A cookware coating manufacturer settled potential OFAC civil liability stemming from apparent violations of the Iranian Transactions and Sanctions Regulations ("ITSR").
According to OFAC, the manufacturer violated the ITSR 74 times when its Italian and Turkish subsidiaries exported products to, and engaged in trade transactions with, Iran, and when U.S.-person employees facilitated the Iran-related business. OFAC alleged that after Iran sanctions updates in 2012 under EO 13628, which prohibited U.S.-owned or -controlled entities from conducting business with Iran, the manufacturer's foreign subsidiaries continued to sell the manufacturer's products to Iran.
According to OFAC, the manufacturer's managing director for Europe - a U.S. person - helped to devise a plan to continue selling products to Iran indirectly through third-party distributors while avoiding referencing Iran in related documents. The manufacturer claimed that it realized the Iran-related business was not in compliance with the ITSR in 2016, only after OFAC issued General License H pursuant to the Iran nuclear deal. General License H relaxed certain prohibitions on dealings of foreign subsidiaries with Iran, and likely would have permitted the conduct that the manufacturer's subsidiaries had been engaged in - impermissibly - for years.
OFAC determined that the manufacturer's conduct constituted a "non-egregious" case. Taking into consideration, among other factors, the manufacturer's cooperation and voluntary self-disclosure of the violations, OFAC agreed to a settlement amount of $824,314.
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