Halliburton Atlantic Limited (HAL) and Halliburton Overseas Limited (HOL) exported goods and services to an oil and gas production consortium which had 5% ownership by Cuba Petroleo (aka Cupet), a state-owned Cuban firm. The value of the 19 invoices issued by Halliburton was $1,189,752.
The statutory maximum penalty for these voluntarily self-reported, non-egregious violations was $1,235,000, while the base penalty was $423,202.
The aggravating factors in OFAC’s decision:
- HAL and HOL acted with reckless disregard for U.S. sanctions by conducting transactions for the benefit of a Consortium without conducting reasonable due diligence to determine who belonged to the Consortium and had a corresponding interest in the Concession;
- HAL and HOL should have known that a Cuban entity belonged to the Consortium because the Consortium operator provided HAL with documents that showed that Cupet was a member, and there were other contemporaneous documents that stated Cupet held an interest in the Consortium, including a news article and a notice in an Angolan government registry;
- Halliburton and its affiliated companies are sophisticated entities that regularly deal in oilfield goods and services around the world; and
- Halliburton’s sanctions compliance program was inadequate because it did not include a procedure to screen all of the Consortium members.
and the mitigating factors:
- HAL and HOL are eligible for up to 25 percent “first violation” mitigation because they have not been the subject of a penalty notice or Finding of Violation in the five years preceding the date of the earliest transaction giving rise to the apparent violations; and
- Cupet’s interest in the Concession was only five percent, thus reducing the extent of the economic benefit provided to a sanctioned country.