On October 29, 2010, Office of Foreign Assets Controls (OFAC) published recent civil penalties cases:
- Garlock Sealing Tech, LLC (Garlock), a subsidiary of Enpro Industries (Enpro) of Charlotte, NC, has remitted $16,875 to settle allegations of violations of Executive Order 13405, "Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus" occurring on June 23, 2008. OFAC alleged that Garlock attempted to send, without authorization from OFAC, a funds transfer in the amount of $14,308 to the account of an entity blocked pursuant to Executive Order 13405. Garlock did not voluntarily disclose this matter to OFAC. The base penalty for the apparent violation was $25,000. The settlement amount reflects OFAC's consideration of the following General Factors: Garlock was a sophisticated entity with global operations; Garlock has not been subject to an OFAC enforcement action in the five years preceding the date of the apparent violation; and Garlock has taken remedial steps to prevent the recurrence of such a payment.
- OFAC issued a Finding of Violation Letter to Christ for all Nations (CfaN) of Orlando, FL, for violations of the Sudanese Sanctions Regulations. CfaN exported goods and services to Sudan in support of a non-commercial event in Sudan during 2006. CfaN has implemented steps to ensure that it does not perform any activities in violation of OFAC regulations and has not been subject to other OFAC enforcement action. The transactions in question appear to have been licensable had CfaN timely submitted a license application. A Finding of Violation was deemed appropriate given the clear violation of OFAC regulations on the one hand, and the licensable, non-commercial nature of the conduct and the non-profit nature of the violator on the other hand.
- Yokozuna Pearls & Gems, Inc. (Yokozuna) of Monrovia, CA, has been assessed a penalty of $25,000 for its violation of the Burmese Sanctions Regulations (BSR) that occurred in March 2006. Yokozuna initiated a $220,465 funds transfer to Myanmar Foreign Trade Bank, an entity blocked pursuant to the BSR, in furtherance of a contract to purchase and import pearls from Myanmar Pearl Enterprise, Yangoon, Burma. The funds transfer was blocked by a U.S. financial institution and the contract was not completed. The exportation of financial services (defined to include direct and indirect transfers of funds from the U.S. or by a U.S. person, wherever located, to Burma) is prohibited by the BSR. Yokozuna did not voluntarily disclose this matter to OFAC. The base penalty for the violation was $250,000. The final penalty amount reflects OFAC's consideration of the following General Factors: this was Yokozuna's first OFAC violation; Yokozuna received inaccurate legal guidance before engaging in the prohibited transaction; Yokozuna cooperated with OFAC and terminated its business transactions with Burma; and the documented financial condition of Yokozuna's owner.
- Hydra-Tech Pumps, Inc. (Hydra-Tech), Nesquehoning, PA, has been assessed a penalty of $1,961 for its violation of the Sudanese Sanctions Regulations that occurred in September 2007. Hydra-Tech exported a hydraulic hose to Khartoum State Water Corporation, Khartoum, Sudan. Hydra-Tech did not voluntarily disclose this matter to OFAC but has implemented enhanced export compliance procedures. This matter was resolved according to the prior enforcement guidelines published by OFAC at 68 Fed. Reg. 4422.
- Sumitomo Mitsui Banking Corporation (SMBC), a Japanese corporation, has agreed to pay $229,380 to settle allegations that SMBC's New York Branch Office (SMBCNY) violated the Sudanese Sanctions Regulations (the SSR). OFAC alleged that, from December 9, 2005, until about December 1, 2006, SMBCNY appears to have violated the SSR when it exported services to Sudan through its processing of the payments for SMBC's purchase of six export bills, in an aggregate amount of $1,037,988, relating to letters of credit (LC) issued by Sudanese banks and by its receipt of two USD payments, in the aggregate amount of $15,357,720, related to approximately forty LCs issued by a Sudanese bank. OFAC determined that SMBC voluntarily self disclosed the matter to OFAC and that the alleged violations constituted a non-egregious case. The base penalty amount for the apparent violations was $655,373. The settlement amount reflects OFAC's consideration of the following General Factors: SMBCNY was part of a commercially sophisticated international bank and had reason to know its conduct may have violated the SSR; SMBC had no violations of this nature on record with OFAC; SMBC substantially cooperated with OFAC's investigation of the alleged violations; and SMBC promptly responded to all requests for additional information and agreed to a statute of limitations tolling agreement when requested by OFAC.