Enforcement Release: January 11, 2022
OFAC Settles with Sojitz (Hong Kong) Limited for $5,228,298 Related to Apparent Violations of the Iranian Transactions and Sanctions Regulations
Sojitz (Hong Kong) Limited (“Sojitz HK”), a Hong Kong, China-based company that engages in offshore trading and cross-border trade financing, has agreed to pay $5,228,298 to settle its potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR). The apparent violations occurred when Sojitz HK made U.S. dollar payments through U.S. financial institutions for Iranian-origin high density polyethylene resin (HDPE) from its bank in Hong Kong to the HDPE supplier’s banks in Thailand. In doing so, Sojitz HK caused the U.S. financial institutions that processed the funds to engage in and facilitate prohibited financial transactions related to goods of Iranian origin. The settlement amount reflects OFAC’s determination that Sojitz HK’s apparent violations were non-egregious and voluntarily self-disclosed,...
From a legal basis standpoint, the facts of this case are usual, but not wholly unprecedented. Compare Civil Enforcement Information - PT Bukit Muria Jaya (non-U.S. person manufacturer routed payments through the U.S. in connection with exports to North Korea, thereby “causing” the U.S. person banks to “facilitate” the underlying exports to North Korea from a third country). Here the facts are similar, except the non-U.S. person “caused” the U.S. banks to “facilitate” the dealing in Iranian-origin goods that would be prohibited if engaged in directly by a U.S. person (560.206/560.208).
It is notable that OFAC did not charge a violation of 560.204, which would normally appear in the context of a non-U.S. person “causing” the exportation of “financial services” to Iran. Evidently, there was no actual Iranian person involved in the transactions (e.g. the manufacturer...