On February 21, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $506,250 settlement with a Connecticut-based company for five alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR). The settlement resolves potential civil liability for the company’s alleged transactions valued at over $14 million involving the purchase of Iranian-origin cement clinker from a supplier in the United Arab Emirates who misrepresented to the company that the material was not subject to U.S. economic sanctions on Iran.
In arriving at the settlement amount, OFAC considered various aggravating factors, and noted, among that things, that while the company exercised “limited due diligence,” it failed to “substantively address the U.S. sanctions prohibitions in place with respect to Iran despite contemporaneous risk indicators” and “failed to have in place at the time of the alleged violations a compliance program “commensurate with its level of risk.”
OFAC also considered numerous mitigating factors, including (i) the company has not received a penalty or finding of a violation in the five years prior to the transactions at issue; (ii) the company qualifies as a small business entity under U.S. Small Business Administration standards; (iii) the company took extensive preventative and remedial measures; and (iv) the company cooperated with OFAC’s investigation. OFAC further stressed the importance of implementing risk-based compliance measures when “engaging in transactions involving exposure to jurisdictions or persons implicated by U.S. sanctions.”
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