Case No. BEL-2014-310852-1
Mr. Christian Rossegger,
Director-GM Brunn & Calder Operations
Flowserve (Austria) GmbH
Industriestrasse B/6
A 2345 Brunn am Gebirge
Austria
Dear Mr. Rossegger:
This responds to your request of June 25, 2014 (the “Application”), on behalf of Flowserve Austria GmbH, a subsidiary of Flowserve Corporation, to the Office of Foreign Assets Control (OFAC), requesting guidance as to whether Flowserve Austria and other non-U.S. business units of Flowserve Corporation, a U.S. person, may formalize and continue to utilize a pre-existing non-U.S. based financial due diligence and sales approval process to review proposed transactions involving end use by Naftan OAO, a Specifically Designated National under the Belarus Sanctions Regulations, 31 C.F.R. Part 548 (the BSR).
On June 16, 2006, President Bush issued Executive Order 13405 (E.O. 13405) in response to actions and policies...
In 2011, OFAC fined Flowserve Corporation in connection with transactions its foreign affiliates involving embargoed designations; in particular the exportation of items that were subject to re-export controls that applied to non-U.S. persons.
Here, where the Belarus Sanctions Regulations contain no such re-export controls, OFAC assures the applicant, a non-U.S. person subsidiary of Flowserve Corporation, that “non-U.S. subsidiaries of U.S. companies are generally not subject to the BSR, provided that the subsidiaries are not organized under the laws of the United States, are not considered ‘branches’ of U.S. companies, and there is no U.S. nexus to the transactions. Accordingly, the BSR would not prohibit transactions by a non-U.S. subsidiary doing business where all of those conditions were satisfied.” (Compare Case No. BEL-2014-313440-1; same but letter issued to U.S....