The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has reached a settlement agreementwith the Yantai Jereh Oilfield Services Group Co., Ltd., its affiliates and subsidiaries (collectively referred to as the “Jereh Group”) for apparent violations of Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR).
The Jereh Group, headquartered in Yantai, China, specialize in oil and gas equipment manufacturing, engineering and construction and oilfield services. From approximately October 2014 to March 2016 the Jereh Group apparently violated the ITSR on a minimum of 11 occasions by 1) exporting or re-exporting (or attempts thereof) U.S.-origin goods intended for end-use in Iran, via China or 2) exporting U.S.-origin items knowing (or having reason to know) that the items were intended to be produced, commingled or incorporated with Chinese goods for intentional end-use in Iran. Two of the 11 shipments, containing oilfield equipment (e.g. spare parts, coiled tubing strings, pump sets), were seized by U.S. Customs and Border Protection prior to leaving the U.S. The apparent violations did not cease until the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) added several Jereh Group companies to its Entity List in March 2016.
OFAC has determined that these violations constitute an ‘egregious’ case due to the lack of disclosure regarding the apparent violations by the Jereh Group. The Jereh Group has agreed to pay $2,774,972 from the maximum base civil monetary penalty amount of $3,083,302.