Enforcement Release: June 26, 2024
Mondo TV, S.p.a. Settles with OFAC for $538,000 for Apparent Violations of the North Korea Sanctions Regulations
Mondo TV, S.p.a. (“Mondo”), an animation company headquartered in Rome, Italy, has agreed to pay $538,000 to settle its potential civil liability for apparent violations of OFAC sanctions on the Democratic People’s Republic of Korea (DPRK or “North Korea”). Between May 2019 and November 2021, Mondo remitted approximately $537,939 to a Government of North Korea-owned studio in payment for outsourced animation work. In doing so, Mondo caused U.S. financial institutions to process wire transfers that contained the blocked property interests of the Government of North Korea and to export financial services to North Korea. The settlement amount reflects OFAC’s determination that Mondo’s apparent violations were not voluntarily self- disclosed and non-egregious.
Description of the Apparent Violations
Mondo’s business dealings with...
1) From a legal basis standpoint, this enforcement action is somewhat unusual. If Mondo had simply made payments to a third party for onward transfer to a North Korean entity, it would have been straightforward and comparable to other North Korea-related actions. Compare e.g. Enforcement Release - Godfrey Phillips India Limited (non-U.S. person causing payments to be routed through the U.S. financial system where payments derived from North Korea and the alleged violator used "several third-country intermediary parties to receive payment"). Here, however, Mondo made payments to a third country company that were not routed onward to North Korea, but instead were "to satisfy debts [the North Korean company] had to [the payment recipients]". This sort of arrangement entails funds transfers in which the North Korean government entity had an "interest," and OFAC also regards the transfers as constituting the "export financial services...