CMA CGM (America) LLC recently agreed to shell out $374,400 to the Office of Foreign Assets Control (“OFAC”) to settle charges that it accepted payments for shipping services provided by its foreign parent company, CMA CGM, or its foreign affiliates, in connection with shipments between third countries and Cuba, Iran, or Sudan. Notice that there were no allegations that CMA CGM (America) itself shipped goods to Cuba, Iran, or Sudan, but only that it was involved in perfectly legal shipments by its foreign parent and affiliates to those countries. Ah, yes, the OFAC facilitation doctrine rears its ugly head again. Under that doctrine, a U.S. person can be held liable if it facilitates transactions by foreign persons that aren’t illegal but would be illegal if engaged in by U.S. persons.

Even though CMA CGM (America) did not voluntarily disclose the violation, the agency cited a number of mitigating factors in reducing the penalty from its base level of $640,000, including cooperation with the investigation, agreeing to toll the statute of limitations, the absence of prior penalties, and the adoption of a compliance program. Interestingly, OFAC also said this:

[S]ome of the goods exported from third countries to Cuba and Iran may have qualified as agricultural/medical products under the Trade Sanctions Reform and Export Enhancement Act of 2000 and, thus, may have been eligible for a license.

This statement may be slightly misleading. Under OFAC and BIS rules, agricultural products may be shipped from foreign ports to Cuba by U.S. owned or controlled companies only if they are 100 percent U.S. origin, which is not likely to have been the case for any foreign shipments of agricultural products.

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