The American Steamship Owners Mutual Protection and Indemnity Association, Inc. (the “American Club”) just got fined $348,000 for 55 non-egregious violations of the Cuban, Iranian and Sudanese sanctions programs that they did not voluntarily self-disclose. The transactions were maritime Protection and Indemnity (P&I) insurance claims, Letters of Undertaking (LOU – will have to look that one up) and letters of indemnity for LOUs. The total base penalty for all the violations, which all occured between 2003 and 2007, was $1,729,000.
So, why was almost 80% knocked off the base penalty?
The American Club had actual knowledge or reason to know that some P&I claim activity and LOUs involved sanctioned countries; and the American Club is a sophisticated commercial entity. OFAC considered the following to be mitigating factors in this case: the American Club’s conduct does not appear to have been willful or reckless; the P&I claims and LOUs constituting the apparent violations may have been licensable at the time the transactions occurred; the size of operations, financial condition, and other relevant factors related to the individual characteristics of the American Club; the American Club had not received a penalty notice or Finding of Violation from OFAC in the five years preceding the date of the transactions giving rise to the apparent violations; the American Club took appropriate remedial action following the apparent violations; and the American Club cooperated with OFAC, including by providing all information in a responsive, well-organized fashion, and by signing a tolling agreement and two extensions to that agreement.