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$2.1 Million Penalty for Purchasing Items Made of Cuban-Origin Material

Monday, November 17, 2014
Sandler, Travis & Rosenberg Trade Report

The Office of Foreign Assets Control announced Nov. 13 that an Oregon company has agreed to pay $2.06 million to settle potential civil liability for apparent violations of the Cuban Assets Control Regulations in connection with its subsidiary’s purchase of nickel briquettes made or derived from Cuban-origin nickel.

The total transaction value for the apparent violations was $6.2 million and the base penalty amount was $3.05 million. OFAC considered the following to be aggravating factors: the company acted with reckless disregard for the Cuba sanctions program by failing to identify, despite the presence of contemporaneous “red flags” in the public domain, that the nickel briquettes were made or derived from Cuban-origin nickel; the company caused significant harm to the Cuba sanctions program and its policy objectives by conducting large-volume and high-value transactions in products made or derived from Cuban-origin nickel, which were ultimately sourced from specially designated nationals; and the company is a commercially sophisticated company with international operations. OFAC considered the following to be mitigating factors: the company has not received a penalty notice or finding of violation from OFAC in the last five years, has enhanced its OFAC compliance plan and conducted a thorough look-back, and cooperated with OFAC’s investigation. OFAC further determined that the company voluntarily self-disclosed the apparent violations, which constitute a non-egregious case.

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