ExxonMobil fights back after $2m fine from OFAC

The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has fined US oil and gas company ExxonMobil $2m for alleged violations of US sanctions imposed on Russia in response to its 2014 annexation of Ukraine. In response, ExxonMobil has launched its own legal action against OFAC.

OFAC stated that the reason for the fine was a series of dealings between ExxonMobil and specially designated individual (‘SDN’) Igor Sechin, president of Rosneft, Russia’s state-owned oil company.

Between 14 May and 23 May 2014 – when Secretary of State Rex Tillerson was chief executive of ExxonMobil – eight legal documents were signed between the company and Sechin, concerning a joint oil venture. In its statement, OFAC said that it considered that ExxonMobil had ‘demonstrated reckless disregard for U.S. sanctions requirements’ by signing the deals with Sechin within weeks of him being blacklisted, and pointed to relevant FAQs available on its website.

ExxonMobil has issued a legal complaint branding OFAC’s actions ‘arbitrary’ and ‘capricious’, claiming that Sechin was ‘subject to sanctions only in his individual capacity’ and not in his professional capacity as president of Rosneft. The complaint also argues that OFAC is applying a retroactive interpretation of the sanctions regime that is not in line with its stance at the time the deals were signed.

OFAC’s enforcement notice can be found here:
https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20170720_exxonmobil.pdf

ExxonMobil’s complaint can be found here:
http://cdn.exxonmobil.com/~/media/global/files/other/2017/exxonmobil-complaint.pdf