Risk Level:
unknown %

Status:
Risk Alert – Entity in a problematic sector - Sector controlled by the Top Alert entities

Info:
Japanese trading conglomerate Sojitz has been hit with a multi-million dollar fine by US authorities after wayward employees secretly traded Iranian-origin goods in violation of economic sanctions on the country;

Sojitz’s Hong Kong subsidiary agreed to pay US$5.2mn to settle allegations by the US sanctions enforcement agency, the Office of Foreign Assets Control (OFAC), that it routed payments for Iranian-origin high-density polyethylene resin (HDPE) through US financial institutions. The material is used in plastics production;

A settlement notice published by OFAC on January 11 says that “employees acting contrary to companywide policies and procedures” purchased 64,000 tonnes of Iranian HDPE from an unnamed supplier in Thailand, which were then shipped to Sojitz’s buyers in China;

Sojitz, listed on the Tokyo stock exchange, is a trading giant also involved in financing, manufacturing and project development;

Between 2016 and 2018 Sojitz transferred US$75.6mn from its Hong Kong bank to the supplier’s bank in Thailand as payment for the goods, according to OFAC’s notice. Neither financial institution is named in the document;

Some of the toughest sanctions target Iran’s petrochemical sector, the country’s top export earner;

OFAC says the Sojitz trade transactions violated a section of the Iranian Transactions and Sanctions Regulations that prohibit payments that “evade or avoid” sanctions;

OFAC says one of the aggravating factors in the case is that “Sojitz Hong Kong is a sophisticated offshore trading and cross-border trade financing company with ready access to experience and expertise in international trade, investment, financing, and sanctions compliance”;

But in considering the settlement amount it also noted that the trading was carried out without the knowledge of senior management and that Sojitz voluntarily disclosed the breach to OFAC, co-operated fully with the agency’s investigation subsequently and had no prior history of sanctions violations;

OFAC deemed the violations “non-egregious” and afforded the firm a steep discount on a possible maximum penalty of US$151mn.

The company fired the employees involved – one of whom had a “mid-level managerial position” – and enhanced its sanctions compliance programme, the notice says;

OFAC says the case is an example of why “US and foreign companies should conduct robust risk assessments to identify activities that pose greater sanctions risks, including of their supply chains, products, and services, and institute appropriately tailored risk-based procedures designed to minimise violations, including the ability of ‘rogue’ employees to circumvent internal controls”;

Industry:
Conglomerate

Also Known As:
Sojitz Corporation

Country:
Japan

Address:
Chiyoda, Tokyo, Japan

Website:
www.sojitz.com

E-mail:
info@sojitz.com

Reason for the color:
» OFAC Settles with Sojitz (Hong Kong) Limited for $5,228,298 Related to Apparent Violations of the Iranian Transactions and Sanctions Regulations;


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IFMAT Color Guide

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We sort entities who are connected with terrorist activities, in two sections, first by risk and second by geolocation.
GeoLocation divisions are divided into two fields, Black List and Gray List.
BlackList is a list of all companies, organizations and figures who originate from Iran.
GrayList is a list of all companies, organizations and figures out of Iranian borders, and doing business with Iran.
We identify risk of entities by COLOR selection, each color marks the risk level of the entity.(by declining order)
 
TOP ALERT
Designated / Sanctioned / Illicit entities
 
HIGH ALERT
Entities affiliated with Designated / Sanctioned / Illicit entities.
 
MEDIUM ALERT
Entities sanctioned in the past for Terror or Illicit activities / WMD related / Human rights violations.
 
RISK ALERT
Entities in a problematic sector - Sector controlled by the Top Alert entities.
 
GENERAL ALERT
Legitimate entities - we cannot determine whether an entity is completely green, and that is due to the facts that the Iranian economy is not transparent enough for us. Be sure.