Swiss deny Transocean’s work for drug lords violated sanctions

Monday, 19 July 2010 20:56 Thomas Maung Shwe

The Swiss government’s sanctions unit deputy chief has told Mizzima that Swiss-American firm Transocean did not violate Switzerland’s Burma sanctions last year when the firm did exploratory drilling work for a group that includes a company controlled by accused drug lord, money launderer and junta crony businessman Stephen Law.

The statement came despite the presence of Asia World chief Law, his wife and his father on the Swiss government’s sanctions blacklist.

Mizzima reported in May that Transocean’s November 2009 8-K filing with the US stock-market regulator showed that CNOOC, a state-owned Chinese firm partnered with Stephen Law in exploring Burma’s gas fields hired Transocean to operate in Burmese waters last year in blocks co-owned by CNOOC and the Law drug-trafficking family.

According to the CNOOC website, all of its stakes in Burma’s gas industry are held in partnership with China Focus Development (formerly known as Golden Aaron) and China Global Construction, with CNOOC as the operator. China Focus is a privately owned Singapore-registered firm whose sole shareholders are Stephen Law and his wife Ng Sor Hong, aka Cynthia Ng. The US, EU and Swiss sanctions list show Ng Sor Hong to be chief executive of the firm, which is also among more than a dozen companies controlled by Law on the US government’s blacklist of banned Burma-related entities.

Thomas Graf, deputy dead of the Swiss government’s sanctions task force replied in an e-mail to a Mizzima query on the matter that Transocean had not violated the sanctions because it was hired by CNOOC a Chinese firm not on the sanctions list.

In the detailed response, Graf also told Mizzima that although Golden Aaron (the former name of China Focus) was mentioned in the Swiss sanctions list it only appeared under the blacklisted individuals section as “identifying information for Ms. Ng Sor Hong”, the firm’s chief executive and Stephen’s Law’s spouse. Both the old and new name of the firm were absent from the list of blacklisted entities, which does however include several other firms controlled by the Law family.

While the Swiss sanctions list does not bar target firm China Focus both the Eurpean Union and US sanctions blacklist the Singaporean firm. Mizzima has so far been unable to learn why the firm is not also on the Swiss sanctions list when other Law firms targeted by the EU and the US are also targeted by the Swiss.

While Transocean denies violating US sanctions, critics claim firm is being misleading.

The New York Times reported on July 7 Transocean had claimed in a statement that the firm had not violated US sanctions on Burma because neither Stephen Law nor his father’s names appeared on their contract with CNOOC. The statement failed however to confirm or deny whether the notorious money-launderers’s wife, Ng Sor Hong, or the firm she heads, China Focus, appeared on Transocean’s contract.

Human rights activist Wong Aung of the Shwe Gas Movement told Mizzima that Transocean’s statement was misleading. “The statement to The New York Times only says that Stephen Law and his father weren’t mentioned in the CNOOC Burma contract. It’s interesting that in their statement the firm chose not to disclose whether the contract mentions Law’s wife Ng Sor Hong and the company she heads that co-owns the rights to the gas block with CNOOC.

“It’s extremely unlikely that such a contract would not state who co-owns the gas rights to the area where the drilling would occur. The US and Swiss government must force Transocean to fully disclose the text of this contract,” Wong Aung said.

The company’s statement to the Times also included the cryptic claim that: “No Transocean affiliate that is subject to the US ban has ever done business in Myanmar [Burma].” As Transocean is now headquartered in landlocked Switzerland and the Actinia rig sent to drill for CNOOC is registered in Panama, it is unclear whether the firm is in fact subject to any US sanctions.

Mizzima’s attempts to reach Transocean to elaborate on this were unsuccessful.

Wong Aung is disturbed by Transocean’s apparently successful attempt to avoid American sanctions.

“Transocean, a company that employs thousands of people, is reported to have less than a dozen staff at its so-called headquarters in Switzerland, most of the members of the board of directors are American and it’s listed on the US stock exchange. A large segment of the firm’s business is in the US and really the firm is still American,” he said.

“What’s stopping other American firms that want to do business in Burma from hiring a few people offshore to have a company headquarters in a regulatory black hole like the Cayman Islands or the British Virgin Islands. It makes a joke of American attempts to target one of Burma’s most infamous narco tycoons.”

Transocean has been under increasing scrutiny following a massive explosion that destroyed the firm’s rig operated by BP in the Gulf of Mexico this year. The disaster killed several Transocean employees and caused one of the world’s worst oil spills. In its article in July, which reported on the firm’s business dealings with one of Burma’s richest drug-dealing families (information first reported by Mizzima some six weeks earlier) The New York Times reported that Transocean had skirted American sanctions against Syria and Iran. The firm is also under investigation in Norway for tax fraud and was cited by a Norwegian board of inquiry for committing errors that led to the death of eight employees off the coast of Scotland in 2007.

Law’s Sino-Burmese father Lao Sit Han, aka Lo Hsing Han, is believed by US drug-trafficking analysts to have controlled one of Southeast Asia’s best-armed narcotics militias during the 1970’s.

When the US Treasury department added Stephen Law and his family to its sanctions list in February, 2008, it announced: “In addition to their support for the Burmese regime, Steven Law and Lo Hsing Han have a history of involvement in illicit activities.”

“Lo Hsing Han, known as the ‘Godfather of Heroin’, has been one of the world’s key heroin traffickers dating back to the early 1970s. Steven Law joined his father’s drug empire in the 1990s and has since become one of the wealthiest individuals in Burma,” the Treasury statement said.