Los Angeles shipping company settles OFAC allegations for $500,000

A Los Angeles-based shipping company, Blue Sky Blue Sea, Inc., (doing business as American Export Lines and International Shipping Company or ‘AEL’)  has agreed to pay $518,063 to settle potential civil liability for 140 apparent violations of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560 (ITSR).

The US Treasury’s Office of Foreign Assets  Controls (‘OFAC’) said: ‘Specifically, from on or about April 25, 2010 to on or about June 2, 2012, AEL appears to have violated § 560.204 of the ITSR by transshipping used and junked cars and parts from the United States via Iran to Afghanistan on 140 occasions.’

It added that ‘OFAC determined that AEL did not voluntarily self-disclose the apparent violations to OFAC, and that the apparent violations constitute a non-egregious case.’

OFAC noted the following aggravating issues:

‘(1) AEL demonstrated a reckless disregard for U.S. sanctions requirements by failing to exercise a minimal degree of caution or care in transshipping goods through Iran;

(2) AEL’s President and co-owner knew and approved of the transshipments via Iran;

(3) AEL provided an economic benefit to Iran through its pattern of conduct and the volume of transactions in which it engaged; and

(4) AEL is a sophisticated international full-service freight forwarder with experience with U.S. export laws and OFAC regulations, particularly the ITSR.’

OFAC also noted some mitigating factors, amongst them, that the items were transshipped through Iran and did not appear to have an end use in the country; that AEL is a small company and the shipments represented a very small percentage of total business, and that the company did have a compliance programme in place (albeit one that was ‘silent on transshipments via Iran’.)

Full details of the settlement are at:
https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20170817_ael.pdf

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