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Last Updated: Tuesday, 15 April, 2003, 21:42 GMT 22:42 UK
US fines sanctions-busting firms
US dollars
No reasons are given for the fines
Some of America's best known corporations have been fined by the US Treasury for busting sanction laws to trade with countries such as Iraq, Libya and Cuba.

Among the 59 companies fined a total of about $1.1m were Amazon, Bank of New York, Caterpillar, ChevronTexaco, Citibank, ExxonMobil, New York Yankees and WalMart.

The fines range from $500 to $250,000 against Zim American Israeli Shipping, which is nearly half-owned by the state of Israel and is one of the world's largest container shipping companies.

The Treasury does not give details of who the companies traded with or a reason for the size of the fines.

The Treasury's Office of Foreign Assets Control (Ofac) enforces the US government's sanctions against terrorists, drug dealers and foreign countries and is responsible for freezing the US assets of suspects.

Treasury criticism

The release of the settlements on 4 and 11 April have been criticised for the lack of publicity and detail from the Treasury.

Countries with US sanctions
Burma
Cuba
Iran
Iraq
Liberia
Libya
North Korea
Sierra Leone
Sudan
Zimbabwe
"From the beginning, Ofac's enforcement has been shrouded in secrecy," said Russell Mokhiber, the editor of legal newsletter Corporate Crime Reporter.

Corporate Crime Reporter and the advocacy group Public Citizen sued the Treasury under the Freedom of Information Act for the release of the information.

"Significantly, Ofac has resisted providing a meaningful description of the conduct that underlies these sanctions, the settlements proposed by the alleged offenders, and the reasoning behind Ofac's decision to impose a particular penalty, or settle for a given amount," Michael Tankersley, an attorney with Public Citizen said.

Voluntary disclosure

Several of the companies named by Ofac have blamed third parties or said the infringements were accidental oversights rather than deliberate sanctions busting.

ChevronTexaco said it had been buying Iraqi oil through a "third country, third party purchaser" under the terms of the United Nations oil for food programme.

But the company claims in mid-2000 Iraqi port agents at Umm Qasr began demanding fees and threatened to block supplies unless Chevron paid up.

ChevronTexaco said it had to apply for licences from Ofac for permission to pay the fees.

"On the day after the Ofac licence was received, Chevron's London trading office inadvertently reimbursed a third country, third party purchaser for port fees that the purchaser had paid to a port agent that had been designated by Iraq, but that was not an authorised payee under UN guidance.

"Chevron then voluntarily and promptly reported problems to Ofac and we paid a settlement," a ChevronTexaco spokesman told BBC News Online.

Cuban cigars

In a second infringement, ChevronTexaco's subsidiary in Belize was caught supplying petrol to the Cuban consulate in that country by an internal company audit.

Again the company said it had promptly ended the arrangement and reported the infringement to Ofac and reached a settlement, for $9,000.

Exxon Mobil said it had "inadvertently" broken sanctions by shipping computer equipment to Sudan for use by an affiliate company, between 1998 and 2000.

The company contacted Ofac in September 2001, after it realised the error, a company spokesman said.

Amazon.com said it was contacted by Ofac after people were discovered trying to sell Cuban cigars through its online auction service.

Banned from site

An Amazon spokeswoman said it had banned "about 20 individuals" from its auction site for selling the cigars, which are illegal in the US.

"Amazon.com doesn't think a penalty should have been imposed in this case.

"Nevertheless, Ofac decided to impose a small fine anyway, which Amazon.com paid in 2002," she added.

Retail giant Wal-Mart said it contacted Ofac in 1997, after pyjamas that were said to have originated in Cuba were discovered by a customer in one of its stores.

The retailer reached a settlement with Ofac for $50,000.

US engineering giant Caterpillar said its $18,000 fine related to a 1999 shipment of marine parts from one of its factories in Europe, which had been diverted without the company's knowledge to Cuba.

A spokesman said: "When we realised what had happened we immediately called Ofac."




SEE ALSO:
US reward to combat terror funding
13 Nov 02  |  Americas


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