OFAC fines ExxonMobil $2,000,000 for sanctions violations

OFAC has fined US oil and gas company ExxonMobil $2,000,000 for violating US sanctions relating to the Ukraine crisis. Between 14 May and 23 May 2014, the presidents of ExxonMobil’s US subsidiaries are said to have dealt with designated person Igor Sechin, president of Russian oil company Rosneft. Exxon signed 8 legal documents with Mr Sechin related to oil and gas projects in Russia, but has said that it believed the sanctions only prohibited doing business with Mr Sechin as an individual and not in his capacity as president of Rosneft. The deals were signed during US Secretary of State Rex Tillerson’s tenure as Exxon’s chief executive.

At the time the contracts were signed, there was a FAQ on the OFAC website stating that it was prohibited to enter into contracts signed by a SDN. OFAC stated in its enforcement notice that although the guidance said that “different interpretations may exist among and between the sanctions programmes” OFAC administers, the FAQ clearly indicated that OFAC had in another sanctions programme involving SDNs viewed the signing of a contract with an SDN as prohibited, even if the company on whose behalf the SDN signed was not prohibited. Exxon disputes this, and has brought a lawsuit in the US attempting to stop the fine. It claims that OFAC is trying to retroactively apply a new interpretation of the sanctions that did not apply at the time the deals were signed.

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About Michael O'Kane

Michael O'Kane

Michael was called to the Bar in 1992 and prior to joining Peters & Peters was a senior specialist prosecutor at the Crown Prosecution Service Headquarters (CPS). He was a key member of a small specialist unit responsible for the prosecution of serious and high-profile fraud, terrorist,...

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