OFAC fines Jereh Group for violating US sanctions on Iran

OFAC2OFAC has announced a $2,774,972 settlement with Chinese company Yantai Jereh Oilfield Service Group Ltd and its affiliated companies (the “Jereh Group”) for violating US sanctions on Iran. Yantai is a provider of oil field services and manufacturer of related equipment.

Between around 2 October 2014 and 4 March 2016, on at least 11 occasions Jereh Group is said to have (re)exported or attempted to (re)export US-origin goods ultimately intended for Iran, by way of China. Similarly, it is also said to have exported certain US-origin items for use in the production of goods in China, with reason to know that the goods were ultimately destined for Iran.

In its press release, OFAC reports that, beginning in late 2013, a former Jereh Group Sales Executive and a former Business management arranged meetings with Iranian customers and developed a scheme utilising intermediary companies in China and the UAE to sell and ship goods, many of which relied upon US-origin items, to Iran. In addition, it says that an external review of Jereh Group’s compliance programme in 2015-16 noted that its controls were “largely non-existent and, when in place, were ineffective and easily circumvented”, adding that “the circumvention could and did go undetected”. According to OFAC, the violations did not cease until the US Bureau of Industry and Security sanctioned several Jereh Group companies and related individuals in March 2016.

OFAC found that Jereh Group had not voluntarily disclosed the violations, and that they constituted an egregious case. The base penalty amount was $3,083,302.

This entry was posted in Iran, USA by Michael O'Kane. Bookmark the permalink.

About Michael O'Kane

Michael O’Kane is a partner and Head of the Business Crime team at leading UK firm Peters & Peters. Described as ‘first-rate’ (Legal 500 2012), he “draws glowing praise from commentators” (Chambers 2013) for handling the international aspects of business crime, including sanctions, extradition and mutual legal assistance. Called to the Bar in 1992 and prior to joining Peters & Peters he was a senior specialist prosecutor at the Crown Prosecution Service Headquarters(CPS). At CPS HQ he was a key member of a small specialist unit responsible for the prosecution of serious and high profile fraud, terrorist and special interest criminal matters including the Stansted Airport Afghan hijacking and the prosecution of Paul Burrell (Princess Diana’s butler). Michael joined Peters & Peters in 2002. He became a partner in May 2004, and Head of the Business Crime team in May 2009. Since joining Peters & Peters, Michael has dealt with a wide range of business crime matters. He has particular expertise in international sanctions, criminal cartels, extradition, corruption, mutual legal assistance, and FSA investigations. Described as“ an influential practitioner in fraud and regulatory work, so much so that he is top of the referral lists of many City firms for independent advice for directors” (The Lawyer’s Hot 100 2009), he was recognised as one of the UK’s most innovative lawyers in the 2011 FT Innovative Lawyer Awards and included in the list of the UK's leading lawyers in 'The International Who's Who of Asset Recovery 2012. In 2012 he was the winner of the Global Competition Review Article of the Year. Michael regularly appears on television and radio to discuss his specialist areas and he is the author of the leading textbook on the UK Criminal Cartel Offence “The Law of Criminal Cartels-Practice and Procedure” (Oxford University Press 2009). Recent/Current Sanctions Work • Representing 109 individuals and 12 companies subject to designation by the European Council under targeted measures imposed against Zimbabwe. This is the largest and most complex collective challenge to a sanctions listing ever brought before the European Court. • Acting for a former Egyptian Minister and his UK resident wife, challenging their designation by the European Council of Ministers under targeted measures brought against former members of the Egyptian Government. • Advising a company accused in a UN investigation report to have breached UN sanctions imposed in relation to Somalia. • Advising a UK company in relation to ongoing commercial relationships with an Iranian company listed under both EU and UN sanctions. • Advising an individual in relation to a UK investigation for alleging breaching nuclear export controls.

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