OFAC announced last week that it had reached a settlement with Koch Foods, a major chicken processing firm, arising out of shipments by Koch to Iraq in August 2002. The OFAC announcement follows OFAC’s general policy of providing minimal guidance to the export community and, thus, has few details of Koch’s violation other than this:

OFAC alleged that Koch shipped under contract with a company located in a third country four shipments (consisting of 20 containers) of frozen poultry that had a final destination of Iraq. Koch has reported to OFAC corrective measures and improvements to its OFAC compliance program. Koch did not voluntarily disclose this matter to OFAC.

Since Koch’s contract was with a third-party outside Iraq, it is not clear from this barebones factual statement whether Koch knew, or even should have known, that the chicken was destined for Iraq. If, for example, this was a case where Koch didn’t know, but should have known, where the chicken was being shipped, then OFAC could educate exporters and prevent future violations by detailing the factors that should have alerted Koch that the poultry was headed for the markets of Saddam Hussein’s Baghdad.

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