What You Don’t Know Can Hurt You: OFAC’s First 2019 Enforcement Cases Emphasize Global Supply Chain and Affiliate Risks
The Treasury Department’s Office of Foreign Assets Control has settled three cases with what Arnold & Porter attorneys describe as a common theme: “the need for end-to-end visibility when implementing a global compliance program; merely relying on assurances from partners may not be enough.”
- A nearly $1 million settlement with e.l.f. Cosmetics for alleged violations of North Korean sanctions involved supply chain oversight that focused on quality and production, but not enough on material sourcing.
- U.S. company Kollmorgan Corporation acquired a Turkish company that did business in Iran, and took steps to comply with trade sanctions, but management of the subsidiary willfully evaded these rules. Kollmorgan’s cooperation earned it a $13,000 penalty.
- German company AppliChem GmbH continued to do business in Cuba after being acquired by a U.S. company, and responded to warnings from OFAC with subterfuge, leading to a $5.4 million settlement.
