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Enforcement Release: January 17, 2025
Haas Automation, Inc. Settles with OFAC for $1,044,781 for Apparent Violations of the Ukraine-/Russia-related Sanctions Regulations
Haas Automation, Inc. (“Haas”), a manufacturer of machine tools and related parts based in California, has agreed to pay $1,044,781 to settle its potential civil liability for 21 apparent violations of sanctions related to the defense and energy sectors of the Russian Federation economy. Between December 2019 and March 2022, Haas indirectly supplied one computer numerical control (CNC) machine, 13 orders of spare parts, and seven authorization codes for CNC machines owned by blocked Russian entities. The settlement amount reflects the determination by the Office of Foreign Assets Control (OFAC) that the apparent violations were not voluntarily disclosed and that eight of the 21 apparent violations were egregious. The settlement amount also reflects Haas’s significant remedial efforts and extensive cooperation with OFAC’s investigation.
OFAC...
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1) From a legal basis perspective, most (14) of the violations included within this enforcement action are similar to Cobham Holdings, Inc. (U.S. person sold goods through a non-U.S. distributor where such goods were destined for a person blocked pursuant to the 50 Percent Rule and the U.S. person had a reason to know that such end user was blocked). These are straightforward indirect export violations. Note that while OFAC points out that the “purchase order is generated” by the Haas Business Center web portal, this type of potential “facilitation” through the passive use of U.S.-based IT infrastructure was not regarded as a violation in and of itself. Hass was actually exporting the parts itself in addition to the other activities.
2) The balance of the violations pertain to the “financial unlock codes”. As a threshold issue, it is...