ENFORCEMENT INFORMATION FOR July 19, 2013
Stanley Drilling Equipment & Supply, Inc. Settles Potential Civil Liability for Alleged Violations of the Iranian Transactions Regulations: Stanley Drilling Equipment & Supply, Inc. ("Stanley Drilling"), Houston, TX, has agreed to pay $84,240 to settle potential civil liability for alleged violations of the Iranian Transactions Regulations, 31 C.F.R. part 560, which were renamed, amended, and reissued as the Iranian Transactions and Sanctions Regulations on October 22, 2012. The alleged violations by Stanley Drilling occurred between June 16, 2008, and October 17, 2008, when Stanley Drilling attempted to export four shipments and successfully exported two shipments of goods, valued at $93,329, from the United States to the United Arab Emirates, with reason to know that the shipments were intended specifically for supply, transshipment, or reexportation to an oil drilling rig located in Iranian waters.
This matter was not voluntarily disclosed to OFAC and the alleged violations constitute a non-egregious case. The base penalty amount for the alleged violations was $156,000.
The settlement amount reflects OFAC’s consideration of the following facts and circumstances, pursuant to the General Factors under OFAC’s Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A: Stanley Drilling did not have an OFAC compliance program in place at the time of the violations; the transactions were particularly harmful to U.S. sanctions program objectives because they aided the development of Iranian petroleum resources; the harm to OFAC sanctions program objectives was lessened because four of the six shipments were detained prior to leaving the United States; Stanley Drilling did not appear to have actual knowledge that the drilling rig was destined for or located in Iranian waters at the time of the subject transactions (although Stanley Drilling had reason to know these facts, because they were publicly and readily available before and at the time of the subject transactions); Stanley Drilling is a small company; and Stanley Drilling has no history of prior OFAC violations.
1) The Stanley Drilling case appears to be OFAC making an example of a small company with limited resources for not exercising due diligence adequate enough to detect a diversion risk. The fined entity appears to have been a small distributor of goods. OFAC takes the rare step of specifically conceding that there was no actual knowledge on the part of the fined entity, but states that the company had "reason to know [of the prohibited designation], because [the facts] were publicly and readily available before and at the time of the subject transactions."
2) Compare Civil Enforcement Information - Indam International, Inc. (2014), which is a similar case, but with OFAC citing the legal provisions violated (560.203, 560.204, and 560.206).