PACCAR Inc, headquartered in Bellevue, Washington, agreed to pay $1.7 million for its violations of the Iranian Transactions and Sanctions Regulations (ITSR). PACCAR manufactures and sells trucks, and related good and services, including under the name of DAF. Here are the background and some of highlights regarding this OFAC enforcement action:
- The violations of the ITSR occurred on three occasions between October 2013 and February 2015, when DAF sold or supplied 63 trucks to customers in Europe that it knew or had reason to know the end-users were in Iran. OFAC determined that the transactional value of the 63 trucks was around $5,4M.
- OFAC also determined that PACCAR voluntarily disclosed its violations, and that the apparent violations constitute a non-egregious case. The base penalty amount for the apparent violations is $2,7M.
- OFAC considered the following to be aggravating factors:
- DAF personnel in Germany failed to exercise care when they ignored warning signs regarding potential sales involving OFAC-sanctioned countries and permitted goods to be sold to customers that they knew or had reason to know intended to re-sell the goods to buyers in Iran;
- DAF employees had knowledge or reason to know the goods were being re-sold to buyers in Iran;
- DAF’s exportation of goods from Germany to Iran conferred millions of dollars in economic benefits on Iran; and
- PACCAR is a large sophisticated entity that engages extensively in international business.
- On the other hand, OFAC considered the following as mitigating factors:
- None of these companies has received a penalty notice or Finding of Violation from OFAC in the previous five years,
- DAF maintained a trade compliance program with contractual prohibitions on partner companies with respect to the U.S. sanctions,
- DAF took remedial actions as soon as possible, such as an internal investigation regarding this matter; terminating employees involved in some of the apparent violations; cancelling delivery of other trucks that were part of an order, providing in-person compliance training to their subsidiaries on an annual basis since the violations; and implementing improved trade compliance controls,
- Both companies cooperated with OFAC during the investigation.
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