The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has reached a $87.5k settlement with Cobham Holdings for three ‘apparent’ violations of the Ukraine Related Sanctions Regulations (‘URSR’).
Between July 2014 and January 2015, a subsidiary of Cobham Holdings, Aeroflex/Metelics (‘Metelics’), indirectly exported components for commercial air traffic control radar to a business owned by a person on OFAC’s Specially Designated Nationals (‘SDN’) List.
The ‘apparent’ violations were uncovered in negotiations to sell Metelics in 2015. The purchaser identified several shipments through a Russian distributor for end use by Almaz Antey Telecommunications (‘ATT’). Although ATT is not identified on the SDN List, it is 51% owned by joint-stock company concern Almaz-Antey, which was sanctioned by OFAC on 16 July 2014, two weeks before Metelics made the first shipment of those under OFAC’s scrutiny.
Cobham determined that its screening software failed to generate an alert because it did not match ‘Almaz Antey’ when Cobham searched for ‘Almaz Antey Telecom’. The $87.5k settlement for the ‘apparent violations’ – for which the statutory maximum civil monetary penalty is $1,990,664 – was reached after Cobham self-disclosed in what was determined by OFAC to be a ‘non-egregious case’.
‘This case demonstrates the importance of companies operating in high-risk industries (i.e., defense) to implement effective, risk-based compliance measures, especially when engaging in transactions involving high-risk jurisdictions,’ said OFAC in its enforcement notice.
OFAC’s notice can be found here: