OFAC Imposes Civil Penalty for the Export of Orthodontic Supplies to Iran

Sanctions OFAC

On September 7, OFAC announced a $43,200 settlement with an Oregon-based manufacturing company for alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR), 31 C.F.R. part 560. Specifically, OFAC alleges that the company violated §§ 560.204 and 560.206 of the ITSR between April 2008 and July 2010 by exporting orthodontic supplies, with a collective value of $59,886, to Germany, United Arab Emirates, and/or Lebanon with the knowledge or reason to know that the supplies were ultimately destined for Iran. The settlement amount reflects OFAC’s consideration of the following aggravating factors: (i) the company acted willfully by exporting products it knew or had reason to know were ultimately destined for Iran; (ii) the company’s management knew or had reason to know that the products were destined for Iran; and (iii) the company failed to implement a compliance program until June 2008. Mitigating factors considered when determining the settlement amount include (i) the fact that alleged violations did not “result in great economic or other benefit conferred on Iran” because the transactions were generally consistent with OFAC’s licensing policy; (ii) the company’s lack of sanctions history with OFAC for five years before the first of the seven alleged violations; (iii) the company’s cooperation with OFAC by agreeing to toll the statute of limitations; (iv) the company’s development of an economic sanctions compliance procedure in June 2008 and the subsequent draft of a written compliance policy; and (v) the company’s lack of “commercial sophistication in conducting international sales at the time of the alleged violations.”