Kenneth Rijock

Kenneth Rijock

Friday, October 28, 2011

DOES CIVIL PENALTY PROVIDE CLUES TO US FOCUS ?

This week's OFAC Civil Penalty press release* was a small one; or was it ? A token $7,000 penalty levied upon an export firm located in South Florida for a violation of Iranian sanctions regulations, due to an attempted export to Iran. Why bother to give this apparently small violation its own press release ? Why not roll it over for the next Civ Pen list ?

The company had no prior sanctions violation history, but it had no compliance programme in place to check for OFAC issues.That, in and of itself, for a company primarily engaged in exporting, demonstrates a serious lack of judgment. But why the very public name & shame ? Perhaps there's more to this company's activities than the press release states.

Here's what I see, from my perspective:

(1)  The company is also an importer, and it has recent business with companies in China.

(2)  The company is located in Weston, Florida, which happens to be a strictly residential town on the very edge of the Florida Everglades. Weston also happens to have a large population of Venezuelans.

(3) The company also exports Chinese products to Venezuela.

Iran has been going to great lengths to evade global sanctions, and China and Venezuela are two of the participants who have repeatedly facilitated Iranian avoidance of the sanctions, by moving goods through their countries. Are we seeing here a very public demonstration of Treasury's ability to see the big picture, and to bluntly warn any potential Iran sanctions violators that American regulators can see through the smokescreen of sanctions evaders and identify & very swiftly punish them ? This may be a simple exercise in deterrence.
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*http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/10272011.pdf

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