Despite the unwanted publicity of a criminal trial for one of their main suppliers, business is booming at Pyongyang’s “Singapore shops,” which sell everything from Ukrainian vodka to brand-name knockoffs from China.
The stores stock many of the things UN sanctions banning trade in luxury goods are intended to block and provide a reminder that not all potential trade partners are lining up behind the UN’s pronouncements or the US’ policy of maximum pressure on Pyongyang.
The stores are anything but secret. They are well marked, open to walk-ins and distribute membership cards to reward regular customers.
Photo: AP
Until recently, the name of their Singaporean partner, OCN Group, was printed on Bugsae Shop’s plastic shopping bags.
While being the focus of a court case that could land OCN’s former director in prison for a long time, they continue to unabashedly specialize in imported products — perfumes, fine jewelry, wines, clothing and cosmetics — that appear to blatantly contravene UN restrictions.
Formally known as the Potonggang Ryugyong Shop and the Bugsae Shop, the stores are a fixture of the upscale shopping scene in Pyongyang, catering to the capital’s elites, Chinese businesspeople and members of the diplomatic corps.
Purchases can be made in US dollars, euros and yuan. The price in each is displayed digitally on the cash register.
Both stores have been substantially renovated since last summer.
The Ryugyong store now has a coffee shop behind the imported shoe section on its second floor. The Bugsae Shop has installed dark wood paneling and glass casing for its wines and spirits corner, which has been dominated by vodkas from Ukraine.
It has separate display areas for snacks and soft drinks from Japan, Malaysia and China, a row dedicated to fancy shampoos, and a section in the rear for imported electronic appliances and household goods.
The well-stocked shelves belie the hit supplies must have taken with the arrest of their former Singaporean trading partner.
Ng Kheng Wah (吳慶華), 56, faces 80 charges of contravening UN sanctions for allegedly supplying US$6 million of luxury goods to the Bugsae Shop from 2010 to last year. This includes watches “clad with a precious metal,” jewelry, musical instruments and wine.
While OCN is not mentioned, the charges accuse Ng of trying to defraud banks through another of his companies, T Specialist International.
Ng, who stepped down as an OCN director in March, also faces 81 charges for working with a partner identified as Wang Zhiguo to deceive DBS, Oversea-Chinese Banking Corp and Malayan Banking Berhad to carry out his deals, issuing false invoices for the sale of Watari Instant Noodles to T Specialist, most amounting to hundreds of thousands of US dollars.
Ng was charged on July 18 and granted bail of S$500,000 (US$365,564).
A pretrial conference is scheduled for Jan. 17.
For each offense under the UN sanctions act, Ng faces up to five years in jail and a S$100,000 fine. Each cheating charge comes with an additional maximum jail term of 10 years and an unspecified fine.
INVESTIGATIONS
Singaporean authorities have accused another Singaporean and a North Korean man of helping to supply luxury goods to Pyongyang.
They are also investigating a Singaporean businessman who is facing criminal charges in the US for allegedly breaching sanctions against North Korea.
Ng denied any wrongdoing in an interview with the Straits Times shortly after reports of possible breaches became public.
He said that OCN was the sole distributor of the popular Japanese Pokka brand of canned drinks in North Korea from 2000 and 2012, but added that OCN dropped that when Japan imposed sanctions banning such exports.
Documents presented in court showed that in early 2014, T Specialist International presented a bogus invoice to a bank from which it was seeking a loan, claiming it had received US$522,410 for Pokka sales.
The case hints at an uncomfortable truth that has long hamstrung efforts to make sanctions enforcement really bite: Engaging North Korea is not as uniformly taboo with potential trading partners as Washington might like.
China has long been Pyongyang’s biggest pipeline. With Ng on trial, it is almost certainly where most of the Singapore shops’ goodies come from, even if they originate elsewhere.
The two nations have a long border, a rail connection and almost-daily flights between their capitals that allow for the transport of a significant amount of goods.
Russia is another important trader, and there has been interest from Egypt, which helped fund and set up North Korea’s mobile phone system, and HB Oil of Mongolia, which was involved in a 2013 deal to build gas stations in Pyongyang.
Singapore, which in June hosted the summit between US President Donald Trump and North Korean leader Kim Jong-un, has relatively close ties with North Korea. The North has an embassy in Singapore, although Singapore does not have an embassy in Pyongyang.
BUSINESS TIES
The two also have a long history of doing business.
While rumors swirled about how the Trump summit might lead to North Korea getting its first McDonalds, a trio of Singaporean businessmen had already gotten the jump on the Pyongyang burger market in 2009.
Burgers from a chain of fast-food restaurants started by Patrick Soh (蘇炳強), Quek Cher Lan and Timothy Tan called Samtaesong, or Three Big Stars, are almost required eating at an amusement park next to Kim Il-sung Stadium.
The menu at another somewhat fancier Samtaesong outlet has a wide selection of coffee, smoothies, fried chicken and even “sausage, egg and cheese McGrddles” on its menu.
Soh, also speaking to the Straits Times, said he receives no income from the restaurants and that he has cut back his travel to Pyongyang.
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