The U.S. Department of Treasury’s Office of Foreign Assets Control has fined a Boston-area company for violating Iranian sanctions and using Web developers from that country.
On April 29, the U.S. Department of the Treasury's Office of Foreign Assets Control issued a Pre-Penalty Notice to Blue Robin, Inc. for 33 transactions where Web development services, valued at $205,650, were contracted from an Iranian company called PersiaBME. The transactions took place from approximately January 2009 to July 2010, a violation of the Iranian Transactions and Sanctions Regulations.
Given the chance to respond to the allegations, the firm, a cloud computing developer, claimed that the proposed penalty, $82,260, “was disproportionately higher than other penalties and settlements in similar OF AC enforcement cases.” The company also argued that it “did not show reckless disregard for U.S. sanctions in its transactions with PersiaBME,” was unaware that it was violating U.S. law; and that the harm to U.S. sanctions program objectives was negligible.
Blue Robin added that it should receive mitigation for remedial steps that it took, and continues to take, and that “its lack of a compliance program and failure to implement one should not be considered an aggravating factor.”
The firm argued for a 25 percent reduction to the proposed penalty because this was a first offense and “a cautionary letter would sufficiently promote future compliance and have a deterrent effect.”
OFAC, however, stuck to its initial fine. “No additional mitigation should be provided due to comparisons with other enforcement cases because [we] evaluate each case on its own merits,” it wrote in its response. It added that: “Blue Robin acted recklessly because it knew it was importing services from an Iranian company over a period of more than five years, it sent payments through unlicensed money exchangers instead of through traditional commercial banking channels, and it appears that the company did not take any steps to research the legality of funds transfers to Iran or the importation of services from Iran until after it lost contact with its unlicensed money exchanger.”