S&P Global, Inc. OFAC Settlement: $78.8K (2022)

Rosneft, Russia's largest oil company, was placed on OFAC's Sectoral Sanctions Identification List ("SSI List") on July 16, 2014, pursuant to Directive 2 of E.O. 13662, which prohibits all transactions or other dealings in new debt of Rosneft of longer than 90 days maturity.

In August 2015, prior to its acquisition by S&P Global, PIRA issued an invoice for $82,500 to Rosneft for an ongoing subscription service offering bespoke advisory services and market analysis. Although the invoice was due October 18, 2015, Rosneft did not pay by that date. In May 2016, Rosneft attempted payment; its bank rejected the transfer citing the sanctions program. A second attempt that month was not processed after Rosneft failed to respond to a U.S. financial institution's request for additional information. In July 2016, PIRA suggested Rosneft pay by check; Rosneft again attributed the failed payments to its bank's sanctions policy.

In August 2016, S&P Global employees (formerly PIRA employees) reissued and re-dated the original invoice with a new date of August 26, 2016, 374 days after the debt was originally issued. In communicating with Rosneft, S&P Global management acknowledged the risk, cautioning that "when the payment is made against an old invoice (as recent ones were), the bank may perceive that to be 'extending credit' to a Russian company, which we cannot do by law." In October 2016, S&P Global received a $55,000 partial payment from Rosneft.

With $27,500 still outstanding, S&P Global on November 22, 2016, reissued the original invoice a second time (462 days after original issuance), splitting the balance into two invoices of $13,750 each. Rosneft paid one on December 29, 2016. S&P Global then reissued and re-dated a fourth invoice dated September 5, 2017 (749 days after PIRA had issued the original invoice) and received the final $13,750 on October 6, 2017. By extending the payment dates far beyond the 90-day limit, S&P Global appears to have violated Directive 2 of E.O. 13662 and § 589.201 of the Ukraine-Related Sanctions Regulations, 31 C.F.R. part 589.

The statutory maximum civil monetary penalty applicable in this matter is $1,246,248. OFAC determined that S&P Global 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, 31 C.F.R. Part 501, app. A, the base civil monetary penalty equals the applicable schedule amount of $175,000. The settlement amount of $78,750 reflects OFAC's consideration of the General Factors under the Enforcement Guidelines.

This case underscores the importance of careful adherence to OFAC regulations, including in cases where counterparties may make compliance challenging. Companies who do business with entities on the SSI List must ensure that they comply with all aspects of the relevant Directives. Firms facing similar circumstances should contact OFAC if compliance becomes untenable due to actions or delays by their clients on the SSI List.

This action also emphasizes the importance of U.S. companies conducting sanctions-related due diligence and taking active steps to extend their compliance programs, including training and monitoring, to newly incorporated businesses and their employees. After merger and acquisition transactions are complete, companies should continue to closely oversee their new business elements in addition to their existing units to identify any additional sanctions-related issues and take appropriate preventative or remedial measures.

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.