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On March 26, the US Treasury Department’s Office of Foreign Assets Control (OFAC) announcement a $950,000 settlement to resolve alleged violations of Iran’s Transactions and Sanctions Regulations with an Italian company that produces and re-exports air pressure switches. According to the accompaniment of the OFAC online reviews, between 2013 and 2017, the company allegedly “knowingly re-exported 27 shipments of air pressure switches purchased from a US company to up to ten customers in Iran and caused a US company to indirectly export its goods to Iran “. OFAC also alleged that the company worked to obfuscate its re-export of goods from the United States to Iranian end users, including causing employees to use misleading alternative terms for Iran in communications with American society in order to avoid referring to the Iranian end. -users, and asking that the term “Made in USA” be removed from switches to disguise their origin.

In arriving at the settlement amount, OFAC considered a variety of aggravating factors, including (i) the company deliberately re-exported air pressure switches even though it knew it was violating US sanctions; (ii) the company’s management “either failed to provide effective oversight of its employees and operations, or chose to ignore these prohibited business practices”; and (iii) the conduct resulted in the diversion of over $2.5 million in goods from the United States to Iran.

OFAC also considered various mitigating factors, including that the company (i) did not receive a sanction notice from OFAC in the five years of litigation; (ii) has ceased the impugned conduct and taken corrective action, including implementing a sanctions compliance program and accepting enhanced compliance undertakings; and (iii) cooperated with OFAC’s investigation.