U.S. Person-1 OFAC Settlement: $133.9K (2021)

Over a two-month period in 2016, U.S. Person-1 arranged for, and received, four payments totaling $133,860 into his personal bank account in the United States on behalf of an Iranian cement company. These payments were for Iranian-origin clinker, a cement precursor, that the Iranian company supplied to a project in a third country. U.S. Person-1 coordinated and further facilitated the sale of the clinker with a family member working at the Iranian cement company by relaying logistical and shipping information to the purchasing company.

U.S. Person-1 knew or had reason to know that accepting payments for or on behalf of the Iranian cement company and that facilitating the export of goods from Iran was prohibited. Previously, U.S. Person-1 had submitted a license request to OFAC to authorize other transactions with Iran; that request was denied. In its denial letter, OFAC listed and detailed the prohibitions involving Iran. U.S. Person-1 also received information from the Iranian company that identified the sanctions imposed against Iran and described complications the Iranian company had faced when attempting to receive U.S. dollar payments in the past. OFAC did not find that U.S. Person-1 received significant, if any, financial benefits from their conduct.

In accepting the payments and coordinating the sale, U.S. Person-1 appears to have violated §§ 560.204, 560.206, and 560.208 of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 ("ITSR"), on at least four occasions, specifically through: (1) exporting financial services to a company in Iran; (2) engaging in transactions or dealings related to the sale of Iranian-origin clinker on behalf of an Iranian company; and (3) facilitating four transactions that violate the prohibitions of §§ 560.204 and 560.206. Although the facilitation of the payments involved a family member, § 560.550 of the ITSR generally authorizes certain personal remittances to or from Iran only if the transactions are "noncommercial." OFAC found the underlying transactions to be commercial, and thus unavailable for the authorization found in § 560.550.

OFAC determined that U.S. Person-1 did not voluntarily self-disclose the apparent violations, and that the apparent violations constitute an egregious case. The statutory maximum civil monetary penalty applicable in this matter is $1,210,336. Accordingly, under OFAC's Economic Sanctions Enforcement Guidelines, the base civil monetary penalty amount applicable in this matter is $1,210,336. The settlement amount of $133,860 reflects OFAC's consideration of the General Factors under the Enforcement Guidelines.

This enforcement action highlights the broad range of prohibitions on dealings with Iran for natural U.S. persons, including those who act as intermediaries between non-U.S. parties. U.S. sanctions on Iran encompass a wide range of conduct, including dealings in goods of Iranian origin, providing services to Iran or persons normally resident in Iran, and facilitating other prohibited activity. OFAC's regulations and enforcement actions make clear that all U.S. persons face significant risks of violating U.S. sanctions when engaging in such dealings.

OFAC's regulations authorize or exempt specified activities that promote or are consistent with U.S. foreign policy and national security interests, such as exceptions for transactions involving humanitarian goods, certain communications technology, informational exchange, and personal remittances. To avail themselves of these authorizations, however, U.S. persons must ensure that their conduct is consistent with their scope. As this action illustrates, most non-humanitarian commercial activity falls outside OFAC's authorizations. Similarly, it is essential that U.S. persons seeking to transmit personal remittances to or from Iran or other sanctioned jurisdictions ensure there is no intertwined commercial activity.

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