Epsilon Electronics, Inc. OFAC Settlement: $1.5M (2018)

From on or about August 26, 2008 to May 22, 2012, Epsilon violated § 560.204 of the ITSR by issuing 39 invoices for sales to Asra International LLC, a/k/a Asra Electronic Trading Co., a company that Epsilon knew or had reason to know distributed most, if not all, of its products to Iran. The exported goods were valued at $2,823,000 or more.

On July 21, 2014, OFAC issued Epsilon a Penalty Notice for the alleged violations. Epsilon challenged the notice in the U.S. District Court for the District of Columbia, which granted summary judgment in favor of OFAC. See Epsilon Electronics, Inc., v. U.S. Department of the Treasury, Office of Foreign Assets Control, 168 F. Supp. 3d 131 (D.D.C. 2016). Epsilon appealed to the U.S. Court of Appeals for the District of Columbia Circuit, which affirmed in part and reversed in part the district court's order, remanding the case to the district court with instructions to remand to OFAC for further consideration. See Epsilon Electronics, Inc., v. U.S. Department of the Treasury, Office of Foreign Assets Control, 857 F.3d 913 (D.C. Cir. 2017). The $1,500,000 settlement amount reflects OFAC's further consideration of the case in light of the D.C. Circuit's decision and pursuant to the General Factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A. The settlement resolves the alleged violations, the prior Penalty Notice, and the subsequent litigation in both courts.

Following litigation of the alleged violations, Epsilon took additional remedial actions to address the conduct that led to the alleged violations, including terminating its relationship with Asra International LLC and instituting an OFAC sanctions compliance program.

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