Two weeks ago, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) announced that a settlement was reached with Teledyne Technologies and its subsidiary, Teledyne RD Instruments, concerning apparent violations of the Sudanese Sanctions Regulations. The apparent violations concerned the indirect export of Acoustic Doppler Current Profilers. The total amount of the export was $122,766.

In calculating the penalty OFAC determined that Teledyne voluntarily self-disclosed the apparent violations, and that such apparent violations did not constitute an egregious case. When calculating a penalty for a sanctions violation of an egregious case that was voluntarily self-disclosed OFAC will begin with one-half of the transaction value, which in this case was $61,383.

In coming to the final settlement amount, OFAC took into consideration that the integrity of the sanctions program was not harmed and that Teledyne did take remedial actions to prevent future violations. Moreover, engaging in a settlement with OFAC calls for a 10% reduction in penalty. The final settlement amount was $30,385, meaning that OFAC deducted $30,998 in total for consideration of the Enforcement Guidelines, including $6,138 for the settlement.

There are a number of general factors that OFAC considers in coming to an enforcement decision and in their penalty calculations. It is crucial that when responding to an OFAC administrative subpoena or when filing a voluntary self-disclosure that those general factors be analyzed in light of the facts surrounding the apparent violations. Not only will this allow you to highlight those facts which are most relevant to OFAC’s enforcement consideration, it allows an opportunity to raise considerations under those factors which the enforcement officer may not have thought of in reviewing the case.

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.