Published: Fri, July 21, 2017
Global Media | By Garry Long

Treasury Department Fines Exxon Mobil for Russia Sanctions Violations

Treasury Department Fines Exxon Mobil for Russia Sanctions Violations

The U.S. Department of the Treasury said on Thursday that it is imposing a US$2-million civil monetary penalty against ExxonMobil and some of its subsidiaries for having breached Ukraine-related sanctions on Russian Federation in May 2014.

OFAC says ExxonMobil violated sanctions against Russian officials in May 2014, by "signing eight legal documents related to oil and gas projects in Russia with Igor Sechin, the President of Rosneft", Russia's state-owned oil company.

The OFAC filing, however, says the company's "senior-most executives knew" the sanctions barred them from signing deals with Sechin, calling ExxonMobil "a sophisticated and experienced oil and gas company" that routinely navigates US sanctions and export rules.

Treasury stated that "ExxonMobil's senior-most executives knew of Sechin's status as an SDN when they dealt in the blocked services of Sechin".

According to the Treasury, Exxon "demonstrated reckless disregard for US sanctions requirements" and "caused significant harm to the Ukraine-related sanctions program objectives".

During that time, current Secretary of State Rex Tillerson was still Exxon's CEO.

Not so, said the Treasury Department, arguing that the government never gave Exxon or anyone else a reason to believe there was an exception for professional dealings.

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Sechin signed the documents on behalf of Rosneft, Jeffers said. The Treasury Department named Sechin a subject of those sanctions that April.

The energy giant's request to return to Russian Federation for oil and gas activities was rejected in April by the Treasury because of existing sanctions. A few days later, Tillerson was unambiguous about Exxon's opposition to the sanctions during his company's annual meeting.

Tillerson had played a central role over the years in developing that multibillion dollar deal. The $2 million fine, Treasury said, was the maximum amount it could fine the firm.

The Treasury, under orders from then-President Barack Obama, levied sanctions against several leading Russian businessmen with strong ties to the Kremlin in a bid to loosen President Vladimir Putin's grip on power. Exxon's suit asks the court to set aside the fine.

The State Department referred questions about the fine to ExxonMobil and the Treasury.

Tillerson has taken a tough line with Ukraine-related sanctions as secretary of state, saying earlier this month on a trip to Kiev that the sanctions would not be lifted until Russian Federation met its obligations.

"The secretary continues to abide by his ethical commitments, including that recusal from Exxon-related commitments", said State Department spokeswoman Heather Nauert.

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