The Office of Foreign Assets Control (“OFAC”) today released its monthly civil penalty report for June. The report indicates that General Reinsurance Company (“Gen Re”) agreed to pay $59,130 to settle allegations that it had paid $309,740.65 in 2005 under a facultative reinsurance policy issued to Steamship Mutual Underwriting Association Limited (“Steamship”). The payment was made in connection with claims made against Steamship for losses between 1998 and 2002 covered by a policy issued by Steamship to the National Iranian Tanker Company (“NITC”). In reducing (somewhat) the base penalty of $131,424, OFAC cited a number of mitigating factors including the company’s entry into a tolling agreement, its voluntary disclosure of the violations, its cooperation in the investigation, its subsequent enhancement of its compliance program, and the absence of prior OFAC violations.

The discussion of the violation by OFAC might leave the misleading impression that the payment of the premium by General Reinsurance was the crux of the violation rather than the issuance of the reinsurance policy covering Steamship’s insurance policy for NITC in the first place. OFAC guidance to the insurance industry makes clear that the issuance of the reinsurance to Steamship for its NITC policy would itself have violated OFAC rules without regard to whether any claims were actually made or paid to Steamship.

The reason, however, for the focus on the payment was the five-year statute of limitations. Based on the claim dates involved, the reinsurance policy had to have been issued in 1998 or earlier and thus was well beyond the statute of limitations by the time that General Reinsurance voluntarily disclosed its payments under the reinsurance policy in 2005.

The Office of Foreign Assets Control (“OFAC”) today announced a new round of sanctions against various Iranian entities including the national airline Iran Air and its domestic air carrier Iran Air Tours. The press release announcing the sanctions highlighted Iran Air’s involvement in transporting missiles and parts and components used in developing ballistic missiles. The sanctions also targeted Tidewater Middle East Co. (“Tidewater”), which is the company that manages seven of Iran’s ports. The press release highlighted a number of Iranian vessels that were found to be carrying arms and materiel that had been loaded at ports managed by Tidewater. But the most interesting part of the designation was a footnote:

*There is no relationship between today’s target, Tidewater Middle East Co., and Tidewater (US), an international shipping company headquartered in the United States, listed on the New York Stock Exchange as TDW.

In the past, OFAC has usually declined to provide any statements about people or companies that are not on the SDN list, even though it gives an avenue to parties on the SDN list to argue that they should not be on the list. In short, an innocent party, like someone named Daniel Garcia, who is denied a loan because there is another Daniel Garcia on the list, has less rights with respect to the SDN list than a terrorist who is actually nam mmed on the list. OFAC’s reasoning has been that it doesn’t won’t to say who is not on the list because that person might someday be on the list and the previous negative certification would then be misleading. So what gives with Tidewater, Inc., the Tidewater that is not the Tidewater now on the SDN list? Is this the beginning of a reversal of OFAC’s unwillingness to provide negative certifications, or does Tidewater have extra special clout at OFAC? I am aware of only one other instance where OFAC specifically called out companies with similar names to make clear that they are not on the list. Should all the Daniel Garcias that aren’t the Daniel Garcia on the SDN list give OFAC a call?