Regulatory intelligence for US exporters

Three Companies Disclose Potential Export, Sanctions Violations

Three U.S. companies said they may have violated U.S. sanctions or export controls related to overseas sales and illegally processed payments, according to their most recent filings with the Securities and Exchange Commission. The potential violations include disclosures of dealings with sanctioned businesses, including sales to Iran.

Visteon Corporation, an automotive electronics supplier, filed multiple voluntary self-disclosures regarding potential sanctions violations with the Office of Foreign Assets Control in 2013 and 2014, according to its Oct. 29 filing. The company said it and Halla Visteon Climate Control Corporation had a minority stake in a Chinese joint venture that sold heating, ventilation, and air conditioning components into Iran, which ultimately resulted in $12 million in sales. OFAC is reviewing the disclosure, Visteon said, and may impose civil penalties, fines or “limitations on the company's ability to export products from the United States.”

The company said it cannot estimate whether OFAC will issue a penalty or when the agency’s investigation will be completed. But it said that any OFAC penalties “could harm the company’s reputation and have a material adverse effect on its business, operating results and financial condition.”

A10 Networks Inc., a software and hardware manufacturing company, said it recently discovered it may have been violating export controls administered by the Bureau of Industry and Security, according to its Oct. 30 filing. The company said it shipped encryption products before obtaining the required export licenses from BIS and “prior to submitting the required classification request.” A10 said it implemented “corrective actions,” filed an initial notification for a voluntary self-disclosure with BIS, and is conducting an investigation as it prepares to submit a full disclosure. The company said it “may incur penalties.”

A third company said it may have violated OFAC sanctions due to illegally processed payments. Moneygram International Inc., a money transfer company, said in its Oct. 30 filing that it began an investigation in 2015 to “identify payments processed” by the company that violated OFAC regulations. Moneygram filed a voluntary self-disclosure in 2017 and said it is still being reviewed by OFAC. The company said it is “not possible to determine the outcome of this matter” or whether OFAC’s investigation will be completed.

In another case, U.S.-based Flir Systems Inc., a producer of thermal imaging cameras, said it recently extended its tolling agreements with BIS and the Justice Department as they continue to investigate the company’s potential export violations (see 2008180011). The company had previously extended the agreement with BIS through Sept. 1 but said in an Oct. 30 filing that the agreement with BIS now extends to Dec. 1 and that its agreement with the Justice Department extends to Dec. 15. Flir Systems said the potential violations relate to “certain export classifications obtained through the commodity jurisdiction process.”