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Tokyo police on Thursday arrested the president of a Kobe-based trading company and one of its executives on suspicion of illegally exporting to North Korea a secondhand fishing boat that is believed to have subsequently been fitted out for espionage, police said.

Kim Ki Min, 52, president of Toa Gijutsu Kogyo, and 53-year-old executive Toshikazu Shimada are suspected of violating the Foreign Exchange and Foreign Trade Control Law by submitting documents to the government stating the vessel was to be sold to Indonesia, police said.

The vessel is believed to have entered the North Korean port where two suspected North Korean spy ships fled after intruding into Japanese waters in 1999.

Kim and Shimada are believed to have played the central role in the export and reportedly asked Yun Kyong Jung, 51, a ship broker based in Pusan, South Korea, and others to buy the ship from its original owner. Yun was arrested Saturday in connection with the case.

Kim and Shimada allegedly conspired with Yun and Yoji Kishimoto, 59, president of ship dealer Matsushima Kaiun, to illegally export the secondhand squid fishing boat to the North by stating it was destined for Indonesia in documents submitted to the Fisheries Agency, police said. Kishimoto has also been arrested in the case.

On Aug. 6 last year, Matsushima Kaiun, based in Miyagi Prefecture, organized a crew of three Japanese to take the boat from the port of Onahama in Fukushima Prefecture to a fishing port in South Korea near the demilitarized zone. The boat arrived Aug. 11 via waters south of Kyushu, the police said.

The boat was then taken by a separate non-Japanese crew organized by Yun to North Korea, they said.

MPD investigators, who earlier raided the offices of Toa Gijutsu Kogyo, are investigating the background of the sale and the flow of money.

Toa Gijutsu Kogyo was established in 1963 and exports ship parts to North Korea, while Matsushima Kaiun, set up in 1992, exports used fishing boats mainly to China, South Korea and the Philippines. In April 1996, Hyogo Prefectural Police arrested an employee of Toa Gijutsu Kogyo on suspicion of smuggling materials that can be used to produce sarin nerve gas to North Korea. The materials are subject to export restrictions.

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