Strong deterrence called for after NZ company Pacific Aerospace breaches UN's North Korean sanctions

A judge has been asked to send a message of deterrence which goes above and beyond anything seen in New Zealand after an aircraft manufacturer indirectly exported parts to North Korea, breaking strict United Nations laws imposed against the rogue nuclear state.

Pacific Aerospace pleaded guilty in August last year to three breaches of the UN sanctions against North Korea and one charge under the Customs and Excise Act.

Today, a sentencing hearing was heard for the Hamilton-based company before Judge John Bergseng in the Manukau District Court.

He reserved his decision, which will be released in writing at a later date.

However, Customs prosecutor Jasper Rhodes asked Judge Bergseng to impose a denunciatory sentence "that goes above and beyond" to send a strong message of deterrence.

The strict UN laws ban a wide range of exports and services to the isolationist nation, described by the United States as "rogue", in response to its nuclear weapons programme.

Customs confirmed it was investigating Pacific Aerospace after the Kiwi-made aircraft was seen at a North Korean military airshow in the city of Wonson displaying the hermit state's colours in September 2016.

It was North Korea's first-ever public airshow and featured fighter jets and military helicopters.

A UN panel of experts also conducted an investigation.

The PAC P-750 XSTOL aircraft is used for skydiving and the potential was for it to be used for military purposes, such as deploying paratroopers.

Pacific Aerospace chief executive Damian Camp earlier said his company, which has been making small aircraft for more than 60 years, had sold the 10-seater plane to a Chinese company, translated as Free Sky, several months earlier.

Replacement parts for the airplane were then sent to North Korea.

The court heard today that Pacific Aerospace had installed tracking data to the plane, which was turned on at all times, and were able to locate the whereabouts of the aircraft.

Rhodes said exporting offences ranged from the top end, which is weapons of mass destruction, to arms and then a list of luxury goods.

While the aircraft parts come under luxury goods, Rhodes said Pacific Aerospace's offending was "near the most serious, if not the most serious on that list".

He said while the aircraft was never intended for military use it was painted in North Korean colours and paraded in a military airshow.

Rhodes asked the court to keep in mind the potential for its use.

There are strict UN sanctions against North Korea due to its nuclear weapons programme, often championed by Supreme Leader Kim Jong-un. Photo / AP

The Crown prosecutor said Pacific Aerospace's offending came through a commercial motivation to honour a warranty but said it should be expected that those operating in such an industry be aware of sanctions and abide by them.

"They said 'we have a contractual business obligation and we are going to choose that over the sanctions and obligations to the law'.

"We're looking at New Zealand's obligations under United Nations sanctions - it needs to be treated seriously by New Zealand's courts," Rhodes said.

He said the case was the first of its kind in New Zealand, while globally, Rhodes said there was only one other case of a similar nature.

Pacific Aerospace's counsel Emmeline Rushbrook said the company recognised the seriousness of the offence and did not want to minimise it.

She said there was no evidence that the aircraft or its parts were to be used for a military purpose.

However, Judge Bergseng replied: "Isn't there an inference if the plane has been painted with North Korean colours and flown at a military airshow?"

Pacific Aerospace chief executive Damian Camp. Photo / Supplied

Rushbrook continued there was nothing covert or undercover, or some "hidden scheme", to export the plane to North Korea through China.

She said the company accepted the offending had affected New Zealand's global trade reputation following extensive media coverage.

Pacific Aerospace have made changes to its corporate structure to ensure such a breach does not recur, the court heard.

A UN Security Council report, however, showed a chain of emails that suggest the company knew its plane was in North Korea and it had been contacted by the Chinese company for parts and training.

The Chinese counterpart emailed Pacific Airspace regarding parts and saying that North Korean operators should be "trained ASAP for this aircraft operating".

Pacific Aerospace replied that they would co-ordinate training in China.

"[Name redacted] departs for China tomorrow and will co-ordinate with you to deliver the training in how to replace the flat motor," the email read.

An inside look at the Waikato-made PAC P-750 XSTOL. Photo / Supplied

Camp said at the time of the investigations that he was looking for answers.

"We're trying to get some detail on that because that aircraft is owned and operated by a Chinese company," he said.

"I'm interested to find out more detail on it - we're going to find out what the detail is there. It's certainly nothing to do with us we've got no involvement with it. We're well aware of the restrictions into that part of the world - we're not interested in cutting across any of those," he said in September 2016.

Pacific Aerospace has been selling aircraft in China since late 2015 and in August the following year Camp announced the company had won a US$13 million order for five skydive aircraft to a Chinese Government sports agency.

The P-750's configuration can be changed and the aircraft used in a range of roles, including passenger/cargo; freight; agriculture, solid and liquid; fire-fighting; survey, geophysical and photographic; medical evacuation; skydiving; and ISR (intelligence, surveillance and reconnaissance).

Fears over the rogue state's nuclear ambitions escalated after exchanges between Kim Jong-un and US President Donald Trump. Photo / AP

In January, Deputy Prime Minister and Foreign Affairs Minister Winston Peters called for "maximum pressure" to be applied on North Korea, following an international meeting of foreign ministers in Vancouver, Canada.

The conference, which revealed hundreds of thousands of international airline passengers are within range of North Korean missiles, was hosted by Canadian Foreign Affairs Minister Chrystia Freeland and former US Secretary of State Rex Tillerson.

It aimed to show international solidarity in pursuing the denuclearisation of the Korean peninsula.

Fears over North Korea's nuclear ambitions were escalated by missile tests and verbal barbs between its Supreme Leader Kim Jong-un and US President Donald Trump, and turned to panic for the people of Japan and Hawaii in January when two mobile alerts were mistakenly issued about incoming missile strikes.

However, the two leaders have agreed to meet - leading to hope for continued peace between the two Koreas.