, reported a total profit of just $1.5 million—0.89 percent—with $73.5 million in total liabilities. The auditor listed in OCN corporate documents declined to comment to NK Pro, citing client confidentiality.

OCN GOES QUIET

OCN has been exporting to North Korea for years, and used to do it rather openly. The photo on the left, taken in 2008, shows “OCN (S) Pte Ltd” printed directly on the back of a can of Pokka coffee; the one on the right, taken this year in Pyongyang, shows a blank space where the OCN labeling used to be:

When Japan imposed a total embargo on exports to North Korea in 2012, Pokka Corporation Singapore “made an internal decision to cease any trade which exports our products directly” to the country, CEO Alain Ong told NK Pro in an email. All OCN labeling was subsequently removed from the cans, and Ong said Pokka Singapore, which began working with OCN in 1997, no longer does business with the company.

“We have dealings only with T Specialist now,” Ong said. “We explained that the products we supply to them are to be exported to China, and based on this explanation, we continue to trade with them.”

But T Specialist is OCN. A spokesperson for Pokka Sapporo, Pokka Singapore’s parent company, said they never knew their products were being exported to North Korea until Pokka Singapore informed them that the relationship with OCN would be ending. She said the company was unaware that Pokka Singapore continues to do business with T Specialist.

Other companies doing business with T Specialist may not realize they are, in fact, dealing with OCN.

Shoes from Americaya, for instance, a Japanese footwear company, can be clearly seen in photographs of the Pothonggang Ryugyong store obtained by NK Pro. When asked for comment, Americaya initially denied a relationship with OCN, but later shared details of two transactions with T Specialist: 232 pairs of shoes in October 2014, sold for 19,000 Singaporean dollars (just under $14,000 USD), and a 10,000 SGD transaction (just over $7,000 USD) in 2013.

In both the Puksae and Pothonggang Ryugyong stores, dedicated Montblanc sections offer high-end watches, belts and wallets, among other items. One Montblanc watch seen at the Pothonggang Ryugyong had a price tag of 460,000 Won: more than $4,300 at North Korea’s official exchange rate. (In North Korea, the official rate, rather than the black market one, is used when paying with hard currency.)

Despite its extensive in-store presence, Richemont Luxury, the Singaporean arm of Montblanc’s French parent company, Compagnie Financiere Richemont, insisted it had “no commercial relationship” with OCN, or any of its related entities, including T Specialist.

“Sanctioned Countries is an area which Richemont takes seriously,” a Richemont spokesperson told NK Pro in an emailed statement. “Richemont does not sell Montblanc products (or any other Maison products) in the North Korean territory. The imports you are referring to could be linked to grey market activities and/or involve counterfeited products.”

The former North Korean official familiar with the two Pyongyang stores said the supply chain may run through two North Korean nationals linked to OCN who are regularly dispatched to Singapore to personally obtain the highest-value items.

When informed that Yamaha products, including drums, saxophones, and keyboards, were being sold in North Korea, a company spokesman told NK Pro the revelation had caught executives there “by surprise.”

“We have already started investigating this matter after receiving your inquiry and we are checking all our invoice records thoroughly,” he said.

In fact, unilateral Japanese sanctions bar any exports to North Korea at all. This, on top of UN Security Council sanctions on luxury goods and Singapore’s own definition of which goods are forbidden, means the presence of many of the items spotted in the Puksae Shop and Pothonggang Ryugyong Store appear to be violations of national and international regulations regarding the DPRK.

A Singaporean analyst familiar with North Korean affairs said the DPRK is “welcoming to Singaporean business because we don’t take a stand on human rights issues.”

“We just go there and do business, we don’t probe into those areas,” he told NK Pro, on condition of anonymity. “We respect the system for what it is.”

Then there’s the not-insignificant fact that Singaporean law defines “proliferation finance” much more narrowly than is required to fully implement sanctions measures adopted by the UN Security Council.

This failing led to a court acquittal of Chinpo Shipping, as Andrea Berger of the Middlebury Institute of International Studies explained in May. For this reason and others, Singapore features prominently in the most recent UN Panel of Experts report, along with China and Malaysia, as relative safe havens for North Korean trading networks.

A spokesperson for Singapore’s Ministry of Foreign Affairs told NK Pro that Singapore “takes its obligations under the United Nations Security Council Resolutions seriously,” maintains a “robust export control system that is regularly updated to be in line with the latest international standards,” and that they will “investigate any wrongdoing by individuals or entities in Singapore.”

FROM RETAIL TO BANKING

In OCN’s case, the former North Korean official said the company at one time did its banking with Pyongyang’s Jae-il Shinyong Unhaeng, or “First Credit Bank.” But at some point later on, OCN reportedly set up their own institution, Ryugyong Commercial Bank, an informed source told NK Pro.

A Ryugyong Commercial Bank ATM machine was installed this spring at the Puksae Shop, another source said, and Ryugyong Commercial Bank customers who keep $10,000 dollars or more on deposit for at least a year get a “VIP” Gold or Silver Card and a 10 percent discount at the Puksae Shop and Pothonggang Ryugyong Store, according to Korean-language marketing materials reviewed by NK Pro. It is not yet known if the cards will entitle customers to a similar discount at the “Ryu Gyong Supermarket”, which according to a sign posted outside the site, will occupy the retail space in the brand-new OCN-linked development along the Taedong River.

Ryugyong Commercial Bank has been identified by the UN Panel of Experts as having worked closely with Daedong Credit Bank (DCB), which allegedly handled transactions for sanctioned entities and financing weapons deals through Beijing. And T Specialist, the OCN-owned export company, was identified as maintaining an account at DCB in documents seen by NK Pro.

DCB was designated by the UN in March of last year; the UN Panel of Experts has identified at least four sanctioned companies with accounts there.

“If OCN had dealings with DCB, it should have immediately suspended this relationship since continuing would be in violation of sanctions,” said Newcomb, the former Panel of Experts member.

Any relationship of any sort between OCN and Ryugyong Commercial Bank (or any other bank in North Korea), from owner to joint venture to mere account holder, would also be a violation.

MURKY WATERS

To get Japanese-made goods around Japan’s trade embargo with North Korea, containers are first sent to a third country, often Hong Kong, or Chinese ports like Tianjin, said the former North Korean official.

“We have an agent there; Shanghai is very expensive,” the former official told NK Pro. “The agent reloads the products into another container, which then goes to Nampo,” the port closest to Pyongyang.

North Korea masks its shipping activity by using proxies and frequently renaming and reflagging its vessels. However, it is apparent that the same networks which smuggle arms for North Korea are smuggling their luxury goods, too.

According to NK Pro Vessel Tracker data, the M/V Blue Sky 1, a cargo ship owned by OCN Shipping (Singapore), made multiple visits to Nampo in 2014. In 2016, the Blue Sky 1 was sold to Korea Poksong Shipping (also spelled “Puksong”), a North Korean entity identified by the U.N. Security Council. A month later, Korea Poksong sold the Blue Sky 1 to an unidentified buyer; it was reflagged and renamed and is currently based in the Philippines.

According to the Equasis Shipping Database, OCN Shipping has another location in Pyongyang, C/O Korea Poksong Shipping, and a third office in Hong Kong. And the NK Vessel Tracker shows the Blue Sky 1 having been managed by Korea Green Leaves Shipping, a known North Korean entity also identified by the UNSC.

Documents filed with the Hong Kong Companies Registry (ICRIS) connect OCN Shipping (Hong Kong) back to OCN (S) Pte Ltd in Singapore through director Wang Zhi Guo, a shareholder in the Lagun Sari wedding hall owned by Leo Ng and OCN. Wang’s listed address in the filings places him in Tianjin City, China.

As determined by NK Pro Data Director Leo Byrne, OCN Shipping Hong Kong is managed by Sea Star Ships, which has been identified by the U.N. and C4ADS as part of North Korea’s smuggling network. Sea Star’s sole shareholder and director is identified in corporate registration documents as Lu Tiehe, a Chinese national who is also a shareholder in Dalian Sea Glory and V-Star Ships Ltd. V-Star is linked to Chinpo Shipping and the M/V Chong Chon Gang, while Dalian Sea Glory has ties to the M/V Light, which was carrying missile components from  North Korea to Myanmar when it was intercepted by the U.S. Navy in May 2011.

Corporate filings for OCN Shipping Hong Kong and Sea Star both identify their corporate secretaries as Hong Kong-registered Winning International Consulting Group Co., Ltd., which has served the same role for other companies linked to North Korea including Leader International Trading Limited, designated in 2013 by the United Nations Security Council and the U.S. Department of the Treasury for providing support to the DPRK’s nuclear and ballistic missile programs.

Lu, who works out of an office in central Dalian, did not respond to interview requests.

In an email seen by NK Pro, a T Specialist representative revealed the company also works with freight forwarder Müller + Partner GmbH, a German-based company with long-established ties to the DPRK. (Müller’s agent in Pyongyang is a former official of the North Korean foreign trade ministry.) Müller + Partner’s Singapore office confirmed an existing relationship with T Specialist, but, citing customer privacy, wouldn’t share additional details.

“You see the same guys show up over and over and over again,” David Thompson, a senior analyst at C4ADS, told NK Pro. “These relationships don’t necessarily constitute illegal activity, but they absolutely should draw more scrutiny. There’s a lot more convergence after the first level among the shell companies than you would expect.”

INTO THE FUTURE

Ongoing construction at OCN’s new Pyongyang commercial complex near Tongil Street has shown many of the characteristics of private investment in North Korea. While entire areas like Pyongyang’s sprawling Ryomyong and Mirae streets have gone up in under 12 months, more than five years have passed since this project broke ground, satellite imagery indicates.

This slow pace of construction is one of two factors that suggest the building is being privately funded. According to North Korea observers, the superior build quality is another key differentiator between investor-backed projects and those financed predominantly by the state.

The prime location, too, in an area once reserved for a sprawling Korea Kumgang Group (KKG) riverfront modernization project – seemingly now axed – and adjacent to the city’s landmark Tongil market, where trade has for years been flourishing, suggests the project’s backers are confident about their prospects prospects.

“Tongil market were very against it,” said the former North Korean official, explaining that local merchants are fearful of losing their business to the new retail emporium.

“[Eventually] OCN will get rid of Tongil Market and provide every type of goods possible in that place, even cars,” the former official said. “It’s a huge market, like a Lotte shopping mall, and they will get rid of Tongil.”

With construction now seemingly near-complete, OCN’s new Pyongyang tower has a retail footprint that appears bigger than that of the Puksae Shop and Pothonggang Ryugyong Store combined. Even with sanctions tightening, stocking the shelves shouldn’t be a problem, based on a recent Washington Post interview with former Office 39 official Ri Jong Ho.

“We were never in pain or hurting in our trade business because of the sanctions,” Ri told the Post’s Anna Fifield. “Instead, we conducted our first nuclear test in 2006.”

Update: Tuesday, July 18. A Pyongyang map was removed from this article as one location could not be corroborated, while additional information about NK Pro’s attempts to contact OCN Singapore was added.

With additional reporting by Kosuke Takahashi, JH Ahn, and Jennifer Dodgson