Enforcement Release - Danfoss A/S

Date issued: Dec. 30 2022

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TURBOFAC Commentary (463 words)

Notes:

1) “Directing” Customers to Make Prohibited Payments - an Unusual Application of the “Causing” Provision

Compare e.g. Civil Enforcement Information - Sojitz (Hong Kong) Limited, a similar case of a non-U.S. manufacturer “causing” violations of embargo regulations by routing payments through the U.S. financial system.

Note that is only the second case (as of the date on which the web post was published) in which OFAC charges “causing”-based violations as a result of non-U.S. persons issuing invoices to customers in USD/instructing customers to make payments through the U.S. financial system (Civil Enforcement Information - Toll Holdings Limited, where USD invoices were issued by non-U.S. persons). Here OFAC says that Danfoss “directed customers” to make otherwise prohibited payments, which presumably took the form of something similar to the issuance of an invoice requiring payment to a USD account....