Stanley Black & Decker settles with OFAC for $1.87 million
OFAC has posted a bulletin announcing a $1,869,144 settlement with Stanley Black & Decker, Inc,. and its foreign subsidiary, Jiangsu Guoqiang Tools Co., Ltd. (“GQ”).
Stanley Black & Decker, a company based in New Britain, Connecticut, on behalf of itself and its subsidiary located in China, GQ, has agreed to settle its potential civil liability for 23 apparent violations of the Iranian Transactions and Sanctions Regulations. Specifically, between about June 29, 2013, and December 30, 2014, GQ exported and attempted to export 23 shipments of power tools and spare parts, with a total value of $3,201,647.73, to Iran or to a third country with knowledge that such goods were intended specifically for supply, transshipment, or re-exportation, directly or indirectly, to Iran. OFAC determined that Stanley Black & Decker voluntarily self-disclosed the apparent violations on behalf of GQ, and that the apparent violations constitute an egregious case. The statutory maximum civil monetary penalty amount for the Apparent Violations is $6,922,757, and the base civil monetary penalty amount for the Apparent Violations is $3,461,378.
Stanley Black & Decker acquired a controlling interest in GQ in 2013, after learning that GQ exported to Iran. Stanley Black & Decker made cessation of such sales a condition of the closing, and undertook training of GQ's employees on the the company's business conduct guidelines, the Foreign Corrupt Practices Act and sanctions. In spite of the training, some rogue GQ board memners and senior managers, aware of the parent company's policies and U.S. economic sanctions against Iran, took non-routine steps to conceal prohibited GQ exports to Iran, using 6 trading companies in the United Arab Emirates and China. In addition, GQ employee used fictitious bills of lading and ensured that "Iran" would not appear on business documents. Once it learned of GQ's apparent violations, Stanley implemented immediate remedial effects, including halting all GQ exports, hiring and independent investigator, and self-reporting to OFAC. The company also cooperated with OFAC's investigation, and agreed to extension of the statute of limitations.
Stanley Black & Decker also committed to enhancing GQ's compliance procedures by ensuring that it has a management team in place that: (1) is committed to a culture of compliance; (2) conducts regular risk assessments to ensure that its internal controls appropriately mitigate the entity’s sanctions-related risks; (3) conducts regularized audits; and (4) provides ongoing sanctions compliance training throughout GQ.