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Enforcement Release: September 21, 2023
OFAC Settles with 3M Company for $9,618,477
Related to Apparent Violations of the Iranian Transactions and Sanctions Regulations
3M Company (“3M”), a global manufacturing company based in St. Paul, Minnesota, has agreed to pay $9,618,477 to settle its potential civil liability for 54 apparent violations of OFAC sanctions on Iran. This conduct occurred between 2016 and 2018 when a 3M subsidiary based in Switzerland, 3M (East) AG (“3M East”), knowingly sold reflective license plate sheeting via a German reseller to Bonyad Taavon Naja, an entity controlled by Iran’s Law Enforcement Forces. Additionally, one U.S. person employed by a 3M foreign subsidiary was closely involved in the sales. The settlement amount reflects OFAC’s determination that 3M’s apparent violations were egregious and voluntarily self-disclosed.
Description of the Apparent Violations
In November 2015, in anticipation of the implementation of...
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1) BACKGROUND; LEGAL BASIS FOR LIABILITY
This enforcement action comes less than a month after Enforcement Release: Construction Specialties Inc., which, similar to this case, involved activities engaged in during the JCPOA period--when Iran General License (No. H) was valid--that were outside teh scope of the GL.
Here, OFAC says that "3M East" (the Swiss Subsidiary) and 3M Gulf (the UAE Subsidiary) engaged in transactions that, due to 560.701(a)(4), the subsidiaries' U.S. person parent was ultimately responsible for. While 560.215 has the effect of subjecting U.S.-owned or -controlled foreign entities to most of the ITSR's substantive prohibitions, 560.701(a)(4) provides that it is the U.S. person parent that is responsible for the civil...