Authorities said it was the first time a person in Australia had been charged with brokering sales and discussing the supply of weapons of mass destruction.
Assistant Commissioner Neil Gaughan said this morning investigators carefully and methodically investigated the actions of this individual over a period of months.
A Sydney man could face at least ten years behind bars after being accused of acting as an economic agent for North Korea to generate millions of dollars.
Police said the man, a naturalized Australian citizen, allegedly brokered the sale of missiles, missile components and expertise from North Korea to other worldwide entities, and discussed the supply of weapons of mass destruction.
The AFP allege the man was generating income for Pyongyang by brokering the sale of missiles and componentry and expertise from North Korea to other worldwide entities and was trying to transfer coal from North Korea to bodies in Indonesia and Vietnam.
Citing the ANZUS treaty, prime minister Malcolm Turnbull said in August that Australia would join the United States in war.
But police insisted the man's actions did not pose any "direct risk" to Australians, with the actions occurring offshore. "The AFP endeavours to support global efforts to maintain peace and security", Gaughan said in the police statement.
He was arrested during the search of his home in Eastwood on Saturday and also charged with attempting to transfer coal from North Korea to entities in Indonesia and Vietnam.
Assistant Commissioner Gaughan said Mr Chan had been under investigation since earlier this year, after the AFP received information from its global law enforcement partners.
"This is black market 101", he said.
Choi didn't appear or apply for bail during court on Sunday, and bail was formally refused by Acting Magistrate Carl Milovanovich, the CNN affiliate reported.
He is in custody and faces a total of six charges, with maximum penalties of up to 10 years in jail.
It will be alleged in court the man was involved in: "brokering the sale of missiles and missile componentry and expertise from North Korea to other global entities", the police statement read.