Eagle Shipping International OFAC Settlement: $1.1M

The 36 apparent violations involve Eagle Shipping's dealings in the property interests of Myawaddy Trading Limited ("Myawaddy"), which was on OFAC's SDN List at all relevant times, and its provision of transportation services from Burma to Singapore, in apparent violation of § 537.201 of the BSR. The total transaction value was $1,796,400.

The conduct began on or around June 3, 2011, when Eagle Shipping's Singapore affiliate, Eagle Bulk Pte Ltd ("Eagle Pte"), entered into a chartering agreement with a Singaporean company to carry sea sand from Kawthaung, Burma to Singapore. On June 28, 2011, the Singaporean Company sent Eagle Pte sample shipping documents listing Myawaddy as the shipper. In response to Eagle Pte's demand for clarification, the Singaporean Company substituted an alternate shipper name, and a former manager of Eagle instructed the captain of the Eagle vessel to sign departure documentation listing the alternate shipper. The captain refused, having learned that additional shipping documents (including the mate's receipt and export declaration) explicitly listed Myawaddy as the shipper, and he further reported that the alternate shipper did not sell sea sand in the region and that only Myawaddy had a contract with the Burmese government.

On June 30, 2011, Burmese local officials seized the crew's passports and refused to clear the vessel for departure. Eagle applied for an OFAC license due to evidence of SDN involvement. Before OFAC responded, on or about July 2, 2011, Eagle signed the revised shipping documents and obtained return of the crew's passports, citing crew safety concerns. The vessel departed Burma and discharged the cargo in Singapore.

Following the first voyage, on May 18, 2012, Eagle filed a new license application requesting authorization to carry additional sand cargoes procured from Myawaddy. OFAC denied the application on October 11, 2012. Despite this denial, Eagle resumed shipping sand from Myawaddy. The former President of Eagle Shipping received OFAC's denial letter but allegedly failed to forward it to others within Eagle, and Eagle thereafter continued carrying sand cargoes from Burma to Singapore through 2014.

The statutory maximum civil monetary penalty in this matter was $9,000,000. OFAC determined that Eagle Shipping voluntarily self-disclosed the Apparent Violations, and that the Apparent Violations constitute an egregious case. Accordingly, under OFAC's Economic Sanctions Enforcement Guidelines, the base civil monetary penalty applicable in this matter was $4,500,000. The settlement amount of $1,125,000 reflects OFAC's consideration of the General Factors under the Enforcement Guidelines.

As noted in OFAC's Framework for Compliance Commitments, this case demonstrates the importance for companies operating in high-risk industries (e.g., international shipping and trading) to implement risk-based compliance measures, especially when engaging in transactions involving exposure to jurisdictions or persons implicated by U.S. sanctions. It is essential that companies engaging in international transactions consider and respond to sanctions-related warning signs, such as information that goods originated from or were supplied by a person or entity subject to U.S. economic and trade sanctions. The failure to adhere to formal responses from OFAC, such as the adjudication of license applications or requests for guidance, can represent serious sanctions infractions.

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