OFAC reaches settlement with aviation investment management company for apparent violations of Sudan sanctions

On November 7, 2019, the Office of Foreign Assets Control of the US Department of the Treasury announced that it had reached a settlement with Apollo Aviation Group, LLC (now doing business as Carlyle Aviation Partners Ltd.).  Apollo, a Florida company, agreed to pay $210,600 to settle its potential civil liability for twelve apparent violations of the Sudanese Sanctions Regulations, 31 CFR §§ 538.201 and 538.205, related to the company’s lease of three aircraft engines to a United Arab Emirates entity that subleased the engines to a Ukrainian airline, which installed the engines in an airplane that was leased to Sudan Airways during a time when Sudan Airways appeared on OFAC’s list of Specially Designated Nationals and Blocked persons.  According to OFAC, Apollo’s contract with the UAE company contained a provision prohibiting the lessee from transferring the engines to countries subject to US or United Nations sanctions, but Apollo did not take measures to ensure compliance with this provision.  The apparent violations took place between 2013 and 2015.  Sudan Airways was removed from the SDN list in October 2017.

In determining the appropriate settlement amount, OFAC considered as aggravating factors the company’s failure to monitor or verify the whereabouts of the leased aircraft engines during the life of the leases, and the company’s status as a large and sophisticated entity.  OFAC’s determination was mitigated by Apollo’s lack of actual knowledge of the apparent violations, the company’s clean record for five years preceding the subject transactions and subsequent remedial measures, and its efficient cooperation with OFAC.  In addition to the settlement amount, Apollo has agreed to improve its Know-Your-Customer screening procedures and enhance employee compliance training.

OFAC Press Release | OFAC Enforcement Information

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