Bangkok-based Plastics Firm Agrees to $20 Million Settlement Over Iran Sanctions Violations
SCG Plastics to pay $20 million for 467 violations of Iran sanctions, obfuscating product's Iranian origin, causing economic benefits for Iran.
A Bangkok-based plastics firm has reached a settlement with the U.S. Treasury, agreeing to pay $20 million to resolve 467 violations of Iran sanctions. The settlement stems from the firm's use of U.S. banks to process $291 million in sales of Iranian high-density polyethylene resin between 2017 and 2018.
Violation Details
The settlement agreement, signed between the plastics firm and the Treasury's Office of Foreign Assets Control, revealed that the resin, commonly used for product bottles and industrial items, was manufactured by an Iranian joint venture partially owned by the firm's parent company and the National Petrochemical Company of Iran, a government entity.
The firm utilized "shipping and documentation practices that obfuscated the product’s Iranian origin and Iranian parties’ involvement," leading banks to process transfers unknowingly violating OFAC’s sanctions on Iran. This resulted in significant economic benefits to Iran’s petrochemical sector, Treasury stated.
Enforcement and Fine
The Office of Foreign Assets Control deemed the 467 violations as "egregious" and imposed a fine of $20 million on the company, payable within 90 days. Despite the firm no longer being operational, a signed agreement between OFAC and the plastics company absolves it of any liability related to the violations.
Broader Sanctions and Response
The settlement comes amid U.S. administration officials' plans to enforce additional sanctions on Iran following an unprecedented attack on Israel by Tehran, sparking concerns of an escalation in the Middle East. Both the U.S. and U.K. recently imposed a new round of sanctions on Iranian individuals and firms linked to drone production.
Speaking on the matter, Treasury Secretary Janet Yellen emphasized the continued deployment of sanctions authority to counter Iran, with further actions expected in the days and weeks ahead. Yellen highlighted the vigorous enforcement of existing sanctions, including levying historic fines and exposing sanctions evasion schemes and networks, making it increasingly difficult and costly for Iran to sustain its destabilizing behavior.
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