International Trade Law News

Published by Jacobson Burton Kelley PLLC

The Treasury Department's Office of Foreign Assets Control's (OFAC) has made significant changes to its monthly compilation of civil enforcement actions. In OFAC's monthly civil penalty report issued on October 12, 2005, OFAC, for the first time, released specific details about the alleged violation and other information regarding the terms contained in the settlement agreement. This information, which is being released as part of OFAC's efforts to make the civil penalty process more transparent, will greatly assist counsel, exporters and financial institutions in understanding the types of activities that lead to violations of the sanctions regimes that OFAC administers and enforces.

OFAC's monthly civil penalty report issued on October 12, 2005 notes that the agency entered into the following settlements with four companies since the last report was issued:

Archer Daniels Midland (ADM) Company, of Decatur, Illinois, agreed to remit $13,750 to settle allegations of violations of the Cuban embargo between February and March 2000. OFAC alleged that Finora Canada Ltd. (Finora), a wholly owned subsidiary of ADM, entered into a contract with an entity in which the government of Cuba has an interest. During the performance of the contract, Finora engaged in multiple export transactions. ADM did not voluntarily disclose this matter to OFAC.

Imbsen & Associates of Sacramento, California agreed to remit $2,400 to settle allegations of a violation of the Libyan program in March 2004. OFAC alleged that Imbsen violated the Libyan program then in effect by contracting with an entity in Malta, for the sale of Imbsen software to Al Nibras for Science and Technology, Tripoli, Libya, and accepting payment for the sale. As a term of settlement, Imbsen agreed to enhance its OFAC compliance program. Imbsen did not voluntarily disclose this matter to OFAC.

IndeCorp Corporation, of Chicago, Illinois, agreed to remit $14,520 to settle allegations of violations of the Libyan program between January 2001 and April 2003. OFAC alleged that, at the time prohibitions were in place, IndeCorp exported services, including sales, reservations and marketing support, to an entity, that at the time, was a Specially Designated National of Libya. IndeCorp has represented to OFAC that it has taken remedial measures and made upgrades to its OFAC compliance program. IndeCorp did not voluntarily disclose this matter to OFAC.

Stolt-Nielsen Transportation Group (SNTG), of Greenwich, Connecticut, agreed to remit $16,500 to OFAC in order to settle allegations of violations of the Iran program between December 2000 and February 2001. OFAC alleged that SNTG paid a foreign affiliate’s port expenses in Iran by wire transfer. SNTG has reported upgrades to its OFAC compliance program. SNTG did not voluntarily disclose this matter to OFAC.

The report also indicates that OFAC entered into settlement agreements with six individuals for violating the Cuban embargo (OFAC does not release the names of individuals). In four of the cases, the individuals agreed to pay civil penalties totaling $4,875 for allegedly violating the Cuban embargo by engaging in travel-related transactions incident to travel to Cuba. According to OFAC, the travel-related transactions included, but were not limited to, the purchase of food, drinks, entertainment, lodgings, ground transportation and incidentals. During their travel to and from Cuba, two of the individuals traveled through Toronto, Canada and two traveled through Nassau, the Bahamas. Two other individuals were penalized a total of $4,000 for allegedly violating the Cuban embargo by engaging in travel-related transactions incident to travel to Cuba and importing merchandise of Cuban origin. In addition to the travel-related transactions, OFAC alleged that each individual imported into the U.S. Cuban-origin goods valued at $750 or less per individual. In their travel to and from Cuba, both of the individuals traveled through Toronto, Canada.

Labels: OFAC