Singapore tech firm CSE Global fined US$12 million for apparent violation of Iran sanctions

WASHINGTON - Singapore-based technology company CSE Global has agreed to pay more than US$12 million (S$16 million) to settle 104 apparent violations of Iran sanctions by its subsidiary.

The US Department of Treasury said on Thursday (July 27) that the subsidiary, CSE TransTel, "caused at least six separate financial institutions to engage in the unauthorised exportation or re-exportation of financial services from the United States to Iran". This happened in 2012 and 2013, the US Treasury said in a statement.

The alleged violations involved 104 US currency wire transfers to Iran through the US totalling more than US$11 million. CSE Transtel said they were for payments for non-US goods and services lawfully rendered by CSE Transtel through non-US third-party vendors to Iran or persons located in Iran.

Both CSE Global and CSE TransTel are located in Singapore.

The US Treasury's Office of Foreign Assets Control (OFAC) determined that TransTel did not voluntarily self-disclose the apparent violations to OFAC, and that the apparent violations "constitute an egregious case".

CSE Global said in a statement: "After due and careful consideration, CSE and CSE Transtel have agreed to settle with OFAC, the matter of the alleged violations as the alternative would have been a costly and lengthy litigation in the US, which would take up much of management time and resources, the outcome of which is not at all certain."

The company said that the OFAC has released and discharged CSE Global and CSE Transtel permanently as part of the settlement.

"While the settlement with OFAC is very much regretted, the Board of CSE has taken active remedial steps to review its business and operational processes to ensure that such alleged violations or anything similar will not happen again," it said in the statement.

Listed on the Singapore Stock Exchange, CSE Global has more than 1,300 employees worldwide and offers integrated solutions to companies in the automation, telecommunications and environmental sectors.

It started out in 1985 as the engineering projects division of Chartered Electronics Industries, the electronics arm of Singapore Technologies.

The company said this settlement is likely to result in a net loss for the second quarter of this year and a drag on the full year 2017 performance, although its core business is likely to remain profitable.