A 59-year-old Sydney man, who has been described as a "loyal agent of North Korea", has been arrested by the Australian police for allegedly brokering sales of missiles and missile components to the diplomatically isolated nation.

The Australian Federal Police (AFP) said Chan Han Choi, born in South Korea and now a naturalised Australian citizen, was allegedly acting as an economic agent for Pyongyang in order to raise revenue for the cash-strapped Kim Jong-un regime, which is reeling under heavy international sanctions over its nuclear and missile programmes.

Chan has lived in Australia for more than 30 years and his actions have reportedly violated both UN and Australia's sanctions which are currently in force against the North. He also allegedly discussed supply of weapons of mass destruction to North Korea, which has recently stepped up its bellicose rhetoric and threats.

"This case is like nothing we have ever seen on Australian soil," said the AFP's Assistant Commissioner Neil Gaughan. "This is the first time charges have been laid under the Commonwealth Weapons of Mass Destruction Act in Australia, and the first time we have laid charges specifically for alleged breaches of UN sanctions against North Korea."

"This is black market 101," said Gaughan, adding that the North Korean regime would have earned "tens of millions of dollars" if the trade deals facilitated by Chan had been successful. The senior police officer refused to divulge which countries were potential buyers of the components citing political sensitivity over the matter.

The police said Chan, who is suspected to have had dealings with high-ranking North Korean officials, was not a "spy" and there was no threat to Australians.

"This man was acting as a loyal agent for North Korea who believed he was acting to serve some higher patriotic purpose. I think at the end of the day he would sell whatever he could to make money back for the North Korean government," Gaughan told reporters.

Chan's bail was formally rejected by the Parramatta Bail Court on Sunday, 17 December and he will face charges in the coming days. "As a result of extensive investigations, the AFP alleged the man was acting as an economic agent of North Korea through his facilitation of various exports from North Korea," said a police statement.

Under the framed charges he could face up to 10 years in jail, but police have not ruled out adding more charges against him.

Kim Jong-un
North Korean leader Kim Jong-Un (R) reacting after the test-fire of the intercontinental ballistic missile Hwasong-14 at an undisclosed location STR/AFP/Getty Images