On September 9, 2021, the Department of the Treasury’s Office of Foreign Assets Control reached a $189,483 settlement with NewTek, Inc., a Texas-based developer of 3D animation hardware and software systems, to resolve potential civil liability for 52 apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR). The apparent violations occurred between December 2013 and May 2018 when the company exported 49 of its products from the US to two third-country distributors that NewTek knew or had reason to know intended to sell the products to companies and individuals in Iran. OFAC arrived at the settlement amount after determining that NewTek’s actions were non-egregious, based upon the company’s voluntary self-disclosure of apparent violations to OFAC, its cooperation with OFAC investigators and substantial remedial response.
According to OFAC, NewTek also provided the two third-country distributors with software updates, support, reseller training, and other services on three separate occasions in order to facilitate the sale of their products to customers located in Iran. OFAC reports that NewTek engaged in more than $583,000 in transactions that were apparent violations of §§ 560.204 and 560.206 of the ITSR and also Executive Order 13628 of October 9, 2012 for providing three products, in particular, to the Islamic Republic of Iran Broadcasting (IRIB).
During the relevant time period, NewTek did not have export control or sanctions compliance policies or procedures in place, which contributed to the company’s mistaken belief that its sales to the Iranian Reseller through third-party distributors was in accordance with US sanctions regulations. However, prior to settlement, NewTek implemented several remedial measures to address its lack of sanctions oversight and compliance, including among other things, the establishment of an export control and sanctions compliance program, hiring a Director of Compliance, and creation a compliance training program for its employees in sales, marketing, shipping, other service and compliance-related fields.
Department of Treasury Recent Action | OFAC Enforcement Release