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US fines ExxonMobil for violating Russian sanctions

EBR Staff Writer Published 21 July 2017

Petrochemical giant ExxonMobil has been slapped with a fine of $2m by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) on grounds of violating sanctions on Russia in the year 2014.

The federal department said that in May 2014, ExxonMobil had breached the Ukraine-Related Sanctions Regulations when the presidents of its American subsidiaries had engaged services of Russian individuals whose assets were blocked.

According to OFAC, ExxonMobil had forged eight documents with the Russian nationals pertaining to certain oil and gas projects in Russia.

While one of them was Rosneft president Igor Sechin, the other person, whose name is not known, has been identified on the List of Specially Designated Nationals and Blocked Persons maintained by OFAC.

The Treasury Department accused ExxonMobil of not voluntarily self-disclosing the violations to it and has determined the petrochemical company’s actions to be egregious in nature.

Calling the actions of OFAC to be unfair, ExxonMobil has filed a lawsuit against it which says that the department had violated the Administrative Procedure Act while denying the due process under the American constitution.

ExxonMobil added that it did not have notice of the interpretation which it says the federal department is now looking to enforce retroactively.

The company’s filing in a US District Court read: “OFAC seeks to retroactively enforce a new interpretation of an executive order that is inconsistent with the explicit and unambiguous guidance from the White House and Treasury issued before the relevant conduct and still publicly available today.”

ExxonMobil stated that it had complied with the guidance issued by White House and Treasury Department while signing the documents in May 2014 with Rosneft which was not a blocked entity. The documents signed by Sechin were on behalf of Rosneft in his official capacity, said ExxonMobil.

Adding further to its defense, ExxonMobil said that during the timing of signing of the documents, the activities did not come under any direct sanction by the US.


Image: Exxon Mobil Refinery in Baton Rouge, Louisiana, seen from the top of the Louisiana State Capitol. Photo: courtesy of WClarke/Commons.wikipedia.org.