OFAC Enforcement Action: United Medical Instruments Settles for $515,400

The firm made 56 alleged violations of the OFAC Iranian sanctions when they shipped medical imaging equipment valued just under $2.5MM to a company in the UAE, knowing (or should have known) that the devices would be shipped to Iran. The settlement agreement doesn’t say that the behavior was egregious or not, nor if it was voluntarily self-reported.

Here is what OFAC considered in levying the penalty:

 

OFAC considered the following to be aggravating factors:

  1. UMI willfully exported goods from the United States to Iran with actual knowledge and prior notice that such shipments constituted or likely constituted a violation of U.S. law;
  2. UMI had actual knowledge that it required a license to send and/or export its products to Iran, as demonstrated by a November 2003 license application the company submitted to OFAC; and 
  3. UMI failed to effectively manage and enforce its compliance program.

OFAC considered the following to be mitigating factors: 

  1. the alleged violations occurred due to the actions of a single UMI employee rather than a systemic pattern of company-wide conduct;
  2. UMI took remedial action in response to the alleged violations, including by voluntarily ceasing transactions involving Iran and by implementing new procedures and updating its compliance program to prevent the recurrence of similar sanctions violations;
  3. UMI has not received 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;
  4. UMI cooperated with OFAC’s investigation by providing timely responses to OFACs correspondence and by entering into multiple statute of limitations tolling agreements;
  5. UMI is a small business, as determined by the size standards set forth by the Small Business Administration; and
  6. based on the financial condition of UMI, including significant financial difficulties experienced by the company in recent years, additional mitigation is warranted.

Only $15,400 is destined for Treasury, while the rest is part of a settlement with the Bureau of Industry and Security (BIS), part of the Commerce Department.

Assuming the worst (egregious and not self-reported), the base penalty could have been as high as $14 MM ($250K each for 56 violations). So, this is a serious haircut.

Link:

OFAC Enforcement Information

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