The U.S. Department of the Treasury said on Thursday that it is imposing a US$2-million civil monetary penalty against ExxonMobil and some of its subsidiaries for having breached Ukraine-related sanctions on Russia in May 2014.
“Between on or about May 14, 2014 and on or about May 23, 2014, ExxonMobil violated § 589.201 of the Ukraine-Related Sanctions Regulations when the presidents of its U.S. subsidiaries dealt in services of an individual whose property and interests in property were blocked, namely, by signing eight legal documents related to oil and gas projects in Russia with Igor Sechin, the President of Rosneft OAO, and an individual identified on OFAC’s List of Specially Designated Nationals and Blocked Persons,” the U.S. Department of Treasury said in its statement today.
The Treasury’s Office of Foreign Assets Control (OFAC) “determined that ExxonMobil did not voluntarily self-disclose the violations to OFAC, and that the violations constitute an egregious case,” the statement reads.
In its full web notice about the fine it is imposing to Exxon, the Treasury said that OFAC considered as aggravating factors, among others, that “ExxonMobil demonstrated reckless disregard for U.S. sanctions requirements when it failed to consider warning signs associated with dealing in the blocked services of an SDN” and that “ExxonMobil’s senior-most executives knew of Sechin’s status as an SDN when they dealt in the blocked services of Sechin”.
In May 2014, Exxon’s chief executive was Rex Tillerson, now U.S. Secretary of State.
Exxon, for its part, published a statement, following the Treasury’s announcement of the fine, and in it the oil and gas supermajor said:
“ExxonMobil followed the clear guidance from the White House and Treasury Department when its representatives signed documents involving ongoing oil and gas activities in Russia with Rosneft – a non-blocked entity -- that were countersigned on behalf of Rosneft by CEO Igor Sechin in his official representative capacity.”
“Based on the Enforcement Information published today, OFAC is trying to retroactively enforce a new interpretation of an executive order that is inconsistent with the explicit and unambiguous guidance from the White House and Treasury issued before the relevant conduct and still publicly available today. OFAC’s action is fundamentally unfair,” Exxon said.
By Tsvetana Paraskova for Oilprice.com
