Halliburton Atlantic OFAC Settlement: $304.7K (2016)

From on or about February 15, 2011, to on or about April 6, 2011, HAL and HOL appear to have violated § 515.201(b) of the CACR by dealing in property in which Cuba or a Cuban national had an interest when they exported goods and services in support of oil and gas exploration and drilling activities within the Cabinda Onshore South Block oil concession (the "Concession") in Angola. Cuba Petroleo, a state-owned Cuban company also known as Cupet, held a five percent interest in an oil and gas production consortium (the "Consortium") and corresponding interests in the Concession and any oil or gas procured within the Concession. HAL and HOL knew or should have known they were dealing in property in which Cupet — and therefore Cuba — had an interest. HAL issued 19 invoices to the Consortium operator, a company with headquarters in Angola, related to these goods and services, and HOL primarily performed the services which were invoiced. The total amount invoiced by HAL was $1,189,752.

OFAC determined that the alleged violations were voluntarily self-disclosed and constituted a non-egregious case. The total transaction value of the alleged violations was $1,189,752. The statutory maximum civil monetary penalty was $1,235,000 and the base penalty amount was $423,202. The settlement amount of $304,706 reflects OFAC's consideration of aggravating and mitigating factors pursuant to the General Factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, App. A.

The case illustrates sanctions exposure when providing goods and services to a multi-party consortium in which a sanctioned entity holds a minority interest. HAL and HOL's compliance program was found inadequate because it did not include a procedure to screen all Consortium members. The fact that the Consortium operator had provided HAL with documents showing Cupet's membership — and that contemporaneous sources including a news article and an Angolan government registry notice stated Cupet held an interest — established that HAL and HOL should have known of Cupet's participation. Conducting reasonable due diligence to identify all parties with interests in a concession or consortium, including minority stakeholders, is necessary to avoid dealing in property in which a sanctioned country or national has an interest.

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