Bureau of Industry and Security (BIS)
On February 9, BIS’ Office of Antiboycott Compliance entered into a Settlement Agreement with Pelco, Inc., a U.S. company, to settle 66 alleged violations of the Export Administration Regulations (EAR). BIS charged Pelco with 32 violations of intent to comply with, further or support an unsanctioned foreign boycott by agreeing to refuse to do business with another person pursuant to an agreement with, a requirement of, or a request from or on behalf of a boycotting country. The office also charged the company with 34 violations of failure to report to the Department of Commerce receipt of request to engage in a restrictive trade practice or boycott.
Financial Crimes Enforcement Network (FinCEN)
On February 27, FinCEN announced the assessment of a $7 million civil money penalty against Merchants Bank of California for will violations of the Bank Secrecy Act (BSA). The Office of the Comptroller of the Currency (OCC) simultaneously assessed a $1 million penalty for violations of previous consent orders. Merchant failed to establish and implement an adequate anti-money laundering (AML) program, conduct required due diligence on its foreign correspondent accounts, and detect and report suspicious activity.
Office of Foreign Assets Control (OFAC)
On February 28, OFAC announced that United Medical Instruments, Inc. (UMI), a California-based company, agreed to settle its potential civil liability for 56 alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR) for $515,400. UMI’s obligation to pay the settlement with OFAC will be satisfied by: (a) its compliance with the terms of its September 24, 2013 Settlement Agreement with the U.S. Department of the Commerce’s Bureau of Industry and Security; and (b) its payment of $15,400 to the U.S. Department of the Treasury.
OFAC alleged UMI violated the ITSR when it made sales of medical imaging equipment with knowledge or reason to know that the goods were intended specifically for supply or re-exportation to buyers located in Iran, and when it facilitated the sales of medical imaging equipment from a company located in the United Arab Emirates to Iran. The sales took place between 2007 and 2009.