3M Imtec OFAC Settlement: $125K (2010)

During the period June 29, 2004 through April 16, 2007, Imtec appears to have violated the ITR when it sold and shipped dental implants and related dental equipment to purchasers in a third country for delivery to Iran. A proposed charging letter issued by BIS pursuant to § 764.2(e) of the EAR states that the items sold were classified as EAR99, meaning they were subject to the EAR but not listed on the Commerce Control List. Although Imtec had previously requested and obtained separate OFAC licenses authorizing the sale of dental equipment to Iran, the sales that are the subject of the settlement agreement were made outside the effective dates of those licenses. Imtec did not have a trade compliance program in place at the time the apparent violations occurred. Although Imtec management was aware of the need to obtain OFAC licenses authorizing sales to Iran, as evidenced by its prior licenses, Imtec's apparent lack of a comprehensive trade compliance program resulted in the lapse of those licenses.

The conduct was voluntarily disclosed to OFAC and BIS. The $125,000 settlement is part of a joint settlement agreement among 3M Imtec, OFAC, and BIS; no separate OFAC-only amount is identified. OFAC's settlement amount reflects consideration of general factors: Imtec cooperated with investigations by OFAC and BIS, including prompt responses to all requests for information and entry into two statute of limitations tolling agreements; since the acquisition, 3M Imtec took effective corrective action, including providing all employees with trade compliance training and requiring employees to consult with compliance staff regarding sales and exports to sanctioned countries or entities; neither Imtec nor 3M Imtec has a history of prior sanctions violations; and OFAC weighed the enforcement action taken by BIS, including the execution of the joint settlement agreement.

BIS (U.S. Department of Commerce's Bureau of Industry and Security) issued a proposed charging letter to 3M Imtec pursuant to § 764.2(e) of the Export Administration Regulations based on the same underlying transactions, which also appear to have violated the EAR. The OFAC and BIS enforcement actions were resolved through the joint settlement agreement.

Imtec did not have a trade compliance program in place at the time the apparent violations occurred. Although Imtec management was aware of the need to obtain OFAC licenses for sales to Iran, as evidenced by prior licenses it had requested and obtained, the lack of a comprehensive trade compliance program resulted in the lapse of those licenses. Following the acquisition, 3M Imtec provided all employees with trade compliance training and required employees to consult with compliance staff regarding sales and exports to sanctioned countries or entities.

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