OFAC Fines Financial Analytics Firm for Sanctions Violations
The Office of Foreign Assets Control on April 1 fined S&P Global, a business analytics firm, $78,750 for violating U.S. Ukraine-related sanctions regulations. OFAC said the case was non-egreious, partly due to S&P's cooperation and agreement to improve its compliance program.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The violations began when S&P Global and one of its companies, Petroleum Industry Research Associates, reissued and redated multiple invoices to continue to extend credit to JSC Rosneft, a state-owned Russian oil company, OFAC said. At the time, all transactions or other dealings in new debt of Rosneft of longer than 90 days' maturity were prohibited, the notice said, but S&P Global accepted past-due payments totaling $82,500 from Rosneft.
OFAC determined that S&P Global "failed to exercise a minimal degree of caution or care when it reissued the invoices to extend the payment date of invoices far beyond the authorized debt tenor," and likely knew the conduct would violate U.S. sanctions. OFAC also said the company is a "commercially sophisticated entity," considered a "leader in global energy market analysis" and didn't voluntarily disclose the violations.
OFAC also pointed to several mitigating factors, including the fact that S&P Global had not received a penalty notice in the previous five years. The company also took remedial measures by improving its compliance program by creating more robust training, adding periodic testing to invoices involving SSI List entities, and adding additional staff to manage sanctions issues. S&P's cooperation with OFAC and submissions of detailed documentation were also mitigating factors as part of a settlement agreement with OFAC. An S&P spokesperson didn't respond to a request for comment.
OFAC said the case underscored the importance of "careful adherence" to OFAC's regulations, especially in cases where "counterparties may make compliance challenging." The agency said "firms facing similar circumstances should contact OFAC if compliance becomes untenable due to actions or delays by their clients on" OFAC’s Sectoral Sanctions Identification List