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Facilitating Third-Country Export to Sudan Nets OFAC Penalty

Wednesday, October 11, 2017
Sandler, Travis & Rosenberg Trade Report

The Office of Foreign Assets Control reports that a U.S. company has agreed to pay $372,465 to settle its potential civil liability for three apparent violations of the Sudanese Sanctions Regulations. OFAC states that this company facilitated the sale and shipment of Canadian-origin paper from Canada to Sudan by actively discussing, arranging, and executing the export transactions.

The statutory maximum civil monetary penalty for the apparent violations was $853,746 and the base penalty was $445,000. OFAC considered the following to be aggravating factors: (1) the company exhibited reckless disregard for U.S. sanctions requirements by failing to exercise a minimal degree of caution or care with regard to the apparent violations; (2) company personnel appear to have attempted to conceal the ultimate destination of the goods from a U.S. financial institution serving as the confirming bank on a letter of credit with respect to two of the apparent violations; (3) multiple company personnel, including individuals in supervisory or managerial positions, had actual knowledge of and were actively involved in, or had reason to know of, the conduct that led to the apparent violations; (4) the company is a large and commercially sophisticated company; (5) the company’s compliance program was either non-existent or inadequate at the time of the apparent violations; and (6) the company did not initially cooperate with OFAC’s investigation, particularly when it submitted materially inaccurate, incomplete, and/or misleading information. In addition, the company did not voluntarily disclose the apparent violations to OFAC.

On the other hand, the apparent violations constitute a non-egregious case and there were two mitigating factors: (1) the company has no prior OFAC sanctions history and had not received a penalty notice or finding of violation in the five years preceding the earliest date of the transactions giving rise to the apparent violations; and (2) the company has taken remedial steps, including by updating its employee manual to include additional information concerning economic sanctions, implementing new compliance policies, and administering company-wide OFAC compliance training.

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