US Company Found in Violation of Reporting Regs for Not Complying With OFAC Subpoena

The Treasury's Office of Foreign Assets Control found a U.S. company in violation of OFAC’s Reporting, Procedures and Penalties Regulations for failing to provide information about a sale to Iran after being subpoenaed, OFAC said in an Aug. 8 enforcement notice. The violations stem from Southern Cross Aviation’s sale of helicopters to an Iranian businessman in Ecuador, OFAC said.

OFAC said it issued Southern Cross, which has offices in Florida and North Carolina, a subpoena in July 2016 requesting “detailed information, descriptions, and documents” regarding its sale to the Iranian businessman. Southern Cross’ president denied the sale and said it had no documents to provide, the notice said. Days later, the company sent a letter to OFAC saying it employed a sales representative in Ecuador who sent “technical details to an Ecuadorian group for a potential sale of helicopters to an Iranian group for operation in Ecuador,” the notice said. The company only gave OFAC a copy of its export management manual, the agency said.

After OFAC sent another subpoena in October 2016 requesting information about the sale, Southern Cross gave OFAC “correspondence relating to the potential sale, including direct email exchanges between the SC Ecuador Representative and the Iranian Businessman explicitly referenced in both of OFAC’s Administrative Subpoenas,” the notice said.

OFAC said Southern Cross violated the Reporting, Procedures and Penalties Regulations by failing to provide the information to the agency’s first subpoena. OFAC said aggravating factors included Southern Cross’ “reckless disregard” for U.S. sanctions and its failure to cooperate with OFAC’s investigation. Mitigating factors included the fact that Southern Cross “appears to be a small-to-medium-sized business,” it had “no prior OFAC sanctions history” and “the underlying potential sale in question does not appear to have occurred.”