KMT Group OFAC Settlement: $125K (2013)

On February 24, 2009, and March 6, 2009, KMT GmbH appears to have violated §§ 560.203 and 560.204 of the ITSR when it attempted to export nine high pressure water jetting pump units from the United States to Iran, and exported, reexported, sold, or supplied the pumps from the United States to Hamburg, Germany, with knowledge or reason to know that the goods were intended specifically for reexportation to South Pars Industrial Gas Complex in Tehran, Iran. KMT GmbH, acting as sales agent for the pumps, failed to disclose to KMT AD — the U.S.-based manufacturer — that the end destination and end-user of the goods were in Iran. The U.S. Department of Homeland Security's Customs and Border Protection seized the nine pumps and partial payment for the pumps upon redelivery from Europe to the United States.

This matter was not voluntarily self-disclosed to OFAC and the apparent violations do not constitute an egregious case. The base penalty amount for the apparent violations was $500,000. The $125,000 settlement reflects OFAC's consideration of the following facts and circumstances pursuant to the General Factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, App. A: KMT GmbH demonstrated reckless disregard for U.S. sanctions requirements, including failing to disclose to KMT AD that the end destination and end-user of the goods were in Iran; KMT GmbH had not received a penalty notice or Finding of Violation in the five years preceding the transactions; there was no actual sanctions harm since the goods were not reexported to Iran; the nine pumps were seized by CBP and KMT GmbH had already forfeited two of the pumps and $579,026 (partial payment for the pumps); the KMT Group entities took remedial measures to resolve issues related to the apparent violations and prevent future violations; and the KMT Group entities substantially cooperated with the U.S. government's investigation. In addition to the $125,000 payment, KMT Group agreed that no KMT Group entities will contest CBP's forfeiture proceedings against the remaining seven pumps.

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