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Company Fined for Exports to Restricted Entity in China

Monday, August 17, 2015
Sandler, Travis & Rosenberg Trade Report

The Office of Foreign Assets Control reports that a Maryland company has agreed to pay $78,750 to settle potential civil liability for two alleged violations of the Weapons of Mass Destruction Proliferators Sanctions Regulations. OFAC states that the company shipped three duct fabrication machines to a Chinese firm listed as a specially designated national and received payment in connection with that export without OFAC authorization.

The maximum penalty for the alleged violations was $1 million and the base penalty was $250,000. Among the aggravating factors are that the company failed to exercise a minimal degree of caution or care with respect to OFAC sanctions, had knowledge that the transaction involved an SDN and did not have a sanctions compliance program in place at the time of the transaction. On the other hand, the company has not received a penalty notice or finding of violation from OFAC in the five years preceding the date of the transaction giving rise to the alleged violations, is a small, family-owned business with only ten employees, took remedial steps to implement a sanctions compliance program, and substantially cooperated with OFAC by responding promptly and completely to its additional requests for information and documents.

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