The Panama Canal Authority announced Thursday that it slapped a $1 million fine on a North Korean cargo ship caught with an undeclared shipment of Cuban weapons in July.

The canal administrator, Jorge Quijano, said the ship was sanctioned because "it put our canal and our people at risk to a certain point."

The fine was delivered to the freighter's captain and owners, he said, adding that the boat is barred from unmooring until they pay at least two-thirds of the penalty, or around $650,000.

He said the penalty could change depending on the response of the ship's owners, but they have not replied.

The Panamanian government said last month that a United Nations report found that the shipment was a violation of UN sanctions against arms transfers to North Korea's communist regime.

The ship, the Chong Chon Gang, was intercepted on July 10 as it tried to enter the Panama Canal on suspicion it was carrying drugs.

Authorities instead uncovered 25 containers of military hardware, including two Soviet era MiG-21 fighter jets, air defense systems, missiles and command and control vehicles.

Both Havana and Pyongyang said they were "obsolete" Cuban arms being shipped to North Korea for refurbishment under a legitimate contract.

The communist allies did not explain why the items were buried under more than 200,000 sacks of sugar inside the ship.

The ship's 35 crew members are being detained at a former US military base in Panama on arms trafficking charges. They face up to 12 years in prison if convicted.

Five percent of the world's commerce travels through the nearly century-old Panama Canal, with that expected to increase following the completion of a major expansion project.

Warships or vessels carrying military and even nuclear material regularly cross the 50-mile (80-kilometer) long waterway, but they have to warn the local authorities beforehand so they can take security measures.

Fines range from $100,000 for "serious" offenses to $1 million for the most egregious violations.