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Toll Holdings, an Australian-based international freight forwarding and logistics company, has agreed to pay more than $6.1 million as part of a settlement resolving nearly 3,000 apparent violations of Iran, North Korea, and Syria sanctions, the Treasury Department's Office of Foreign Assets Control (OFAC) announced Monday.
According to the agency's online notice, the settlement sum reflects its assessment that the alleged infractions were self-disclosed willingly and were not serious.
According to OFAC, the apparent violations occurred between approximately January 2013 and February 2019 when Toll originated or received payments through at least four United States-based financial institutions or foreign branches of United States-based financial institutions involving sanctioned jurisdictions and individuals.
Specifically, Toll “originated or caused to be received 2,958 payments in connection with sea, air, and rail shipments conducted by Toll, its affiliates, or providers and suppliers to, from, or through the [Democratic People’s Republic of Korea], Iran, or Syria, and/or involving the property or interests in property of an entity on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List),” the agency stated.
According to OFAC, the suspected payments totaled around $48.4 million.
OFAC noted that Toll's growth initiatives, which began in 2007, were not matched by an adequate increase in compliance resources.
“While Toll had a sanctions compliance policy in place, its compliance program, personnel, and associated controls failed to keep up with the pace and complexity of its growing operations, including with respect to the risks associated with the use of U.S. financial institutions to make or receive payments related to U.S.-sanctioned jurisdictions and persons,” the agency explained.
Even though Toll said in June 2016 that it will discontinue all business with sanctioned nations, the firm did not implement "strict controls" to block shipments to or from sanctioned countries until February 2017, according to OFAC.
“This enforcement action highlights the importance of instituting strong internal controls and procedures to govern payments involving affiliates, subsidiaries, agents, or other counterparties when any of them conduct business with sanctioned jurisdictions or persons,” OFAC stated. “… Entities should also respond promptly and fully to address compliance weaknesses when issues first arise, identify their full extent and causes, and implement necessary changes to their compliance programs, practices, and procedures.”
OFAC stated that Toll "ultimately took considerable procedures to address its compliance shortcomings," which included the following:
Conducting a risk assessment to ascertain the underlying reasons of compliance failures;
Restructuring its compliance section to address procedural concerns and simplify sanctions screening procedures;
Appointing its most senior compliance executive with increased sanctions-related responsibilities;
Implementing a training program on sanctions compliance for all relevant staff;
By enforcing its sanctions compliance criteria on anybody working on Toll's behalf; and
Terminating all franchise agreements, enhancing due diligence processes for onboarding agents, and establishing a due diligence screening process in which all third parties comply to the same compliance requirements as Toll.
Additional OFAC actions
OFAC announced separate settlements with Newmont Corp. and Chisu International on April 21 as a consequence of their respective breaches of Cuban sanctions.
Newmont, a global mining corporation, has agreed to pay $141,442 in restitution for four alleged violations of the Cuban Assets Control Regulations (CACR). OFAC decided that Newmont revealed the suspected infractions willingly and that the situation was not egregious.
According to OFAC, Newmont Suriname, a fully owned subsidiary of Newmont and a person subject to US jurisdiction under the CACR, acquired Cuban-origin explosives and explosive components from a third-party vendor in four different transactions between roughly June 2016 and November 2017.
OFAC obtained a $45,908 settlement with Chisu, a corporation linked with a dealer of explosives and mining supplies, for four alleged CACR breaches.
Between June 2016 and November 2017, Chisu and its Suriname and Panama affiliates "purchased Cuban-origin explosives and related accessories from Cuban firm Unión Latinoamericana de Explosivos (ULAEX) on behalf of a US business for the US company's mining project in Suriname," according to OFAC.
The regulator decided that Chisu did not report the alleged infractions willingly and that the matter was not particularly serious.
By fLEXI tEAM