Paper Products Manufacturer Settles OFAC Charges for North Korea Sanctions Violations
An Indonesian paper products manufacturer settled potential civil liability for apparent violations of the North Korea Sanctions Regulations ("NKSR").
According to OFAC, the company exported cigarette paper to the Democratic People's Republic of North Korea ("DPRK") using a U.S. dollar bank account at a non-U.S. bank. OFAC alleged that such use led to the clearing of wire transfers in connection with the exports by U.S. banks, including exports made to a blocked North Korean individual. As a result, OFAC found that the company violated provisions of the NKSR by:
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doing business with the property or interests of a Specially Designated National or Blocked Person;
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exporting to the DPRK U.S. financial services; and
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facilitating export transactions that would have been prohibited had they been participated in by a U.S. person.
The company cooperated with OFAC's investigation and implemented a new sanctions compliance program after learning of the violations. Although the company's violations conferred economic benefits to North Korea, OFAC concluded that the violations constituted a "non-egregious" case.
To settle the charges, the company agreed to pay $1,016,000.