US exempts SG from sanctions despite cases of illegal trade with Iran in recent years
Quick Summary
Earlythis year, the US State Department extended Singapore's exceptionfrom the US National Defence Authorisation Act sanctions, which areimposed oncountries that trade with Iran. This followed the US decision ofJune 28, 2012, when the city-state received such an exception for thefiscal year 2012. Singapore's ministry of foreign affairs (MFA) hadthen said,“We welcome the US’ decision that sanctions pursuant to the USNational Defence Authorisation Act will not apply, for the next 180days, to financial institutions (FIs) based in Singapore, taking intoaccount that since May 2012, no Iranian crude oil was imported intoSingapore. In fact, Iran represented only one percent of Singapore'stotal crude oil imports during the last twoyears.”
Butwhy did Singapore-based companies and FIs comeunder US scrutiny in the first place? The reason is a spat of casesin recent years involving Singaporeans and Singapore-based entitieswho have been found to be involved in illegal trade with Iran invarious 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.
A summary by US Justice Department ofsome of the major counter-proliferation, export control, economicespionage, theft of trade secrets, and embargo-related criminalprosecutions during the last six years reveals that Singapore hasbeen used as a front for transferring antennas, aircraft and evenIEDs components to Iran.
Military antennas
The latest case relates to anindictment in the District of Columbia on November 20, 2012, chargingAmin Ravan and his Iranian company, IC Market Iran (IMI), withconspiracy to smuggle 50 cavity-backed spiral antennas and fivebiconical antennas to Iran through Singapore violating the ArmsExport Control Act. Ravan was based in Iran and, at various times,acted as an agent of Corezing International, Pte, Ltd, a companybased Singapore. According to the indictment, neither party to thesetransactions -- including Ravan or IMI – ever applied for orreceived a license from the government to export any of theseantennas to Singapore. Corezing International was also charged forits role in this particular antennae transaction.
Components for ImprovisedExplosive Devices (IEDs)
Earlier on October 25, 2011, CorezingInternational was charged for its role in a separate conspiracyinvolving the illegal export of radio frequency modules from the USto Iran, some of which later ended up in IEDs in Iraq. The caseinvolved four individuals in Singapore, another individual in Iran,and four companies with various violations, including a conspiracythat allegedly caused 6,000 radio frequency modules to be illegallyexported from the US to Iran via Singapore, at least 16 of which werelater found in IEDs in Iraq.
Those charged included two otherSingapore-based entities Opto Electronics Pte, Ltd. and and NELElectronics Pte. Ltd; and four persons namely Wong Yuh Lan, OptoElectronics' agent, Lim Yong Nam, NEL’s owner and director, Lim KowSeng, Corezing's agent, and Hia Soo Gan Benson, a director ofCorezing. The defendants allegedly told the US government that atelecommunications project in Singapore was the final destination ofthe goods, which were later found out in Iraq by the Coalitionforces.
Military and commercial aircraftcomponents
Laura Wang-Woodford, who had servedas a director of Monarch Aviation Pte Ltd., a Singapore company thatimported and exported military and commercial aircraft components formore than two decades, was sentenced to 46 months imprisonment in2009 for violating the US trade embargo by exporting controlledaircraft components to Iran. According to the indictment,Wang-Woodford operated Jungda International Pte. Ltd (“Jungda”),a Singapore-based successor to Monarch, and exported controlled USaircraft parts to Monarch and Jungda in Singapore. These parts werethen re-exported to companies in Iran without obtaining the requiredUS government licenses. The defendants also falsely listed Monarchand Jungda as the ultimate recipients of the parts on exportdocuments filed with the US government. The aircraft parts illegallyexported to Iran include aircraft shields, shears, “o” rings,switch assemblies, as well as components designed for use in Chinookmilitary helicopters.
Meanwhile,Singapore government, on its part, has repeatedly emphasised oncracking down on such illegal trades. Regarding the US exemption forSingapore from sanctions, the MFA cautioned,“Notwithstanding the exception, Singapore companies and FIs knowthese unilateral sanctions still exist, and should continue toconsider the impact of all such sanctions on their commercialdecisions. The Monetary Authority of Singapore (MAS) has reminded theFIs that they should enhance their due diligence and monitor moreclosely 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.