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Enforcement Release: December 18, 2024
Córdoba Music Group LLC Settles with OFAC for $41,591 Related to Apparent Violations of the Iranian Transactions and Sanctions Regulations
Córdoba Music Group LLC (Córdoba), a manufacturer of musical instruments based in California, has agreed to pay $41,591 to settle its potential civil liability for apparent violations of sanctions on Iran. On nine occasions, Córdoba shipped instruments and related accessories that it knew were ultimately destined for Iran. The settlement amount reflects the Office of Foreign Assets Control’s (OFAC) determination that Córdoba’s apparent violations were non-egregious and voluntarily self- disclosed, and further reflects the remedial measures implemented upon discovery of the apparent violations.
Description of the Apparent Violations
Between June 4, 2014 and October 30, 2018, Córdoba maintained a distribution agreement with a Dubai-based company for sales in the Middle East, including Iran. In 2018, Córdoba sought...
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1) From a legal basis standpoint, this enforcement action is as straightforward as they come with respect to the exportation of goods to a third country with reason to know that they are destined for Iran (560.204), but not how OFAC only appears to count the actual exports as violations, rather than having “maintained a distribution agreement with a Dubai-based company for sales in the Middle East, including Iran” and having “entered into an informal arrangement [with an Iranian company] for it to distribute Córdoba products in Iran”. Compare Enforcement Release - NewTek, Inc. and Ubiquiti Networks. It is possible that the agreement-related “transactions” were outside the statute of limitations, and that’s why they weren’t cited as violations.
2) It is noteworthy that this is the lowest penalty assessed to an entity by OFAC since...