A Texas federal court vacated a $2 million penalty imposed on ExxonMobil by the Treasury's Office of Foreign Assets Control for sanctions violations, in a decision issued Dec. 31. The Northern Texas U.S. District Court ruled that OFAC did not provide ExxonMobil “fair notice that their conduct was prohibited.” The decision stems from a lawsuit filed in August (see 1908280031) against OFAC, in which ExxonMobil alleged its business dealings with Rosneft, the Russian oil company owned by sanctioned oligarch Igor Sechin, did not warrant a sanctions penalty.
OFAC sanction activity
The U.S. designated Aas’ib Ahl al-Haq (AAH) a foreign terrorist organization and sanctioned two of its leaders, Qays (also known as Qais) al-Khazali and Laith al-Khazali, both Iraqi nationals, the State Department said in a Jan. 3 press release. The sanctions are aimed at denying AAH and its leadership the “resources to plan and carry out terrorist attacks,” the State Department said. The agency said the group and its leaders are backed by Iran, and their efforts are aimed at undermining “Iraqi sovereignty.” Qays and Laith were previously sanctioned by the Treasury’s Office of Foreign Assets Control in December (see 1912060022). OFAC updated identifying information for both individuals, according to a Jan. 3 notice.
Export Compliance Daily is providing readers with some of the top stories for 2019 in case they were missed.
More than half of the sanctions-related enforcement actions issued by the Treasury Department in 2019 involved supply chain violations, signaling that supply chain compliance is one of the most important factors in avoiding violations, according to a December report released by Kharon, a sanctions advisory firm. The penalties are mostly due to deficiencies in three main areas of supply chain compliance, Kharon said: companies that operated in “heightened-risk jurisdictions,” companies that operated “existing and newly acquired” foreign subsidiaries, and companies that showed deficiencies while monitoring actors in its supply chain.
Export Compliance Daily is providing readers with some of the top stories for Dec. 16-20 in case you missed them.
The Treasury’s Office of Foreign Assets Control issued a frequently asked question to address Congress’ inclusion of sanctions on the Nord Stream 2 pipeline in the 2020 National Defense Authorization Act (see 1912190075), according to a Dec. 20 notice. In FAQ 815, OFAC clarified the wind-down provisions in the NDAA, which specify that all parties involved in selling, leasing or providing vessels for Nord Stream 2 or Turkstream must “immediately cease construction-related activity.” But OFAC said it may extend “good-faith wind-down exceptions” to certain parties for the safety of the pipeline, the crews and to avoid environmental damage.
The Treasury’s Office of Foreign Assets Control renewed a license authorizing certain transactions with COSCO Shipping Tanker (Dalian) Co. and amended three Iran-related frequently asked questions, OFAC said in a Dec. 19 notice. General License K-1, which replaced General License K, authorizes transactions relating to the maintenance or wind-down of dealings with the COSCO subsidiary until Feb. 4, 2020. The license was previously set to expire Dec. 20.
The Treasury’s Office of Foreign Assets Control sanctioned five people in Mali for threatening the country’s peace and obstructing humanitarian aid, Treasury said in a Dec. 20 press release. The United Nations Security Council also designated the five people, imposing asset freezes throughout UN member states, according to a Dec. 19 press release.
The Treasury’s Office of Foreign Assets Control designated a Guatemalan mayor, four Guatemalan nationals, five Guatemalan businesses and a drug trafficking organization as significant narcotics traffickers, Treasury said in a Dec. 19 press release. OFAC sanctioned Erik Salvador Suñiga Rodriguez, the Suñiga Rodriguez drug trafficking organization and various associates and family members of Rodriguez, including Wildin Tulio Jui Escobar, Juan Carlos Cruz Ovalle, Jose Juan Suñiga Rodriguez and Alex Oswaldo Parada Rodriguez. The sanctioned entities include Multiservicios y Finca El Encanto (an agricultural company), Rancho La Dorada (an agricultural company), Cevicheria La Concha (a restaurant), Star Market Melanye (a grocery store) and JC Car Audio (a car audio store), Treasury said. Treasury also released a chart related to the sanctions.
The Treasury’s Office of Foreign Assets Control sanctioned two Iranian judges who have “punished” citizens for exercising freedoms of expression and assembly, Treasury said in a Dec. 19 press release. The sanctions target Abolghassem Salavati, who presides over Branch 15 of the Tehran Revolutionary Court, and Mohammad Moghisseh, who presides over Branch 28.