The Office of Foreign Assets Control will adjust for inflation some civil monetary penalties, it said in an interim final rule released Sept. 2. The changes apply to “penalties for failure to comply with certain recordkeeping and reporting requirements, which are contained in OFAC’s Economic Sanctions Enforcement Guidelines in OFAC’s Reporting, Procedures and Penalties Regulations,” it said. Increases are effective Oct. 5.
A British Virgin Islands company agreed to plead guilty to charges related to the evasion of sanctions on North Korea, the Department of Justice said in an Aug. 31 news release. The company, Yang Ban Corporation, admitted it “deceived banks in the U.S. into processing transactions for North Korean customers,” using “financial cutouts and front companies,” the U.S. Attorney’s Office for the District of Columbia said. In addition to the guilty plea, Yang Ban will pay a penalty of more than $673,000, which includes a fine of about $112,000.
Industry members should be aware of the “key North Korean procurement entities and deceptive techniques employed in the operation and support of the regime’s ballistic missile program,” the Office of Foreign Assets Control, the Bureau of Industry and Security and the State Department Bureau of International Security said in a guidance document. The procurement activities “expose the electronics, chemical, metals, and materials industries as well as the financial, transportation, and logistics sectors to the risk of possibly violating United Nations (UN) and U.S. sanctions, as well as the imposition of sanctions and penalties under various U.S. legal authorities,” they said.
A U.S. website infrastructure company said the Commerce Department determined not to penalize it after the company submitted a voluntary disclosure about potential export control and filing violations. Cloudflare, based in California, submitted disclosures last year (see 1909120065) to the Bureau of Industry and Security and the Census Bureau for making “incorrect” electronic export information statements and for allowing the export or “download of certain software prior to making required filings.” The company, in an Aug. 10 Securities and Exchange Commission filing, said its disclosures were “completed with no penalties” by Census in November and BIS in June.
A gaming software company said it may have violated U.S. sanctions and export reporting requirements, according to its regulatory filing with the Securities and Exchange Commission. Unity Software, based in California, told the SEC it voluntarily disclosed possible export and sanctions violations to the Bureau of Industry and Security and the Office of Foreign Assets Control in August. The SEC filing, dated Aug. 24, is a registration statement ahead of the company's eventual initial public offering.
Curtiss-Wright, a U.S. manufacturer, may have violated U.S. sanctions on Russia when it continued to do business with two customers after they were acquired by a sanctioned entity, the company said in an Aug. 19 Securities and Exchange Commission filing. The company said the two customers, “unbeknown” to Curtiss-Wright, were acquired in 2019 by an entity subject to OFAC’s Ukraine-related sanctions. “Change of ownership resulted in beneficial ownership sanctions now capturing our two long-time customers,” the company said.
The Office of Foreign Assets Control on Aug. 25 sanctioned a Chinese national and his company for shipping fentanyl to the U.S., and removed sanctions from a Honduran money laundering ring. The Chinese sanctions target Taotao Zhang and his company, Hong Kong-based Allyrise Technology Group Co., Limited, for shipping fentanyl to the U.S. through freight forwarding services and other means to disguise their origin. OFAC also removed sanctions from Jaime Rolando Rosenthal Oliva, who is now deceased, and five associated companies and other entities involved in Rosenthal's money laundering scheme, which have been seized by Honduran authorities.
The Treasury's Office of Foreign Assets Control sanctioned two United Arab Emirates-based companies and a business owner for supporting sanctioned Iranian airline Mahan Air, an Aug. 19 news release said. The designations target Parthia Cargo, Delta Parts Supply FZC and Iranian national Amin Mahdavi, who owns Parthia Cargo. OFAC said the companies provided “key parts and logistics services” that help Mahan Air sustain its fleet of “western manufactured aircraft.” The parts and services also help the airline transport terrorists, “lethal cargo” and technical equipment to Syria and Venezuela.
Export Compliance Daily is providing readers with some of the top stories for Aug. 10-14 in case you missed them. You can find any article by searching on the title or by clicking on the hyperlinked reference number.
The Department of Justice’s recent changes to its voluntary disclosure policies (see 1912130047) could lead to complications for companies and were met with backlash from other enforcement agencies, said Robert Clifton Burns, an export control lawyer with Crowell & Moring. The guidance, which outlined benefits for companies that disclose export control and sanctions penalties, can be interpreted as saying industry should first submit their voluntary disclosures to the Justice Department instead of to other agencies, Burns said.