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$125,000 Penalty for Attempted Exports to Iran

Wednesday, October 30, 2013
Sandler, Travis & Rosenberg Trade Report

The Treasury Department’s Office of Foreign Assets Control announced Oct. 25 that a Swedish company has agreed to pay $125,000 on behalf of two subsidiaries to settle potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations. One of the subsidiaries was charged with attempting to export nine high-pressure water jetting pump units (used for industrial pipe cleaning, surface preparation, hydrostatic testing and hydro demolition) from the U.S. to Iran and exporting, reexporting, selling or supplying the pumps from the U.S. to Germany with knowledge or reason to know that the goods were intended specifically for reexportation to Iran. OFAC notes that this action is part of a global settlement with the Bureau of Industry and Security.

The base penalty amount for the apparent violations was $500,000. OFAC notes that the subsidiary demonstrated reckless disregard for U.S. sanctions requirements, including failing to disclose to the parent company that the end destination and end-user of the goods were in Iran. On the other hand, this subsidiary has not received a penalty notice or finding of violation in the last five years; there was no actual sanctions harm since the goods were not reexported to Iran; the nine pumps were seized by U.S. Customs and Border Protection, the subsidiary has already forfeited two of the pumps and $579,026 (partial payment for the pumps), and CBP’s forfeiture proceedings against the remaining seven pumps will not be contested; all three corporate entities took remedial measures to resolve issues related to the apparent violations and prevent future violations; and there was substantial cooperation with OFAC’s investigation.

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