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U.S. company pays $870,000 to settle sanctions violations

U.S. company pays to settle sanctions violations

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) today announced that a New York company has agreed to pay approximately $870,000 to settle its potential civil liability for five apparent violations of the weapons-of-mass-destruction proliferators sanctions regulations.

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According to an OFAC release [PDF 225 KB], between February and November 2011, the company processed five electronic funds transfers (totaling approximately $473,000) that pertained to payments associated with blocked vessels as identified by OFAC.

OFAC found:

  • The company’s subsidiaries in China and Turkey negotiated three charter party agreements between multiple third parties regarding the transportation of goods from foreign ports to other foreign ports and connecting the vessels to Iran.
  • The company’s culture of compliance appeared to have been deficient at the time of the apparent violations.
  • The company did not voluntarily self-disclose the apparent violations, and the apparent violations constituted an egregious case.

The release from OFAC concludes:

This case illustrates the benefits companies operating in high-risk industries (e.g., international shipping and logistics) can realize by implementing risk-based compliance measures, especially when engaging in transactions involving high-risk exposure to jurisdictions or persons implicated by U.S. sanctions. Furthermore, this case also illustrates the benefits that companies engaging in international transactions can realize by developing and maintaining a culture of compliance where senior management sets a positive example of compliance and encourages staff to comply with the law. Companies engaging in international transactions should take note of and respond accordingly to sanctions-related warning signs, such as payments that are blocked or rejected by financial institutions for compliance or U.S. economic and trade sanctions purposes.

 

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094
E: labad@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Amie Ahanchian
Managing Director
T: 202-533-3247
E: aahanchian@kpmg.com

Robert Waldrop
Principal
T: 212-954-8117
E: rwaldrop@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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