May 2, 2019

OFAC settles with NY shipping company for transactions involving blocked vessels associated with Iran

The Office of Foreign Assets Control of the US Department of Treasury has entered into a $871,837 settlement with Mid-Ship Group LLC, a New York-based global shipping and logistics company, to resolve potential civil liability for violations of the Weapons of Mass Destruction Proliferators Sanctions Regulations (WMDPSR), 31 CFR part 544, issued pursuant to the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06 (IEEPA) and other statutes.  According to OFAC, Mid-Ship’s subsidiaries in China and Turkey negotiated charter party agreements, earning commissions for money transferring services for five transactions connected with blocked vessels controlled by the Islamic Republic of Iran Shipping Lines, an entity designed in 2008 pursuant to Executive Order 13382.  

In its assessment of Mid-Ship’s potential liability, OFAC deemed the company to have recklessly disregarded its obligations to comply with US sanctions, and noted that Mid-Ship is a global, sophisticated company whose managers knew of the conduct that gave rise to the apparent violations. Furthermore, the company did not voluntarily self-disclose the apparent violations to OFAC.  As mitigating factors, OFAC considered subsequent remedial measures undertaken by Mid-Ship, such as the appointment of an OFAC Compliance Officer, and the provision of sanctions training to employees.  OFAC also took into consideration the fact that the company has no record of violations in the five years preceding the suspect transactions, which constituted .05 percent of Mid-Ship’s transactional history for the period of the apparent violations.