Acteon Group Ltd. OFAC Settlement: $213.9K (2019)

The three Acteon subsidiaries party to the Apparent Violations are Seatronics Ltd. (organized under the laws of the UK), Seatronics, Inc. (Texas), and Seatronics Pte. Ltd. (Singapore), collectively referred to as "Seatronics."

In October 2007, Acteon issued sanctions compliance guidance to all of its Seatronics locations that instructed them not to engage in transactions with Cuba, even indirectly through third countries. Despite receiving this guidance, Seatronics appears to have violated § 515.201 of the CACR when it rented, sold, or received a commission for referring shipments of equipment for projects in Cuban territorial waters on ten occasions, and sent company engineers to service this equipment in Cuban territorial waters on three occasions. Between August 12, 2010 and March 16, 2012, Seatronics rented or sold equipment to Modus Seabed Intervention Ltd. or Impresub Marine & Diving Contractors S.R.L., and provided company engineers who traveled through Havana, Cuba to reach the vessel on which the equipment was embarked. These violations pre-dated KKR's acquisition of a majority stake in Acteon in November 2012.

In December 2013, Acteon issued updated sanctions compliance guidance to all Seatronics locations that instructed them not to engage in transactions with Iran, even indirectly through third parties. Despite receiving this updated guidance, Seatronics appears to have violated § 560.215 of the ITSR on three occasions when Seatronics Ltd.'s Abu Dhabi, UAE branch ("Seatronics-AE") rented or sold equipment to customers who appear to have embarked the equipment on vessels that operated in Iranian territorial waters. One of these transactions appears to have also violated § 560.204 of the ITSR because the equipment was exported from the United States. Between September 10, 2014 and November 11, 2014, Seatronics-AE rented or sold marine equipment to two UAE companies that appear to have embarked the equipment onboard vessels that operated in Iranian territorial waters. KKR and its affiliated investment funds do not appear to have been directly involved in the Apparent Violations involving Iran.

OFAC determined that Acteon made a voluntary self-disclosure of the Apparent Violations, and that these Apparent Violations constitute a non-egregious case. The total statutory maximum civil monetary penalty amount for the Apparent Violations is $1,595,000: $845,000 for the 13 apparent violations of the CACR and $750,000 for the three apparent violations of the ITSR. The total base civil monetary penalty amount is $237,629: $211,937 for the 13 apparent CACR violations and $25,692 for the three apparent ITSR violations. The settlement amount of $213,866 reflects OFAC's consideration of the facts and circumstances pursuant to the General Factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. Part 501, app. A.

This enforcement action highlights the importance of: (1) implementing risk-based controls, such as regular audits, to ensure subsidiaries are complying with their obligations under OFAC's sanctions regulations; (2) performing heightened due diligence, particularly with regard to affiliates, subsidiaries, or counter-parties known to transact with OFAC-sanctioned countries or persons, or that otherwise pose high-risks due to their geographic location, customers or suppliers, or products and services they offer; and (3) appropriately responding to derogatory information regarding the sanctions compliance efforts of persons subject to the jurisdiction of the United States.

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