OFAC Continues to Target German, Non-U.S. Entities for U.S. Sanctions Violations

On Dec. 3, 2024, the U.S. Department of Treasury's Office of Foreign Assets Control (OFAC) announced a $14,550,000 settlement agreement with Berlin, Germany-based Aiotec GmbH. According to OFAC, Aiotec apparently violated the Iranian Transactions and Sanctions Regulations (ITSR) by participating in a conspiracy to “cause” an unnamed U.S. company to indirectly sell and supply an Australian polypropylene plant to Iran, and for sending related payments to U.S. financial institutions.

While this enforcement action involves a purportedly “willful” violation of U.S. law, it nonetheless highlights risks for all non-U.S. entities that engage in transactions having U.S. touchpoints. The two main U.S. touchpoints in this enforcement action were: 1) the unnamed U.S. company reseller of a plant located in Australia, and 2) Euro-denominated payments that were sent to U.S. financial institutions.  

U.S. touchpoints also can arise in other ways, such as:

• U.S. origin goods, technology, or software
• U.S. third-party service providers
• Shared resources between related U.S. and non-U.S. entities 
• U.S. dollar-denominated payments

Non-U.S. entities should assess whether their compliance programs are designed to prevent violations of U.S. export controls and sanctions laws. In particular, non-U.S. entities should review a 2024 U.S. government publication on obligations of foreign-based persons to comply with U.S. sanctions and export control laws. As the U.S. continues to expand the reach of its sanctions and export controls, compliance is more critical than ever.