OFAC REPORTS $500,000 PENALTIES FOR VIOLATIONS OF IRAN SANCTIONS BY CEMENT SOURCING COMPANY

On 21st February, OFAC announced that a US company, ZAG IP, LLC (formerly known as ZAG International, LLC) – a business focused on global sourcing and marketing of cement raw materials and providing strategic advisory services related to raw material selection for companies in the construction industry – had reached agreement to pay $506,250 in penalties for 5 self-reported, non-egregious apparent violations of the Iranian Transactions and Sanctions Regulations, for sourcing from Iran (via the UAE) alternative supplies to fulfil a contract.  OFAC said that, whilst ZAG did exercise limited due diligence, it acted with reckless disregard for sanctions requirements by failing to substantively address the US sanctions prohibitions in place with respect to Iran despite contemporaneous risk indicators, that senior management knew what had happened, and that there had been considerable economic benefit to Iran as a result.  Also, did not have an effective OFAC compliance programme in place at the time of the transactions commensurate with its level of risk, giving its status as an international trading company.

https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20190221_zag.pdf

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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