Treasury Discloses Fines on Violators
FROM THE ARCHIVES: March 5, 2002
Treasury Discloses Fines on Violators
Of Trade Embargoes in Recent Years
By MICHAEL M. PHILLIPS
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- The U.S. government has fined more than 100
companies, banks, churches and other organizations in recent
years for violating American trade embargoes on Cuba, North
Korea, Sudan, Haiti and Iran.
In response to a lawsuit, the Treasury Department's Office
of Foreign Assets Control for the first time released
information relating to 10 cases resolved between 1998 and
2000, including settlements paid by Bank of America Corp.,
Brown Brothers Harriman & Co. and Banca Nazionale del Lavoro
In Bank of America's case, the Treasury found the bank had
processed a customer's instructions on a payment relating to
a Cuban ship, a violation of the Trading with the Enemy Act
and other regulations. The bank, which declined to comment,
paid the Treasury $11,000 to settle the allegation.
Banca Nazionale del Lavoro's New York branch paid the
Treasury $25,000 for allegedly attempting to transfer nearly
$900,000 related to the financing of another Cuban ship. The
branch financial-division manager didn't return a call for
Brown Brothers Harriman's violation came in 1998 when the
private commercial bank failed to catch a client's
transaction that ultimately was destined for Cuba. "We made
a clerical error and passed through instructions that should
have been caught by our systems," said Donald Murphy, a
partner in the bank, which paid $20,000 to settle the case.
"Virtually every single enforcement action taken by the
Treasury Department against a U.S. company relating to Cuba
is a result of a technical violation of an OFAC regulation,"
said John Kavulich, president of the U.S.-Cuba Trade and
Economic Council Inc., a New York nonpartisan group funded
International Commodity Management Inc. of Seattle paid
$15,000 to settle allegations that it tried to transfer
$50,000 to an unnamed entity in North Korea to pay the lease
on a fishing vessel. ICM officials didn't respond to a
request for comment. Cedars Bank, of Los Angeles, settled
for $11,000 the Treasury's allegation that it tried to
transfer more than $100,000 to a business in Iran. Cedars
Bank Chief Financial Officer Fuad Khoury blamed the incident
on a clerical error that inserted the word "Tehran" into the
Pacific Roller Die Co., of Hayward, Calif., paid $11,000
after the Treasury concluded the company violated federal
law by facilitating the export of steel-pipe-making
equipment to Sudan. Company Vice President Rob Miller said
Pacific Roller canceled its own sale to Sudan when the
embargo was imposed but thought it was still permitted to
accept a $100,000 referral fee for arranging for a foreign
company to complete the deal in its stead. "We did think we
had done everything right," he said.
Treasury settled with the Pentacostal Holiness Church of
Coconut Creek, Fla., for $2,000 after Customs agents at
Miami International Airport seized nearly $11,000 from a
church representative allegedly headed for Cuba. The
Treasury said the church had failed to obtain an OFAC
license for humanitarian remittances to Cuba. Church
officials couldn't be located for comment Tuesday.
The Treasury Department, which resisted releasing the
enforcement data for two years, did so after being sued
under the Freedom of Information Act by Public Citizen and
the Corporate Crime Reporter, a newsletter that reported the
settlements. The department said there were 100-150 cases
during the 1998-2000 period. The Treasury hasn't agreed to
provide information on any cases occurring since the
information request took place in 2000.
The release of the Treasury's enforcement record comes as
the trade embargo with Cuba is under increasing attack in
Congress and from business interests. Since 1992, the U.S.
has loosened aspects of its four-decade trade embargo, and
now allows direct exports of food, agricultural material,
health-care products, music, films and other information.
U.S. commercial activity with Cuba measured an estimated
$500 million last year, most of it expenditures by U.S.
citizens traveling in Cuba, the U.S.-Cuba Trade and Economic
Write to Michael M. Phillips at michael.phillips@...
Updated March 5, 2002