OFAC Designates Turkish Individual For Violations Of Iranian Sanctions

Author:Mr James Treanor
Profession:Cadwalader, Wickersham & Taft LLP
 
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The U.S. Treasury Department ("Treasury") Office of Foreign Assets Control ("OFAC") sanctioned a Turkish individual as a "Foreign Sanctions Evader" for allegedly instructing the Turkish subsidiary of a U.S. company to violate U.S. sanctions against Iran. The U.S. company settled potential civil liability for the Turkish subsidiary's conduct. This marks the first case in which OFAC designated a Foreign Sanctions Evader in relation to a civil enforcement action.

Pursuant to Executive Order 13608, OFAC sanctioned Evren Kayakiran for causing six violations of U.S. sanctions against Iran. Mr. Kayakiran was the managing director of a Turkish company that "imports, distributes, and installs motion control products." After the Turkish company was acquired in 2013 by the U.S. company Kollmorgen Corporation ("Kollmorgen"), Kollmorgen undertook compliance measures designed to make sure that the newly acquired Turkish company complied with U.S. sanctions requirements. Nonetheless, Mr. Kayakiran and other managers at the Turkish subsidiary reportedly ordered employees of the Turkish subsidiary to service machinery located in Iran, threatened to fire those employees if they refused to travel to Iran, and directed them to falsify corporate records by indicating that their travel was personal and not business related.

In addition, OFAC alleged that Mr. Kayakiran consistently and fraudulently certified to Kollmorgen that no products were being sent to Iran. OFAC noted that upon learning of Kollmorgen's investigation, Mr. Kayakiran and other managers of the Turkish subsidiary misled Kollmorgen's lawyers, tried to obstruct the investigation by instructing the Turkish company's employees to delete references to Iran in company records, and attempted to delete emails related to Iran.

To settle the OFAC charges, Kollmorgen agreed to pay approximately $13,000 on behalf of its Turkish subsidiary to settle potential civil liability for the six violations of U.S. sanctions against Iran. OFAC determined that Kollmorgen voluntarily disclosed the violations, and that the violations constituted a "non-egregious case." In addition, after the violations were discovered, OFAC said, Kollmorgen undertook remedial action to address its compliance issues and "discourage...

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