Dublin firm set to be wound up after Russia sanctions

The directors of a Dublin-based company have begun winding up proceedings after the company was sanctioned by the US treasury department for trading activity that supported “Russia’s military-industrial base”.

Damien Murran and Enda Lowry of Teneo Restructuring Ireland were on Wednesday appointed as provisional joint liquidators of Cubit Semiconductor Limited, which has a registered address at Milltown, Dublin 6.

Cubit was sanctioned in February in a major wave of sanctions by the US treasury department’s office of foreign assets control (OFAC), which coincided with the second anniversary of Russia’s invasion of Ukraine.

A press release by OFAC stated that “Cubit Semiconductor Limited has made dozens of shipments of sensitive electronic components” to JSC Mikron, a Russian manufacturer and exporter of microelectronics. Mikron was sanctioned in March 2022.

Cubit was added to the sanctions list published for “operating or having operated in a sector of the Russian Federation economy determined to support Russia’s military-industrial base”.

The directors of Cubit Semiconductor Limited are two Korean nationals, Jae Sik Ban and Joung Ok Hong, documents show.

In May Cubit filed proceedings against AIB, claiming that it had been wrongly sanctioned and petitioning AIB to unfreeze its bank accounts.

The filings in that case show the company had a turnover of €4.9 million in 2023. In a grounding affidavit one of the company’s directors, Jae Sik Ban, said the company was “highly profitable and successful and [had] significant cash reserves”.

It says that its trading with Mikron, the Russian company, had taken place before Mikron was placed on OFAC’s sanctions list. The company also argued that AIB should not have frozen the accounts because “the sanctions issued by OFAC did not … have any grounding in European or Irish law, nor are they enforceable in Irish law”.

The effect of the sanctions, according to the court papers, “has been nothing short of catastrophic. The [company] has become inert in any meaningful commercial sense, and this has led to reverberations for the directors, the staff, the assets, and the family involved”.

The court papers stated in May that the company is owed €160,000 by its clients and owes $260,000 to its suppliers, and was three months behind on salaries, with an annual wage bill of €370,000.

Due to the liquidation, that case is likely to fall away.