US exempts SG from sanctions despite cases of illegal trade with Iran in recent years

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Singapore Port

Quick Summary

  • Spat of cases involving Singapore-based entities trading with Iran illegally in recent years
  • US exempts Singapore from sanctions targeting Iran
  • MAS cautions companies to exercise due diligence in Iran-related business transactions
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Source

Early this year, the US State Department extended Singapore’s exception from the US National Defence Authorisation Act sanctions, which are imposed on countries that trade with Iran. This followed the US decision of June 28, 2012, when the city-state received such an exception for the fiscal year 2012. Singapore’s ministry of foreign affairs (MFA) had then said, “We welcome the US’ decision that sanctions pursuant to the US National Defence Authorisation Act will not apply, for the next 180 days, to financial institutions (FIs) based in Singapore, taking into account that since May 2012, no Iranian crude oil was imported into Singapore. In fact, Iran represented only one percent of Singapore’s total crude oil imports during the last two years.”

But why did Singapore-based companies and FIs come under US scrutiny in the first place? The reason is a spat of cases in recent years involving Singaporeans and Singapore-based entities who have been found to be involved in illegal trade with Iran in various US courts.

Notably, Singapore’s Strategic Goods (Control) Act has been in force since 2003 and is updated accordingly to reflect changing security needs. Also, with effect from November 1, 2010, Singapore had brought its regulatory controls on the movement of strategic goods and related technologies in line with the United Nations Security Council’s sanctions imposed on Iran.
Singapore Port
Singapore Port

A summary by US Justice Department of some of the major counter-proliferation, export control, economic espionage, theft of trade secrets, and embargo-related criminal prosecutions during the last six years reveals that Singapore has been used as a front for transferring antennas, aircraft and even IEDs components to Iran.

Military antennas

The latest case relates to an indictment in the District of Columbia on November 20, 2012, charging Amin Ravan and his Iranian company, IC Market Iran (IMI), with conspiracy to smuggle 50 cavity-backed spiral antennas and five biconical antennas to Iran through Singapore violating the Arms Export Control Act. Ravan was based in Iran and, at various times, acted as an agent of Corezing International, Pte, Ltd, a company based Singapore. According to the indictment, neither party to these transactions — including Ravan or IMI – ever applied for or received a license from the government to export any of these antennas to Singapore. Corezing International was also charged for its role in this particular antennae transaction.

Components for Improvised Explosive Devices (IEDs)

Earlier on October 25, 2011, Corezing International was charged for its role in a separate conspiracy involving the illegal export of radio frequency modules from the US to Iran, some of which later ended up in IEDs in Iraq. The case involved four individuals in Singapore, another individual in Iran, and four companies with various violations, including a conspiracy that allegedly caused 6,000 radio frequency modules to be illegally exported from the US to Iran via Singapore, at least 16 of which were later found in IEDs in Iraq.

Those charged included two other Singapore-based entities Opto Electronics Pte, Ltd. and and NEL Electronics Pte. Ltd; and four persons namely Wong Yuh Lan, Opto Electronics’ agent, Lim Yong Nam, NEL’s owner and director, Lim Kow Seng, Corezing’s agent, and Hia Soo Gan Benson, a director of Corezing. The defendants allegedly told the US government that a telecommunications project in Singapore was the final destination of the goods, which were later found out in Iraq by the Coalition forces.

Military and commercial aircraft components

Laura Wang-Woodford, who had served as a director of Monarch Aviation Pte Ltd., a Singapore company that imported and exported military and commercial aircraft components for more than two decades, was sentenced to 46 months imprisonment in 2009 for violating the US trade embargo by exporting controlled aircraft components to Iran. According to the indictment, Wang-Woodford operated Jungda International Pte. Ltd (“Jungda”), a Singapore-based successor to Monarch, and exported controlled US aircraft parts to Monarch and Jungda in Singapore. These parts were then re-exported to companies in Iran without obtaining the required US government licenses. The defendants also falsely listed Monarch and Jungda as the ultimate recipients of the parts on export documents filed with the US government. The aircraft parts illegally exported to Iran include aircraft shields, shears, “o” rings, switch assemblies, as well as components designed for use in Chinook military helicopters.

Meanwhile, Singapore government, on its part, has repeatedly emphasised on cracking down on such illegal trades. Regarding the US exemption for Singapore from sanctions, the MFA cautioned, “Notwithstanding the exception, Singapore companies and FIs know these unilateral sanctions still exist, and should continue to consider the impact of all such sanctions on their commercial decisions. The Monetary Authority of Singapore (MAS) has reminded the FIs that they should enhance their due diligence and monitor more closely Iran-related business transactions.”

Note: All information in this article is courtesy US’ Department of Justice summary of major US export enforcement, economic espionage, trade secret and embargo-related criminal cases between January 2007 and February 2013.

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