On 31 December 2014, Epsilon Electronics Inc. (“Epsilon”), a California-based entity, commenced a lawsuit in the US District Court for the District of Columbia seeking judicial review of an OFAC penalty assessment in the amount of $4,073,000 for violations of the Iranian Transactions and Sanctions Regulations.  The alleged violations consisted of exporting car audio and video equipment to the United Arab Emirates for reexport to Iran.  In assessing the penalty, OFAC found that Epsilon knew or had reason to know that the equipment was specifically destined for Iran.  Epsilon is now alleging that the penalties imposed by OFAC violate the Administrative Procedures Act on the grounds that they are arbitrary and capricious, are not supported by substantial evidence, fail to take into consideration OFAC’s own guidance and enforcement guidelines, and are excessive.