On March 26, 2021, the US Department of the Treasury’s Office of Foreign Assets Control announced a $950,000 settlement with Nordgas Srl, an Italian electronics manufacturer, related to apparent violations of the Iranian Transactions and Sanctions Regulations. The alleged violations took place between 2013 and 2017 and resulted in a total of 27 shipments of air pressure switches that were procured from a US company and knowingly re-exported to as many as ten customers in Iran. Nordgas also attempted to conceal the ultimate consumers from the US company, and by doing so, caused the company to export its goods indirectly to Iran.
Nordgas first approached the US company in 2010 with the intent of re-exporting air pressure switches to Iran; however, at that time the US company informed Nordgas that it could not provide the switches if the end users were in Iran. Then in late 2012, Nordgas approached the same company to procure the switches, allegedly misrepresenting their recipients as an Italian affiliate, when in fact the end users were in Iran. Once the shipments had commenced, Nordgas’ employees were instructed to use code words and replacement terms for Iran in communications and documentation shared with the US company, in order to conceal the identity and location of the actual end user. According to OFAC, Nordgas even asked the US company to remove the “made in USA” label from the switches in order to disguise their origin. However, In 2017 the US company discovered Nordgas’ intent to re-export its goods to Iran, and requested that Nordgas return the latest shipment of goods in exchange for a refund. In total, Nordgas sold over $2.5 million in air pressure switches to Iran in the four years that it worked with the US company.
OFAC considered Nordgas’ actions, which were not voluntarily self-disclosed, to be egregious; however, in light of the company’s extensive cooperation in the investigation, OFAC agreed to suspend $650,000 of the settlement amount on condition that Nordgas successfully meet certain compliance commitments. OFAC also deemed as mitigating factors Nordgas’ extensive cooperation with OFAC, the company’s clean record for the five years preceding the apparent violations, and its commitment to submit annual compliance reports to OFAC for five years.