The Treasury Department’s Office of Foreign Assets Control reports that a Singapore company has agreed to pay $12.0 million to settle its potential civil liability for 104 apparent violations of the International Emergency Economic Powers Act and the Iranian Transactions and Sanctions Regulations. OFAC states that this enforcement action highlights the sanctions compliance obligations of all individuals and entities that conduct business in OFAC-sanctioned jurisdictions or with OFAC-sanctioned parties and that also process transactions directly or indirectly through the U.S. or involving U.S. companies or U.S.-origin goods, services, and technology.
According to OFAC, the company violated a written assurance to the Singapore bank where it did business that it would not route any transactions related to Iran through that bank. Specifically, OFAC states, the company appears to have originated from its account with the bank 104 U.S. dollar wire transfers totaling more than $11.1 million that were destined for third-party vendors (including several Iranian parties) that supplied goods or services to or for the company’s energy projects in Iran. All of these funds transfers were processed through the U.S., causing at least six separate banks to engage in the unauthorized exportation or reexportation of financial services from the U.S. to Iran, but none contained references to Iran, the Iranian projects, or any Iranian parties.
Both the statutory maximum and base civil monetary penalty amounts for the apparent violations were $38.2 million. OFAC considered the following to be aggravating factors: (1) the company willfully and recklessly caused apparent violations of U.S. economic sanctions by engaging in, and systematically obfuscating, conduct it knew to be prohibited, including by engaging in a pattern or practice that lasted for 10 months; (2) the company’s then-senior management had actual knowledge of, and played an active role in, the conduct underlying the apparent violations; (3) the company’s actions conveyed significant economic benefit to Iran and/or persons on OFAC’s list of specially designated nationals and blocked persons by processing dozens of transactions that benefited Iran’s oil, gas, and power industries; and (4) the company is a commercially sophisticated company that engages in business in multiple countries. In addition, OFAC determined that the company did not voluntarily self-disclose the apparent violations, which constitute an egregious case.
OFAC considered the following to be mitigating factors: (1) the company has not received a penalty notice, finding of violation, or cautionary letter from OFAC in the five years preceding the date of the earliest transaction giving rise to the apparent violations; (2) the company has undertaken remedial steps to ensure compliance with U.S. sanctions programs; and (3) the company provided substantial cooperation during the course of OFAC’s investigation, including by submitting detailed information in an organized manner and responding to several inquiries in a complete and timely fashion.