Background

The Office of Foreign Assets Control reports that a U.S. company has agreed to pay a $435,003 penalty regarding 61 apparent violations of Iran-related sanctions. OFAC states that this action demonstrates the importance of developing and maintaining effective, risk-based sanctions compliance controls, even for companies operating predominantly within the U.S.

The company at issue sells its products exclusively to U.S. consumers, does not export goods or services, and does not market itself outside the U.S. As a result, company officials said they were not attuned to U.S. sanctions laws and regulations and therefore allowed the outsourcing of work to an Iranian company when demand for the U.S. company’s services exceeded its available resources. OFAC said this demonstrates the risk of violating U.S. sanctions even in isolated or sporadic international business or contracting activities and the need to train and enable staff to identify and address potential violations.

The statutory maximum civil monetary penalty in this case is $17.3 million and the base penalty amount is $725,004. OFAC said aggravating factors included the company’s failure to conduct basic due diligence and senior management’s knowledge of the conduct at issue. However, the final penalty amount reflected mitigating factors such as the company’s self-disclosure and remedial measures, including developing and implementing an export compliance policy.

For more information on sanctions penalties and compliance, please contact attorney Kristine Pirnia via email.

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