On July 20, 2017, OFAC issued a civil monetary penalty of $2 million against ExxonMobil Corp. for violations of the Ukraine-Related Sanctions Regulations, as in May 2014 presidents of the company’s U.S. subsidiaries signed eight legal documents related to oil and gas projects in Russia with a person named in April 2014 to the Specially Designated Nationals and Blocked Persons List (SDN List).
OFAC noted that it does not interpret its Regulations to contain a “personal” versus “professional” distinction with respect to persons on the SDN List; the signing of a contract with an SDN is prohibited, even if the entity on whose behalf the SDN signs is not listed.
OFAC determined that ExxonMobil did not voluntarily self-disclose these violations. Aggravating factors considered by OFAC included: (1) ExxonMobil’s “reckless disregard” for sanctions requirements when it “failed to consider warning signs” in dealing in the services of the SDN; (2) the knowledge of ExxonMobil’s senior-most executives of the status of the SDN as such at the time the signings occurred; (3) the “significant harm” caused to the Ukraine-related sanctions program objectives; and (4) the sophistication and experience of Exxon Mobil. A mitigating factor considered was that ExxonMobil had not received a penalty notice or Finding of Violation from OFAC in the five years preceding the first date of the conduct forming the basis of the violations.
More information can be found at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20170720.aspx.
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