A Whale of an OFAC Enforcement Action…

This one takes a little research to figure out…

B Whale Corporation, a Taiwanese company which operates the M/V B Whale, was issued a Finding of Violation for taking on crude oil from a tanker owned by the National Iranian Tanker Company, which is subject to OFAC’s Iran sanctions, between August 30 and September 2, 2013. So, how does OFAC have any jurisdiction? The enforcement information says that this occurred while the company was present in Texas bankruptcy court at the time, which gives OFAC jurisdiction. .

So, why only a Finding of Violation?

 

OFAC considered the following to be aggravating factors:

  1. BWC demonstrated reckless disregard for U.S. sanctions requirements while the company and its vessel were subject to U.S. jurisdiction;
  2. BWC took steps to conceal a ship-to-ship transfer of Iranian oil with an Iranian vessel on the SDN List, including by leaving ship logs blank and switching off the vessel’s automatic identification system during the time period corresponding with the ship-to- ship transfer;
  3. BWC knew or should have known that this transaction involved Iranian-origin oil and an Iranian vessel on the SDN List; and 
  4. this transaction provided a significant benefit to Iran because it allowed condensate crude oil from an Iranian vessel identified on the SDN List to be transported to a market in a manner that concealed its origin.
OFAC considered the following to be mitigating factors:

  1. BWC has not been the subject of a penalty notice or Finding of Violation from OFAC in the five years preceding the transaction constituting the violation; and
  2. all of BWC’s assets appear to have been liquidated in bankruptcy. 

I would think that last bullet says it all – what would be the utility of issuing a fine when there is nothing to attach?

Link:

OFAC Enforcement Information

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