Menu Home

Starting off the New Year with a civil penalty (a small one)…

Ellman International has agreed to a $191,000 civil penalty for non-egregious violations of the Iran Transaction Regulations that were not voluntarily self-disclosed. The transactions were for exports of medical equipment to Iran and the hiring of an Iranian physician. The base penalty amount was $426,000 for transactions totaling $317,211, so the eventual penalty was apparently a higher percentage of the base than a lot of the recent big fines.

What went into the calculation?

The settlement amount reflects OFAC’s consideration of the following facts and circumstances, pursuant to the General Factors under the Enforcement Guidelines: the transactions appear to have been undertaken by Ellman’s prior owners willfully with knowledge that such transactions likely constituted violations of U.S. law—for instance, Ellman entered into an agreement with a Dubai company to act as a middleman for the sale of Ellman products to Iran, apparently for the purpose of evading sanctions; Ellman’s senior management prior to the 2008 change in ownership actively participated in the conduct giving rise to the apparent violations; Ellman did not have a sanctions compliance program in place at the time of the apparent violations; the transactions likely would have been eligible for an OFAC license; Ellman’s purchasers and new owners/management substantially cooperated with the investigation by: promptly bringing to OFAC’s attention the full scope of the prohibited conduct that had transpired within the company and was discovered after its purchase, providing all requested information in a responsive and well-organized fashion, and agreeing to toll the statute of limitations and extend the tolled period several times; OFAC has no record of prior sanctions enforcement matters involving Ellman; and the new owners/management of Ellman undertook significant remedial measures, including implementing a sanctions and export compliance program.

Again, similar to the smallish fine to Bank of Tokyo Mitsubishi UFJ, this penalty is not trumpeted on the Recent Actions page, but requires you to drill down 3 clicks to get to the details. Big enough to report, but not big enough to scream from the rooftops.

Links:

OFAC Enforcement Information update

Categories: OFAC Updates Settlements

eric9to5

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: