Singapore Electronics Company Discloses Potential Sanctions Violations
A Singapore electronics manufacturer voluntarily disclosed to the Treasury Department possible U.S. sanctions violations, the company said in a May 28 Securities and Exchange Commission filing. The company, Flex Ltd., said the violations may have been committed by its non-U.S. affiliates and that it is conducting an internal investigation, expected to be completed “by the end of the second quarter of fiscal year 2021,” so it cannot estimate possible penalties.
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The company also said tariffs imposed due to the U.S.-China trade war could “materially affect our business” and lead to “increased cost of goods sold, decreased margins, increased pricing for customers, and reduced sales.” Flex added that it formerly did business with Huawei and Huawei affiliates, which were recently “made subject to enhanced restrictions,” including U.S. changes to the direct product rule (see 2005150058). “We could be subject to reputational harm based on [Huawei's] business activities, including activities with sanctioned countries,” the company said.