A U.S. company has agreed to pay $216,464 to settle its potential civil liability for apparent violations of the Iran Transactions and Sanctions Regulations, according to information from the Treasury Department’s Office of Foreign Assets Control.
OFAC states that as a result of the company’s failure to act on multiple apparent warning signs it exported 19 shipments of goods from the U.S. to two European companies with reason to know the goods were intended specifically for supply, transshipment, or reexportation to Iran. The warning signs included customer interest in the Iranian market, the inclusion of Iran in the authorized sales territory, obfuscated end-user requests, engagement with Iranian nationals at European trade shows, and requests to remove a “Made in USA” label.
The statutory maximum civil monetary penalty amount for the apparent violations is $5.4 million, but OFAC determined that the company voluntarily self-disclosed the apparent violations and that they constitute a non-egregious case. Accordingly, the base civil monetary penalty amount is $343,595, and the settlement amount reflects OFAC’s consideration of the general factors under the enforcement guidelines. Aggravating factors include that the company’s senior leadership was or should have been aware of the reexports to Iran in some cases and was aware in others. Mitigating factors include that the company strengthened its trade compliance procedures, including by hiring outside counsel to help improve its sanctions compliance and export policies and procedures, requiring customers to sign end-user and end-use certificates, requiring end-user certificates from secondary and tertiary buyers of reexported products, and adding a destination control statement to the footer of certain trade documents.
OFAC states that this enforcement action highlights the importance of identifying and assessing warning signs that indicate a foreign trade partner may be reexporting goods to a sanctioned jurisdiction. In particular, U.S. businesses should seek transparency when dealing with foreign trade partners and follow up on activities that raise concerns or suspicion. For example, should a foreign trade partner indicate an interest in reexporting goods to a sanctioned jurisdiction, a U.S. business should actively communicate with the partner about relevant trade restrictions, review relevant trade documents, and conduct other risk-based due diligence to ensure the trade partner understands the relevant prohibitions and does not engage in violative activity.
For more information on sanctions compliance, please contact attorney Kristine Pirnia via email.
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