Manufacturing Company and Bank Settle Iranian Sanctions Violations

A global manufacturing company based in Minnesota and a New York bank settled separate OFAC charges for violating the Iranian Transactions and Sanctions Regulations ("ITSR").

According to the settlement agreement with the manufacturing company, there were 54 violations of the ITSR involving transactions totaling nearly $10 million between 2016 and 2018. OFAC found that a Germany-based subsidiary of the company knowingly sold reflective license plate sheeting to an Iranian entity via a German reseller. OFAC said that a U.S. person employed by the foreign subsidiary played a significant role in these sales. To resolve its potential liability, the Company agreed to pay a fine of $9,618,477. OFAC noted that the violations were considered egregious, but they involved misunderstandings and miscommunications and were voluntarily self-disclosed.

According to the settlement agreement with the bank, there were 30 violations of the ITSR as a result of the bank's handling of a certificate of deposit account maintained for two Iranian individuals over a period of approximately 26 years. The bank processed transactions totaling $91,051 for this account between June 2017 and March 2021, despite having actual knowledge of the accountholders' Iranian residency. OFAC stated that the bank's compliance processes failed to flag these transactions for potential sanctions issues until June 2016 when a wire transfer request triggered a review. The bank erroneously proceeded with the payments. It was not until June 2021, during a regulatory examination, that the bank became aware of the apparent violations and initiated an investigation which resulted in the bank closing the account. To settle its potential civil liability, the bank agreed to pay a $31,867 fine. The violations were voluntarily self-disclosed and were considered non-egregious.