A subsidiary of Thailand-based SCG Chemicals Co. agreed to pay a $20 million fine to the Treasury Department’s Office of Foreign Assets Control (OFAC) over “egregious” violations of sanctions against Iran.

SCG Plastics, which is currently undergoing bankruptcy proceedings in Thailand, allegedly used U.S-based correspondent banks to process 467 transactions worth $291 million related to sales of lranian-origin high-density polyethylene resin (HDPE), according to its settlement agreement released Friday.

Of the alleged sales, 457 represented payments for HDPE products manufactured at an Iranian plant and 10 represented payments to resolve debt to third parties. The sales occurred from 2017-18, OFAC noted.

With SCG Plastics no longer in business, it transferred all assets to Thai Polyethylene Co. (TPE), another subsidiary of SCG Chemicals.

OFAC labeled all 467 sanctions violations as “egregious.” The agency noted that SCG Plastics self-disclosed the 10 third-party debt transactions but not the 457 sales transactions.

The details: In 2005, SCG Chemicals established Mehr Petrochemical Company in Singapore with the National Petrochemical Company of Iran, an Iran-government owned entity, according to OFAC’s enforcement release. In 2009, Mehr began building a petrochemical plant in Iran.

SCG Plastics had its customers send money to pay for products produced by the Iranian plant to bank accounts in Thailand, OFAC alleged. SCG hid the source of the Iranian plant’s products, claiming the products’ country of origin was the “Middle East.” SCG Plastics would also ship the goods manufactured in Iran to the United Arab Emirates, then claim the UAE as the products’ country of origin, OFAC alleged.

OFAC said SCG Plastics “willfully engaged in a persistent, multiyear pattern of conduct to conceal the fact that the HDPE it sold was of Iranian origin, thus demonstrating an intent to evade detection by financial institutions processing the transactions and avoid measures these institutions would likely have taken to comply with U.S. law.” The sales “were a major source of revenue generation for the government of Iran,” the agency added.

Compliance considerations: SCG Plastics cooperated with OFAC’s investigation, turned over the results of an internal investigation, provided information and data promptly upon request, and entered into tolling agreements with OFAC.

TPE adopted a sanctions compliance policy, entered into an agreement with OFAC to maintain certain compliance commitments, and will report to the agency on the status of those commitments for five years.

TPE’s compliance policy includes the creation and adoption of a risk-based U.S. sanctions compliance policy tailored to the company; hiring a new sanctions compliance officer; and implementing sanctions screening policies, procedures, training, and auditing procedures.

“This case highlights the risks and potential costs that non-U.S. companies are exposed to when using the U.S. financial system for transactions that may involve U.S. sanctioned persons or jurisdictions,” OFAC stated in the release. “Commercial activity that might not otherwise violate OFAC regulations—such as the sale of non-U.S. goods by a non-U.S. person to an entity in an OFAC-sanctioned country—can nonetheless result in a violation when the financial transactions related to that activity are processed through or involve U.S. financial institutions.”

SGC Chemicals did not respond to a request for comment.