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$350,000 Civil Penalty for Improper Medical Device Sales to Iran

Tuesday, September 10, 2013
Sandler, Travis & Rosenberg Trade Report

The Treasury Department’s Office of Foreign Assets Control announced Sept. 6 that a California company has agreed to pay $346,530 to settle potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations. According to OFAC, the Switzerland branch office of the company’s U.S. subsidiary sold X-ray generators to an entity in Iran, attempted to sell X-ray generators and a medical digital imaging workstation to an entity in Iran, directed an affiliate in Canada to make three shipments of X-ray generators and one shipment of automatic exposure control field kits to an entity in Turkey, and referred to its Canadian affiliate an order it had received from an entity in Iran for a medical digital imaging workstation and one X-ray generator.

The base penalty amount for the apparent violations was $1.1 million. OFAC notes that the company’s delay in assessing the applicability of U.S. sanctions laws to the Switzerland branch office of its subsidiary demonstrated a reckless disregard of these laws and that the company lacked an adequate risk-based OFAC compliance program at the time of the apparent violations. On the other hand, the company voluntarily disclosed the apparent violations, undertook a thorough investigation, implemented significant remedial measures and has no history of prior OFAC violations. In addition, the apparent violations represent a very small percentage of the company’s overall sales and the exports at issue likely would have been licensed by OFAC under existing licensing policy.

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