Sandhill Scientific, Inc. OFAC Settlement: $126K (2012)

OFAC alleged that on or about May 4, 2007, Sandhill exported medical equipment valued at approximately $6,700 to Dubai, United Arab Emirates, with knowledge or reason to know that the goods were intended for transshipment or supply to a company in Iran with which Sandhill had an exclusive distributor agreement, in apparent violation of the Iranian Transactions Regulations, 31 C.F.R. part 560. OFAC further alleged that Sandhill failed to provide documents responsive to two administrative subpoenas issued by OFAC during its investigation, on separate occasions in May and July 2008, in apparent violation of OFAC's Reporting, Procedures and Penalties Regulations, 31 C.F.R. part 501.

The matter was not voluntarily disclosed to OFAC. OFAC determined that the alleged ITR violation constituted an egregious case because Sandhill's unlicensed export appears to have resulted from willful and reckless conduct in which the company's management was directly involved; Sandhill appears to have deliberately concealed the fact that the goods were destined for Iran; and Sandhill did not fully cooperate with the investigation. These determinations resulted in a base penalty of $250,000 for the alleged ITR violation.

For the two alleged RPPR violations, OFAC's Enforcement Guidelines provide that, where the value of the underlying transaction is $500,000 or less, failure to comply with an administrative subpoena may result in a civil penalty of up to $20,000 irrespective of whether any other violation is alleged. Because the exported equipment had a value of approximately $6,700, the base penalty for the two alleged RPPR violations totaled $40,000.

The $126,000 settlement amount reflects OFAC's further consideration of the following General Factors: Sandhill does not appear to have had any compliance program in place at the time of the alleged violations; Sandhill does not appear to have taken any remedial action after the alleged violations came to its attention; the export may have been eligible for an OFAC license pursuant to § 560.530 of the ITR; and OFAC has no record of any prior sanctions enforcement actions involving Sandhill.

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