In its first enforcement action of 2018, the U.S. Treasury Department’s Office of Foreign Assets Control on June 6 reached a $145,893 settlement agreement with Swedish telecommunications company Ericsson for violating Sudanese sanctions regulations.
According to OFAC, employees of Ericsson AB and its U.S. subsidiary Ericsson Inc. conspired together and with employees of Lebanese telecommunications company BCom Offshore SAL to export and reexport a satellite hub from the United States to Sudan and to export and reexport satellite-related services from the United States to Sudan from late 2011 to mid-2012 in violation of Sudanese sanctions regulations.
The transaction occurred despite Ericsson’s compliance department explicitly warning that “the supply of such a satellite hub to Sudan would violate Ericsson’s internal policy regarding sanctions compliance,” according to the settlement agreement.
OFAC determined that EUS and EAB voluntarily self-disclosed the violation and that the violation constituted an egregious case. The $145,893 settlement agreement is still a modest financial penalty, compared to what the fine could have been.
“This enforcement action highlights the importance of empowering compliance personnel to prevent transactions prohibited by U.S. economic and trade sanctions,” OFAC stated. “Entities should ensure their sanctions compliance teams are adequately staffed, receive sufficient technology and other resources, and are delegated appropriate authority to ensure compliance efforts meet an entity’s risk profile.”
OFAC added, “Sanctions compliance personnel should be equipped with the tools necessary to review, assess, and proactively address sanctions-related issues that arise with ongoing or prospective transactions, customers, or counterparties.”