On 6 March 2014, Ubiquiti Networks, Inc., a US company, agreed to pay $504,225 to the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) to settle apparent violations of the Iranian Transactions and Sanctions Regulations. The apparent violations involved the re-export of Ubiquiti’s goods for broadband wireless connectivity to Iran, worth at least $588,938, by distributors based in the United Arab Emirates and Greece. Ubiquiti had entered into an agreement granting the UAE distributor exclusive rights to distribute Ubiquiti’s goods in Iran, and OFAC alleged that Ubiquiti had knowledge or reason to know that the goods sold to the Greek distributor were intended specifically for re-export to Iran.
In determining the settlement amount, OFAC found that Ubiquiti did not voluntarily disclose the apparent violations but that this constituted a non-egregious case. Aggravating factors considered by OFAC included that Ubiquiti demonstrated reckless disregard of US sanctions requirements, Ubiquiti had no OFAC compliance programme at the time of the apparent violations, members of Ubiquiti’s senior management knew or had reason to know that Ubiquiti products were being re-exported to Iran, and the apparent violations occurred over a period of five years. The mitigating factors considered by OFAC included that Ubiquiti had no prior sanctions history, cooperated with OFAC during its investigation, and has since taken remedial action in response to the apparent violations.