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$17,500 Penalty on Indian Company for Export of U.S. Goods to Iran

Friday, January 20, 2017
Sandler, Travis & Rosenberg Trade Report

The Treasury Department’s Office of Foreign Assets Control reports that an Indian company has agreed to pay $17,500 to settle potential civil liability for an apparent violation of the Iranian Transactions and Sanctions Regulations. According to OFAC, the company’s Singapore subsidiary placed an order for oil rig supplies from a vendor in the U.S. with the intended purpose of reexporting the goods from the United Arab Emirates to an oil rig in Iranian territorial waters.

The statutory maximum civil monetary penalty amount for the apparent violation was $250,000 and the base penalty amount was $25,000. OFAC considered the following to be aggravating factors: (1) the company failed to exercise a minimal degree of caution when it reexported U.S.-origin goods from the U.S. to an oil rig while it was located in Iranian territorial waters; (2) the company’s reexportation aided in the development of Iran’s energy resources; (3) the company is a large sophisticated company with approximately 15 oil rigs doing business throughout the world; and (4) the company did not have an OFAC compliance program in place at the time of the transaction despite conducting business with the U.S. and/or U.S. companies in relation to the petrochemical and offshore drilling sectors.

OFAC considered the following to be mitigating factors: (1) the company has no prior sanctions history with OFAC and has not received a penalty notice or finding of violation in the five years preceding the date of this apparent violation; (2) the company took remedial action by instituting an OFAC sanctions compliance program; and (3) the company displayed substantial cooperation throughout the course of OFAC’s investigation, including by conducting an internal look-back investigation for potential ITSR violations, providing OFAC with detailed and well-organized information, and entering into multiple tolling agreements with OFAC.

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