OFAC Fines California Company for Illegal Exports by Foreign Subsidiary
A California electronics company was fined about $475,000 after its former Finnish subsidiary illegally exported test measurement equipment to Iran, the Office of Foreign Assets Control said Sept. 24. After Keysight Technologies acquired Anite Finland Oy in 2015, Anite continued to illegally supply equipment to Iranian end-users, hiding the transactions from Keysight, OFAC said. In a settlement agreement, Keysight agreed to implement improved compliance procedures and an annual audit of its compliance program for the next five years.
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Even though Anite said it would stop selling to Iran after it was acquired by Keysight, the Finnish company’s vice president, regional director and other employees agreed to continue the transactions “to preserve their credibility in local markets,” OFAC said. Between January and June 2016, the company completed six orders worth more than $300,000 involving Iran without U.S. authorization. OFAC said the items contained 10% or more of U.S. equipment controlled under the Export Administration Regulations.
Anite employees tried to hide the dealings from Keysight by deleting all references to Iran in documents and emails, OFAC said. Keysight eventually found out about the violations, investigated and submitted a voluntary self-disclosure to OFAC. OFAC said the violations constituted an egregious case.
Aggravating factors included Anite’s willful violation of the Iranian Transaction Sanctions Regulations, knowledge of the violations by senior Anite employees, the high value of the shipments and Anite’s “attempts at concealment,” which “significantly harmed” the ITSR. Mitigating factors included the fact that both Anite and Keysight had not received a penalty notice in the previous five years, Keysight’s cooperation with OFAC, its remedial measures and its commitment to improve its sanctions compliance program.
OFAC said Keysight fired the employees involved in the violations, introduced better training for Anite staff and implemented improved screenings for Anite’s transactions. OFAC said the case highlights the advantages of “proactive and ongoing sanctions compliance controls in foreign companies” that source U.S.-origin content. The agency stressed that companies should “assess the sanctions risk” when acquiring foreign subsidiaries.