140 violations of the ITSR (Iranian Transactions and Sanctions Regulations) resulted in a settlement for $518.063 for the firm, which was doing business as American Export Lines and International Shipping Company (USA). This was for 140 shipments of used and/or junked cars to Afghanistan – via Iran. The violations were not voluntarily self-disclosed, but not egregious in OFAC’s eyes. While the statutory maximum for 140 violations is $35 million (these occured before the recent adjustment in the penalty amounts), the base penalty was only $1,535,000.
Here is OFAC’s justification for dropping the penalty over 60%:
OFAC found the following to be aggravating factors:
- AEL demonstrated a reckless disregard for U.S. sanctions requirements by failing to exercise a minimal degree of caution or care in transshipping goods through Iran;
- AEL’s President and co-owner knew and approved of the transshipments via Iran;
- AEL provided an economic benefit to Iran through its pattern of conduct and the volume of transactions in which it engaged; and
- AEL is a sophisticated international full-service freight forwarder with experience with U.S. export laws and OFAC regulations, particularly the ITSR.
OFAC found the following to be mitigating factors:
- the goods were transshipped through Iran and do not appear to have had an end use in Iran;
- AEL has no prior OFAC sanctions history and has not received a Penalty Notice or Finding of Violation in the five years preceding the earliest date of transactions giving rise to the apparent violations, making it eligible for “first violation” mitigation of up to 25 percent;
- AEL is a small business, and the apparent violations at issue constituted less than one percent of its total shipments during the time period in which the apparent violations occurred;
- AEL had an OFAC compliance program in place at the time of the violations, although it was silent on transshipments via Iran;
- AEL took remedial steps, including ceasing transshipments via Iran before the inception of OFAC’s investigation and amending its compliance policy to address the conduct at issue; and (6) AEL cooperated with OFAC’s investigation, including by agreeing to toll the statute of limitations for a total of 804 days.
Mr. Watchlist has a question: how can you say that AEL is both “sophisticated” (#4 in first list) and “small” (#3 in second list)? That makes no sense – especially when the statement about it being small notes that the 140 violations was less than 1% of its total shipments duritng that time. That implies that the “small” company did a fair amount of business – sounds like they had over 14,000 shipments during the time period….
Links:
Filed under: Civil Monetary Penalties, Enforcement Actions, Iranian Sanctions, OFAC Updates
