Published: Fri, July 21, 2017
Medicine | By Rogelio Lindsey

Treasury Department Fines Exxon Mobil for Russia Sanctions Violations

Treasury Department Fines Exxon Mobil for Russia Sanctions Violations

The American oil giant was found to have conducted business with Igor Sechin, the head of the state-owned Rosneft in May 2014.

Former U.S. President Barack Obama signed an executive order that imposed sanctions on Russian Federation in March 2014 and the Treasury Department included Sechin on the list a month later, the OFAC said.

According to OFAC, ExxonMobil deliberately failed to disclose its dealings to regulators in order to bypass the restrictions.

According to the Treasury, Exxon "demonstrated reckless disregard for USA sanctions requirements" and "caused significant harm to the Ukraine-related sanctions program objectives".

The documents, which Treasury said Exxon Mobil failed to "voluntarily self-disclose", were related to oil and gas projects in Russian Federation.

Sechin was at the helm of Rosneft in 2011 when Exxon signed a massive joint venture with the Russian oil company to drill for oil in the Arctic.

Exxon Mobil, whose chief executive at the time is now the US secretary of state, pushed back strongly, calling the action "fundamentally unfair". The company pointed out that a Treasury Department spokesman had even said it would be permissible for an American CEO to attend a Rosneft board meeting with Sechin as long as it wasn't related to Sechin's "personal business".

The Treasury Department called the violation an "egregious case" and noted that Exxon "is a sophisticated and experienced oil and gas company that has global operations" and should know better when it comes to US sanctions.

But while he was at Exxon, Tillerson opposed the sanctions levied on Moscow for its annexation of Crimea. Tillerson knew both Sechin and Russian President Vladimir Putin for more than a decade before he became secretary of state. It leveled the statutory maximum civil penal of $2 million for the breaches.

Tillerson, whom Putin personally awarded Russia's Order of Friendship in 2013, reportedly argued at the time that he was not in favor of sanctions because he believed them to be ineffective, which is definitely the case if you choose to ignore them.

Exxon stock traded slightly up late in the afternoon. Tillerson stepped down as CEO of ExxonMobil in December 2016 to lead the Trump Administration's State Department.

"The secretary continues to abide by his ethical commitments, including that recusal from Exxon-related commitments", said State Department spokeswoman Heather Nauert.

The State Department referred questions about the fine to ExxonMobil and the Treasury.

The US imposed sanctions against Russian Federation amid rising tension in Ukraine.

Like this: