A recent fine imposed by the Office of Foreign Assets Control (OFAC) in the US demonstrated the dangers of disregarding US regulations when handling US-controlled items.
Italian business Nordgas S.r.l. has agreed to pay $950,000 to settle its potential civil liability for apparent violations of the US Iranian Transactions and Sanctions Regulations (ITSR).
The US Department of the Treasury highlighted the fine in a recent notice.
The firm, which produces and sells components for gas boiler systems and applications, knowingly reexported 27 shipments of air pressure switches procured by a US company. These consignments were intended for as many as ten customers in Iran over a four-year period.
This meant that its US supplier had indirectly exported its goods to Iran.
Pending an enhancement of its compliance commitments, $650,000 of the settlement will be suspended.
In the associated enforcement statement, OFAC states that the settlement amount reflects its consideration of the ‘General Factors under the Enforcement Guidelines’ and outlines both the aggravating and mitigating factors in this case.
Roger Arthey, chair IOE&IT’s Export Control Profession, advised firms to review these guidelines.
“Export control and sanctions specialists should review and act upon these factors, and those highlighted in other actions, to mitigate the penalties associated with inadvertent non-compliance,” he said.
Trading with the US
When trading with US firms or individuals, or procuring goods from the country, firms should understand that OFAC’s prohibitions can extend not just to their US partners, but also to their foreign trading activities as well.
Foreign companies should not expect their obligations with respect to US sanctions to be fulfilled by their US partners, Arthey warns.
Ineffective management or poor oversight of employees and sales can present a sanctions risk when dealing with US partners, he adds.
“Organisations undertaking such trade should ensure that their export control and sanctions specialists review all proposed transactions in the light of all US regulations to avoid violations and hence penalties, Arthey said.