U.S. Fines 86 Firms For Business With Nations on "Enemies"

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U.S. Fines 86 Firms For Business With Nations on "Enemies"

Postby admin » Wed Nov 08, 2017 8:22 am

U.S. Fines 86 Firms For Business With Nations on "Enemies" List
by Stephanie M. Horvath
Wall Street Journal
July 3, 2002

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WASHINGTON -- The U.S. government disclosed it has fined 86 companies, including Ikea, CNA Insurance Cos. and the Los Angeles Dodgers, for violating a law that bars companies from doing business with an "enemies" list of nations that includes Iran, Iraq, Cuba and North Korea.

The Treasury Department's Office of Foreign Assets Control released a list of 115 fines totaling $5.8 million for violations of the Trading With The Enemy Act dating back to 1998. The list adds to information it disclosed in March, but doesn't include all fines during the period.

In the case of the Dodgers, the professional baseball team reached a $75,000 settlement in 1999 with OFAC for signing two Cuban players. Patrick Courtney, a spokesman for Major League Baseball, said the players joined the Dodgers' organization in the Dominican Republic and claimed to be citizens of that Caribbean nation.

Mr. Courtney said when the matter came to light, the players, whom he didn't identify, were declared free agents and the Los Angeles club was fined.

CNA, a unit of CNA Financial Corp., Chicago, had the costliest settlements -- nearly $2.4 million -- for trading with Cuba. In a written statement, CNA said the settlements were the result of the actions of two British subsidiaries that "engaged in conduct inconsistent with OFAC rules." The company said it brought both violations to the Treasury's attention.

In the case of Ikea, Treasury found the Swedish home-furnishings retailer ordered rugs from a Taliban-controlled part of Afghanistan. Ikea spokesman Clive Cashman said the region wasn't under Taliban control at the time Ikea placed its order for 150 rugs.

Mr. Cashman said the Taliban took control of the area after the rugs had been shipped out of the country in November 1999, and it wasn't Ikea's intent to violate U.S. rules. The company reached an $8,000 settlement, and has since stopped trading with Afghanistan, he said.

Other companies that reached settlements include Goodyear Tire & Rubber Co., Akron, Ohio, which traded with Cuba and settled for $195,000, and GRE Insurance Group, now owned by Liberty Mutual Insurance Co., Boston, which settled for $244,250 for trading with Iraq. Representatives from both companies said they had no information on the matter.

Mary Eshet, a spokeswoman for First Union Bank, now part of Wachovia Corp., Charlotte, N.C., which paid $360,000 to settle allegations it traded with Iran, said she couldn't comment on individual transactions. She said the bank has "stringent policies and procedures" that are in place to prevent violations.

Treasury spokeswoman Tasi Scolinos said OFAC analysts consider a number of factors when determining settlement amounts, including the value of the illegal transaction and whether the company is a repeat offender. Ms. Scolinos said she couldn't comment on individual cases.

The administration began releasing information on illegal trading this March after being sued under the Freedom of Information Act by Public Citizen and the Corporate Crime Reporter, a newsletter that earlier reported these settlements. Treasury is planning to make such settlements public on a regular basis.

The Treasury's latest list didn't include Halliburton Co., Dallas, the oil services company formerly run by Vice President Dick Cheney. Halliburton opened an office in Tehran in 2000, when Mr. Cheney was chief executive officer. When the news became public last year, the company denied its office violated the U.S. law.

The Treasury is expected to disclose more settlements later this year.
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