US Fines Exxon $2 Million Over Russia Sanctions Breaches

by Abel Hampton July 21, 2017, 0:27
US Fines Exxon $2 Million Over Russia Sanctions Breaches

ExxonMobil has been handed a fine of $2 million for breaching anti-Russia sanctions, the Office of Foreign Assets Control (OFAC) said Thursday in an online statement.

Exxon violated USA sanctions on Russia during May 2014 when it signed eight documents relating to oil and gas projects in Russia with Igor Sechin, the president of Russian state-oil firm Rosneft, Treasury said in an enforcement notice posted to its website.

In its full web notice about the fine it is imposing to Exxon, the Treasury said that OFAC considered as aggravating factors, among others, that "ExxonMobil demonstrated reckless disregard for USA sanctions requirements when it failed to consider warning signs associated with dealing in the blocked services of an SDN" and that "ExxonMobil's senior-most executives knew of Sechin's status as an SDN when they dealt in the blocked services of Sechin".

Treasury had instituted the sanctions against Sechin on April 28, 2014, when it said "transactions by US persons or within the United States involving the individuals and entities designated today are generally prohibited".

The US in April said it would not waive sanctions to allow Exxon to resume drilling in Russian Federation.

ExxonMobil, in a statement, called the Treasury Department's fine "fundamentally unfair" and said that it was following "clear guidance from the White House and Treasury Department" at the time.

OFAC said it had considered and rejected Exxon's explanation that it had believed from press accounts of the sanctions that there was a distinction between Sechin acting in a "professional" rather than a "personal" capacity.

Exxon did not disclose the activities, the Treasury Department said.

Before he became Secretary of State, Mr Tillerson knew both Mr Sechin and Russian President Vladimir Putin for more than a decade.

The fine was the maximum civil penalty it could level.

After the Ukraine-related sanctions put in place under President Barack Obama, Tillerson saw Exxon's stake in a lucrative offshore drilling project with Rosneft come under threat.

Exxon signed the agreements between May 14 and 23, 2014. Tillerson has recused himself from any decisions regarding his former employer for his first two years as Secretary, according to the State Department. The State Department declined to comment on Tillerson's role, referring all questions to Exxon.

"The secretary continues to abide by his ethical commitments, including that recusal from Exxon-related commitments", said State Department spokeswoman Heather Nauert.

Publicly available guidance on Treasury's website at the time of Exxon's dealings with Sechin said Americans should ensure they do not enter into contracts signed by sanctioned individuals, OFAC said.

Since taking office in Washington, Mr Tillerson has taken a tough line on Ukraine-related sanctions. Earlier this year, the Trump administration said it would not let any USA company, including ExxonMobil, drill in areas prohibited by US sanctions on Russian Federation.


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