COSL Singapore Ltd OFAC Settlement: $415.4K (2017)

The 55 apparent violations of §§ 560.203 and 560.204 of the ITSR occurred between the approximate dates of October 7, 2011 and February 20, 2013. Through its subsidiary companies COSL Drilling Pan-Pacific (Labuan) Ltd and COSL Drilling Pan-Pacific Ltd, COSL Singapore exported or attempted to export 55 orders of oil rig supplies from the United States to Singapore and the United Arab Emirates, and then re-exported or attempted to re-export these supplies to four separate oil rigs located in Iranian territorial waters. The transactional value of the 55 orders is $524,664.

COSL Singapore enters into time charter agreements with third-party drilling companies to allow them to use its oil rigs for drilling operations within a specified territory. COSL Singapore is responsible for maintaining the oil rigs, including procuring equipment and spare parts. Procurement specialists located in Singapore or assigned to an oil rig's base of operations were responsible for day-to-day procurement, including initiating requests for quotation, obtaining quotations, and issuing purchase orders. These specialists purchased at least 55 orders of supplies from vendors located in the United States on behalf of, and specifically intended for shipment and/or re-export to, four COSL Singapore oil rigs operating in Iranian territorial waters. Although some of the purchase order quotations received from U.S. vendors included specific language warning that the goods could not be shipped or re-exported to countries subject to U.S. economic sanctions, specifically including Iran, COSL Singapore purchased the goods and shipped them to the oil rigs over a period of several years.

OFAC determined that COSL Singapore did not voluntarily disclose the apparent violations and that the apparent violations constitute a non-egregious case. The statutory maximum penalty amount is $13,750,000, and the base penalty amount is $923,000. The settlement amount of $415,350 reflects OFAC's consideration of the facts and circumstances pursuant to the General Factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. Part 501, app. A.

Some purchase order quotations received from U.S. vendors included specific language warning that goods could not be shipped or re-exported to countries subject to U.S. economic sanctions, specifically including Iran — yet COSL Singapore purchased and shipped the goods regardless. OFAC identified as an aggravating factor that COSL Singapore did not have an OFAC compliance program in place at the time of the transactions despite conducting business in the United States and/or with U.S. companies in relation to the offshore drilling and petrochemical sectors. OFAC credited as a mitigating factor COSL Singapore's remedial action in instituting an OFAC sanctions compliance program following the investigation.

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