The Office of Foreign Assets Control (“OFAC”) announced today that it had issued a “notice of violation” (but no fine) to Johnson and Johnson (Middle East), Inc. (“JJME”), a New Jersey Corporation, in connection with five shipments by Johnson and Johnson (Egypt) S.A.E. (“JJE”) to Sudan in violation of the Sudanese Sanctions Regulations. No description was given of the shipped goods other than that they were worth $227,818.
Not surprisingly, the violation involved “facilitation” by JJME of the shipments by JJE to Sudan in violation of section 538.206 of the Sudanese Sanctions Regulations. OFAC did not detail how JJME facilitated the shipments other than by saying that it did so by “coordinating and supervising” those shipments. It’s hard to discern exactly what is meant by “coordinating” a shipment and perhaps some things that might be called “coordination” might also be facilitation.
But the use of the word “supervising” is a bit odd. The Sudanese Sanctions Regulations, in section 538.407, provide the only clarification in all of OFAC’s regulations of the meaning of the slippery term “facilitation.” That section says:
Activity of a purely clerical or reporting nature that does not further trade or financial transactions with Sudan or the Government of Sudan is not considered prohibited facilitation. For example, reporting on the results of a subsidiary’s trade with Sudan is not prohibited, while financing or insuring that trade or warranting the quality of goods sold by a subsidiary to the Government of Sudan constitutes prohibited facilitation.
Supervising the shipments could simply be keeping track of the shipments and perhaps reporting their progress, and that would fall clearly on the side of reporting the trade with Sudan, which is not facilitation according to this definition. Who among us has not been “supervised” by someone sitting on a sofa while we perform some task? And how did that ever “facilitate” that task?
It’s no secret that OFAC has consciously tried to leave the scope of facilitation vague in order to have exporters over-regulate themselves out of fear of transgression and the attendant punishment. By suggesting that supervising is somehow facilitating it contributes to this regulatory ambiguity. If OFAC truly wanted to provide guidance on what it means by facilitation, it would would have described exactly what JJME did with respect to the shipments rather than fall back on vague terms that might not really even describe facilitation as anyone understands it.