OFAC ANNOUNCES SETTLEMENT OVER SANCTIONS VIOLATIONS
January 27, 2025
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On December 13, 2024, the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) settled with C.H. Robinson International Inc. (“Robinson”) for violating sanctions against Iran and Cuba. Robinson, a Minnesota-based global transportation and logistics company, settled with OFAC after five of Robinson’s non-U.S. subsidiaries provided freight brokerage or transportation services for 82 shipments in violation of the Iranian Transactions and Sanctions Regulations (“ITSR”) and the Cuban Assets Control Regulations (“CACR”). Following an extensive investigation, OFAC determined that most violations occurred because the five non-U.S. subsidiaries did not properly screen for potentially violative transactions, nor did they use the latest sanctions compliance controls. One such example included a China-based subsidiary that provided transportation services for a shipment from China to Turkey even though the air waybill clearly denoted an Iranian airline as operating the first leg of the journey to Tehran. Despite clear sanctions implications, Robinson’s subsidiary staff failed to recognize the potentially violative transactions due in part to insufficient internal controls. While the maximum civil monetary penalty applicable in this matter was $28,629,270, OFAC opted for a $257,690 settlement amount because the violations were voluntarily self-disclosed, and Robinson promptly implemented remedial measures to prevent future violations. Companies are advised to establish appropriate compliance controls and trainings, especially with foreign subsidiaries, to avoid potential violations. Please further note that the ITSR and CACR extend to foreign subsidiaries of U.S. companies and thus imports and exports not involving the United States may still be subject to U.S. jurisdiction.
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