Skip to main content
Menu Icon

InfoBytes Blog

Financial Services Law Insights and Observations


Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.

  • OFAC sanctions Iranian entities for petrochemicals and petroleum sales

    Financial Crimes

    On September 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13846 against an international network of companies involved in the sale of Iranian petrochemicals and petroleum products in South and East Asia. According to OFAC, the designations target Iranian brokers and several front companies in the UAE, Hong Kong, and India that have facilitated financial transfers and shipping of Iranian petroleum and petrochemical products. OFAC also noted that the sanctioned entities have played a critical role in concealing the origin of the Iranian shipments and enabling two sanctioned Iranian brokers to transfer funds and ship Iranian petroleum and petrochemicals to buyers in Asia. In addition to OFAC’s designations, the State Department is designating two entities based in the People’s Republic of China for their involvement in Iran’s petrochemical trade. As a result of the sanctions, all property and interests in property belonging to the sanctioned persons subject to U.S. jurisdiction are blocked and must be reported to OFAC. Additionally, “any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.” U.S. persons are also generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons unless authorized by an OFAC general or specific license. Persons that engage in certain transactions with the individuals or entities designated today may themselves be exposed to designation. Additionally, OFAC warned that “any foreign financial institution that knowingly facilitates a significant transaction or provides significant financial services for any of the individuals or entities designated today could be subject to U.S. correspondent or payable-through account sanctions.”

    Financial Crimes Of Interest to Non-US Persons Department of Treasury OFAC Iran OFAC Sanctions OFAC Designations SDN List China United Arab Emirates Hong Kong India

  • SEC fines tech company $23 million for FCPA violations

    Financial Crimes

    On September 27, the SEC announced that a multinational information technology company headquartered in Texas  (the “Company”) agreed to pay over $23 million to settle claims that its agents and employees of its subsidiaries in Turkey, the United Arab Emirates (UAE), and India violated the anti-bribery, books and records, and internal accounting controls provisions of the FCPA. According to the SEC’s order, from at least 2014 through 2019, several subsidiary employees used discount schemes and false marketing reimbursement payments to create slush funds used to bribe foreign officials in exchange for business. The slush funds were also used to provide other benefits, including paying for foreign officials and their families to attend technology conferences around the world and trips to the U.S. The SEC explained that first-level supervisors at the subsidiaries could approve purchase orders under $5,000 without evidence that marketing activity actually took place. By exploiting this loophole in the company’s controls, employees of the Company’s subsidiaries in Turkey, the UAE, and India were able to funnel money into the slush funds undetected. Employees of the Turkish subsidiary allegedly used the funds to bribe government officials and pay for the travel and accommodation expenses of customers, including foreign officials, the SEC claimed. Employees of the UAE subsidiary allegedly used the funds to pay $130,000 in bribes to government officials in exchange for six contracts. Employees in India also allegedly engaged in a similar scheme, with one employee claiming that the Company would lose out on a deal if the Indian Ministry of Railways was not provided a 70 percent software discount. According to the SEC, the Ministry’s procurement website showed that the Indian subsidiary faced no competition because the Ministry required the use of the Company’s products for the project.

    The resolution requires the Company to pay a $15 million civil money penalty, $7,114,376 million in disgorgement, and $791,040 in prejudgment interest. The Company neither admitted nor denied the allegations.

    This is the second time the Company has resolved FCPA charges with the SEC. In 2012, the Company paid a $2 million penalty to settle allegations that it violated the anti-bribery, books and records, and internal accounting controls provisions of the FCPA when it allegedly failed to prevent an India subsidiary from maintaining unauthorized side funds at distributors. 

    Financial Crimes Of Interest to Non-US Persons SEC Bribery Enforcement FCPA Turkey United Arab Emirates India

Upcoming Events