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Iran Export Penalty Mitigated for Remedial Steps, Cooperation

Monday, June 27, 2016
Sandler, Travis & Rosenberg Trade Report

The Treasury Department’s Office of Foreign Assets Control announced June 23 a $107,691 penalty against a North Carolina company to settle charges that it violated the Iranian Transactions and Sanctions Regulations by exporting medical products to a United Arab Emirates distributor with knowledge or reason to know that the goods were ultimately destined for Iran.

OFAC states that the statutory maximum civil monetary penalty amount for the apparent violations was $1.13 million, the base civil monetary penalty was $159,542, and the settlement amount reflects OFAC’s consideration of the following.

- aggravating factors include (1) the company acted willfully by exporting products to its foreign distributor with knowledge or reason to know that the exports were ultimately destined for Iran in apparent violation of U.S. law, editing its destination control statement at the request of its distributor and continuing to conduct business with its distributor after receiving confirmation that the distributor had reexported its products to Iran in apparent violation of U.S. law; (2) the company’s former CEO and former international sales manager knew that the exports at issue were ultimately destined for Iran; and (3) the company did not have a sanctions compliance program in place at the time of the apparent violations

- mitigating factors include (1) harm to U.S. sanctions program objectives was limited because the exports involved medical end-use products that were likely eligible for a specific license; (2) the company has no prior OFAC sanctions history, including no penalty notice or finding of violation in the last five years, making it eligible for “first violation” mitigation of up to 25 percent; (3) the company took remedial steps, including the implementation of an OFAC compliance program; and (4) the company cooperated with OFAC’s investigation and agreed to toll the statute of limitations for a total of 513 days

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