OFAC

Forwarders are seeing a rise in maximum penalties issued by CBP for violations surrounding ocean shipments that occurred over a year ago, National Customs Brokers & Forwarders Association of America officials said. Joe Brogan, the chair of NCBFAA’s export compliance subcommittee, said CBP officers are increasingly digging up old violations where forwarders submitted incorrect transportation-related information, such as the date of export or the port of export, and have levied penalties higher than $14,000 for a “single occurrence.”

President Joe Biden signed a sweeping executive order authorizing new sanctions against Russia, allowing the U.S. to designate people and companies operating in Russia’s defense and technology sectors or involved in attempts to influence foreign elections. The order, announced April 15, also authorizes sanctions against a range of Russian government officials and their associates as well as people and companies involved in Russian corruption, actions to “undermine democratic processes,” and human rights violations and transactions designed to circumvent U.S. sanctions.

The Office of Foreign Assets Control issued a cautionary letter but did not fine Asana, the U.S. company behind a team-management and organization app, Asana said in its March 30 Securities and Exchange Commission filing. Asana said it submitted a voluntary self-disclosure to OFAC after possibly providing services to sanctioned parties and illegally exporting controlled software. OFAC told Asana in February that it wouldn't pursue a civil monetary penalty against the company or “take other enforcement action,” according to the filing. The company also disclosed export violations to the Bureau of Industry and Security, which also issued a warning letter with no fine (see 2012300067).

The recent U.S. decision to increase sanctions and export controls on Russia, although largely narrow, could have significant implications for exporters doing business in Russia, law firms said. U.S. companies should pay close attention to new restrictions on certain controlled services and the potential impacts of the restrictions on disclosure and reporting requirements, the firms said.

The U.S., the European Union, the United Kingdom and Canada announced sanctions against China for human rights abuses in an internationally coordinated effort to condemn China’s treatment of its Uyghur population. The sanctions, announced March 22, target officials and an entity in the Xinjiang Uyghur Autonomous Region for leading the repression and detention of Muslim minorities.

Five companies said they may have violated U.S. sanctions, export controls or anti-corruption laws, according to their February Securities and Exchange Commission filings. The potential violations involved illegal exports, providing services to sanctioned territories and gift cards sent to the Chinese government.

The U.S. sanctioned a host of Russian officials and agencies, will add 14 entities to the Entity List and will increase restrictions on exports of military-related goods to Russia in response to the poisoning and imprisonment of Russian opposition leader Alexei Navalny. The increased export controls will also remove certain license exceptions for shipments to Russia and will impose stricter license review policies for certain sensitive goods, the State Department said March 2.

An American animal pharmaceutical company may have violated U.S. sanctions after acquiring a company that illegally sold goods to Iran, Zoetis disclosed in a Feb. 16 Securities and Exchange Commission filing. Zoetis said it acquired Platinum Performance in August 2019 and soon discovered that Platinum had sold food, medicine or “devices” to people or entities with ties to Iran, adding that the sales were not approved by a Treasury Department general license. Zoetis submitted an initial voluntary disclosure to the Office of Foreign Assets Control in February 2020 while it conducted an internal investigation, and in December 2020 submitted a final disclosure to both OFAC and the Justice Department. The agencies have said they don't comment on ongoing investigations.

The U.S. on Feb. 11 announced sanctions and export controls targeting the Myanmar military, defense ministry and security services after it carried out a coup earlier this month (see 2102100060). The White House also issued an executive order outlining a new Myanmar sanctions regime and said more restrictions will be imposed “in the coming days.”

A U.S. adhesive manufacturing company said it was issued a warning letter from the Treasury Department after disclosing potential violations of U.S. sanctions against Iran, according to the company’s Jan. 26 Securities and Exchange Commission filing. H.B. Fuller said customers of its subsidiaries in Turkey and India may have sold its hygiene products into Iran, which would have violated U.S. sanctions. The company said it disclosed the violations to the Office of Foreign Assets Control in 2018, and in December OFAC issued a cautionary letter with no penalty. H.B. Fuller said the transactions at the center of the potential violations represented less than 1% of the company’s 2018 net revenue.