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Financial Services Law Insights and Observations

OFAC Reaches $1.192 Billion Resolution with Chinese Telecommunication Equipment Corporation

Financial Crimes Sanctions OFAC

Financial Crimes

On March 7, the Treasury’s Office of Foreign Asset Control (OFAC) announced a combined $1.192 billion resolution with other federal agencies against a Chinese telecommunications equipment corporation and its subsidiaries and affiliates to settle alleged violations of the Iranian Transactions and Sanctions Regulations. The resolution is pending approval of the company’s criminal plea in federal court. OFAC’s settlement agreement  resolves its investigation into the company’s practice of “utilizing third-party companies to surreptitiously supply Iran with a substantial volume of U.S.-origin goods, including controlled goods appearing on the Commerce Control List.” As noted by Steven T. Mnuchin, Secretary of the Treasury, this “settlement is OFAC’s largest ever against a non-financial entity and sends a powerful message that Treasury will aggressively pursue any company that willfully violates U.S. economic sanctions laws and obstructs federal investigations of such violations.”

In addition to the monetary penalty, the company must maintain policies and procedures designed to minimize future risk of violations of U.S. economic sanctions and export control violations.

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