By Lomi Kriel
PANAMA CITY (Reuters) - A North Korean ship detained near the Panama Canal for smuggling Cuban weapons will set sail with most of its crew aboard later on Wednesday after the ship's representatives paid a trafficking fine to free it, Panama's government said.
The Chong Chon Gang ship was seized in July for smuggling Soviet-era arms, including two MiG-21 jet fighters, under thousands of tonnes of sugar.
It was not immediately clear whether the ship, carrying 32 members of its North Korean crew, would be headed straight home or whether they would first sail elsewhere.
The ship has been moored at a terminal on Panama's Atlantic side while the canal authority waited for the payment of at least two-thirds of a $1 million fine imposed for trying to traffic illegal weapons through the waterway.
Representatives of the ship paid a $693,333 fine on Saturday.
Crew members were informed they were free to go on Tuesday, Panama's foreign ministry said in a statement.
The three highest-ranking people on the ship, including the captain, will remain detained in Panama, where they are being charged with weapons trafficking.
Panamanian prosecutors concluded the three had a "clear involvement" in smuggling the arms, including the two MiG-21 aircraft, 15 MiG engines and nine anti-aircraft missiles.
After the arms were discovered hidden beneath the sugar, Cuba acknowledged it was sending "obsolete" Soviet-era weapons to be repaired in North Korea and returned to Cuba.
Cuban officials told Panama the cargo was a donation of sugar for the people of North Korea.
(Writing by Julia Symmes Cobb; Editing by Simon Gardner and Jonathan Oatis)