Last week, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement in the amount of $20,800 with Maritech Commerical, Inc. (Maritech) for violations of 31 C.F.R. Part 544 when it provided fuel inspection services on board five (5) Islamic Republic of Iran Shipping Lines (IRISL) vessels. This activity was particularly troublesome due to the fact that although the names of the vessels were changed, the IMO numbers remained the same. IMO numbers are unique identifiers that are assigned to vessels of a certain size and nature when constructed, and are permanently and visibly marked on vessels. Prior to the initiation of the OFAC enforcement case against Maritech, Maritech was not screening IMO numbers or the names of vessels that they were servicing.

As readers of this blog will know, OFAC considers the Enforcement Guidelines in coming to an appropriate enforcement response for an apparent OFAC violation. In considering Maritech’s activities, OFAC determined that since there was no sanctions compliance program in place that it demonstrated reckless behavior, and that the integrity of the sanctions program was compromised. Maritech did obtain some mitigation when it demonstrated that it had no prior OFAC sanctions enforcement history, and that it had instituted a system to screen against OFAC’s List of Specially Designated Nationals and Blocked Persons (“SDN List”).

This recent OFAC enforcement action highlights the need for OFAC screening in a variety of industries, not just the financial services industry. Regardless of the size of the company, if there is any kind of international business taking place, some level of OFAC compliance should be instituted. This could come in the form of an OFAC compliance manual or process that is implemented, utilization of screening software that checks for names on the OFAC SDN List, or some other measures that ensure compliance with U.S. economic sanctions regulations administered by OFAC. As the Maritech enforcement action demonstrates no company, nor activity, is too small to draw a penalty for violating OFAC sanctions if the circumstances call for 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@ferrariassociatespc.com.