The Treasury Department’s Office of Foreign Assets Control won’t impose more fines on Schlumberger for “knowingly and willfully” violating the Iran and Sudan sanctions.
In March, a unit of Paris-based Schlumberger Ltd. agreed with the DOJ to plead guilty and pay a $232.7 million penalty for conspiracy to violate the trade sanctions.
The penalty included a $77.5 million criminal forfeiture and a $155 million criminal fine. It was the biggest criminal fine in connection with a prosecution under the International Emergency Economic Powers Act.
This month OFAC issued a Finding of Violation to Schlumberger Oilfield Holdings, Ltd. for violations of the Iran and Sudan sanctions.
OFAC said it considered both aggravating and mitigating factors before deciding not to impose additional penalties.
Among the aggravating factors OFAC cited were Schlumberger’s “acts of concealment” of a “long-term pattern of conduct.”
The violations occurred from early 2004 through June 2010, the DOJ said.
OFAC also said “Schlumberger’s senior management knew or had reason to know of the conduct giving rise to the alleged violations.”
Employees of a Schlumberger unit outside the United States often sent emails to a U.S.-based manager justifying requests for services in Iran and Sudan, the DOJ said.
“Schlumberger failed to effectively enforce its compliance program despite operating in a high-risk industry,” OFAC said.
A mitigating factor, OFAC said, was Schlumberger’s remedial action, including “voluntarily ceasing to provide oilfield services in Iran and Sudan.”
Schlumberger had no prior OFAC sanctions history five years prior to the alleged offenses, and “cooperated with OFAC’s investigation by entering into several statute of limitations tolling agreements.”
OFAC also cited Schlumberger’s agreement with the DOJ to pay $232 million in criminal fines and forfeitures.
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OFAC’s August 7, 2015 Finding of Violation to Schlumberger Oilfield Holdings, Ltd. (SOHL), a subsidiary of Schlumberger Ltd., for Violations of the Iranian Transactions and Sanctions Regulations and the Sudanese Sanctions Regulations is here (pdf).
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.