Cartier OFAC Settlement: $334.8K (2017)

Between on or about October 5, 2010 and on or about April 21, 2011, Richemont appears to have violated § 589.203 of the FNKSR when it exported four shipments of jewelry to Shuen Wai Holding Limited in Hong Kong ("Shuen Wai"), an entity OFAC added to the SDN List on November 13, 2008.

On four separate occasions, an individual purchased jewelry from one of Richemont's Cartier boutiques located in California or Nevada and provided Shuen Wai's name and mailing address to Richemont as the ship-to party. Although the information and documentation provided to Richemont contained the same name, address, and country location for Shuen Wai as they appear on the SDN List, Richemont did not identify any sanctions-related issues with the transaction prior to shipping the goods.

OFAC determined that Richemont did not voluntarily self-disclose the apparent violations, and that the apparent violations constitute a non-egregious case. Accordingly, the base penalty amount equals the sum of the applicable schedule amount for each apparent violation, totaling $620,000. The settlement amount of $334,800 reflects OFAC's consideration of facts and circumstances pursuant to the General Factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A.

This enforcement action highlights the risks for companies with retail operations that engage in international transactions, specifically including businesses that ship their products directly to customers located outside of the United States. OFAC encourages companies to develop, implement, and maintain a risk-based approach to sanctions compliance, and to implement processes and procedures to identify and mitigate areas of risks. Factors that a company could consider with respect to its compliance program include an assessment of its products and services, frequency and volume of international transactions and shipments, client base, and size and geographic location(s).

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