Enforcement Release: December 31, 2024
SkyGeek Logistics, Inc. Settles with OFAC for $22,172 for Apparent Violations of the Russian Harmful Foreign Activities Sanctions Regulations
SkyGeek Logistics, Inc. (SkyGeek), a New York-based company that supplies aviation products, including avionic equipment and instruments, engine parts, tools, and specialty chemicals, has agreed to pay $22,172 to settle its potential civil liability related to six apparent violations of sanctions related to Russia’s aerospace and technology sectors. In 2024, SkyGeek attempted two refunds and sent four shipments to two Specially Designated Nationals (SDNs) in the United Arab Emirates sanctioned in connection with these sectors, key elements of Russia’s military-industrial base that enable its illegal war in Ukraine. The settlement amount reflects the Office of Foreign Assets Control’s (OFAC) determination that SkyGeek’s apparent violations were non-egregious and that certain of its conduct was voluntarily self-disclosed, as well as SkyGeek’s cooperation with OFAC....
1) From a legal basis perspective, these violations are extremely straightforward. In each case, a U.S. person attempted to send aviation-related goods directly to an SDN or otherwise initiate payments (here the refunds) to an SDN. Violations this straightforward that result in penalties this low in “non egregious / voluntary self-disclosure” scenarios are typically the subject of cautionary letters. The reason for this enforcement release resulting in a published penalty is likely the “Future Compliance/Deterrence Effect” “General Factor Affecting Administrative Action” in OFAC’s enforcement guidelines (“impact administrative action may have on promoting future compliance with U.S. economic sanctions by the Subject Person and similar Subject Persons, particularly those in the same industry sector”).
2) OFAC has, in the past and in the enforcement action context, suggested that the UAE is a “high-risk” jurisdiction in a way that appeared...