September 24, 2020

OFAC reaches settlement with US-based technology company for apparent violations by Finnish subsidiary

On September 24, 2020, the Department of the Treasury’s Office of Foreign Assets Control announced a settlement with California-based Keysight Technologies Inc., on behalf of its former Finnish subsidiary, Anite Finland OY.  According to the documents, Anite allegedly reexported US export-controlled test measurement equipment to Iran in violation of § 560.205 of the Iranian Transactions and Sanctions Regulations, 31 CFR part 560.  After voluntarily disclosing the apparent violations to OFAC, Keysight agreed to pay $473,157 to settle the matter, a fraction of the statutory civil monetary penalty applicable for this type of violation, according to OFAC.

OFAC reports that Keysight acquired Anite, plc, the UK-based parent company of Anite Finland OY in August 2015, and, based on pre-acquisition due diligence, knew that Anite had sold test and measurement instruments and related software to sanctioned countries, including Iran.  Prior to the acquisition, Anite agreed to cease all existing and future business with sanctioned countries; however, a month after the acquisition, Anite’s Vice President and Regional Director for Europe, Middle East and Africa expressed reluctance to comply, after Keysight reiterated that business with sanctioned countries should cease.  Shortly thereafter in 2016, three Anite employees completed six orders with Iran valued at $331,089 without OFAC authorization, and attempted to hide the deals from Keysight with the assistance of the Vice President and Regional Director.  When Keysight discovered the misconduct, it reported the apparent violations in its SEC filings and to OFAC directly, after conducting an internal investigation and terminating the employees involved.

According to OFAC, the statutory civil monetary penalty for these infractions should be between $1,051,460 and $2,102,920, but OFAC agreed to accept a lesser amount because of Keysight’s full cooperation with OFAC’s investigation, its lack of OFAC penalties for five years preceding this incident, and the extensive remedial measures taken by Keysight to identify and prevent future offenses from occurring.  Anite is no longer a subsidiary of Keysight but is now fully integrated into Keysight and its trade compliance program.

OFAC Press Release