CGG Services SA agreed to a settlement of $614,250 for violating the Cuban Asset Control Regulations in new and exciting ways. First, one of the company’s US affiliates supplied goods to a number of vessels between 2010 and 2011 while these ships were in Cuban territorial waters. Secondly, the US company’s Venezuelan subsidiary processed seismic data from Cuba’s Exclusive Economic Zone on 5 occasions – which benefitted a Cuban firm.
The statutory maximum penalty for these non-egregious violations that were not voluntarily self-reported was $2,340,000 – which is $65,000 for each of 36 violations. And the base penalty was $975,000.
And how did OFAC get from $975,000 to $614,250? Child’s play:
- CGG France acted with reckless disregard for U.S. sanctions requirements by exporting U.S.-origin goods to Cuban waters, especially after its U.S. affiliate informed it that such exports could be a violation of U.S. sanctions;
- Veritas Geoservices acted with reckless disregard for U.S. sanctions requirements by performing data processing related to seismic surveys conducted in Cuban waters without determining if there was a Cuban interest in the data;
- CGG France was aware of the conduct giving rise to the alleged violations because it knew where the vessels were located and the origin of the goods;
- The underlying transactions had a total value of $2,758,701 and were related to oil exploration, which likely caused significant harm to U.S. sanctions program objectives by providing a substantial economic benefit to Cuba;
- CGG France and its affiliated companies have not been the subject of a penalty notice or Finding of Violation from OFAC in the five years preceding the earliest date of the transactions giving rise to the alleged violations;
- CGG France took some steps to avoid OFAC violations as part of its compliance program, including removing U.S. personnel and equipment for M/V Vantage prior to it entering Cuba’s territorial waters;
- CGG France has adjusted its supply procedures to minimize the risk of future sanctions violations; and
- CGGVeritas agreed to toll the statute of limitations and substantially cooperated with Enforcement’s investigation.