Flowserve Corporation OFAC Settlement: $502.4K (2011)

Flowserve disclosed that its domestic and foreign affiliates engaged in unlicensed exports of pumps, valves, and related component parts and supplies from the United States indirectly to Iran in apparent violation of the Iranian Transactions Regulations, 31 C.F.R. part 560. Its foreign affiliates also engaged in unlicensed exports of pump components from the United States indirectly to Sudan in apparent violation of the Sudanese Sanctions Regulations, 31 C.F.R. part 538. Additionally, its foreign affiliates engaged in transactions involving property in which Cuba or a Cuban national had an interest in apparent violation of the Cuban Assets Control Regulations, 31 C.F.R. part 515. The conduct occurred from on or about January 7, 2005 through on or about December 18, 2006, and the relevant transactions involved a total value of $2,148,328.

OFAC determined that Flowserve voluntarily self-disclosed the apparent violations and that the apparent violations constituted a non-egregious case. The base penalty amount totaled $661,053. The settlement amount of $502,408 reflects OFAC's consideration of General Factors under its Economic Sanctions Enforcement Guidelines. Several of the apparent violations reflected a reckless disregard for U.S. sanctions requirements and involved awareness by facility supervisors of the conduct giving rise to the apparent violations; and the apparent violations resulted in harm to U.S. sanctions program objectives. Additionally relevant, OFAC had not taken enforcement action against Flowserve in the five years preceding the transactions at issue; Flowserve substantially cooperated with OFAC's investigation both by gathering relevant data from its foreign affiliates and by agreeing to toll the statute of limitations; and Flowserve instituted significant remedial measures, including implementing a "Market Withdrawal Program" that will result in a company-wide cessation of business with sanctioned countries.

Simultaneous with OFAC's settlement, Flowserve agreed to remit $2,500,000 to the Department of Commerce's Bureau of Industry and Security to settle apparent violations of the Export Administration Regulations arising from the same course of conduct.

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