ExxonMobil Corporation OFAC Civil Penalty: $2M (2017)

Between on or about May 14, 2014 and on or about May 23, 2014, the presidents of ExxonMobil's U.S. subsidiaries — ExxonMobil Development Company and ExxonMobil Oil Corp. — signed eight legal documents related to oil and gas projects in Russia with Igor Sechin, the President of Rosneft OAO, violating § 589.201 of the Ukraine-Related Sanctions Regulations, 31 C.F.R. part 589. Sechin had been designated by OFAC pursuant to Executive Order 13661 on April 28, 2014. The Ukraine-Related Sanctions Regulations, published on May 8, 2014, defined "property" and "property interest" to include "services of any nature whatsoever" and "contracts of any nature whatsoever," making clear that U.S. persons may not deal with persons designated pursuant to E.O. 13661 or deal in, receive, or benefit from any service such a person might provide. Both the designation and the regulations preceded ExxonMobil's execution of the documents.

ExxonMobil claimed it interpreted press statements as establishing a distinction between Sechin's "professional" and "personal" capacity, citing in part a news article quoting a Treasury representative as saying a U.S. person would not be prohibited from participating in a meeting of Rosneft's board of directors. OFAC rejected this interpretation. The plain language of E.O. 13661 and the Ukraine-Related Sanctions Regulations contains no professional-versus-personal distinction, and OFAC has neither interpreted its regulations in that manner nor endorsed such a distinction. No materials issued by the White House or the Treasury asserted an exception or carve-out for the professional conduct of designated persons, nor did any suggest that U.S. persons could continue to conduct business with them.

Additionally, FAQ #285 — issued by OFAC in 2013 in the context of the Burma sanctions program and publicly available on OFAC's website at the time of the violations — stated that U.S. parties should "be cautious in dealings with [a non-designated] entity to ensure that they are not providing funds, goods, or services to the SDN, for example, by entering into any contracts that are signed by the SDN." Although ExxonMobil noted that different interpretations may exist across sanctions programs, OFAC found that FAQ #285 clearly signaled its view that signing a contract with an SDN is prohibited even if the entity on whose behalf the SDN signs is not itself subject to blocking sanctions, and OFAC acted consistently with that approach. Rosneft OAO was not subject to blocking sanctions.

OFAC determined that ExxonMobil did not voluntarily self-disclose the violations and that the violations constitute an egregious case. Both the base civil monetary penalty and the statutory maximum civil monetary penalty amounts were $2,000,000. OFAC thoroughly considered the arguments ExxonMobil set forth in its submissions, and the assessed civil monetary penalty is $2,000,000.

The case addresses whether White House and Treasury press statements established a distinction between an SDN's professional and personal conduct. OFAC rejected this argument: such statements provided context for the policy rationale surrounding the targeted sanctions approach during the early days of the Ukraine crisis — to isolate designated individuals rather than impose blocking sanctions on the large companies they managed. They did not assert an exception or carve-out for the professional conduct of designated persons, and no materials suggested that U.S. persons could continue to conduct or engage in business with such individuals.

FAQ #285, issued in 2013 in the context of the Burma sanctions program and publicly available on OFAC's website at the time of the violations, stated that U.S. parties should "be cautious in dealings with [a non-designated] entity to ensure that they are not providing funds, goods, or services to the SDN, for example, by entering into any contracts that are signed by the SDN." Although ExxonMobil noted that different interpretations may exist across sanctions programs, OFAC found that FAQ #285 clearly signaled its view that signing a contract with an SDN constitutes prohibited dealing in that person's blocked services, even when the entity on whose behalf the SDN signed is not itself blocked. OFAC acted consistently with that approach.

The issuance of E.O. 13661, publication of the Ukraine-Related Sanctions Regulations, press statements by the White House and Treasury, and prior OFAC precedent all clearly put ExxonMobil on notice that executing documents with an SDN would violate the prohibitions in the Ukraine-Related Sanctions Regulations.

This page summarizes an OFAC enforcement case based on the document archived below. SanctionsLookup assumes no liability for errors, omissions, or inaccuracies in the original documents, this summary, or any changes made to the source documents at any time.

Provided for informational purposes only and does not constitute legal or compliance advice. Always consult the source document directly rather than relying on this summary.