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U.S. company pays $1.87 million settlement for Chinese subsidiary’s trades with Iran

Settlement for Chinese subsidiary’s trades with Iran

The U.S. Treasury Department, Office of Foreign Assets Control (OFAC), today announced that a U.S. company and its Chinese subsidiary agreed to pay approximately $1.87 million to settle violations of the Iranian sanctions regulations.

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According to the OFAC release [PDF 142 KB], the U.S. company began acquisition negotiations with the Chinese entity in 2011, at which time the U.S. company discovered that the Chinese entity exported products to Iran. The U.S. company then undertook certain steps and training to stop these trades with Iran.

However, the Chinese subsidiary between June 2013 and the end of 2014, exported and attempted to export 23 shipments of power tools and spare parts (having a total value of about $3.2 million) to Iran or to a third country with knowledge that these goods were intended specifically for supply, transshipment, or re-exportation (directly or indirectly) to Iran. These transactions would have been prohibited if engaged in by a U.S. person.

The U.S. company voluntarily self-disclosed the apparent violations on behalf of its Chinese entity. OFAC determined that these violations constituted an “egregious case.”


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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