New York business analytics company settles potential civil liability in Ukraine sanctions case

The Office of Foreign Assets Control of the US Department of the Treasury has reached a settlement with S&P Global, Inc., a New York-based provider of business and financial information, resolving OFAC’s investigation into S&P’s apparent violations of Directive 2 of the Ukraine-Related Sanctions Regulations, issued in 2014 pursuant to Executive Order 13662.

According to OFAC, Petroleum Industry Research Associates, Inc., a US company acquired by S&P in August 2016, issued an invoice to JSC Rosneft, a Russian oil company, in August 2015.  Rosneft was sanctioned by OFAC in July 2014 following Russia’s invasion of the Crimea.  In May and June 2016, Rosneft made several attempts to pay the past-due invoice, but the payments were rejected by the processing bank.  S&P employees then reissued the $82,500 invoice with a current date, explaining to Rosneft that “when the payment is made against an old invoice (as recent ones were), the bank may perceive that to be ‘extending credit’ to a Russian company, which we cannot do by law.”  Rosneft made partial payment in October 2016.  S&P Global issued two newly dated invoices in November 2016 for the remainder of Rosneft’s outstanding obligation, but one of these remained unpaid until September 2017, when, 749 days after the original invoice had been issued,  S&P re-issued and re-dated an invoice for the final amount owed.  The invoice was paid in full on October 6, 2017.  By extending the payment date of its invoices, thereby transacting in new debt in excess of 90 days, S&P apparently violated Directive 2 of EO 13662 and § 589.201 of the Ukraine-Related Sanctions Regulations, 31 CFR part 589.

In assessing a civil monetary penalty of $78,750, OFAC took into consideration aggravating factors such as S&P’s failure to exercise caution when it reissued and re-dated invoices with the knowledge that doing so could violate US sanctions regulations, the involvement of the company’s management in the apparent violations, and the sophisticated and global nature of S&P’s business, and the determination that S&P did not voluntarily self-disclose the apparent violations.  At the same time, OFAC took into account the non-egregious nature of the apparent violations, and mitigating factors such as the company’s violation-free record for the five year preceding the apparent violations, the remedial measures taken by S&P to enhance its compliance program, and the company’s cooperation during OFAC’s investigation.

OFAC press release |  Settlement 

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