OFAC Releases April Penalties Information

The United States Department of the Treasury Office of Foreign Assets Control (OFAC) has released a new announcement describing recent penalties imposed for violations of OFAC administered sanctions regulations. In this announcement two companies were penalized for violations of the Iranian Transactions Regulations (ITR) and one individual was penalized for a violation of the Sudanese Sanctions Regulations (SSR).

The total penalties for violations of the ITR was $75,528 and involved a Houston based insurance holding company, HCC Insurance Holdings, Inc., and a New Jersey based medical instruments company, Robbins Instruments, Inc (Robbins). The Robbins penalty announcement highlighted just how careless some companies can be. Robbins was exporting medical instruments to Iran that were licensable under the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) program without said license. Moreover, Robbins had a compliance program in place and continued to export medical products to Iran despite being warned by OFAC of the violation.

The individual who was found to have violated the SSR was involved in facilitating a trade related transaction involving the supply of jute bags in Sudan without an OFAC license. That individual, a Houston resident, was penalized $112,500 for the facilitation of these transactions.

The facilitation provision for which the aforementioned individual was penalized is often over looked and yet provides OFAC the ability to enforce sanctions against a wide range of transactions. Facilitation occurs when a U.S. person carries out some activity which allows for two foreign persons to engage in any activity which is otherwise prohibited. This definition can be applied to a number of complex transactions in order to find violations of OFAC administered sanctions by U.S. persons. As such, those parties with any nexus to a transaction with a targeted country or party should be particularly careful of taking any action in relation to that transaction.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

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