PT Bukit Muria Jaya OFAC Settlement: $1M (2021)

BMJ exported cigarette paper to entities located in or doing business on behalf of the DPRK, including to an intermediary in China that procured cigarette paper from BMJ on behalf of OFAC-designated Korea Daesong General Trading Corporation ("Daesong") while Daesong was operating under an alias. BMJ initially referenced DPRK entities on its transactional documents, but at the request of its customers certain BMJ sales employees later replaced such references with the names of intermediaries located in third countries, including on invoices, packing lists, and bills of lading. The approximate commercial value of BMJ's exports to the DPRK was $959,111.

BMJ directed payments for its DPRK-related exports to its U.S. dollar bank account at a non-U.S. bank. This caused 28 wire transfers related to such exports to clear through U.S. banks between March 2016 and May 2018. BMJ appears to have violated § 510.212 of the North Korea Sanctions Regulations, 31 C.F.R. part 510 (NKSR), when it caused U.S. banks to: (i) deal in the property or interests in property of a Specially Designated National or Blocked Person; (ii) export financial services to the DPRK; or (iii) otherwise facilitate export transactions that would have been prohibited if engaged in by U.S. persons, in apparent violation of §§ 510.201, 510.206, and 510.211 of the NKSR.

The statutory maximum civil monetary penalty applicable in this matter is $8,621,816. OFAC determined that BMJ did not voluntarily self-disclose 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 applicable in this matter is $1,270,000. The settlement amount of $1,016,000 reflects OFAC's consideration of the General Factors under the Enforcement Guidelines.

BMJ's obligation to pay OFAC the settlement amount shall be deemed satisfied by BMJ's payment of a greater amount in satisfaction of penalties assessed by the U.S. Department of Justice arising from the same course of conduct.

BMJ's obligation to pay OFAC the settlement amount was deemed satisfied by its payment of a greater amount in satisfaction of penalties assessed by the U.S. Department of Justice arising from the same course of conduct.

All persons, including non-U.S. persons, engaged in international trade and commerce should be aware of sanctions prohibitions applicable to non-U.S. persons who involve U.S. persons in such transactions. These circumstances can arise when financial transactions that pertain to commercial activity with an OFAC-sanctioned country, region, or person are processed through or involve U.S. financial institutions. Involving a U.S. financial institution in such commercial activity, including the shipment of goods to or from a third-country to an OFAC-sanctioned country, may cause violations of OFAC regulations, such as the prohibited exportation or reexportation of services from the United States, or by U.S. persons, to a comprehensively sanctioned jurisdiction.

For companies engaged in trade with international partners, the absence of a risk-based sanctions compliance program may contribute to the likelihood of committing such a violation. This risk may be particularly acute when dealing with DPRK companies and individuals, or those who may be acting on their behalf, given the DPRK's widespread efforts to evade U.S. and international sanctions.

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