Penalties
Australian Bank Pays $5.75M to Settle OFAC Alleged Violations
08/25/09 08:23 AM
On
August 24, 2009, the Office of Foreign Assets
Control of the U.S. Department of the Treasury
(OFAC) announced that Australia and New Zealand
Bank Group, Ltd., of Melbourne, Australia (ANZ),
remitted $5.75 million to settle allegations
of
violating both Sudanese Sanctions Regulations
and Cuban Assets Control Regulations.
OFAC alleged that from 2004 to 2006, ANZ processed international trade financing and foreign currency exchange transactions through U.S. correspondent accounts. In the process, ANZ concealed the identities of persons targeted by the U.S. sanctions by removing their names as well as references to Sudan, thus impeding the U.S. banks’ ability to detect these violations.
The settlement agreement covers 16 transactions totaling $28 million that allegedly violated the Sudanese Sanctions Regulations, and 15 sanctions totaling $78 million that allegedly violated the Cuban Assets Control Regulations.
ANZ voluntarily disclosed violating the Cuban Assets Control Regulations but not the apparent Sudanese Sanctions Regulations violations. However, while conducting a review of the transactions, the company discovered additional violations of the Sudanese Sanctions of which OFAC was not aware.
OFAC stated that ANZ’s prompt and substantial cooperation involving extensive review of transactions, as well as the fact the company had not been subject to an OFAC enforcement action in the five years preceding the transactions served as mitigating factors in determining the penalty amount. As part of the settlement agreement, ANZ also agreed to re-design its current operations and policies to implement procedures that establish more effective controls on potential OFAC violations.
OFAC alleged that from 2004 to 2006, ANZ processed international trade financing and foreign currency exchange transactions through U.S. correspondent accounts. In the process, ANZ concealed the identities of persons targeted by the U.S. sanctions by removing their names as well as references to Sudan, thus impeding the U.S. banks’ ability to detect these violations.
The settlement agreement covers 16 transactions totaling $28 million that allegedly violated the Sudanese Sanctions Regulations, and 15 sanctions totaling $78 million that allegedly violated the Cuban Assets Control Regulations.
ANZ voluntarily disclosed violating the Cuban Assets Control Regulations but not the apparent Sudanese Sanctions Regulations violations. However, while conducting a review of the transactions, the company discovered additional violations of the Sudanese Sanctions of which OFAC was not aware.
OFAC stated that ANZ’s prompt and substantial cooperation involving extensive review of transactions, as well as the fact the company had not been subject to an OFAC enforcement action in the five years preceding the transactions served as mitigating factors in determining the penalty amount. As part of the settlement agreement, ANZ also agreed to re-design its current operations and policies to implement procedures that establish more effective controls on potential OFAC violations.
Exporter Agrees to $610,000 Penalty for EAR Violations
08/13/09 08:12 AM
On
August 13, 2009, the Commerce Department’s Bureau
of Industry and Security (BIS) announced that FMC
Technologies, Inc. has agreed to pay a $610,000
civil penalty to settle allegations that between
2003 and 2007 it exported oil and gas industry
service parts in violation of the Export
Administration Regulations (EAR).
The allegations against the Houston, Texas provider of specialty oil and gas products and services involved 78 unlicensed exports of butterfly and check valves classified under the ECCN 2B350 and controlled for reasons of chemical and biological weapons proliferation.
The company voluntarily disclosed the violations and cooperated with the investigation.
The allegations against the Houston, Texas provider of specialty oil and gas products and services involved 78 unlicensed exports of butterfly and check valves classified under the ECCN 2B350 and controlled for reasons of chemical and biological weapons proliferation.
The company voluntarily disclosed the violations and cooperated with the investigation.
CBP Publishes Increased AES Penalties
01/03/09 05:40 PM
On
January 2, 2009, CBP
published increased AES
penalty guidelines effective February 1, 2009, for
enforcing recent Census Bureau rules requiring
exporters and forwarders to electronically file
export declarations before cargo is loaded for
transport.
The regulation requiring use of AES of the web-based AESDirect went into effect on July 2, 2008, enforcement began on September 30, 2008, but penalty assessment was postponed. The new rules increase the maximum fine for failure to file, late or incomplete filing or submitting false information to $10,000 per violation.
CBP said that first time violators are likely to receive a warning or informational letter reminding the company of the new rules. Penalty ranges can be lower based on mitigating factors such as, inter alia, self-disclosure.
The regulation requiring use of AES of the web-based AESDirect went into effect on July 2, 2008, enforcement began on September 30, 2008, but penalty assessment was postponed. The new rules increase the maximum fine for failure to file, late or incomplete filing or submitting false information to $10,000 per violation.
CBP said that first time violators are likely to receive a warning or informational letter reminding the company of the new rules. Penalty ranges can be lower based on mitigating factors such as, inter alia, self-disclosure.
CBP Issues Guidelines For Assessment & Mitigation of Claims for Liquidated Damages
10/17/08 12:10 AM
On October 17, 2008, the U.S. Customs and Border
Protection (CBP) issued a
general notice
announcing guidelines for the assessment of
liquidated damages claims as an alternative
sanction to counter late payment of entry duties
and fees.
Under the current procedure, if a bond principal fails to pay Periodic Monthly Payment Statement estimated duties in a timely fashion, CBP requires the bond principal to file entry summary documentation with estimated duties and fees attached before its merchandise may be released from any CBP port.
Under the new guidelines, when a Periodic Monthly Statement estimated duty payment is not paid in full on or before the 15th of the working day after the month in which the entry or release of the merchandise has occurred, CBP has the authority to jointly and severally assess liquidated damages against the bond principal and surety.
Before issuing any claims for liquidated damages, CBP will notify the statement filer electronically or by paper notice on or before the first day of the month following the month that the payment was due that those estimated duties and fees have not been paid. The statement filer will have two working days from the date of notification to pay the estimated duties and fees or correct the situation. If the late fees are not paid after the two-working day period, the CBP will issue a liquidated damages claim to bond principals and sureties, jointly and severally, for non-payment of the estimated duties and fees.
If the estimated duties and fees are paid in an untimely manner, CBP may issue a liquidated damages claim or a broker penalty claim. Payment of the estimated duties and fees within the two-working day period does not relieve any charged party from incurring a claim for late payment of those estimated duties and fees.
Furthermore, CBP may exercise its authority to suspend any bond principal (the importer of record) from participating in the Periodic Monthly Payment Statement test and require that the bond principal pay estimated duties and fees on an entry-by-entry basis. CBP may also exercise its authority to require the bond principal to file entry summary documentation with estimated duties and fees attached before merchandise is released from any CBP port.
Under the current procedure, if a bond principal fails to pay Periodic Monthly Payment Statement estimated duties in a timely fashion, CBP requires the bond principal to file entry summary documentation with estimated duties and fees attached before its merchandise may be released from any CBP port.
Under the new guidelines, when a Periodic Monthly Statement estimated duty payment is not paid in full on or before the 15th of the working day after the month in which the entry or release of the merchandise has occurred, CBP has the authority to jointly and severally assess liquidated damages against the bond principal and surety.
Before issuing any claims for liquidated damages, CBP will notify the statement filer electronically or by paper notice on or before the first day of the month following the month that the payment was due that those estimated duties and fees have not been paid. The statement filer will have two working days from the date of notification to pay the estimated duties and fees or correct the situation. If the late fees are not paid after the two-working day period, the CBP will issue a liquidated damages claim to bond principals and sureties, jointly and severally, for non-payment of the estimated duties and fees.
If the estimated duties and fees are paid in an untimely manner, CBP may issue a liquidated damages claim or a broker penalty claim. Payment of the estimated duties and fees within the two-working day period does not relieve any charged party from incurring a claim for late payment of those estimated duties and fees.
Furthermore, CBP may exercise its authority to suspend any bond principal (the importer of record) from participating in the Periodic Monthly Payment Statement test and require that the bond principal pay estimated duties and fees on an entry-by-entry basis. CBP may also exercise its authority to require the bond principal to file entry summary documentation with estimated duties and fees attached before merchandise is released from any CBP port.