Monday, October 3, 2011

US REGULATORS LEVY $3M FINE FOR "RECKLESS DISREGARD" OF SANCTIONS


OFAC and the Department of Commerce Bureau of Industry and Security (BIS) have jointly settled multiple sanctions with Texas-based Flowserve Corporation* for slightly more than three million dollars**. Flowserve is a global provider of flow control products, such as pumps, valves and seals, to the oil & gas, chemical and power industries.

The admitted violations:
(1) The unlicensed export, by domestic & foreign affiliates,  of the company's products, indirectly, to Iran.
(2) The company's foreign affiliates engaging in the unlicensed export of products to Sudan.
(3)  Transactions, by the company's  foreign affiliates, involving property in which Cuba, or a Cuban national, had an interest.

OFAC stated in mitigation that there was voluntary self- disclosure, and that there had not been any enforcement action taken against the company in the five years prior to the transactions at issue. Nevertheless, the action was taken because:
(A) "Several of the apparent violations reflected a reckless disregard for US sanctions requirements..."
(B)  "... and involved awareness by facility supervisors of the conduct giving rise to the apparent violations."

The penalties are $502,408 to be remitted to OFAC, and $2.5m to be paid to BIS. It should be noted that the company fully cooperated, and has now instituted major remedial measures, including exiting all business with sanctioned countries, and conducting a one-time, post-settlement compliance audit, according to a press release dated 3 October, 2011, and appearing on the company's website.

US regulators continue to exact fines and penalties upon American  corporations committing sanctions violations, especially violations of Iranian sanctions.
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*http://www.flowserve.com/
**http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/flowserve09302011.pdf




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