Iranian Transactions and Sanctions Regulations

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Global communications solutions provider, CSE TransTel, a subsidiary of CSE Global Limited (both based in Singapore), recently agreed to settle Iran sanctions charges leveled by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) for $12 million.  The charges involve 104 violations of the Iran sanctions between June 2012 and March 2013.  The case involved an independent U.S. government investigation, not a voluntary self-disclosure.

The charges related to TransTel causing six different financial institutions to provide unauthorized financial services relating to transactions with Iran.  The funds transfers were processed in part in the U.S. and they involved the supply of goods or services handled by a variety of vendors and service providers with connections to Iran.  …
Continue Reading OFAC Penalizes Singaporean Communications Provider $12 Million For Iranian Transactions Conducted In U.S. Dollars  

On May 26, the U.S. Court of Appeals for the DC Circuit remanded for further consideration OFAC’s imposition of a $4 million penalty against Epsilon Electronics for 39 shipments found to violate the Iranian Transactions and Sanctions Regulations (“ITSR”).  According to the DC Circuit, OFAC failed to meet its burden to justify its finding of violation with respect to five of the 39 shipments in question.  The Court therefore directed OFAC to reconsider its findings with respect to the five violations and to recalculate the penalty.  Despite this being a rare circumstance in which a company (temporarily?) successfully challenged an OFAC determination in court, this ruling is not a broad rebuke of OFAC’s authority to interpret its regulations.

Even in remanding a portion of OFAC’s determination to the agency, the Court upheld OFAC’s broad interpretation of the ITSR.  OFAC’s final Penalty Notice imposed liability for 39 exports of car audio/visual equipment to the UAE that Epsilon knew, or should have known, were intended for reexport to Iran.  OFAC relied on evidence from the UAE company’s site advertising extensive relationships with Iran, among other factors, to draw its conclusion.  Epsilon argued that OFAC did not prove that any of the 39 shipments actually arrived in Iran.  The Court agreed with the government that actual arrival in Iran is not necessary to find a violation – that exporting with reason to know the items were intended for Iran is sufficient to sustain a finding of violation.
Continue Reading Appeals Court Says That Actual Arrival In Iran Is Not Necessary For OFAC To Find Violation