On July 8, 2020, the US Department of the Treasury’s Office of Foreign Assets Control announced a settlement with Amazon.com, Inc., in which Amazon agreed to pay $134,523 for alleged violations of multiple OFAC sanctions programs. Between 2011 and 2018, Amazon allegedly accepted and processed orders on its websites from individuals in Crimea, Iran and Syria, as well as individuals who were employed by foreign missions of Cuba, Iran, North Korea, Sudan and Syria. According to OFAC, Amazon also processed orders from persons listed on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN), in part because Amazon’s automated screening processes failed to detect certain alternative spellings of sanctioned countries or flag certain orders sent to the embassies of sanctioned countries. OFAC also reported that in several hundred instances, Amazon’s screening process failed to detect correctly spelled names and addresses of individuals on OFAC’s SDN List.
Amazon also failed to report 362 transactions involving Crimea, according to OFAC, that were conducted pursuant to General License No. 5, “Authorizing Certain Activities Prohibited by Executive Order 13685 of December 19, 2014 Necessary to Wind Down Operations Involving the Crimea Region on Ukraine,” that authorized certain transactions until February 1, 2015, but with a mandatory reporting requirement. While Amazon identified and reported 245 transactions pursuant to GL 5 in a timely manner, OFAC reported that the company failed to report the additional 362 transactions until after the reporting period had expired, thereby nullifying OFAC’s authorization for the 362 transactions.
According to OFAC, the maximum civil monetary penalty amount for Amazon’s alleged violations was $1,038,206,212; however, the company was only required to pay $134,523, the base civil monetary penalty, that equals the sum of one-half of the transaction value for each apparent violation. OFAC agreed to the lower amount because Amazon voluntarily self-disclosed its apparent violations, and the violations were non-egregious in nature. OFAC also considered the absence of penalties for the five years prior to Amazon’s earliest violation, and the significant remedial measures taken to address its screening deficiencies once discovered, as mitigating factors that justified the lower penalty amount.