R v Choi (No 10)

[2021] NSWSC 891

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

R v Choi (No 10) [2021] NSWSC 891

Hearing dates:

13-15 July 2021

Decision date:

23 July 2021

Jurisdiction:

Common Law

Before:

Adamson J

Decision:

The offender, Chan Han Choi, is convicted of counts 1 and 2 on the indictment. The offender is sentenced to an aggregate sentence of imprisonment for a fixed term of 3 years and 6 months, commencing on 16 December 2017 and expiring on 15 June 2021. As the sentence has expired, the offender is no longer subject to the conditions of bail.

Catchwords:

SENTENCING – Plea of guilty to providing sanctioned services to North Korean entities contrary to s 27(1) of the Charter of the United Nations Act 1945 (Cth) and the Autonomous Sanctions Act 2011 (Cth) – brokering services for transactions involving military equipment, coal, petroleum and pig iron

SENTENCING – Seriousness of offence – relevance of maximum penalty for most serious category of offences – wide conduct covered by offences

SENTENCING – Relevance of motivation – twofold motive to assist people of North Korea adversely affected by sanctions and for financial gain

SENTENCING – aggregate sentence imposed – no specification of non-parole period as total term expired prior to imposition of sentence having regard to lengthy period on remand – following grant of bail, strict conditions imposed which amounted to quasi-custody

Legislation Cited:

Autonomous Sanctions Act 2011 (Cth), ss 6, 10, 11, 16

Autonomous Sanctions Regulations 2011 (Cth), reg 13

Charter of the United Nations (Sanctions – Democratic People’s Republic of Korea) Regulations 2008 (Cth), regs 4, 5, 11

Charter of the United Nations Act 1945 (Cth), s 27

Crimes (Sentencing Procedure) Act 1999 (NSW), ss 32, 47, 53A

Crimes Act 1914 (Cth), ss 16A, 16AB, 16BA, 16E, 16F, 17A, 19AB

Evidence Act 1995 (NSW), s 191

The Charter of the UN (Sanctions – Democratic People’s Republic of Korea) Amendment (2017 Measures No 2) Regulations, Sch 1

Cases Cited:

Attorney General’s Application under s 37 of the Crimes (Sentencing Procedure) Act 1999 No 1 of 2002 (2002) 56 NSWLR 146; [2002] NSWCCA 518

Director of Public Prosecutions (Cth) v Beattie [2017] NSWCCA 301; (2017) 270 A Crim R 556

Putland v The Queen (2004) 218 CLR 174; [2004] HCA 8

R v Choi [2020] NSWSC 1586

R v De Leeuw [2015] NSWCCA 183

Restricted Judgment [2019] NSWSC 1892

The Queen v Olbrich (1999) 199 CLR 270; [1999] HCA 54

The Queen v Pham (2015) 256 CLR 550; [2015] HCA 39

Veen v The Queen (No. 2) (1988) 164 CLR 465 at 478; [1988] HCA 14

Weininger v The Queen (2003) 212 CLR 629; [2003] HCA 14

Xioa v R (2018) 96 NSWLR 1; [2018] NSWCCA 4

Texts Cited:

Explanatory Memorandum, Autonomous Sanctions Bill 2010 (Cth)

Second Reading Speech, International Trade Integrity Bill 2007 (Cth) (Commonwealth House of Representatives, 14 June 2007)

United Nations Security Council, Resolution 1718 (adopted 14 October 2006)

United Nations Security Council, Resolution 2270 (adopted 2 March 2016)

United Nations Security Council, Resolution 2321 (adopted 30 November 2016)

United Nations Security Council, Resolution 2371 (adopted 5 August 2017)

United Nations Security Council, Resolution 2375 (adopted 11 September 2017)

Category:

Sentence

Parties:

Regina
Chan Han Choi (Offender)

Representation:

Counsel:
J Single SC / S Love (Crown)
T D Anderson (Offender)

Solicitors:
Commonwealth Director of Public Prosecutions (Crown)
Sydney City Crime (Offender)

File Number(s):

2017/380546

Judgment

Introduction

1. Chan Han Choi (the offender) pleaded guilty to two offences relating to sanctions imposed on the Democratic People’s Republic of Korea (North Korea):

1. Between about 5 August 2017 and 16 December 2017 did engage in conduct that contravened a United Nations sanction enforcement law, contrary to s 27(1) of the Charter of the United Nations Act 1945 (Cth) (the UN Act) (count 1); and

2. Between about 5 August 2017 and 16 December 2017 did engage in conduct that contravened a sanction law, contrary to s 16(1) of the Autonomous Sanctions Act 2011 (Cth) (count 2).

2. Count 1 is a rolled up charge with three particulars, involving breaches of reg 11(2) of the Charter of the United Nations (Sanctions – Democratic People’s Republic of Korea) Regulations 2008 (Cth) (the UN Sanction Regulations), being a sanction law, by providing sanctioned services as follows:

Approximate time period	Sanctioned service
5 August 2017-16 December 2017	Brokering service for the sale of arms and related matériel from North Korea (the arms particular)
9 November 2017-16 December 2017	Brokering service for the sale of tactical inertial measurement units (IMUs) from North Korea (the IMU particular)
5 November 2017-8 November 2017	Brokering service for the sale of refined petroleum products to North Korea (the petroleum particular)

3. In respect of count 2, the relevant sanction law that was breached was reg 13(1) of the Autonomous Sanctions Regulations 2011 (Cth). The relevant sanctioned service was a brokering service for the sale of coal from North Korea to entities in Indonesia that assisted with, or which was provided in relation to, an extractive industry in North Korea (the coal offence).

4. In addition to counts 1 and 2, the offender has admitted his guilt to an offence on a form for the purposes of s 16BA of the Crimes Act 1914 (Cth) which is to be taken into account on the sentence for count 2. The offence is that between about 19 September 2017 and 18 October 2017, contrary to s 16(1) of the Autonomous Sanctions Act, he engaged in conduct that contravened a sanction law (reg 13(1) of the Autonomous Sanctions Regulations) by providing a sanctioned service in the form of a brokering service for the sale of pig iron from North Korea to entities in the Republic of Korea (South Korea).

5. In substance, the offending conduct comprises brokering services provided by the offender to North Korea for the sale by North Korea of arms, military equipment in the form of IMUs, coal and pig iron, and the purchase by North Korea of refined petroleum products. These transactions were prohibited by sanctions.

The facts

The evidence adduced at the sentence hearing

6. The offender is to be sentenced on the basis of the agreed statement of facts, which is binding on me by reason of s 191 of the Evidence Act 1995 (NSW), and my findings of fact relating to the evidence adduced at the sentence hearing.

7. The Crown’s evidence on sentence included:

1. evidence of Dr Steve Sungkun Sin, a research scientist with expertise in Northeast Asian regional security and weapons, including weapons of mass destruction, who between 2005 and 2010 was in South Korea as part of the US Combined Forces Command and the US Forces Korea;

2. the transaction documents relating to the offending conduct;

3. other documents, including those found at the offender’s unit in Eastwood where he was living at the time of his arrest on 16 December 2017;

4. affidavit evidence of Jason Hodges, the Governor of Long Bay Hospital, Corrective Services, as to the conditions of his custody (which extended from his arrest until he was released on bail on 11 November 2020);

5. expert reports from Dr Stephen Allnutt, a forensic psychiatrist who examined the offender in 2020 to determine the offender’s fitness for trial; and

6. a report of Dr Jacques Ette, a general practitioner employed by Justice Health, who was cross-examined as to the medical services provided to prisoners by Justice Health.

8. The Crown also tendered the transcript of the oral evidence of Dr Sin, which was adduced in the trial before the offender entered his plea to a fresh indictment. His evidence included evidence of the geopolitical situation of North Korea, some of which is summarised below in order to give context to the offender’s conduct and travel movements.

9. The evidence adduced on behalf of the offender comprised his affidavit, about which he was cross-examined; a report of Dr Richard Furst, a forensic psychiatrist; two character references of Young Sang Kwon and Hea Joo You; and an extract from the medical records kept by Justice Health with respect to the offender.

10. As the sentencing judge, I may not take facts, other than the agreed facts, into account in a way that is adverse to the interests of the offender unless the facts have been established beyond reasonable doubt. However, if there are circumstances which I propose to take into account in favour of the offender, it is sufficient that they be proved on the balance of probabilities: The Queen v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at [27] (Gleeson CJ, Gaudron, Hayne and Callinan JJ). There are other matters which can be taken into account in sentencing, or which form part of the narrative, which do not fall into either category: Weininger v The Queen (2003) 212 CLR 629; [2003] HCA 14 at [19]-[24] (Gleeson CJ, McHugh, Gummow and Hayne JJ).

The offender’s reliability

11. Before setting out my findings (which in large measure derive from the agreed facts), it is necessary to outline my assessment of the offender’s evidence, since his evidence forms the basis of many findings which are not covered by the agreed facts. Although I consider the offender to have been substantially honest, I did not find the offender’s evidence reliable in all respects.

12. It was my impression, which was fortified by Dr Allnutt’s opinion (that elements of his presentation were “suggestive of grandiose ideation”), that the offender is susceptible to grandiosity. He tended to overstate his role and importance, including to those to whom he intended to provide brokering services. In his oral evidence, he explained, in substance, that he needed to talk himself up and exaggerate his connection with North Korea in order to be retained as a broker for the transactions.

13. In oral evidence, the offender sought to explain his statements to Dr Allnutt in April 2020 that he had met Kim Jong-Un who had given him a personal guarantee (which the offender admitted to be false) by saying that his uncontrolled diabetes had caused him to make such a statement. I do not accept this explanation. Although I accept that the offender was unwell during 2020 by reason of his uncontrolled diabetes, I do not accept that his boast relating to Kim Jong-un can be attributed to his medical condition since his grandiosity and associated tendency to exaggerate was reflected in statements made to others outside this period, including in the course of his offending conduct.

14. His tendency towards grandiosity was also exhibited in the history he gave to Dr Furst for the purposes of the sentence hearing. He told Dr Furst that he “has been a functional, intelligent and successful engineer and businessman, dating back to the early 1980s.” While I do not doubt the offender’s intelligence, the evidence revealed that he had difficulty obtaining positions in Australia which were of equivalent standing to those he had been able to secure in South Korea (where he was born), possibly because his primary language is Korean and his English is relatively basic (he required an interpreter for all aspects of the proceedings). He set up his own businesses, which were not particularly successful, which led him to seek to broker international transactions. He was not particularly successful in that area, although he effected some transactions in 2008. There is no evidence that his work produced any significant long-term income. I have taken into account the disparity between the impression the offender would like to give and the actual facts when making findings based on his evidence. I accept the concession made by Mr Anderson, who appeared on the offender’s behalf at the sentence hearing, that the truth lies “somewhere between what [the offender] said to Dr Allnutt and what he said to Dr Furst.”

The offender’s background

15. The offender, who is also known as Solomon and Sydney, was born in Seoul, South Korea in 1958. He qualified as a civil engineer in South Korea, having obtained a bachelor’s degree in architecture and civil engineering. He worked for Daewoo as an engineer and project manager from 1982-1984 and subsequently worked for Hyundai for about three years. He migrated to Australia in 1987. At that time, he became a member of the Korean Central Presbyterian Church in Belfield. At the time of his arrest, he was a member of the Saesoon Presbyterian Church in North Rocks.

16. On 4 May 1988, the offender was appointed as one of two directors of Auskor Engineering Pty Ltd (Auskor) and remained as a director until 24 August 2011 when the company was deregistered. The offender became a permanent resident of Australia in 1991 and an Australian citizen in 2001.

17. Between January 1994 and April 2008, the offender regularly travelled to South Korea, where his mother, older sister and younger brother lived and where he owned a house.

The geopolitical background

18. The Korean peninsula is divided into two nation states: North Korea, which shares a large border with China and a short border with Russia, and South Korea, which is closely allied to the West. Kim Jong-Un, the Supreme Leader of North Korea, and his family are more closely allied to Russia than to China, with which North Korea has a relationship of convenience rather than mutual trust. It is possible for foreigners to enter North Korea from China and to depart in the same way, although it is difficult for North Korean nationals to travel to China.

19. Since the 1960s, North Korea has been engaged in nuclear weapons development. It first publicly tested a nuclear device on 9 October 2006. As a consequence, on 14 October 2006, the United Nations (UN) Security Council adopted Resolution 1718, which imposed sanctions on North Korea and banned the import and export of some military supplies and luxury goods from and with North Korea. Since that time, North Korea has established a missile capability and has carried out a number of ballistic and nuclear missile tests, including eight tests of ballistic missiles between 13 May 2017 and 15 September 2017, which have led to international tensions. Since 2006, when Resolution 1718 was adopted by the UN Security Council, the UN Security Council has adopted several further resolutions which impose sanctions on North Korea and expand the goods, products and services to which the sanctions relate.

20. North Korea develops and manufactures weapons not only for its own defence but also for sale.

The offender’s connection with North Korea

21. The offender has no family in, or longstanding connections with, North Korea. However, in the late 1990s, he became sympathetic to the plight of North Korean citizens who were suffering from the famine. In 2002, he donated $5,000 to a North Korean charity to relieve the famine.

22. The offender engaged in project management work in Australia (although this was limited to providing services to Korean clients) and set up his own cleaning business. However, in about 2005, the cleaning business was declining and he began looking for opportunities to work internationally.

23. When the offender first visited North Korea in November 2007, he toured the country. He was shocked by the effects of the famine, for which he blamed the international community for imposing sanctions. After that visit, he decided to do what he could to help the people of North Korea by helping them sell their products to earn foreign income. At times, the offender has told others, including Dr Allnutt, that he has a relationship with the North Korean Government. I am satisfied, for the reasons given above, that these statements were false. I accept the offender’s affidavit evidence at the sentence hearing that he has no such relationship and that his only real tie is, as he put it, “a deep affection for the people of North Korea and a sympathy for the long-term suffering that they have endured.” From time to time in correspondence, the offender made reference to “the mother country” or “the motherland”. I accept his evidence that this was a reference to the Korean peninsula and not specifically to North Korea. He regarded Korea as a country which was unjustly divided as a result of the Cold War. However, I do not accept that the offender’s trading activities were solely motivated by his desire to help North Korea since he was also motivated to earn income for himself, following the decline of his cleaning business and his difficulty obtaining work on engineering projects. He had some competitive advantage in providing the brokering services because, unlike his counterparts, he was fluent in the Korean language and could communicate with his “client” (North Korean entities) in Korean. He could also communicate in basic English with the other parties.

24. In March 2008, the offender travelled from Sydney to Seoul and from there to Shenyang, China, from which he entered North Korea with a view to obtaining work selling pig iron and coal for clients there.

25. The offender travelled to South Korea in April 2008. His hopes of being awarded a contract with respect to the provision of infrastructure in Seoul were not fulfilled. At about that time, he transferred his house in South Korea to his brother because he felt pressured to do so. This caused such a rupture between the offender and his family that he has not visited South Korea since, although he returned to North Korea in June 2008, November 2008, July 2009, August 2009, February 2010 and September 2011. On each occasion on which he went to North Korea, he travelled through China. He also visited Hassan, in Russia, from China, in October 2008, June 2010, August 2010, January 2011 and April 2011 to visit Igor Elizarov, who is referred to below, to investigate the purchase of coal.

The implementation of UN sanctions into Australian law

26. Commissioner Terence Cole QC chaired an inquiry into certain Australian companies in relation to the UN oil for food program. His report, which contained several recommendations, was tabled in Parliament on 27 November 2006. According to the Second Reading Speech (Commonwealth House of Representatives, 14 June 2007, Philip Ruddock, Attorney-General), this prompted the introduction of the Bill which became the International Trade Integrity Act 2007 (Cth). The International Trade Integrity Act amended the UN Act to create the offence of contravening a Commonwealth law that enforces UN sanctions, which is the subject of count 1. The maximum penalty for this offence is, relevantly, 10 years’ imprisonment.

27. In 2008, the UN Sanctions Regulations were made under the UN Act. Of present relevance, “arms or related matériel” were specified as export sanctioned goods: reg 5(1)(a) of the UN Sanctions Regulations. In 2017, reg 5(1) was amended to add, as reg 5(1)(ac), “refined petroleum products”, which is the subject of the petroleum particular in count 1: The Charter of the UN (Sanctions – Democratic People’s Republic of Korea) Amendment (2017 Measures No 2) Regulations, dated 2 November 2017, cl 6 of Sch 1.

28. Regulation 4 of the UN Sanctions Regulations defined the term “arms or related matériel” to include weapons, ammunition, military vehicles and equipment, spare parts and accessories for these things, and paramilitary equipment. It was common ground that the IMUs the subject of the IMU particular were “arms or related matériel” because they were intended to be equipment for weapons, although IMUs also have non-military uses.

The 2008 transactions

29. The offender was involved, as a broker for entities in North Korea, in the following transactions in 2008. On 23 April 2008, the offender arranged for the sale of anthracite coal from North Korea to a company in South Korea which resulted in the payment of AUD$624,222 to Auskor. The following day, he made a telegraphic transfer of USD$540,000 from Auskor to the Far Eastern Commercial Bank OAO, based in Russia. He provided his name and details of a bank account he held in North Korea. The offender could not recall whether he transferred all the money he received. There was no evidence of the applicable exchange rate between AUD and USD to determine whether he did so. In May 2008, the offender arranged for the sale of pig iron from North Korea to a Hong Kong company, for which USD$700,000 was paid to Auskor by way of telegraphic transfer. The offender said that he remitted the total amount to his North Korean client. None of these transactions was illegal at the time as they did not involve any breach of sanctions. There is no evidence as to the profit, if any, made by the offender.

The offender’s work as a broker

30. The offender travelled to North Korea at least eight times between November 2007 and September 2011. He also travelled extensively to other countries, including China and Russia. He took a total of 49 overseas trips between 3 November 1993 and 9 April 2017, 36 of which were between 2007 and 2011. Despite his extensive overseas travel, including to North Korea, other than the three transfers referred to above, the evidence does not reveal that the offender was engaged in any other international financial transactions until he engaged in the conduct which is the subject of the offences to which he has pleaded guilty. I accept his evidence that he had several “discussions” but that no money changed hands in the discussions and negotiations that took place.

31. Raymond Chao, who acted for the unknown client in the conduct which is the subject of the arms particular, is from Taiwan and speaks Mandarin Chinese. As the offender understood it, the reason Mr Chao first contacted him in 2010 was because Mr Chao knew of the offender’s role in the transaction involving anthracite coal referred to above. The offender understood that Mr Chao’s client wanted to buy coal and believed, as was the case, that the offender had contacts in Russia (Mr Elizarov) who had access to coal. The communications between Mr Chao and the offender were inhibited by language difficulties since their only common language was English and neither had attained fluency.

The sinking of the Cheonan

32. On 26 March 2010, a South Korean navy ship, the Cheonan, sank in the Yellow Sea which resulted in the deaths of 46 navy personnel. Although North Korea denied responsibility, other countries, including South Korea, the United States (US) and Australia, held North Korea responsible. This led South Korea to impose sanctions on North Korea, which were announced on 24 May 2010, and, accordingly, came to be known as the “524” or “May 24” measures. These sanctions stopped all communications and business transactions between North and South Korea, and led to a prohibition on North Korean ships docking in South Korean ports.

The Autonomous Sanctions Act

33. On 30 September 2010, the Honourable Kevin Rudd, then Minister for Foreign Affairs, made the Second Reading Speech for the Bill that became the Autonomous Sanctions Act. He explained that the purpose of the Bill was to apply pressure on regimes that were “engaging in behaviour of serious international concern.” He instanced Iran’s suspected nuclear weapons program and also referred to the threat posed to regional stability by the “unprovoked attack on the Republic of Korea[‘s] naval vessel, the Cheonan.” The Autonomous Sanctions Act commenced on 27 May 2011.

34. The purpose of the Act is evident from the Explanatory Memorandum which said:

“The purpose of the Bill is to strengthen Australia’s autonomous sanctions regime by allowing greater flexibility in the range of measures Australia can implement, thus ensuring Australia’s autonomous sanctions match the scope and extent of measures implemented by like-minded countries. The Bill will also assist the administration of, and compliance with, sanctions measures by removing distinctions between the scope and extent of autonomous sanctions and UN sanction enforcement laws.”

35. The Explanatory Memorandum also explained that the Act would complement the UN Act:

“The Bill is modelled on the legislation with which Australia implements United Nations Security Council sanctions, the Charter of the United Nations Act 1945. It is intended to be a framework under which regulations are made, with each set of regulations containing the specific measures to be imposed in response to a particular situation of international concern. By providing for autonomous sanctions measures to be applied by regulation, rather than under the Bill itself, the Bill will allow the necessary flexibility for the Government to respond to international developments in a timely way. It will also enable the Government to harmonise the administration of autonomous sanctions and UN sanction enforcement laws, and simplify compliance arrangements for those entities whose business requires a regular and active engagement with the operation of such laws.”

36. The Autonomous Sanctions Act authorises the Minister, by s 6, to specify a provision of a Commonwealth law as a “sanction law”. Division 1 of Part 2 of the Autonomous Sanctions Act confers a broad regulation-making power, which includes the power to make regulations which apply sanctions (s 10) and which have extraterritorial effect (s 11). Section 16(1) creates an offence where an individual engages in conduct that contravenes a sanction law, for which the maximum penalty is, relevantly, 10 years’ imprisonment. The offence in count 2 arises from s 16(1).

The offender’s conduct in the period from 2015

37. In 2015, the offender moved to a small apartment in Eastwood. As a civil engineer by training who had been born and educated in South Korea, he had a personal interest in the military capacity of North Korea. From time to time he conducted research on the internet on North Korea’s nuclear weapons program and the capabilities of its Intercontinental Ballistic Missiles (ICBMs). I accept his evidence that this research was performed, at least in the first instance, for his own personal interest. I include in this category his notes found in a 2007 diary which refer to ballistic missiles.

38. However, his interest was not entirely theoretical. His plea to count 1, which includes the arms and IMU particulars, indicates that he provided brokering services for the transfer of military equipment from North Korea. I accept that he had limited capacity to understand technical descriptions of this equipment and his understanding of the operation of the goods covered by his brokering services was relatively rudimentary. However, it was not necessary that he acquire any technical expertise since he was merely the broker, or conduit, between the seller and buyer. I am not satisfied that the notes and diagrams relating to military equipment which were found in his apartment when the police executed a search warrant in 2017 increase his criminality.

39. In about 2015, the offender and Mr Chao began to discuss the sale of military equipment. On 13 July 2015, the offender sent Mr Chao a link to a 5 minute 12 second video posted on YouTube, which had been created in April 2014. It was entitled, “Supreme Commander Marshal Kim Jong Un has organised and guided an artillery drill for the soldiers of the Korean People’s Army demonstrating their firing skills.” The video depicted Man-Portable Air Defence systems (MANPADs), which are small surface to air missiles which can be fired from a person’s shoulder or from a launcher which has been mounted on a vehicle. MANPADs are equipped with a “seeker” to permit the missile to follow the target until the missile strikes. MANPADs use solid fuel and are regarded as conventional weapons. The video showed MANPADs engaged in a live fire exercise. A target drone or simulated target was fired. Subsequently, a MANPADs missile was fired at the target. The video also depicted a guided anti-ship, or anti-vehicle, multiple launch rocket system (designed for ground or surface targets), being fired from the beach to a target out at sea. The video did not depict any ballistic missiles or rocket propelled grenades.

40. As MANPADs have an altitude range of about 5,000m, they cannot shoot down commercial airlines at cruising altitude (about 10,000m) although they can shoot them down at lower altitudes when taking off or landing. MANPADs are manufactured in about 20 countries, including most of the members of the North Atlantic Treaty Organisation and countries of the former Soviet Union. The purpose of MANPADs, as with other military equipment, is to kill people and destroy equipment and infrastructure.

41. On 1 January 2016, the offender became the sole director of LWM Engineering Pty Ltd (LWM Engineering) until its deregistration on 13 November 2019. At that time, he was unable to find work in Australia and hoped to be able to work overseas. To that end, he went to a job centre to obtain help with the preparation of a curriculum vitae. His curriculum vitae presented him as a successful civil engineer who had been in continuous work. The offender overstated his achievements in order to obtain work.

Further sanctions imposed on North Korea

42. North Korea has a significant minerals industry, which includes the mining of coal and iron ore. China is the main export customer for North Korean coal. Since 2016, UN Security Council resolutions have imposed sanctions against trade in these commodities. Resolution 2270, which was adopted on 2 March 2016, imposed mandatory restrictions on the export by North Korea of coal, iron and iron ore. It also imposed mandatory inspections on cargo going in and out of North Korea. Resolution 2321, which was adopted on 30 November 2016, imposed further sanctions which prohibited the export of minerals by North Korea. Resolution 2371, which was adopted on 5 August 2017, prohibited the export of materials which included coal, iron and iron ore, and prohibited joint ventures between North Korea and other nations. Resolution 2375, which was adopted on 11 September 2017, imposed sanctions which included restrictions on the importation by North Korea of petroleum products.

43. These sanctions have, by design, made it difficult for North Korea to obtain hard currency by legitimate means. It has resorted to obtaining hard currency from illegal activities in breach of sanctions, including the sale of military equipment, technology transfers and illicit trafficking of counterfeit merchandise and narcotics.

44. As referred to above, North Korea conducted eight tests of ballistic missiles between 13 May 2017 and 15 September 2017. As at 2017, North Korea had missiles in all four classes: short range (250-500km), including scud missiles; medium-range (up to 2,000km); intermediate range (up to 5,000km) and long-range, or ICBMs (up to 10,000km). It also had missiles which could be launched from submarines. North Korea has supplied missiles, together with spare parts, to Iran, Libya, Pakistan, Syria, Egypt and Yemen. It has also sent its missile experts to Iran to assist Iran in developing its own missile capability.

Count 1

45. As set out above, count 1 is a rolled-up charge which comprises three particulars: the arms particular; the IMU particular and the petroleum particular, which will each be addressed in turn.

The arms particular

46. In 2017, Mr Chao, who believed that many regional armies would be interested in purchasing the equipment from North Korea, sought the offender’s advice on a business venture for the production of weapons, such as those depicted in the video the offender had sent to him in 2015. The offender offered to provide him with North Korean engineers and technicians who would have the knowledge and expertise for the project, with a view to helping North Korea obtain foreign income.

47. The offender communicated with individuals in North Korea in connection with Mr Chao’s request: Mr Park; an associate of Mr Park, “Ah Xiang”; and Mr Lee. Mr Park, Mr Lee and Ah Xiang were associated with the Kwangyong Trading Corporation which was based on Pyongyang, the capital of North Korea. The offender conducted research of his own into MANPADs. Much of his research, which he noted in his diary, was publicly available on the internet. I accept that his note that the missile was capable of hitting its target within 3-5 seconds could have been established by viewing the YouTube video which he sent to Mr Chao and does not necessarily reflect any “inside knowledge” or special expertise.

48. In April or May 2017, the offender and Mr Chao established a code whereby the weapons they were discussing would be referred to as “trees” or “pine trees” depending on size.

49. The offender spoke to Mr Chao on 5 August 2017. When they spoke about a “little pine tree”, the offender intended to convey, and understood it to be, a reference to a MANPAD. In the course of this discussion, the offender offered to arrange experts (whom he intended to send from North Korea) to go to the location of Mr Chao’s client to provide consulting services. They also discussed solid fuel which was accepted to be suitable for missiles and other weaponry because it can be safely stored within the missile, which can be fired at any time without needing to refuel. In the course of this conversation, Mr Chao suggested to the offender that he could “help us do ICBM”. Mr Chao laughed audibly after making this suggestion. I accept the offender’s evidence that he was not interested in providing brokering services for ICBMs.

50. On 16 August 2017, the offender sent Mr Park two letters by email about what was referred to as the “nursery construction project”. He referred to “ornamental trees for gardens”, “medium sized pine trees and tall needle leaf trees”. He also proposed “inviting relevant personnel to visit the site … to discuss technical issues and distribution of roles between parties for the nursery project.”

51. On 17 August 2017, the offender spoke on the phone to Mr Park who suggested starting with the “flower plants production” and then “large plant such as pine trees and conifers”.

52. On 19 August 2017, the offender spoke to Mr Chao on the phone and told him that he would send “pine trees” and that, at the end of the month or in October 2017, he would send “3 or 4 people. Engineer”. Mr Chao insisted that each have a seeker (the mechanism by which a missile seeks its target). Mr Chao said that the equipment would be manufactured in “another country” and that he would “sell it all over the world”. In response to this, the offender referred to his people being “too scared” because of the “mainland”, to which Mr Chao asked him if he would help them buy from “other countries”.

53. On 19 and 20 August 2017, the offender wrote to Mr Lee’s email address to inform him that the “nursery business” would be suspended and asked him to check what was happening internally. On 21 August 2017, Mr Lee sent the offender a text message regarding the discontinuance of the nursery project.

54. However, on 23 August 2017, Ah Xiang sent the offender a WhatsApp message advising that Mr Lee had arrived in Pyongyang and that the project was continuing as scheduled. He also referred to the delegation visit and to the “Nursery Construction Company”. On 25 August 2017, the offender sent an email to Mr Chao telling him that about five people would visit and requested information as to “where to visit the seedling technician”.

55. On 27 August 2017, the offender sent a WhatsApp message to Ah Xiang asking him to pass on a message about the financial viability of the construction of the nursery. Ah Xiang responded with the news that the delegation would visit Cambodia, which was the intended site for the nursery construction business. There was also discussion about advance payments.

56. On 29 August 2017, North Korea fired intermediate range ballistic missiles over Hokkaido in North Japan, which landed in the Pacific Ocean.

57. On the same day, 29 August 2017, the offender received an email from the address used by Mr Park, containing an attachment which referred to the construction of the nursery and contained the statement that “our company has already built a nursery in numerous locations”.

58. Also on 29 August 2017, the offender spoke with Mr Chao about the pine trees. Mr Chao referred to a “gyro” (gyroscope), which was accepted to be the part of an IMU which communicates with an on-board computer or pilot which way is up, down, left and right, as well as measuring rolling and rotation of an object in flight. When the conversation turned to “pine trees”, Mr Chao asked the offender “how many miles”, which I take to be a question about the range of the missiles. The discussion between them continued. I infer from the transcript of the discussion that the offender did not really know what he was talking about, in terms of technical specifications. He initially said that the missiles were 5,000-6,000kg but shortly afterwards said, “[t]his is a very short one. Small.”

59. In the course of the conversation, the offender said to Mr Chao:

“And then today also Kim send good present, you know ... Now is and then Japanese and then jumping up. … Now they are without control now. They - without control … So, now is and then good for the chance to you, head your company also.”

60. The offender accepted that his statement was a reference to the missile tests which North Korea had conducted that day. His statement demonstrated his sympathies, which were with North Korea. However, the offender’s concern about the increased international opposition to North Korea in response to its tests, led him to suspend the nursery project until things quietened down. He let his North Korean counterparts know by text that “[d]ue to the poor weather situation, the nursery business is temporarily suspended.” He confirmed the message in a conversation with Mr Park that evening.

61. On 6 September 2017, the offender wrote to Mr Park apologising that the project was delayed due to the “weather”. He said:

“However, the trader said that he is not going to budge under any circumstances currently. He also said that the ‘seedling’ that they want is not the only ‘seedling’ in the world and he asked for my understanding of the situation that they are in.

I believe that if the trader is pressurised to go ahead with the planned project now he will abandon the business. I would also like you to know that I am the one who is feeling more frustrated than Mr Park’s party. I hope you consider this as well.

…

The trader’s opinion is that he fears he will be a target as an example when having face to face meetings is a sensitive issue. On top of that, there are scumbags who cannot be trusted within the trader's company. Therefore, even if they try to be thorough with the security, they might suffer unimaginable amount of damages because of uncontrollable ramifications. And hence, he says that there is no reason for them to run the risk of doing the business. I cannot demand that we hold meetings any more. I am planning to schedule a meeting again once the weather conditions improve.”

62. There was a pause in communications until 24 October 2017 when the offender received a text from an unknown sender in relation to the nursery project. The sender indicated that the “Corporation” was interested in the joint nursery construction project “for which the planning has already started”.

63. There was a further hiatus in communications until 9 November 2017. On that date, the offender wrote to Mr Park and referred to the sale of 500 units of IMUs. He also referred to this sale in a further letter to Mr Park, sent via email on 18 November 2017, in the context of the “nursery construction” project. On 12 December 2017, the offender wrote to Mr Park, assuring him that the “construction of the nursery” will happen after “this project” (the sale of the IMUs).

64. There is a factual dispute between the Crown and the offender as to the “arms and related materiel” which was the subject of the arms particular. The Crown contended that it comprised small and medium-range ballistic missiles as well as the provision of expertise to assist those setting up a factory for producing such missiles. The offender contended that it comprised conventional military weapons such as those depicted in the YouTube video, being MANPADs and short-range missiles.

65. Although it would be reasonable to infer in this context that “little tree” or “ornamental trees for gardens” of “flower plants production” were references to MANPADs and that the reference to “medium-sized trees”, “tall needle trees” and “large plant such as pine trees and conifers” referred to missiles of greater range, the evidence did not establish that the code was sufficiently well developed to enable the conclusion to be drawn beyond reasonable doubt that the then current proposal went beyond MANPADs to any other identifiable missiles such as ballistic missiles or missiles which carried unconventional warheads.

62. The communications referred to above form part of the agreed facts and are therefore binding on me. The offender gave oral evidence to the effect that he had decided to abandon the nursery project completely and that he used the testing by North Korea on 29 August 2017 as an excuse to suspend them. He explained that he said that the project was suspended rather than terminated because he wanted to save the face of the North Koreans, as well as Mr Chao. While I accept that the offender does not always say what he means, I consider that in this instance, he intended merely to suspend the project and defer it until international scrutiny had died down. He gave similar evidence in respect of the petroleum particular, which I have also rejected.

63. Subsequently, in his evidence, he said that he intended to use any money he made from the transactions relating to coal and pig iron to fund the travel of experts to North Korea in relation to the missile “project” as well as helping the economy of North Korea. As these transactions post-dated the arms particular, it must have been, as far as he was concerned, a live project after he had purported to suspend it at the end of August 2017. He had not reactivated it by the time of his arrest on 16 December 2017 but I do not accept that it had been abandoned or terminated before that date: it had simply gone into abeyance.

64. It was an agreed fact that the brokering service provided by the offender in respect of the arms was not covered by a permit and was a sanctioned service.

The IMU particular

69. Between about 9 November 2017 and 16 December 2017, the offender provided a brokering service for the sale of IMUs from North Korea. The offender communicated, on the North Korean side of the transaction, with Mr Kim, Mr Ahn, Mr Park and Mr Hyang.

70. Although an IMU is mounted in any body which can fly, including missiles and aircraft, it was accepted that the IMUs the subject of this particular had a military purpose. An IMU is usually comprised of a gyroscope (as referred to above) and an accelerometer.

71. Systron Donner Inertial (SDI) is a company based in California, USA, which manufactures and sells high performance equipment including the SDI500, which is an IMU which is rated for rugged military environments. The SDI500, which has a purchase price of USD$21,000 per unit, is a Micro Electro Mechanical Systems (MEMS)-based IMU, which can only be purchased through SDI. SDI is required by International Trade Arms Regulations (ITAR), US regulations, to verify all purchasers of the SDI500, which has the effect that its use is confined to military applications.

72. On 9 November 2017, the offender wrote to the email address associated with Mr Park and indicated that his “buyer” wanted 500 units, to be purchased in Russia, and invited the recipient to indicate the price. The offender attached to the email a data sheet for the SDI500 as well as a telemetry report. A telemetry report can be generated for any object in flight and records data such as its speed, direction and rotation. Such a report is used by engineers to ascertain whether the object was flying correctly on its intended path or whether it needs to be adjusted to improve its performance.

73. Later that day, 9 November 2017, the offender spoke to an unknown woman at a number associated with Ah Xiang about his email. He also emailed Mr Park’s email address and referred to the SDI500 data sheet which had been provided. He asked for information regarding specification, size, photos, price (based on delivery of products to Cambodia) and the time between the contract and delivery. He said in the email:

“Due to the delay in the planned nursery project I am contacting you Mr Park after the discussion with the trader in an effort to push the suggested project first in the meantime. I would like you to offer our products which are better than the ones shown in the attachment. If we sell our existing products we should be able to supply at a competitive price without the burden of product development.

For your information the trader is currently purchasing from someone else. (The trader) is not after the same product functionality as shown on the attached material. Just offer our existing products please.

However if our products have superior functionality to what was shown on the attached material it will be even better.

Each product is different in terms of functionality and price. That’s why (the trader) is trying to purchase from us. Looking forward to getting your prompt reply. Good bye.

PS currently the buyer is purchasing at the price of $8000 per unit for your information.”

74. Although the offender referred to “our products” as being “better than the ones shown in the attachment”, I regard this statement as being no more than puffery by a broker to a potential client because it is otherwise clear from the email that the offender was asking for the seller’s “existing products”. The SDI500 data sheet was provided to indicate the type of product which the buyer was seeking rather than the precise specifications. Since it was accepted by the offender that he knew that the IMUs were for a military purpose, there is no need to address the question of the potential “ruggedness” of the product which Mr Park was proposing to offer. Further, supply of the SDI500 was controlled by the ITAR, whereas other IMUs, manufactured in countries other than the US, would not have been covered by the ITAR.

75. The offender contacted not only Mr Park regarding the supply of the IMUs but also Mr Kim, from whom he also sought a price and specifications. He sent an email to Mr Kim on 13 November 2017, to which he also attached the SDI500 data sheet. He followed up the email with a telephone conversation in which Mr Kim confirmed that he made IMUs. The offender told Mr Kim that he would prefer to work with “your side rather than others” and asked him for the data “as soon as possible”. He added, by reference to the SDI500 data sheet: “I’m not suggesting the data I sent you is the same but in the same status – You know performance of our own products, right?” I infer that the putative buyer could not purchase SDI500s from the manufacturer because the purchase would have been prohibited by the US ITAR.

76. On 19 November 2017, the offender spoke to Mr Chao, who was acting for the buyers in the transaction. They discussed the size, price and specifications of the IMU. The offender continued to liaise with both Mr Park and Mr Kim on the seller’s side of the transaction. On 11 December 2017, the offender wrote to Mr Park, asking him to organise things so that the “engineers” can travel to Shenzhen, China. He said:

“I ask you to organise things very urgently so that the engineers can arrive by the date specified in the invitation letter. I also request that you send a list of components needed for spinning top [gyroscopes] urgently. If there are certain components that cannot be found locally in China, I will make sure that they are supplied by plane promptly from anywhere in the world so that the sample manufacturing work won’t be affected. I will get the components ready in advance. For your reference we will prepare two samples based on the specification the trader sent us in Chinese first. We will only move on to the next stage in manufacturing process after the trader has done some testing with these samples.”

77. The brokering services in respect of the IMUs ceased as a result of the arrest of the offender on 16 December 2017.

78. As referred to above, it was common ground that the IMUs were “arms and related materiel” and therefore subject to the sanction law. I accept that although the SDI500 did not have widespread civilian application during the charge period (because of its cost and refined specifications, as well as the effect of the ITAR, which controlled its supply), IMUs generally can be used in civilian and military contexts. I note that it was agreed that the IMUs brokered by the offender were to be used for a military purpose. It was an agreed fact that the brokering service provided by the offender in respect of the IMUs was not covered by a permit and was a sanctioned service.

The petroleum particular

79. Between about 5 November 2017 and 8 November 2017, the offender provided a brokering service for the sale of refined petroleum products (unleaded petrol) from Iran to North Korea. The offender knew of the existence of sanctions which prohibited the importation by North Korea of petroleum products and was aware from Mr Chao that, in order to effect the transaction, the petroleum product would have to be passed between ships in the middle of the ocean.

80. On 5 November 2017, the offender communicated with Mr Elizarov, who was based in Russia, regarding the purchase of 5,000 tons per month of unleaded 95 petrol for North Korea, free on board (FOB) Vladivostok. Mr Elizarov told the offender that gasoline was “impossible” from Vladivostok. The offender spoke to Mr Park and Mr Kim about the transaction. The offender and Mr Kim had discussions about how payment would be made and how the petroleum would be transferred (over the high seas or at a port). Subsequently, in an email sent on about 7 November 2017, the offender proposed that the discharge port would be “East Sea of Wonsan”, a port in North Korea. Mr Elizarov responded:

“The price of gasoline 95 standards on CIF port of Wonsan $340/to

Tanker lot is about 10,000 tons. The certificate will send in 1.5 hours.

The maximum volume is 20,000 tons per month.”

81. Later on 7 November 2017, the offender sent the certificate by email. He concluded the email by saying:

“We work quickly. Please operate too quickly.”

82. The offender and Mr Elizarov also exchanged emails regarding their commission. The offender indicated that the commission will be USD$10/ton, to be split equally between himself and Mr Elizarov. On 7 November 2017, the offender and Mr Elizarov discussed contracts, following which Mr Elizarov emailed the offender the specifications and a document titled “Unleaded Motor Gasoline Ai-92”.

83. The offender also spoke to Mr Chao about this transaction, in the course of which they discussed the type of petrol required (by North Korea). In response to the offender’s inquiry, Mr Chao provided information regarding the price of 92 unleaded petrol.

84. On 7 and 8 November 2017, the offender provided his bank account details to Mr Elizarov. They also discussed information to be included in the contract. The offender instructed Mr Elizarov not to write the commission information in the contract. Mr Elizarov provided the contract to the offender. The seller was identified as “Eurasia Neftegaztrade LP”, a company associated with an individual of Azerbaijani origin with an address in Scotland. The buyer was not identified. The offender was listed as the recipient of the commission on the buyer’s side.

85. The offender and Mr Elizarov exchanged further emails on 8 November 2017. At 11.03am, the offender said in one such email:

“Gasoline: The buyer has questions about the arrival of the vessel at the port. The tanker was attacked before he came to the port. I have a buyer request to see how I can get to the port.”

86. Mr Elizarov responded:

“1. What do you suggest? I think the following.

If the tanker was attacked by the Japanese sea, you can[’]t go in Wotsan [sic, Wonsan].

The tanker is expected to go along the coast of China and unload gasoline on a small tanker near Pyongyang.

Another option is to wait for the beginning of the Olympic games [the Winter Olympics, which were held in South Korea in February 2018].

Now we need to prepare all the documents and sign otherwise the seller will not work with us. I’m waiting for the details of the buyer and Commission contract.”

87. The offender then responded:

“The best way is to delay the business and wait for the chance.

It[’]s too dangerous to have all the watchdogs in our territorial waters. Buyers, sellers and everyone are at risk in case of trouble

It’s the best way to delay your progress.”

88. Mr Elizarov reported to the offender:

“Have just spoken with the seller. He told me that they carry Chinese tankers. No one stops the Chinese tanker.

All the time going tanker from lran to NK [North Korea] using Chinese company.

You will work on. We must make contract today.”

89. The offender responded:

“Sellers got the wrong information.

China also can not supply.

China stopped supply before Russia.

Business must delay.”

90. In the final communication relating to this project, Mr Elizarov said to the offender on 8 November 2017:

“You gave me a request yesterday, and today you say that you can’t work. You were supposed to study the problems of NK [North Korea], and then to give the demand for gasoline.”

91. In his evidence, the offender said that he wanted to cancel the proposed transaction and that he used the word “delay” rather than “cancel” because he wanted to be “gentle” and “respect” Mr Elizarov. I do not accept this evidence. I am satisfied that the offender wanted the transaction to proceed but realised that, given the surveillance of international waters which had led to the Chinese stopping supply, it was impossible for the transaction to proceed at that time. His evident desire for haste in his email of 7 November 2017 indicates that he felt the urgency of the situation and wanted the transaction to proceed. However, he soon accepted that it had to be deferred because of the risks associated with it. I am satisfied that the offending conduct was thwarted by the surrounding conditions and not because the offender decided, of his own volition, to stop the transaction.

92. I accept that, as with the other aspects of his offending conduct, the offender had both a financial motive and a political one: he wanted to earn money for himself and also wanted to subvert the sanctions imposed on North Korea by helping them, in this instance, to purchase sanctioned goods, namely, petroleum. It was an agreed fact that the brokering service provided by the offender in respect of the petroleum was not covered by a permit and was a sanctioned service.

Count 2: the coal offence

93. Between 5 August 2017 and 16 December 2017, the offender provided a brokering service for the sale of coal from North Korea to entities in Indonesia, which were represented by Mr Chao. He was aware that the sale of North Korean coal was prohibited by sanctions and discussed ways around the sanctions with Mr Chao. North Korea was represented in the transaction by four individuals: Mr Lee (not the same Mr Lee as in count 1); Mr Whang; Mr Park (not the same Mr Park as in count 1); Mr Noh and Mr Joo. It was an agreed fact that the brokering service provided by the offender in respect of the sale of coal was not covered by a permit and was a sanctioned service.

The properties of coal

94. Coal is a mined rock which is combustible. Its primary use is to provide heat to generate steam for electrical power stations. Coal used for this purpose is referred to as thermal or steaming coal. Higher grade coal, referred to as coking coal, can be converted into coke which can be used in blast furnaces for making steel. Anthracite is a coal of very high quality. It is relatively rare because of the specific geological circumstances required for its formation. It is richest in carbon content (which means it can produce a lot of heat on combustion) and lowest in volatile matter (which makes it more suitable for domestic use than other coals because it tends to emit less odour and produce less smoke). Anthracite is typically used as steaming coal, although it is also used in a blend of coals to produce coking coal.

95. When mined, coal contains moisture. Water may also be added to coal during the cleaning and transport process. The amount of water in coal is normally fixed in contracts. Moisture levels are normally carefully monitored at departure and arrival. Differences between measured and contract moisture levels can result in adjustment to the price paid pursuant to a contract. Drying coal or coke before use creates additional costs for the customer and therefore shipments of coal or coke with lower moisture content are more desirable, though more expensive.

96. Coal can be measured by reference to the mass of carbon in a coal sample. This can be expressed in a number of different ways. If it is measured before drying, the carbon content is expressed on an “as-received basis” (ARB). If it is measured after partial drying, the carbon content is expressed on an “air-dried basis” (ADB). If it is measured after the coal is thoroughly dried, the carbon content is expressed on a “dry basis” (DB). Other characteristics of coal, including hydrogen, sulphur, ash yield, volatile matter (VM) and calorific value can also be reported on an ARB, ADB or DB basis.

97. Ash content or ash yield is the mass fraction of coal which does not contribute to creating heat. Coal producers aim to minimize the amount of ash in coal as severe contractual penalties apply if too much ash is present. The heat produced by combustion of the coal in standard conditions is expressed as kcal/kg or MJ/kg. Gross calorific value includes the heat obtained when water is condensed to liquid. Net calorific value does not include this heat. A typical value for gross calorific value for a low-ash coal is 6,500 kcal/kg. Particle size is usually given as the percentage which passes through a certain sieve size.

The offender’s conduct and role

98. Between 5 August 2017 and 16 December 2017, the offender engaged in lengthy discussions with Mr Chao as well as individuals from North Korea to broker a transaction for the sale of coal from North Korea, which he told them was linked to the “nursery project”.

The offender’s facility as a trader

99. ln his communications with Mr Chao and the North Koreans, the offender demonstrated his familiarity with the technical vocabulary of merchant shipping and coal, such as “LC” (letter of credit), “FOB” (free on board), “CIF” (cost, insurance, freight), “CFR” (cost and freight), “BL” (bill of lading) and “CIQ” (China Inspection and Quarantine). He also was aware of the technical specifications for coal, including determining price based on calorie and particle size, and sent documents bearing the LWM Engineering common seal that described the specifications for the coal, including by reference to moisture, ash content, volatile matter and other qualities.

The efforts to hide the origin of the coal

100. The offender’s communications indicated that the coal was to come from Nampo or Wonsan, both of which were ports in North Korea. He discussed with his North Korean counterparts the means by which the coal would be transported to the Russian ports of Nakhodka or Vladivostok before being moved to another ship to take it to China. Mr Lee suggested that a “Chinese ship with coal from Port Wonsan or Chosun ports [both North Korean ports] could come to Nakhodka.” In order to avoid the cost of coal having to be “disembarked” in Nadhoka, the offender discussed having the ship arrive at Nakhodka and then turn around. This device was used in order to bypass sanctions.

101. The offender asked the North Korean individuals not to mention the true origin of the coal, being North Korea. Instead, the coal was referred to as “coal from above” or similar. The offender arranged for false certificates to certify that the origin of the coal was other than North Korea. The offender had several discussions with Mr Chao and the North Korean individuals about whether the coal should be described in its certificate as having its origin in China or Russia. The offender discussed with Mr Park how to ensure that the price of the coal matched its alleged origin. The offender told Mr Park that the coal would need to stay on the ship because it if was unloaded the price would not “match”. These discussions continued between the offender and Mr Noh until 19 September 2017.

100. The topic of the origin of the coal also arose in discussions with Mr Elizarov, with whom the offender first made contact on 29 September 2017. The offender told Mr Elizarov:

“We have a contract next week. We will enter our port, carry coal, make a certificate of Russia[n] origin, export documents and go to Indonesia. The price is $23 per ton.”

103. Mr Elizarov, who at that stage did not understand that the coal was to come from North Korea, responded:

“Doesn’t want Indonesia [sic, Indonesia want] to buy Australian coal? This is a criminal issue. The release of the vessel from an Australian port will be written into the bill of lading and recorded by the international tracking system of ships in port. The origin of coal it is impossible to hide if someone is interested.”

104. Ultimately, on 3 October 2017, Mr Elizarov told the offender that he could provide forged certification to record a false country of origin for the coal by obtaining a certificate from Siberian coal producers. He told the offender that the cost of false certificates of quality and quantity for a load of coal was $3,000. After the offender confirmed that the coal was from North Korea, Mr Elizarov told him that he would certify that the coal came from Russia. He charged USD$2,000 for a false certificate.

105. In one conversation with Mr Park on 10 December 2017, the offender said that the coal was “[f]rom above but Russia” by which he meant that the coal was from North Korea but would be described as coming from Russia.

Other aspects of the coal transaction

106. Following negotiations, the commission to be paid to the offender and Mr Chao jointly was agreed at USD$5/ton.

107. The transaction documents relating to the coal transaction included the following. On 16 August 2017, LWM Engineering sent Letters of Intent to Mr Whang and Mr Noh respectively, which referred to the sale of “Russia Anthracite Coal” to Indonesia.

108. On 17 August 2017, Mr Whang and his company, Pro-Gain Group (Pro-Gain) sent a document entitled “Soft Corporate Offer” to the offender which referred to the sale of anthracite coal of Russian origin for USD$80/ton, to be delivered to Indonesia and loaded in Nakhodka. The offender, through LWM Engineering, responded by letter to Mr Whang and referred to conditions of payment, including inspection requirements for the coal and demurrage fees. The offender sent the coal specifications to Mr Park on 8 September 2017 and to Mr Whang and Mr Chao on 16 September 2017. On 8 September 2017 the offender sent an instruction to Mr Chao to pay Pro-Gain’s Hong Kong bank account.

109. On 20 September 2017, a sale and purchase contract for “Russian” anthracite coal was entered into between “Pro-Gan [sic] Group Corporation Limited” (based in Hong Kong) and World Vision Trading Limited (based in Taiwan). The contract contained the technical specifications for the coal, and specified the port of loading as Nakhodka in Russia and port of discharge as “Surawesi [sic, Sulawesi]” Tengah (Central Sulawesi), a province in Indonesia. The shipment was to take place in two stages: 12,000 metric tons (MT) before 15 October 2017 and a second shipment of 24,000 MT before 31 October 2017. The price was USD$75 per MT. By clause 10.2 of the contract, the buyer nominated SGS (a multinational company which performed such services) to determine the quality and moisture at the discharging port, which would be the final basis for the invoice against balance payments.

110. On 18 October 2017, LWM Engineering sent a Letter of Intent to an unnamed seller, and also to Mr Elizarov, for the sale of Russian coke for delivery to Indonesia, with cargo survey at the Russia loading port by SGS. On 25 October 2017, LWM Engineering sent a further Letter of Intent to an unnamed seller, which indicated the commodity as “China Coke”, for delivery in Indonesia and made provision for cargo survey at the Russia loading port by SGS.

111. On around 30 November 2017, another contract was drawn up, which the offender emailed to Mr Chao. The contract specified “Russian” anthracite coal and the buyer was identified as “Dan yan Corporation” in Taiwan.

112. When the offender encountered difficulties arranging for the coal to be transported by ship, he and Mr Chao explored the possibility that it could be transported by rail.

113. On 12 December 2017, Mr Chao sent a WhatsApp message to the offender saying:

“The Indonesia side afraid new sanction from his government. The[y] tell us to postpone the deal.

Mr Wu on the negotiations with Indonesia owner.

Sorry for get bad new.

I got the information yesterday. All the we discussion this matter [sic].”

114. The offender and Mr Chao last communicated on 15 December 2017, the day before the offender’s arrest. It was an agreed fact that the transaction ceased due to the offender’s arrest.

The s 16BA offence

115. As referred to above, there is a further offence to be taken into account with respect to the sentence for count 2, which relates to brokering services which the offender admits he provided with respect to the sale of pig iron from North Korea, for which he had no permit.

116. Pig iron is a semi-finished product of the iron industry which refers to the crude iron produced from the first smelting of iron ore in a blast furnace. The molten crude iron is run off into moulds, forming, when cold, ingots that have traditionally been referred to as “pigs”. Pig iron has only limited use in finished products and must be refined and purified further for most industrial applications.

117. On 19 September 2017, the offender proposed the sale of pig iron from North Korea in a text to Mr Noh which said:

“1.    Pig iron for steel manufacturing

2.   FOB Vladivostok

3.    Trial shipment: 3000 t

4.    Method of payment: letter of credit

I would like you to send analysis table and price if possible.”

118. On the same day, the offender sent a WhatsApp message to “Mr Li N Kor Dept” saying:

“We have a lot of pig iron in our mother country.”

119. The offender continued to correspond with Mr Noh about the sale of pig iron which was to be delivered to “lncheon Busan”, which are two ports located in South Korea. He falsely described the country of origin as China. Mr Noh, who was aware of the false description, sent a text message to the offender on 19 September 2017 which said:

“It is impossible to do that with the Chinese product. If we just say it was processed in Russia will it be possible?”

120. On 27 September 2017, the offender and Mr Noh discussed the shipping route for the pig iron and the preparation of a contract and associated documents. On 30 September 2017, at the offender’s request, Mr Noh sent him an analysis table showing percentages of various chemicals, which he had requested which was consistent with the chemical composition of pig iron. The offender also requested that Mr Noh send photos of pig iron.

121. On 11 October 2017, Mr Hwang sent the offender an email which attached a contract for the sale of pig iron. The document did not identify either the seller or the buyer. Pig iron was identified as the commodity. The country of origin was said to be Russia. South Korea was identified as the destination. The chemical composition of the commodity in the contract corresponded with the analysis table sent by Mr Noh in September 2017. The offender made amendments to the contract, which he explained to Mr Noh over the phone after sending him the amended contract.

122. On 12 October 2017, the offender asked Mr Noh for the details of the selling company by the following day “at the latest.” He also told Mr Noh, “[w]e’ve got to hurry.”

123. No further communications were intercepted in relation to this transaction after 12 October 2017. The Crown accepts that the transaction ceased prior to the offender’s arrest on 16 December 2017.

124. The offender has not previously been convicted of an offence.

The offender’s conditions of custody and treatment of his medical conditions while in custody

125. The offender suffers from Type 2 diabetes mellitus and hypercholesterolemia (high cholesterol). These were known conditions for which no medication was prescribed prior to his incarceration. On 12 December 2019, his blood sugar level was recorded to be 11.1 at 9.30am which, according to Dr Ette, would be high unless it was recorded immediately following a meal.

126. On 15 August 2020, a complaint was made on behalf of the offender concerning his medical treatment in gaol. The complaint was not in evidence. The offender’s blood sugar level, having not been tested since 12 December 2019, was tested again at 11.07am on 27 August 2020 at which time it was recorded to be 13.4, which was regarded by Dr Ette as “high”. On 28 August 2020, a registered nurse filled in a “Health Problem Notification Form” which identified the following signs or symptoms “to look for” in the offender, which Dr Ette said were symptoms of hypoglycaemia:

“Unstable type 2 diabetes - monitor for confusion, unable to talk in sentences, excessive sweating, unconsciousness, difficult to rouse.”

127. On 29 August 2020, the offender was seen in the clinic for his blood sugar level, which had been 27.4 at 1.30pm, to be rechecked. At that time, the offender reported that he felt “fine”. Dr Ette considered the reading of 27.4 to be “very high” and indicating hyperglycaemia. The entry for 29 August 2020 also recorded “[f]urther stat dose of Novorapid administered”. Dr Ette explained that Novorapid is fast-acting insulin, which was administered to reduce the offender’s blood sugar level. In a further entry on 31 August 2020, the clinician noted that the offender had Type 2 diabetes with “declining glycaemic control” and that over the weekend, for the first time, he had required insulin. His blood sugar level chart recorded that his fasting blood sugar levels were between 11.5 and 14.2 (which Dr Ette regarded as high) and his post-prandial blood sugar levels were 24 and over. The offender was referred for “urgent diabetes clinic review”, which Dr Ette regarded as having become “urgent” because he had not been reviewed between December 2019 and August 2020.

128. The offender was tested again at 10.30am on 4 September 2020, at which time his blood sugar level was 20.6.

129. On 29 September 2020, the Executive Director of Clinical Operations at Justice Health responded to the letter of complaint dated 15 August 2020 in respect of the medical treatment of the offender while in custody. The author informed the offender that he was on the waiting list for the Diabetes/Endocrinology Clinic at Prince of Wales Hospital and that the Diabetic Nursing Clinic would monitor his diabetes and administer insulin three times a day. The letter also said:

“I have been advised that the Nursing Unit Manager has also apologised for the delay in care and has implemented the above actions to address your concerns.”

130. The offender was released on bail on 11 November 2020 because his conditions of custody disabled him from preparing for his trial: R v Choi [2020] NSWSC 1586. The bail was subject to strict conditions akin to house arrest. The offender was permitted to leave his home only for limited purposes: to report for bail, to see his legal representatives, to attend court, for exercise and to obtain medical treatment.

Factors to be taken into account on sentence

131. I am obliged, by s 16A(1) of the Crimes Act, to impose a sentence that is “of a severity appropriate in all the circumstances of the offence.” The matters which I have taken into account include the factual matters set out above and the matters set out below.

132. I note that some of the matters referred to in s 16A(2) were not suggested to be relevant. For example, it was not suggested that the offender had provided any cooperation in relation to this offence or other offending (s 16A(2)(h)). Nor was it suggested either that the probable effect of the sentence on the offender’s family was relevant (s 16A(2)(p)) or that there was evidence to enable me to make any such finding.

The nature and circumstances of the offending conduct

133. The facts concerning the offending conduct for both counts 1 and 2 and the further offence to be taken into account in the sentence for count 2 are set out above. None of the transactions which the offender brokered came to fruition. In the case of the arms particular, the transaction was suspended as a consequence of the increased international surveillance which resulted from North Korea’s missile testing at the end of August 2017. The offender’s role in the transaction which was the subject of the IMU particular ceased as a result of his arrest. The transaction the subject of petroleum particular had to be deferred because of the risks associated with transporting petroleum by ship. The offender’s role in the coal transaction ceased as a result of his arrest. The offender’s role in the pig iron transaction ceased in about mid-October 2017 for reasons which are not revealed by the evidence. I cannot be satisfied that the offender voluntary desisted from providing brokering services. Indeed, it would have been contrary to his then motivation to do so, since he was intent on breaching sanctions, which he regarded as unjust, in order to help the people of North Korea by finding purchasers for their products (MANPADs and IMUs) and commodities (coal and pig iron), and obtaining petroleum for North Korea’s domestic use.

134. Although, as referred to below, there was no actual injury, loss or damage sustained as a result of the offending conduct, the potential damage was of a kind that was significant. The purpose of criminalising the provision of sanctioned services is to fortify the sanctions. If breaches of sanctions pass without punishment, the sanctions become useless tools of international influence. Although the part played by the offender was relatively small in the overall picture, his conduct tended to undermine the sanctions in ways which, having regard to the relative lack of importance of individual participants such as the offender, can be very difficult to detect and prevent. Thus, the offender’s conduct cannot be regarded as merely a technical breach of the law. However, I accept the submissions made on behalf of the offender that the offending was not particularly sophisticated. Although he adopted a code of sorts when talking about the MANPADs, he otherwise used his own email address and phone. The evidence does not establish that the offender had any particular affiliation, other than that his sympathies were with the people of North Korea. He acted on his own account and used his contacts in China, Russia and North Korea to broker deals. Prior to the imposition of sanctions, he was also involved in brokering services, the provision of which was, at the time, legal.

135. The offences to which the offender stands to be sentenced are, in some senses, comparable to an offence such as dealing with the proceeds of crime. The product may be an otherwise lawful product but if it has been stolen and is then sold by an offender, the offender commits an offence of dealing with the proceeds of crime. There is a lawful market for the sale and purchase of MANPADs, which are used for military purposes, and also for IMUs, which are used both for military and civilian purposes. MANPADs are manufactured and sold throughout the world. IMUs are routinely used for objects in flight. Petroleum, coal and pig iron (as referred to above, the last mentioned is relevant only on the basis of s 16BA) are commodities which are routinely traded in a lawful manner.

136. The evident purpose of the sanctions against North Korea exporting MANPADs, IMUs, coal and pig iron is to deprive North Korea of the economic benefit of such sales (in the form of foreign currency) and thereby place pressure on its government to comply with international law and norms. The purpose of sanctions against the importation by North Korea of petroleum is to deprive North Korea of a valuable energy source and thereby place further pressure on its government. The evidence does not permit any precise calculation to be made of the potential economic benefit to be gained by North Korea of the sale of MANPADs, IMUs, coal or pig iron, or the detriment suffered by not having access to the petroleum which the offender sought to acquire for its benefit.

137. Conduct such as the offender’s has a corrosive effect on the sanctions and tends to undermine their purpose. I take into account that the provision of the services was motivated, as referred to above, both by the financial benefit which he would obtain, as well as the desire to breach the sanctions to, as he saw it, help the people of North Korea.

Whether the conduct amounted to a course of conduct

138. I regard the conduct particularised in count 1, count 2 and the s 16BA offence as constituting a course of conduct. The offender performed the role as a broker on behalf of North Korean entities in the sale of MANPADs, IMUs, coal and pig iron, and in the purchase of petroleum.

Injury, loss or damage

139. It was accepted by the Crown that, as referred to above, there was no actual injury loss or damage resulting from the offending conduct.

The degree to which the offender has shown contrition for the offending conduct and his plea of guilty

Contrition and remorse

140. The offender pleaded guilty to counts 1 and 2 on an amended indictment in the middle of the trial at a time when there was little evidence remaining to be adduced in the Crown case beyond the playing of recorded telephone intercepts and the offender’s recorded interview. On these bare facts, the timing of the plea would appear to be inconsistent with a finding that the offender was truly remorse or contrite.

141. However, in this context, the relationship between the original indictment (presented at the commencement of the trial on 3 February 2021) and the fresh indictment to which the offender pleaded guilty (presented on 10 February 2021) is significant. The relationship between the counts on the two indictments can be seen from the following table.

Count in original indictment	Count in fresh indictment
1	N/A
2	Arms particular in Count 1
3	N/A
4	IMU particular in Count 1
5	Count 2
6	Offence in s 16BA schedule
7	Petroleum particular in Count 1

142. The two charges on the original indictment for which there was no equivalent in the fresh indictment were counts 1 and 3. Count 1 in the original indictment charged that the offender had, between about 5 August 2017 and 16 December 2017, provided services for the sale of missiles and related expertise, believing or suspecting on reasonable grounds that the services would, or may, assist in a weapons of mass destruction (WMD) program, contrary to s 11 of the Weapons of Mass Destruction (Prevention of Proliferation) Act 1995 (Cth). Count 3 was in similar terms, apart from the time period alleged (between about 9 November 2017 and 16 December 2017) and the services (brokering services with respect to the sale of IMUs). The offender has consistently denied that he provided services believing, or suspecting on reasonable grounds, that they would, or may, assist in a WMD program. There is no evidence before me about the plea negotiations. However, I do not regard the lateness of the plea as inconsistent with my findings, set out above, about the offender’s remorse and contrition to the charges to which he has pleaded guilty since the charges to which he pleaded guilty did not include any charges alleging provision of services in relation to a WMD program.

143. Further, while the offender was in gaol on remand, the combined effect of his conditions of custody and his difficulties with the English language made it difficult for him to obtain any meaningful legal advice or to engage in any negotiations with the Crown about the charges.

144. On 27 April 2021, the offender told Dr Furst:

“I have come to realise that my actions of the past were actually wrong. Now, where I feel that a particular law is unjust, I would protest by normally, more acceptable, means such as writing articles or appealing to the media. This is the wisdom I have gained after spending three years in jail. From now on I’m going to comply with all Australian laws and act accordingly.”

145. Where sentence hearings take place before an offender is taken into custody, or at a time when an offender has spent little time in custody, expressions of contrition or remorse may reflect little more than a hope for a shorter sentence. However, the offender in this case was in custody for almost three years (2 years, 10 months and 27 days) before being released to what amounted to house arrest. I am satisfied that, although the purpose of remand is to safeguard the administration of justice rather than to fulfil the purposes of sentencing, his period in custody has caused him to change his attitude to his offending conduct. At the time of his offending, he was motivated, at least in part, to undermine sanctions in the belief that this would help the people of North Korea who were suffering as a result of the sanctions. I accept that the offender now acknowledges that he was wrong to breach the sanctions as a way of protesting against them. I regard his plea of guilty to the charges on the fresh indictment as indicating his contrition.

146. I accept the statement extracted above as a genuine statement of contrition and remorse. I regard the offender as having good prospects of rehabilitation and I regard his risk of re-offending as low. Although the offender continues to regard the sanctions against North Korea as unjust and as adversely affecting its people, I am satisfied that he now appreciates that his protest against them ought not take the form of illegal conduct in breaching them.

The plea of guilty to the fresh indictment

147. The utilitarian value of the offender’s plea cannot be regarded as being particularly high because of its timing. However, I consider that some discount for its utilitarian value ought be allowed.

148. The offences charged were complex and novel. The document setting out the elements of the offences charged (which comprised, as set out above, seven counts), which was settled in advance of the Crown opening so that it could be provided to the jury at the beginning of the trial, ran to some four pages. In a case such as the present, where the elements are numerous and potentially complex, the requirement that jury verdicts be unanimous for Commonwealth offences tends to add to the utilitarian value of a plea of guilty, which removes the prospect of a hung jury and a re-trial. It is desirable that, in such cases, some discount be allowed for a plea in order to provide an incentive to an accused person to plead to charges which will resolve the matter.

149. Although I am not obliged to specify the amount by which the sentence is discounted for the utilitarian of the offender’s plea of guilty, it is desirable in the interests of transparency that I do so: Xioa v R (2018) 96 NSWLR 1; [2018] NSWCCA 4 at [279]-[280] (Bathurst CJ, Beazley P, Hoeben CJ at CL, McCallum and Bellew JJ). I allow a discount of 5% for the utilitarian value of the offender’s plea of guilty.

Specific deterrence

150. In his evidence in chief, the offender said:

“So for [almost] three years I spent time in prison and I believe ‑ I learned that even if it is the right reasons, if I go ‑ if I break the law that I would be sent to prison and that's the wisdom that I learned. From now on, I will comply with all Australian laws and I will act accordingly.”

151. For the reasons given above with respect to remorse and contrition, I am satisfied that the offender’s time in custody has been sufficient to deter him from re-offending. However, since the sentence will be backdated to allow for the offender’s time in custody, specific deterrence will be taken into account in this way.

General deterrence

152. It can be assumed that many international traders and brokers have little concern with the work of the UN, or individual nation States, in imposing sanctions. They may not appreciate the effect of providing sanctioned services, which is to undermine aspects of the international order. As the offences for which the offender is to be sentenced are generally committed in a mercantile context, it is important that the sentence be sufficient to deter those who, for financial or political motives, might otherwise be inclined to offend.

153. The weight to be given to general deterrence is also affected by the circumstance that offences such as those committed by the offender are difficult to detect. Such offences can be committed by communications over the internet and telephone from people’s homes or other private places where there is little or no opportunity for outside scrutiny.

Punishment

154. As referred to above, the purpose of custody on remand is not to fulfil the purposes of sentencing, but rather to protect the administration of justice. However, the offender’s conditions of custody have been particularly punitive. Not only has he been required to spend almost three years in gaol on remand, but for much of that period he was classified as a National Security Inmate. The effect of this classification was to impose further restrictions which do not apply to the general prison population. As referred to above, he was granted bail in order to permit him to prepare for his trial which would have been practically impossible had he remained in custody under such restrictive conditions.

155. I accept that the offender felt his conditions of custody to be, as he described them to Dr Furst, as follows:

“The whole time was very stressful. I suffered three times more than other prisoners. I felt as though I was less than an animal. Sub-human.”

156. According to Mr Hodges (who was not cross-examined on his affidavit affirmed on 30 June 2021), the offender was visited once on 31 December 2019 by Prabakaran Naganathan (a friend at whose residence the offender resided while on bail and who provided $60,000 security for bail). He had a family video contact visit (which was monitored) with Samuel Kwon on 19 September 2020. No other visits are referred to in Mr Hodge’s affidavit, from which I infer that there was none. I accept Mr Hodge’s evidence that, due to the offender’s designation as a National Security Inmate, he had no access to “amenities, employment opportunities and educational opportunities” while in goal. The case note reports in respect of the offender depict his isolation in gaol as well as his attempts to gain access to legal advice and to understand the nature of the charges and his application for Legal Aid. The progress of the preparation of his case for hearing was severely hampered and delayed by his conditions of custody.

The maximum penalty

157. As referred to above, the maximum penalty for each of the counts is 10 years’ imprisonment. The maximum penalty is a relevant matter to be taken into account when passing sentence because it provides an indication of the seriousness with which Parliament regards conduct which falls within the section. I bear in mind that the maximum penalty is to be reserved for the worst category of cases: Veen v The Queen (No. 2) (1988) 164 CLR 465 at 478 (Mason CJ, Brennan, Dawson and Toohey JJ); [1988] HCA 14. Both s 27(1) of the UN Act and s 16(1) of the Autonomous Sanctions Act are capable of applying to matters as serious as the transfer of nuclear or chemical weapons of mass destruction. The present case is plainly not in the worst category of case. The offender played a reasonably significant broking role in bringing together buyers and sellers for transactions that, had they come to fruition, would have constituted breaches of sanctions. However, the transactions were not of a high order. None involved weapons of mass destruction or commodities required for the construction of non-conventional weapons.

Objective seriousness

158. In respect of count 1, the provision of brokering services in respect of MANPADs, IMUs and petroleum products covered a range of commodities and products which fell within sanctioned services. Although none of the transactions came to fruition, I am not satisfied, for the reasons given above, that their cessation was due to any voluntary act by the offender.

159. Although the offending conduct was serious, I regard the conduct in count 1 as being well below the mid-range of objective seriousness but of greater seriousness than the conduct in count 2 because it covers a wider range of sanctioned services and comprises a rolled up charge: R v De Leeuw [2015] NSWCCA 183 at [116] (Johnson J, Ward JA and Garling J agreeing). In respect of both counts, the offender acted deliberately to undermine the applicable sanctions.

The character, antecedents, age, means and physical or mental condition of the person

160. I have referred to the offender’s antecedents, means and physical or mental condition in the narrative set out above. Because I do not accept as accurate the account of his life which the offender gave to Dr Furst (the truth of which was confirmed by the offender in his evidence in chief), it is not possible to make detailed findings on the basis of Dr Furst’s report.

161. The offending occurred when the offender was 58 and 59 years old. He is now 62 years old. His qualifications have been noted above. He is married and has one son who is 37-years old. I understand that members of his family were questioned by the Australian Federal Police, which led to their reluctance to have contact with him, including when he was in gaol.

162. As referred to above, the offender has Type 2 diabetes mellitus and hypercholesterolemia, both of which are treated by medication. I accept that he has no cognitive impairment or substantial mental disorder. I accept that he is a man who professes and holds a strong Christian faith and, other than the present offending conduct, has an unblemished record. I accept the opinions expressed by his character referees, Mr You and Mr Kwon that the offender is regarded by his family and community as diligent, kind and compassionate.

Other matters

163. I confirm that, in imposing a sentence for count 2, I have taken into account the offence on the s 16BA schedule. I have had regard to the following principles set out in the guideline judgment in respect of State offences on a Form 1 (Attorney General’s Application under s 37 of the Crimes (Sentencing Procedure) Act 1999 No 1 of 2002 (2002) 56 NSWLR 146; [2002] NSWCCA 518). The principles which are to be taken into account on sentencing pursuant to s 32 of the Crimes (Sentencing Procedure) Act 1999 (NSW) and to a schedule under s 16BA of the Crimes Act are as follows. First, the focus is on sentencing for the primary offence; secondly, greater weight is given to personal deterrence and retribution limited by the maximum penalty for the primary offence and the principle of totality; thirdly, a longer sentence will generally be imposed due to the existence of the s 16BA schedule offence and the additional penalty may be substantial; and, fourthly, the penalty for the Form 1 (or 16BA schedule) offence may, but need not, be quantified.

164. I have also had regard to the single comparative decision: Restricted Judgment [2019] NSWSC 1892, in which Rothman J imposed a sentence for an offence contrary to s 27(1) of the UN Act. It was common ground that the factual circumstances of that case were significantly different from the present, thus depriving the potential comparison of substantial utility: cf. The Queen v Pham (2015) 256 CLR 550; [2015] HCA 39 at [26] (French CJ, Keane and Nettle JJ). Although it was accepted that no sentence had yet been imposed under the Autonomous Sanctions Act, I understood it to be common ground that the offences under s 27(1) of the UN Act and s 16(1) of the Autonomous Sanctions Act were analogous.

The threshold requirement: s 17A of the Crimes Act

165. By reason of s 17A of the Crimes Act, I am not to impose a sentence of imprisonment for a federal offence unless I am satisfied that, having considered all other available alternatives, no other sentence is appropriate in all the circumstances of the case.

166. This is the offender’s first time in custody. He is entitled to have his prior good character taken into account.

167. The circumstances of this case also include that the offender has spent almost three years in a very onerous form of custody and has spent eight months on very restrictive bail conditions, which amount to house arrest. In these circumstances, were I not to impose a sentence of full-time imprisonment, these almost four years of custody and quasi-custody would not be adequately accounted for. Mr Anderson submitted that a fixed term of imprisonment would be appropriate in these circumstances. He expressly refrained from seeking an Intensive Corrections Order by reason of this matter. The Crown contended that no sentence other than a term of imprisonment would be appropriate.

168. The offending conduct was deliberate and motivated both by personal gain and by the desire to undermine sanctions which had been imposed by the international community, either by the UN or by nation States, on North Korea to put pressure on its government to comply with international law. A custodial sentence is required in the present case to fulfil the need for general deterrence. In all of the circumstances, which included the length of pre-sentence custody, I am satisfied that no sentence other than a sentence of imprisonment is appropriate.

169. I propose to impose an aggregate sentence for the two counts as provided for by s 53A of the Crimes (Sentencing Procedure) Act which has been held to be available for Commonwealth offences: Putland v The Queen (2004) 218 CLR 174; [2004] HCA 8; Director of Public Prosecutions (Cth) v Beattie [2017] NSWCCA 301; (2017) 270 A Crim R 556 at [145]–[146] (Price J, Basten JA and Walton J agreeing).

170. Taking account the offender’s custody on remand and his conditions of bail, which amounted to house arrest, I propose to backdate the commencement date of the sentence to 16 December 2017, being the date on which the offender was first taken into custody following his arrest: s 47 of the Crimes (Sentencing Procedure) Act and s 16E of the Crimes Act. I decline to fix a single non-parole period or make a single recognizance release order. My reason for declining to do so, which is required by s 19AB of the Crimes Act to be given, is that it would be futile to do so, as the whole period of the sentence which I will impose has expired. Accordingly, no explanation to the offender under s 16F is required.

171. Having regard to all factors relevant to sentence and taking into account (with some rounding down) a 5% discount for the offender’s pleas of guilty, I nominate the following indicative sentences:

1. For count 1 – imprisonment for a term of 2 years and 10 months; and

2. For count 2, taking into account the offence on the s 16BA schedule – imprisonment for a term of 1 year and 10 months.

Sentence

Chan Han Choi

1. You are convicted of counts 1 and 2 on the indictment.

2. You are sentenced to an aggregate sentence of imprisonment for a fixed term of 3 years and 6 months, commencing on 16 December 2017 and expiring on 15 June 2021.

3. As your sentence has expired, you are no longer subject to your conditions of bail.

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Decision last updated: 23 July 2021