BIOMIN America, Inc. OFAC Settlement: $257.9K (2020)

From on or about July 11, 2012 to on or about September 29, 2017, BIOMIN America and its owned or controlled foreign entities engaged in a total of 30 sales of agricultural commodities produced outside the United States to Alfarma S.A. ("Alfarma") in Cuba without authorization from OFAC, resulting in 44 apparent violations of § 515.201 of the Cuban Assets Control Regulations (CACR), 31 C.F.R. part 515.

Believing that BIOMIN America could not directly export its agricultural products to Cuba, BIOMIN America's managers developed a transaction structure they incorrectly determined would be consistent with U.S. sanctions requirements. Under this structure, BIOMIN America processed purchase orders from Alfarma on behalf of its foreign affiliates, which then fulfilled the orders. BIOMIN America coordinated, and received commissions on, these sales to Alfarma as executed by its foreign affiliates. As a result, BIOMIN America and its owned or controlled foreign entities dealt in blocked property in apparent violation of the CACR.

BIOMIN America could potentially have availed itself of an existing general license under § 515.533(a) of the CACR or applied for a specific license from OFAC, provided the exports had been consistent with the Export Administration Regulations, but it failed to seek appropriate advice or otherwise take the steps necessary to authorize these transactions. During the time in which the apparent violations occurred, BIOMIN America did not have an OFAC compliance program in place. The conduct of BIOMIN America and its owned or controlled foreign entities had a transactional value of $17,391,950.25.

The statutory maximum civil monetary penalty applicable in this matter is $2,149,230. OFAC determined that BIOMIN America voluntarily self-disclosed the Apparent Violations and that the Apparent Violations constitute a non-egregious case. Accordingly, under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A, the base civil monetary penalty amount applicable in this matter is $973,691. The settlement amount of $257,862 reflects OFAC's consideration of the General Factors under the Enforcement Guidelines.

This case demonstrates the importance of U.S. companies with a global presence maintaining appropriate sanctions compliance programs, particularly when dealing with foreign subsidiaries and affiliates. Furthermore, U.S. companies can benefit from seeking appropriate advice and guidance when contemplating business involving U.S. sanctions programs rather than developing alternative methods through non-U.S. companies in order to avoid prohibitions on U.S. companies.

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