U.S. shipping firm reaches settlement with OFAC for violating Iran sanctions

Blue Sky Blue Sea, Inc., doing business as American Export Lines and International Shipping (USA) (collectively referred to as AEL) agreed to pay $518,063 for violating U.S. sanctions on Iran 140 times.    Blue Sky Blue Sea, Inc., doing business as American Export Lines and International Shipping (USA) (collectively referred to as AEL) of Los Angeles, has agreed to pay a $518,063 settlement for violating U.S. sanctions on Iran, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) reported on Aug. 17.
   AEL transshipped used and junked cars and parts from the United States via Iran to Afghanistan on 140 occasions between on or about April 25, 2010 and on or about June 2, 2012, therefore violating § 560.204 of the Iranian Transactions and Sanctions Regulations (ITSR).
   § 560.204 of the ITSR says, “Except as otherwise authorized pursuant to this part, and notwithstanding any contract entered into or any license or permit granted prior to May 7, 1995, the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, technology, or services to Iran or the Government of Iran is prohibited, including the exportation, reexportation, sale, or supply of any goods, technology, or services to a person in a third country undertaken with knowledge or reason to know that: (a) Such goods, technology, or services are intended specifically for supply, transshipment, or reexportation, directly or indirectly, to Iran or the Government of Iran; or (b) Such goods, technology, or services are intended specifically for use in the production of, for commingling with, or for incorporation into goods, technology, or services to be directly or indirectly supplied, transshipped, or reexported exclusively or predominantly to Iran or the Government of Iran.”
   AEL did not voluntarily self-disclose the apparent violations to OFAC, and the apparent violations constitute a non-egregious case, according to the Treasury Department.
   The maximum statutory civil monetary penalty amount for the apparent violations totaled $35 million, while the base civil monetary penalty amount stood at $1.535 million.
   OFAC found AEL’s actions did provide an economic benefit to Iran, and that the international freight forwarding and logistics company “demonstrated a reckless disregard for U.S. sanctions requirements by failing to exercise a minimal degree of caution or care in transshipping goods through Iran,” the Treasury Department said.
   The Treasury Department also pointed out how AEL’s president and co-owner knew and approved of the transshipments via Iran, and that that AEL was clearly aware of U.S. export laws and OFAC regulations, saying how “AEL is a sophisticated international full-service freight forwarder with experience with U.S. export laws and OFAC regulations, particularly the ITSR.”
   However, OFAC found various mitigating factors, including the fact that the goods were merely transshipped through Iran, and did not appear to have an end use there.
   In addition, the violations at issue comprised less than 1 percent of AEL’s total shipments during the time period when the apparent violations occurred.
   The Treasury Department also pointed out that although AEL was silent on transshipments via Iran, it did have an OFAC compliance program in place at the time of violations.
   In addition, “AEL has no prior OFAC sanctions history and has not received a Penalty Notice or Finding of Violation in the five years preceding the earliest date of transactions giving rise to the apparent violations, making it eligible for ‘first violation’ mitigation of up to 25 percent,” the Treasury Department said.
   AEL also took remedial steps, such as ceasing transshipments via Iran before the inception of OFAC’s investigation and amending its compliance policy to address the conduct at issue, in addition to cooperating with OFAC’s investigation, including by agreeing to toll the statute of limitations for a total of 804 days.
   Since its founding in 1974, AEL has been involved in the domestic and international shipping of automotive spare parts, automobiles, motorcycles, motor homes, buses, heavy equipment (such as bull dozers), along with classic/vintage and high-end luxury cars, according to AEL’s website.
   Overall, AEL provides international and domestic (import and export) airfreight, ocean freight, rail freight, warehousing and trucking services across the globe.