Treasury fines Exxon $2 million for violating Russian Federation sanctions
- by Garry George
- in Health Care
- — Jul 21, 2017
ExxonMobil was fined $2 million for violating Ukraine-related sanctions in 2014, while current U.S. Secretary of State, Rex Tillerson, was CEO, the Treasury Department announced.
Those included "reckless disregard for USA sanctions requirements when it failed to consider warning signs associated with dealing in the blocked services of (a sanctioned person), that "Exxon Mobil's senior-most executives knew of Sechin' s status. when they dealt in the blocked services of Sechin", that the deals "caused significant harm to the Ukraine-related sanctions program objectives" and that the company "is a sophisticated and experienced oil and gas company that has global operations and routinely deals in goods, services and technology subject to U.S economic sanctions and US export controls".
The Treasury said Exxon displayed "reckless disregard" for the sanction order, and senior company officials knew of Sechin's sanctioned status when they completed the business deal in 2014. Hours after the fine was announced, the Texas-based company sued Treasury Secretary Steven Mnuchin and the government, saying the US had clearly told companies that doing business with Rosneft was allowed just not with Sechin himself.
Exxon plans to challenge the action. Sechin is on Treasury's list of "Blocked Persons".
On March 17, 2014, a fact sheet issued by the Obama White House specifically said the focus of the sanctions is to identify "individuals and target their personal assets, but not companies that they may manage on behalf of the Russian state".
The Treasury announced sanctions on Sechin in April 2014 as part of measures to pressure Russian Federation over its intervention in Ukraine, saying Sechin had shown "utter loyalty" to Russia's President Vladimir Putin.
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Exxon did not disclose the activities, the Treasury Department said.
Not so, said the Treasury Department, arguing that the government never gave Exxon or anyone else a reason to believe there was an exception for professional dealings.
A New York Times story that month quoted a Treasury Department official saying, "U.S. persons are not prohibited from dealing with Rosneft, including participating in meetings of the company board on which Mr. Sechin sits".
But while he was at Exxon, Tillerson opposed the sanctions levied on Moscow for its annexation of Crimea. Tillerson visited the White House numerous times as CEO in the immediate aftermath of the sanctions being announced, but they remained in place.
Mr. Tillerson, who has deep ties to Russian Federation and received an Order of Friendship from Moscow, left the firm to become U.S. Secretary of State.
Tillerson recused himself from actions by the State Department related to ExxonMobil after he took office in February. The State Department said it wasn't involved in the decision to punish Exxon for violating the sanctions.
