Yesterday, the United States Department of the Treasury Office of Foreign Assets Control (OFAC) announced the settlement of two matters related to violations of the Iranian Transactions Regulations (ITR). The settlement amounts in these matters were relatively small coming in at $15,000 and $5,400 respectively.

In the first matter, Wilson Tool International was found to have violated the ITR when it exported punch press tooling equipment to Iran valued at $25,000. This amount also served as the base penalty due to Wilson Tool’s failure to self disclose the violation and the non-egregious nature of the transaction. The penalty was mitigated down to $15,000, due to Wilson’s cooperation with OFAC, which included signing a tolling agreement, and the fact that they did not have a prior history of OFAC violations.

In addition to Wilson Tool’s settlement, a Mobile, Alabama based entity, ASF, Inc. also settled claims that they had violated the ITR when they reexported certain goods to Iran. This export took place through a foreign person in a third country. ASF’s base penalty was $10,000, however, the penalty was mitigated down due to ASF’s cooperation, which also included signing a tooling agreement, their lack of prior history of sanctions violations, and the fact that the goods exported would have been eligible for an OFAC license.

As evidenced by the cases above, it often pays to cooperate with OFAC. Indeed, in most cases of civil penalties for violations of OFAC administered sanctions regulations, cooperation with OFAC and entering into tolling agreements with them is often cited as a factor impacting the settlement amount. Had these entities self-disclosed their violations the base penalty determinations would have been reduced by 50% from the beginning. Such a reduction coupled with their cooperation could have possibly meant an even small settlement amount or the issuance of a cautionary letter. Sometimes self-disclosing violations is really worth it.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.