On 13 November, OFAC announced that ESCO Corporation (“ESCO”), based in Portland, Oregon, has agreed to pay $2,057,540 to settle potential civil liability for purchasing nickel briquettes in November 2007 and June 2011 that were made or derived from Cuban-origin nickel. OFAC determined that ESCO voluntarily disclosed the apparent violations and that they constitute a non-egregious case.

As aggravating factors in the determination of the settlement amount, OFAC considered that ESCO acted with reckless disregard of the sanctions requirements, when it failed to identify that the briquettes were made or derived from Cuban-origin nickel despite  contemporaneous “red flags” in the public domain, that the large volume and high value of the transactions caused harm to the Cuba sanctions program and its policy objectives, and that ESCO is a commercially sophisticated company with international operations.  As mitigating factors, OFAC considered that ESCO has not received a penalty notice of Finding of Violation in the five years preceding the first transaction of the apparent violations, that ESCO has enhanced its OFAC compliance plan and conducted a thorough “look-back”, and that ESCO cooperated with OFAC’s investigation (including by agreeing to toll the statute of limitations).

OFAC Enforcement Announcement