FCC Flash

On September 21, 2023, the global manufacturing company 3M Company was penalized $9.6 million by the Office of Foreign Assets Control (OFAC) for apparent violations of sanctions against Iran. These violations occurred between 2016 and 2018 when 3M’s Swiss subsidiary, 3M (East) AG, knowingly sold reflective license plate sheeting through a German reseller to Bonyad Taavon Naja, an OFAC-sanctioned entity controlled by Iran’s Law Enforcement Forces.

To read in detail, go to https://www.fcctimes.com/2023/09/21/the-u-s-department-of-the-treasurys-ofac-announces-settlements-with-3m-company-and-emigrant-bank-for-sanctions-violations/

In November 2015, 3M Gulf in Dubai planned to sell reflective license plate sheeting (RLPS) to a German company, with the assumption that they would export it for use in Iranian license plates.

However, in January 2016, the Joint Comprehensive Plan of Action (JCPOA) OFAC published General License H, which authorized foreign subsidiaries of U.S. companies to engage in certain transactions with Iran. OFAC explicitly excluded transactions with Iranian military, paramilitary, intelligence, or law enforcement agencies, or any entities affiliated with those groups.

Despite this, 3M Gulf proceeded with the business plan and indicated that the end user of the goods would be transport authorities in Iran. While screening against sanctions and restricted parties lists, the 3M Gulf team omitted the page containing sections on “parties involved” and “product end use,” resulting in screening only the German company and not the actual Iranian end-user.

Furthermore, 3M Gulf changed the contracting entity from 3M Gulf to 3M East Switzerland, despite 3M policies establishing 3M Gulf as the sole subsidiary authorized to engage in sales activity with Iran.

3M East sent 43 shipments of the product to the German reseller, knowing that the products were destined for a customer in Iran, according to the agency’s allegations.