A New Jersey-based wholesale building materials company has consented to pay over $660,000 in a settlement with the Treasury Department’s Office of Foreign Assets Control (OFAC). This settlement addresses three apparent sanctions violations in Iran.
Construction Specialties (CS), with 10 U.S. offices and 25 foreign affiliates including Construction Specialties Middle East (CSME) in the UAE, knowingly breached sanctions. CSME imported U.S. building materials and reexported them to Iran, a violation of sanctions, as confirmed by OFAC.
The substantial penalty indicates OFAC’s recognition of CSME’s severe apparent violations, which were disclosed voluntarily, as stated in OFAC’s enforcement release.
In June 2016, during a visit from CS executives, CSME’s non-U.S. general manager proposed supplying building materials for a Tehran mall. CS executives advised against such deals without confirming compliance with U.S. sanctions.
Despite informing CSME about U.S. restrictions on Iran and updating policies accordingly, CSME’s general manager and another senior manager imported and reexported goods to Iran, evading U.S. suppliers by falsifying records, concealing destinations, and altering CSME records.
Upon detecting unusual expenses, a U.S. employee at CSME was dismissed after reporting to senior management. The employee reported misconduct to CS headquarters in the U.S., which initiated an internal review, ceased Iran-related business, and notified OFAC.
As part of the settlement, CS committed to ensuring compliance over five years, including cultivating a compliance culture, conducting routine risk assessments, adjusting internal controls, providing appropriate training, and certifying its compliance program with OFAC annually.
By FCCT Editorial Team
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