ExxonMobil Sanctions Penalty: Lessons for Companies and Practitioners
Daniel Pilarski sees two important lessons from the Treasury Department's $2 million penalty against ExxonMobil for its dealings with a sanctioned officer of a Russian company, even though the company itself was not subject to these sanctions: Conduct diligence and get representations and covenants not only from counterparty companies, but also the company's officers and directors. And exercise caution in relying on informal guidance in dealing with sanctions.
August 14, 2017 at 02:02 PM
8 minute read
On July 20, 2017, the U.S. Department of Treasury's Office of Foreign Assets Controls (OFAC) assessed a $2 million penalty against U.S. oil conglomerate ExxonMobil for its violation of U.S. trade sanctions on Russia enacted in response to Russia's 2014 intervention in Ukraine (the Russia-Ukraine sanctions). The penalty was assessed because of ExxonMobil's dealings with a sanctioned officer of a Russian company, even though the company itself was not subject to these sanctions. ExxonMobil is challenging the assessment, and has filed suit to have the penalty set aside.
The assessment illustrates two important lessons for companies and practitioners:
(1) Conduct diligence and get representations and covenants not only from counterparty companies, but also the company's officers and directors.
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