Tofasco of America, Inc. OFAC Settlement: $21.4K (2014)

On or about April 16, 2009, Tofasco appears to have violated §§ 544.201(a) and 544.205 of the WMDPSR when it dealt in blocked property by engaging a bank to process a blocked letter of credit transaction representing payment for a shipment of recreational chairs with a substitute bill of lading omitting reference to the Islamic Republic of Iran Shipping Lines ("IRISL"), an entity whose property and interests in property are blocked pursuant to the WMDPSR. Tofasco initially presented trade documents to a prior bank in connection with the letter of credit transaction; however, the prior bank refused to advise the letter of credit transaction due to IRISL's involvement. Tofasco subsequently obtained and submitted altered bill of lading documents that concealed IRISL's involvement and presented the trade documents to a second bank.

Tofasco did not make a voluntary self-disclosure. OFAC determined that the alleged violation did not constitute an egregious case. The maximum statutory penalty amount was $250,000, and the base penalty amount was $25,000. The settlement amount of $21,375 reflects OFAC's consideration of the General Factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A.

OFAC determined that Tofasco demonstrated reckless disregard for U.S. sanctions requirements by presenting trade documents to a second bank and making payment for ocean freight after those documents were rejected by a prior bank. Tofasco knew of IRISL's involvement in the transactions. Sanctions program objectives were harmed because the transactions provided a direct economic benefit to a designated entity and because payments were successfully effectuated without OFAC authorization. OFAC noted that Tofasco did not appear to have had an OFAC compliance program in place at the time of the apparent violation.

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