Russian Sanctions Cost Shipping Boss Singapore Work Permit

Lion City aligns itself with US in international affairs

By: Andy Wong Ming Jun

Adkins: defenestrated

Singapore’s latest act to comply with US-led international sanctions imposed against Russia has come in an unexpected manner: the revocation of a major corporate business leader’s work visa. On June 14, the Financial Times reported that Philip Adkins, the CEO of a heavy-duty shipping company by the name of Red Box Energy Services was denied a renewal of his existing Singaporean work visa.

Done in consequence with Red Box’s designation by the US Treasury more than a month earlier as a “sanction-breaching” company for its commercial role in helping Russia ship structural parts of its new “Arctic LNG 2” energy pipeline, the move represents a slap in the face for Adkins personally by the Singaporean government, given his pivotal role as one of the original company founders along with pushing for the company’s relocation to Singapore in August 2020. More significantly, Adkin’s loss of his work visa has also led to his forced resignation as Red Box CEO, leaving the company vulnerable to navigating through its appeal against the US government to remove it from the international sanctions list.

The issue which has resulted in the defenestration of Adkins, a well-established and notable international shipping industry figure from corporate life in Singapore, lies in the company’s most-prized ships: two highly advanced ultra-heavy module carriers that are also specifically designed for year-round transportation of ultra-heavy construction modules in polar waters in the face of bitter cold and pack ice. Named Audax and Pugnax respectively, these two ships allow Red Box to target the most valuable high-end portions of the marine heavy transport global market, which has in recent years seen an explosion in demand for such vessels to ship components for offshore or remote energy infrastructure projects.

What apparently spurred the US Treasury action was Red Box’s handling of Russian contracts linked to its “Arctic LNG 2” energy infrastructure project. Russia’s primary way of earning hard currency in the face of US-led global economic sanctions due to the ongoing Russo-Ukrainian war lies in energy exports. Despite the death of the significant “Nord Stream 2” natural gas pipeline project which was meant to allow for direct exports of Russian natural gas to Western Europe, Russian president Vladimir Putin and the Russian political establishment are doubling down on increasing oil and gas production not only to sustain its energy export economy, but more significantly meet the quid-pro-quo demand of China and the Chinese Communist Party: more Russian energy supplies in exchange for political and material support to keep Russia’s war in Ukraine burning.

When Red Box and its two advanced cargo vessels were put on a global sanctions blacklist by the US Treasury in May, the company and Adkins were quick to protest. While Adkins supported calls to close off sanctions loopholes on service providers for the Russian “Arctic LNG 2” project, he labeled the US Treasury’s decision to blacklist his company and his two most important vessels as overreach. Red Box immediately engaged legal advisers to launch an appeal.

Singapore authorities lifted Adkins’ work visa even before Red Box’s appeal had been concluded on the sanctions blacklisting. One of the most important ideals in society at large, but even more so in both the corporate world as well as a highly regulated and regimented country like Singapore, which is never slow to boast of its safety and stability being a product of its “rule of law” is the respecting of due process and appeals.

Red Box and Adkins have stated that their basis of appeal to rescind the sanctions against the company and its two cargo vessels is due to the Russian structures being transported were of “simple steel frames,” hardly something labeled as sanctionable in the existing regime. Another more salient point of relevance to the latest developments is that the US has not imposed personal sanctions on Adkins despite him being Red Box’s CEO. He isn’t personally liable.

In this light, it’s inexplicable why Singapore would choose to rescind Adkin’s work visa when he isn’t personally targeted with sanctions for his company’s business dealing with Russia, and when a final decision on the ongoing sanctions blacklist brouhaha has yet to be reached pending Red Box’s appeal to the US government. Whilst Adkins tried to sound magnanimous in his comment to the Financial Times (“There’s a certain amount of embarrassment and disappointment that comes with no longer being the CEO,” Adkins said. “But I accept the consequences of the sanctions, even though I don’t agree with them.”), his unceremonious exiling from a country not of his birth (Adkins is a US-born citizen) that he chose during the Covid-19 pandemic to set up business in makes a mockery of the faith and belief he had in Singapore to start with.

Ill sentiment is swirling within Singapore’s expat community and MNC business leaders in reaction to Adkins’ loss of his work visa and his subsequent ouster as Red Box CEO. This is perhaps the most significant demonstration of a constant undercurrent of fear in the minds of every foreigner in Singapore: that it might not require breaking a Singaporean law to see their life in the country end abruptly, if just giving a perception of “attracting/being trouble” to the government is enough to trigger expulsion.

The rescinding of Adkins’ work visa is also likely to be noticed by Beijing, whose political establishment will likely note that when Singapore arrested 10 Fujian-origin individuals in August 2023 as part of the country’s largest-ever money laundering bust, Singaporean politicians took great pains to counter any notion that the arrests had been made by request of the Chinese government due to the coincidental timing of the then-Chinese foreign minister Wang Yi’s visit to the country mere days before the arrests happened. What looked like a display of adherence to the principle of safeguarding non-interference by external powers in its internal affairs, is now shown to be entirely subjective with the decision to pre-emptively rescind Adkins’ work visa on grounds of reputational risk vis-à-vis the US and subjective perception of Adkins. If actions speak louder than words, then Singapore has just shown China and the world that it is aligned with the US in geopolitics and international affairs.