The Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Monday announced a $435,003 settlement with Oklahoma-based manufacturer Alliance Steel regarding apparent violations of Iran sanctions.
The alleged violations related to Alliance’s importation of services from an Iranian engineering company. OFAC deemed the case to be “non-egregious.”
The details: Alliance’s business with the unnamed Iranian company took place between October 2013 and October 2018, according to OFAC. On at least 61 occasions, the regulator states, Alliance engaged with the Iranian firm as a third party to provide engineering services. This relationship was overseen by Alliance’s chief engineer and vice president of engineering, whose brother owned the Iranian company, OFAC noted.
Alliance paid the Iranian company approximately $1.45 million during the period, according to the regulator’s web notice. At least a dozen senior management members knew of the arrangement, but the activity didn’t stop until 2018 because of the company’s lack of familiarity with U.S. sanctions requirements, Alliance said. The arrangement was the company’s only international business relationship at the time, OFAC noted.
Only when a new CEO joined Alliance in October 2018 did the company immediately halt the relationship and self-disclose the apparent violations to OFAC.
Remedial measures: Alliance cooperated fully with OFAC’s investigation. The company terminated the chief engineer that oversaw the Iranian relationship and changed requirements so that international contracting opportunities must be approved by its president.
Compliance takeaway: “This enforcement action demonstrates the importance of developing and maintaining effective, risk-based sanctions compliance controls, even for companies operating predominantly within the United States,” OFAC stated. “U.S. companies can risk violating OFAC regulations if they undertake even isolated or sporadic international business or contracting activities, and do not conduct basic regulatory diligence or have adequate personnel or policies to comply with U.S. sanctions requirements.”
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