Enforcement Release: April 19, 2021
OFAC Settles with Alliance Steel, Inc. for $435,003 with Respect to Potential Civil Liability for Apparent Violations of the Iranian Transactions and Sanctions Regulations
Alliance Steel, Inc. (“Alliance”), a designer and manufacturer of prefabricated steel structures based in Oklahoma City, Oklahoma, has agreed to pay $435,003 to settle its potential civil liability for 61 apparent violations of OFAC regulations related to its importation of engineering services from an Iranian engineering company. Alliance maintained an ongoing business relationship with the Iranian company over a period of approximately five years. This settlement amount reflects OFAC’s determination that Alliance’s conduct was non-egregious and voluntarily self-disclosed, and further reflects Alliance’s remedial response and cooperation with OFAC throughout this investigation.
Description of the Conduct Leading to the Apparent Violations
Alliance describes itself as principally a domestic business—Alliance sells its products exclusively to...
1) From a legal basis standpoint, the Alliance Steel, Inc. enforcement action is extremely straightforward. The use of an Iranian professional service provider is an “importation” of services from Iran (560.201) and a trade-related transaction involving Iranian origin services (560.206).
What is notable about the enforcement action is the fact that the entity penalized is a U.S-based manufacturer that does not actually export (i.e., the entity would ordinarily be considered to have a low sanctions risk profile). OFAC noted this in the enforcement release, evidently to flag its enforcement intentions vis-à-vis entities that would generally not be expected to have sophisticated OFAC compliance programs.