Communications & Power Ind. OFAC Settlement: $346.5K

The Switzerland branch office of CPI's U.S. subsidiary, Communications and Power Industries International Inc., conducted transactions involving x-ray generators and medical equipment with entities in Iran from on or about March 31, 2006 to on or about October 22, 2010. The branch sold x-ray generators to an entity in Tehran, Iran on 30 occasions, and on two occasions attempted to sell x-ray generators and a medical digital imaging workstation to an entity in Tehran, Iran. At the request of an entity in Tehran, Iran, the branch directed its Canadian affiliate, Communications & Power Industries Canada Inc. ("CPI Canada"), to make three shipments of x-ray generators and one shipment of automatic exposure control field kits to an entity in Istanbul, Turkey. The branch also referred to CPI Canada an order it had received from an entity in Tehran, Iran for a medical digital imaging workstation and one x-ray generator.

The base penalty for the apparent violations was $1,100,096. OFAC determined that CPI voluntarily self-disclosed this matter and that the apparent violations constitute a non-egregious case. The final settlement amount of $346,530 reflects OFAC's consideration of the following facts and circumstances pursuant to the General Factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A: CPI's delay in assessing the applicability of U.S. sanctions laws to the Switzerland branch office of its subsidiary demonstrated reckless disregard of those laws; CPI lacked an adequate risk-based OFAC compliance program at the time of the apparent violations; upon discovering the apparent violations, CPI, with the support of its senior management, undertook a thorough investigation and implemented significant remedial measures; CPI has no history of prior OFAC violations; the apparent violations represent a very small percentage of CPI's overall sales; the exports at issue likely would have been licensed by OFAC under existing licensing policy; and CPI cooperated with OFAC by executing a tolling agreement and one extension of that tolling agreement.

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