The Office of Foreign Assets Control reports that a U.S. company has agreed to pay $894,111 for indirectly exporting satellite equipment and facilitating service and training to a government-owned entity in Sudan. The company also committed to make a number of personnel changes, including adding a vice president tasked with trade compliance, hiring an additional trade compliance position to support that VP, and creating a new position of senior trade compliance officer and/or chief trade compliance officer.
OFAC states that the statutory maximum civil monetary penalty amount was $1.17 million and the base amount was $584,386. Aggravating factors included the company’s “reckless disregard” for U.S. sanctions requirements and failure to exercise a minimal degree of caution or care, failing to heed warning signs such as an alert from its compliance screening software, and providing shifting explanations and manipulated communications to OFAC, as well as the company’s status as a sophisticated supplier with significant international operations and experience applying OFAC regulations to its business. The sole mitigating factor was that the company had no OFAC violations in the previous five years.
OFAC states that this case (1) highlights the importance of investing in adequate internal controls to identify, interdict, and escalate prohibited transactions and developing internal checks and balances so individual employees are not able to override those controls, (2) demonstrates the risks of proceeding with transactions while a license application is pending with OFAC, and (3) shows that companies engaging in high-risk international transactions should recognize that they cannot shift their OFAC compliance obligations onto their foreign customers or counterparties.
For more information, please contact Kristine Pirnia.
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