I know I’m starting to sound like a broken record here, but the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) is upping the ante when it comes to the dollar amounts of the fines they issue. As I have discussed over the past year, OFAC has been levying bigger and bigger fines since the Obama Administration has come into office. Last Friday was no exception when they hit Balli Group PLC and Balli Aviation (collectively “Balli”) with an enormous $15 million dollar penalty for violations of the Iranian Transactions Regulations (“ITR”) and the Export Administration Regulations (“EAR”).

This penalty is part of a settlement that is taking place between Balli, OFAC, and the United States Department of the Commerce Bureau of Industry and Security (“BIS”). The settlement pertains to allegations that Balli violated 31 C.F.R. §§ 560.203 and 560.204 of the ITR by way of exporting three commercial airliners from the United States to Mahan Airlines in Iran (“Mahan”). Balli is also accused of attempting to export three additional commercial airliners to Mahan.

In addition to this settlement, Balli Aviation, Ltd. pleaded guilty to a two-count criminal information brought by the U.S. Department of Justice (“DOJ”) for its part in the exportation of the aircraft to Iran. As a result, Balli will pay two million of the 15 million dollars as a criminal fine.

Moreover, Balli will hire a third-party consultant with expertise in U.S. export control laws and sanctions regulations to conduct external audits of Balli’s compliance with U.S. export control laws and sanctions regulations, and to be subject to a five year BIS order denying export privileges to Balli and its representatives, agents, or employees. However, the BIS denial order was suspended in its entirety provided Balli remains in compliance with the terms of the Settlement Agreement and the EAR.

And so here I will state again for the record, if you are a U.S. person conducting any kind of business which in any way might involve Iran or the government of Iran, do the right thing: hire a lawyer with experience and knowledge of the U.S. sanctions and export requirements in regards to Iran.

Also I should note that while OFAC has been moving towards issuing huge penalties against corporate entities, that does not mean that individuals or small companies are off the hook. I mentioned in my last post that OFAC is still very actively pursuing cases against individuals and small to mid size companies who they feel might have violated their sanctions programs. I know this, because I keep getting calls from such individuals and companies.

In sum, the bad news is that OFAC is getting more comfortable issuing the larger penalties. The good news is that these penalties can be avoided through proper compliance. Again if you aren’t absolutely 100% sure that certain transactions you are engaging in are permitted under the sanctions, then seek legal advice. After all, you don’t want to end up with a $15 million dollar fine on your desk.

Read the entire settlement agreement here.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC litigation. If you have any questions please contact him at 202-280-6370 at 202-351-6161 or ferrari@ferrari-legal.com.