On June 5, 2014, the Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it had reached an agreement with Dutch company Fokker Services B.V. to settle over 1,150 alleged violations of U.S. sanctions. The alleged misconduct occurred over a five-year period from November 2005 to September 2010, and involved Fokker indirectly exporting or reexporting aircraft spare parts that had been made, procured, or repaired in the U.S. to Iran and Sudan in violation of the Iranian Transactions and Sanctions Regulations and Sudanese Sanctions Regulations. In some instances, authorizations from other government agencies – e.g., licenses from the Bureau of Industry and Security (BIS) – may have also been required to lawfully conduct the transactions. OFAC characterized the activities as “willful and reckless,” and cited Fokker’s experience as a sophisticated provider of aerospace services as a factor in deciding the case’s disposition. The agency also claimed that Fokker’s actions “caused significant harm” to the objectives of the applicable sanctions programs.
According to OFAC, Fokker’s potential civil liability in this case was just shy of $51 million. By voluntarily disclosing the potential violations to OFAC, cooperating with the ensuing investigation, and enhancing its export compliance program while the investigation unfolded, the company reduced its actual payment amount to less than half that – $10.5 million to BIS and OFAC in the form of a shared civil monetary penalty, with another $10.5 million forfeited to the U.S. Attorney’s Office for the District of Columbia under a deferred prosecution agreement.
Given that the U.S. government could have pursued criminal penalties against the company, this may be considered a favorable outcome for Fokker.