Cement import draws $506,250 OFAC penalty

ZAG International’s overseas managing director acquired cement clinker from a supplier in the United Arab Emirates knowing that it originated in Iran.    The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has reached a $506,250 settlement with a Newtown, Conn.-based company for illegally sourcing cement clinker from Iran.
   Between July 11, 2014, and Jan. 15, 2015, ZAG International purchased 263,563 metric tons of Iranian-origin cement clinker via a supplier in the United Arab Emirates, which was then resold by the company to a customer in Tanzania. 
   OFAC said ZAG’s managing director for the Asia-Pacific, Middle East and East Africa regions purchased the cement clinker, valued at about $14.5 million, with knowledge that it was sourced from Iran. Once discovered, ZAG voluntarily self-disclosed the apparent violations to OFAC, which helped to mitigate the penalty for wrongdoing.
   “Although ZAG did exercise limited due diligence, it acted with reckless disregard for sanctions requirements by failing to substantively address the U.S. sanctions prohibitions in place with respect to Iran despite contemporaneous risk indicators,” the agency said.
   Specifically, ZAG’s actions violated the Iranian Transactions and Sanctions Regulations.
   OFAC said the case is a reminder to companies engaging in international transactions to “consider and respond to sanctions-related warning signs, such as information that goods originating from, being loaded or unloaded at ports located in, or transshipping through, countries or regions subject to comprehensive U.S. economic and trade sanctions.”