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OFAC Enforcement Action Against Weatherford International Ltd

The Swiss oil services company, which has US operations and which trades on the NY Stock Exchange, has agreed to a civil monetary penalty of $91,026,450 for transactions with Cuba, Iran and Sudan totalling $107,089,941. These violations, which include 441 oilfield equipment and services transactions with Cuba, 100 with Iran and 45 with Sudan, all occured between 2005 and 2008. They were egregious and not self-disclosed.

Why the final amount? These are the aggravating factors:

  • Weatherford’s conduct was willful;
  • Various executives and senior management in Weatherford companies knew or had reason to know of the conduct that led to the apparent violations;
  • The apparent violations constituted a long-term pattern of conduct;
  • The apparent violations resulted in significant harm to U.S. sanctions programs objectives;
  • Weatherford is a large and sophisticated oilfield services company;
  • Weatherford’s compliance program at the time of the apparent violations was substantially deficient.

And these are the mitigating factors:

  • Weatherford has not been the subject of prior OFAC penalties or other administrative action;
  • Weatherford undertook significant remedial steps to ensure future compliance;
  • Weatherford substantially cooperated with OFAC’s investigation of the apparent violations. Specifically, Weatherford retained outside counsel to conduct a comprehensive internal investigation and submitted extensive documentation and reports regarding potential sanctions violations.
  • Weatherford agreed to toll the statute of limitations.

It should be noted that this settlement is part of a slightly bigger global settlement, which includes the Bureau of Industry and Security (BIS), which is part of the US Commerce Department, and the US Attorney's Office for the Southern District of Texas. The fine is actually considered settled by the $50 million fine imposed by the US Attorney's Office and the $50 million fine imposed by BIS. There are also investigations by the Department of Justice into violations of the Foreign Corrupt Practices Act (FCPA) as well as an investigation by the Securities and Exchange Commission (SEC).

The company has also agreed to external audits of its sanctions compliance for 2012, 2013 and 2014.

All told, the fines, which include $65 million for the SEC violations and $87 million for the FCPA violations, add up to more than $252 million. The press release from the Department of Justice goes into all the gory details of what the firm did.

Mr. Watchlist is very thankful to not be working there today…yikes!

Links:

OFAC Enforcement Notice

Department of Justice Press Release

 

Categories: Cuba Sanctions Iranian Sanctions OFAC Updates Settlements Sudan Sanctions

eric9to5

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