OFAC Imposing Penalties on Non-U.S. Companies

A recent OFAC enforcement case illustrates that even non-U.S. companies that do business with sanctioned jurisdictions under the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) face significant risks when using U.S. dollar payments. This means that OFAC is claiming jurisdiction over any transaction that’s in U.S. dollars.

On July 27th, OFAC announced a $12 million settlement with CSE Global Limited and its subsidiary, CSE TransTel Pte. Ltd.; both companies based in Singapore. TransTel violated U.S. sanctions by using its U.S. dollar account at a Singapore-based bank to make over $11 million in payments to various third-party vendors that included several Iranian companies providing goods and services to multiple Iranian contracts. OFAC is claiming jurisdiction over these payments because they were processed through the U.S. financial system (using U.S. dollars) and caused multiple financial institutions to violate U.S. sanctions by participating in the illegal exportation of financial services.

This settlement is important because it’s the first time OFAC has penalized a non-U.S., non-financial company for violating U.S. sanctions. It also signals broader enforcement by OFAC to non-bank parties for U.S. dollar payments that involve sanctioned jurisdictions and parties.