Alcon Laboratories (Ft Worth, TX), as well as the Swiss Pharmaceuticals and Management components of the firm, agreed to a $7,617,150 settlement for non-egregious, but not self reported, violations of the Sudan (61 violations) and Iran (452 violations) sanctions program from 2008 through 2011. The firm sold and exported surgical and pharmaceutical products to distributors located in the 2 countries.
The statutory maximum penalty for the violations was $138,982,584 , but the base penalty was $16,927,000.
Tell us, OFAC, how you cut the fine in half…
OFAC considered the following to be aggravating factors in this case:
(1) Alcon demonstrated reckless disregard for U.S. sanctions requirements by having virtually no compliance program, despite significant business involving the exportation of goods from the United States to Iran and Sudan, and by failing to take adequate steps to investigate a third-party freight forwarder’s cessation of shipments to Iran on behalf of Alcon;
(2) Alcon and its then-senior management knew of the conduct giving rise to the Apparent Violations; and
(3) Alcon is a sophisticated multinational corporation with extensive experience in international trade.
OFAC considered the following to be mitigating factors in this case:
(1) harm to U.S. sanctions program objectives was limited because the exports involved medical end-use products that were licensable under the Trade Sanctions Reform and Export Enhancement Act of 2000, and in fact had been previously and subsequently licensed by OFAC for Alcon;
(2) Alcon has no prior OFAC sanctions history, including receipt 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, making it eligible for “first violation” mitigation of up to 25 percent;
(3) Alcon took remedial action by ceasing the unlicensed exports to sanctioned countries, initiating an internal investigation of the Apparent Violations, and instituting a robust compliance program that now includes:
(a) updated or newly-created corporate export and trade sanctions compliance documents,
(b) enhanced trade compliance training, and
(c) enhanced compliance procedures for requesting OFAC licenses; and
(4) Alcon substantially cooperated with OFAC’s investigation, including by providing detailed and well-organized information and entering into several statute of limitations tolling agreements with OFAC.
It should be noted that this is a multi-agency settlement – OFAC only gets about $1.3 million, and the Bureau of Industry and Security (since this was an export control issue) gets a piece, too…