he knew Iran was the ultimate destination. Scott did not have the required U.S. government license for an export to Iran. In addition, Scott failed to maintain appropriate records, made false or misleading statements to federal agents, produced falsified emails, and failed to file the Electronic Export Information (EEI). The Denial Order resolves the Charging Letter and prohibits Scott, Scott Communications, Inc., and Mission Communications, LLC from participating in any transaction involving items subject to the EAR or exported from the United States.
The original Charging Letter can be found here. The Settlement Agreement can be found here.
Notably. The Charging Letter and Settlement Agreement suggest that Jordan is a recurrent transshipment point for U.S.-origin products destined for Iran. Proximity to the sanctioned country is an important determinant for transshipment countries. Companies should be aware of this fact when conducting business in the region.
Iran-Related Designations (OFAC Actions)
Iranian International UAV Procurement Network. On March 9, OFAC designated five companies and one individual constituting a China-based network designed to procure aerospace components for the Iran Aircraft Manufacturing Industrial Company (HESA). HESA has supported the production of the Shahed-136 UAV. Yun Xia Yuan, a Chinese-based employee of S&C Trade PTY Co., Ltd, was the sole individual designated. The OFAC press release can be found here. “Shadow Banking” Network. On March 9, OFAC designated 39 entities involved in a “shadow banking” network that aimed to give sanctioned Iranian companies like Persian Gulf Petrochemical Industry Commercial Co (PGPICC) and Triliance Petrochemical Co Ltd access to the international financial system. The multijurisdictional OFAC action designated entities from numerous countries, including Hong Kong, Pakistan, Turkey, and the UAE. The OFAC press release can be found here.
Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and Wells Fargo Bank, N.A.
Those involved. Wells Fargo, an American multinational financial services company.
Charges with penalties. 124 apparent violations of multiple OFAC sanctions regimes. The bank agreed to pay $30,000,000 in penalties to OFAC and $67.8 million to the Federal Reserve Board. The maximum applicable OFAC civil penalty was over $1 billion. What happened? Wells Fargo took ownership of the Global Trade Services (GTS) business unit of Wachovia Bank when Wells acquired Wachovia in 2008. According to OFAC, the GTS business unit provided a European bank with a trade finance platform, called Eximbills, that the bank used to violate U.S. sanctions against Iran, Syria, and Sudan. OFAC asserted that Eximbills facilitated approximately $532 million in prohibited transactions and that GTS specifically designed the platform to allow the European bank to engage in these prohibited transactions. The government also argued that Wells Fargo should have known the European bank was using Eximbills to violate sanctions regimes. In announcing its penalty in this matter, OFAC cited as aggravating factors GTS’s “reckless disregard for U.S. sanctions requirements” and the sophisticated nature of Wells Fargo and its predecessor, Wachovia. For mitigating factors, OFAC identified GTS as a small business unit, the relatively limited impact of the conduct as a majority of the violations related to the agriculture, medicine, and telecommunications sectors, a lack of prior misconduct, the termination of the European bank’s access to the technology after the apparent violations were identified, and the extent of remediation.
5 International Trade Enforcement Roundup |
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