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Thursday
Jul272017

OFAC fines Singapore firm $12 million for Iran sanction violations

The subsidiary of a technology company that trades on the Singapore stock exchange paid $12 million in fines Thursday to the U.S. Treasury Department's Office of Foreign Assets Control for violating trade sanctions against Iran.

​CSE TransTel Pte. Ltd. settled 104 apparent violations of the Iran sanctions.

(The sanctions are formally cited as the International Emergency Economic Powers Act and the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR)).

TransTel is wholly-owned by CSE Global Limited. Both companies are based in Singapore.

CSE Global trades on the main board of the Singapore Exchange.

During 2012 and 2013, TransTel originated U.S. Dollar wire transfers through the United States involving Iran worth $11 million.

The transfers caused at least six banks "to engage in the unauthorized exportation or re-exportation of financial services from the United States to Iran, a prohibition of § 560.204 of the ITSR."

OFAC said Thursday it could have fined TransTel $38 million.

"TransTel did not voluntarily self-disclose the violations to OFAC, and . . . the violations constitute an egregious case," OFAC said.

In 2010 and 2011, TransTel signed contracts with "multiple Iranian companies" to deliver and install telecommunications equipment for energy projects in Iran or Iranian territorial waters.

TransTel hired third-party vendors -- including several Iranian companies -- for the projects.

CSE Global and TransTel had U.S. Dollar and Singapore Dollar accounts with a non-U.S. bank in Singapore.

The companies gave the bank a letter in April 2012 that said,

In consideration of [the bank] agreeing to continue providing banking services in Singapore to our company, we, CSE TransTel Pte. Ltd … hereby undertake not to route any transactions related to Iran through [the bank], whether in Singapore or elsewhere.

Less than two months later, TransTel began originating transfers from its U.S. Dollar account that were related to its Iran business.

TransTel eventually originated 104 U.S. Dollar wire transfers worth more than $11 million from its account with the bank.

The funds went to third-party vendors, including several Iranian parties that supplied goods or services for the projects in Iran.

All of the money transfers were processed through the United States, OFAC said.

"None of the transactions contained references to Iran, the Iranian projects, or any Iranian parties," according to OFAC.

CSE Global's website says the company has 1,300 employees in 30 offices and 17 countries.

The Settlement Agreement between OFAC and CSE Global and TransTel is here (pdf).

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Richard L. Cassin is the publisher and editor of the FCPA Blog.