Singapore: Persian Gulf Money, Energy, and Non-Energy Export Risks

by Reed Smith

In September 2013, the GCC-Singapore Free Trade Agreement came into force, and it has some wondering whether this will mean an influx of oil and gas trade from the Persian Gulf. The agreement is well-timed, as U.S. Secretary of State John Kerry announced earlier this year that Singapore, along with other countries, would once again be exempt from NDAA sanctions for “significantly” reducing its purchases of Iranian oil. How does this affect the risk analysis associated with sanctions?

When this exemption was received last year, Singapore’s Ministry of Foreign Affairs noted that “Singapore companies and [financial institutions] know these unilateral sanctions still exist, and should continue to consider the impact of all such sanctions on their commercial decisions.” The Ministry’s statement suggests that this carve-out is limited in scope—perhaps reaching only energy-related transactions—but that limitation does not appear to be well-defined. Energy aside, recent experience with Singapore-related export violations suggests that such violations will continue to be enforced regardless of the exemption. Five cases of serious export violations exemplify the risks associated with non-energy trade:

  1. Diversion of Military Antennas. In November 2012, Amin Ravan and his Iranian company were indicted with conspiracy to defraud the United States. Ravan allegedly sought to procure U.S.-made, export-controlled antennas for shipment to Iran by having the antennas altered and first sent to a Singaporean company, Corezing International. Two of Corezing’s principals, both from Singapore, were extradited to the United States and sentenced in September 2013 to serve more than 30 months in prison each, for the unlawful export of 55 of these military antennas.
  2. Fighter Jet Parts to Singapore. In 2011, a U.S. company was sentenced to one year probation for attempting to illegally export J 85 blades for F-5 fighter jets. The fighter jet parts were destined for Singapore, but the U.S. company failed to secure the necessary State Department export licenses and undervalued the parts at $2,000, when in fact they were worth more than $105,000.
  3. Weapons to Sri Lankan Terrorists. In 2010, Balraj Naidu was convicted of conspiracy to provide material support to a foreign terrorist organization, the Tamil Tigers. Naidu, a Singaporean citizen, unwittingly negotiated with an undercover business that posed as a military arms dealer. The weapons deal involved the sale of approximately 28 tons of weapons and ammunition.
  4. Aircraft Components to Iran. In 2009, a U.S. citizen was convicted to 46 months in prison for illegally exporting export-controlled U.S. aircraft parts to a Singapore-based company that then re-exported the parts to Iran without obtaining U.S. export licenses.
  5. Rocket & Spacecraft Material to China. In 2009, a Singaporean citizen, along with two co-conspirators, sought to illegally export carbon-fiber material to China. The material had applications in aircraft, rocket, spacecraft, and uranium enrichment, and required U.S. government licenses for their export. The Singaporean citizen was affiliated with various Singaporean import/export businesses.

So though it is not immediately apparent how this renewed exemption affects the day-to-day operations of one of Asia’s largest trade hubs, the take-away seems clear. Singaporean companies would do well to heed the Foreign Ministry’s advice to “enhance their due diligence and monitor more closely Iran-related business transactions.” Increased trade in the energy sector should prompt close attention to know-your-customer processes, OFAC vetting (though the OFAC hotline is currently offline because of the U.S. government shutdown), and other due diligence. Furthermore, companies outside the energy trade should also be mindful that any perceived leniency does not dispel the sanctions risk posed by dealing in defense and other export-controlled articles.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Reed Smith | Attorney Advertising

Written by:

Reed Smith

Reed Smith on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.