Enforcement Release: January 14, 2021
OFAC Settles with PT Bukit Muria Jaya for Its Potential Civil Liability for Apparent Violations of the North Korea Sanctions Regulations
PT Bukit Muria Jaya (BMJ), a paper products manufacturer located in Indonesia, has agreed to pay $1,016,000 to settle its potential civil liability for 28 apparent violations that arose from its exportation of cigarette paper to the Democratic People’s Republic of Korea (DPRK). BMJ directed payments for these exports to its U.S. dollar bank account at a non-U.S. bank, which caused U.S. banks to clear wire transfers related to these shipments, including shipments made to a blocked North Korean person. This settlement amount reflects OFAC’s determination that BMJ’s conduct was non-egregious and accounts for BMJ’s remedial response. This case further highlights the risks to non-U.S. persons who involve the U.S. financial system in commercial activity with an OFAC-sanctioned country, region,...
1) The facts underlying this enforcement action are similar to those in Civil Enforcement Information - Essentra FZE. In that case, a non-U.S. person manufacturer “received payment for the shipment of [] goods[to North Korea] into its bank accounts at the foreign branch of a U.S. bank. Because the “foreign branch of a U.S. bank” was a “U.S. person,” Essentra was deemed to have “caused” a U.S. person to export financial services to North Korea, and to have “caused” the “facilitation” of the underlying export of the goods.
Here, the facts are similar—including with respect to the deceptive conduct on the part of the payment originating manufacturer—except that the U.S. person involvement in the transactions was standard U.S. person dollar clearing as an intermediary bank. That involvement was “caused” by BMJ. As with Essentra, BMJ was considered to have violated...