Newmont Corporation OFAC Settlement: $141.4K (2022)

In 2013, Newmont and the Government of Suriname entered into a "Mineral Agreement" granting Newmont the right to mine gold in Suriname. On August 11, 2014, the government of Suriname granted Newmont, through Newmont Suriname, an exploitation license for a mine known as Merian. Through a bidding process, Newmont Suriname selected a Suriname-based distributor affiliated with a third-party U.S. corporation to supply explosive materials for the construction of the mine. On Newmont Suriname's behalf, the distributor imported Cuban-origin explosives and explosive accessories from Unión Latinoamericana de Explosivos ("ULAEX"), a Cuban entity, on at least four occasions. As the wholly owned subsidiary of a U.S. person, Newmont Suriname was generally prohibited from dealing in Cuban-origin goods.

On or about July 5, 2016, in the course of the first transaction, a Newmont Suriname assistant manager exchanged shipping documents with an operations manager for Newmont Suriname's distributor. The shipping documents clearly identified the goods were provided by ULAEX and sourced from Cuba. Subsequently, Newmont and Newmont Suriname received assurances that no Cuban origin products would be used to fill their orders. Nevertheless, Newmont Suriname's distributor fulfilled two additional orders from ULAEX, without Newmont's awareness. The bills of lading associated with all four transactions at issue clearly identified ULAEX and its address in Cuba as the source of the explosives and explosive accessories.

These additional shipments occurred because a Newmont Suriname employee failed to understand the implications of engaging in transactions related to merchandise of Cuban origin. The employee involved in the first transaction had not participated in the U.S. export and trade sanctions training provided by Newmont compliance personnel. Prior to learning about the conduct at issue, Newmont Suriname's purchase orders did not contain express statements that no items provided may originate from embargoed jurisdictions, nor did Newmont Suriname ask for country-of-origin information for goods acquired from its suppliers.

In total, OFAC identified four apparent violations by Newmont Suriname when it purchased Cuban-origin explosives and explosive accessories from a third-party vendor, in apparent violation of §§ 515.201 and 515.204 of the CACR.

The statutory maximum civil monetary penalty applicable in this matter is $367,264. OFAC determined that Newmont and Newmont Suriname voluntarily self-disclosed the Apparent Violations, and that the Apparent Violations constitute a non-egregious case. Accordingly, under OFAC's Economic Sanctions Enforcement Guidelines, the base civil monetary penalty amount equals the sum of one-half of the transaction value for each apparent violation, which is $176,803. The settlement amount of $141,442 reflects OFAC's consideration of the General Factors under the Enforcement Guidelines.

This case demonstrates the importance of U.S. companies with a global presence maintaining robust sanctions compliance programs throughout their entire corporate structure, including among their foreign subsidiaries and affiliates. Inadequate training among staff at foreign subsidiaries and affiliates can result in missed red flags, such as references to the country-of-origin of products, that can result in prohibited transactions or dealings.

This case also emphasizes the importance of instituting strong controls with suppliers, and of conducting sufficient transactional due diligence to identify and promptly remediate compliance deficiencies. Compliance efforts in such circumstances should include a thorough examination of risks such as geographic location and type of industry, as well as assessing the status and compliance controls of key partners involved in a company's transactions, including joint ventures, affiliates, subsidiaries, customers, and suppliers.

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.