|| Author: Duncan Riley|

Settlement Agreement Ofac

On September 27, 2020, the Office of Foreign Assets Control (OFAC) of the Ministry of Finance announced that California-based Keysight Technologies Inc. (Keysight) has promised, on behalf of its former Finnish subsidiary Anite Finland Oy (Anite), the payment of $473,157 to settle possible civil liability for the re-export to Iran of U.S.-controlled meters. As part of this comparison, Keysight also expressed its readiness to define and maintain several sanctions compliance measures aimed at minimizing the risk of similar behaviour re-emerging in the future. Anite was a subsidiary of Keysight when the obvious infringements appeared in 2016, but Anite was merged with Keysight and no longer exists as a separate entity. This is the latest enforcement action that emphasizes the need to respect pre-compliance and post-merger compliance diligence, as well as the integration and compliance efforts that followed the merger. This week, the Office of Foreign Assets Control (OFAC) announced a settlement agreement with Berkshire Hathaway Inc., which involves clear violations of the U.S. embargo on Iran by a subsidiary in Turkey. As part of the deal, Berkshire Hathaway agreed to pay more than $4.1 million to respond to accusations that the Turkish subsidiary exported 144 deliveries of cutting tools to third-party traders because they knew the goods would eventually be delivered to Iran. Although the offences at OFAC were voluntarily announced, the Agency found that the actions of the Turkish subsidiary were “monstrous” because of the deliberate nature of the subsidiary`s conduct.

Among other things, the leaders of the Turkish subsidiary deliberately pursued business with Iran when they knew such transactions were prohibited and took a number of measures to mask their behavior, such as the use in Turkey of corresponding third-party intermediaries via personal email accounts and the introduction of false information into internal systems. In the end, the U.S. parent company opened an internal investigation after receiving an anonymous tip about the subsidiary`s behavior. According to OFAC, the subsidiary`s wrongdoing continued during the investigation, lied to investigators and encouraged others to do the same. In its first enforcement measure in 2018, the Office of Foreign Assets Control of the U.S. Ministry of Finance reached a $145,893 settlement agreement with Swedish telecommunications company Ericsson on June 6 for violating Sudanese sanctions regulations. From 2008 to 2018, OFAC surveys led to comparisons with companies totalling more than $2,780,000,000. Yes, it`s $2.7 billion! OFAC found that the EUS and the EAB voluntarily disclosed the infringement and that the violation was a monstrous case. The $145,893 transaction contract is still a modest fine compared to what the fine could have been. The transaction took place although Ericsson`s compliance department expressly warned that “the delivery of such a satellite platform to Sudan would be contrary to Ericsson`s internal sanctions compliance policy,” according to the settlement agreement.

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