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The Alfa Laval Enforcement Actions: the penalty calculations & General Factors

Alfa Laval Middle East:

OFAC determined that AL Middle East did not voluntarily self-disclose the Apparent Violations and that the Apparent Violations constitute an egregious case. Accordingly, under OFAC’s Economic Sanctions Enforcement Guidelines (“Enforcement Guidelines”), the base penalty applicable in this matter was $615,844, which was also the applicable statutory maximum civil penalty amount. The settlement amount of $415,695 reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines. AL Middle East was jointly investigated by BIS. AL Middle East’s obligation to pay the settlement amount will be credited by the amount ultimately paid to BIS pursuant to its settlement with AL Middle East arising out of the same violative conduct.
OFAC determined the following to be aggravating factors:
(1) AL Middle East willfully violated the ITSR when it conspired to export goods from the United States to an Iranian end-user by obfuscating the end-user’s identity from its U.S. affiliate, AL Tank, which caused AL Tank to violate the ITSR;
(2) AL Middle East’s Sales Manager formed and participated in the conspiracy that led to the Apparent Violations, while multiple AL Middle East and AL Iran managers had actual knowledge of the conduct giving rise to the apparent violations; and
(3) AL Middle East caused harm to the integrity of the ITSR by circumventing U.S. sanctions and conferring an economic benefit to Iran’s energy sector.
OFAC determined the following to be mitigating factors:
(1) None of the relevant Alfa Laval AB subsidiaries, including AL Middle East, have 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 Apparent Violations;
(2) AL Middle East through AL U.S. employed outside counsel to conduct an internal investigation, which resulted in several remedial measures, such as disciplinary action against those implicated in the Apparent Violations at AL Middle East and AL Iran (including the termination of three employees), a thorough internal investigation, adoption of enhanced review and screening processes for Iran-related transactions at AL Middle East, and additional in-person training to reinforce Alfa Laval’s Export Control Policy; and
(3) AL Middle East through AL U.S. provided substantial cooperation to OFAC throughout the course of its investigation.

Alfa Laval Inc:

The statutory maximum civil monetary penalty applicable in this matter was $307,922. OFAC determined that AL Tank did not voluntarily self-disclose the Apparent Violations and that the Apparent Violations constitute a non-egregious case. Accordingly, under OFAC’s Economic Sanctions Enforcement Guidelines (“Enforcement Guidelines”), the base civil monetary penalty amount applicable in this matter was $18,750.
The settlement amount of $16,875 reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines. AL U.S. was jointly investigated by the U.S. Department of Commerce’s Bureau of Industry and Security.
OFAC determined the following to be aggravating factors:
(1) AL Tank recklessly violated the ITSR by failing to heed numerous warning signs that
the actual end-user of its products was in Iran; and
(2) AL Tank caused harm to the integrity of the ITSR by referring an Iran-related business opportunity to a foreign affiliate who ultimately formed a conspiracy that succeeded in exporting goods from the United States to Iran’s energy sector.

OFAC determined the following to be mitigating factors:
(1) None of the relevant Alfa Laval AB subsidiaries, including AL U.S., have 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 Apparent Violations;
(2) AL U.S. employed outside counsel to conduct an internal investigation, which resulted in several remedial measures, such as additional in-person training to reinforce Alfa Laval’s Export Control Policy, a thorough internal investigation, and adoption of enhanced review and screening processes; and
(3) AL U.S. provided substantial cooperation to OFAC throughout the course of its investigation.

Links:

Enforcement Actions – Alfa Laval Middle East, Alfa Laval Inc.

Categories: Enforcement Actions OFAC Updates Settlement Agreements

eric9to5

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