The recent court ruling of December 31 absolving ExxonMobil Corp from the payment of $2million fine levied against it in July 2017 by the Treasury’s Office of Foreign Assets Control could ginger the Treasury to provide greater guidance about sanctions and its compliance. The lawsuit by Exxon arose as a result of allegations relating to the company’s dealings with Rosneft, a Russian energy giant and its Chief Executive, Igor Sechin. Sechin, who was sanctioned in 2014 over his personal relationship with the Russian President had signed a series of contracts with Exxon as part of his role at Rosneft, an act is seen as a violation of his sanctions even if the contracts were signed in his professional capacity. On the same date that the penalty was imposed on Exxon, it filed its lawsuit and the US District Judge Jane Boyle ruled that Exxon was not given fair notice about the implications of their conduct by OFAC. Though the Treasury spokeswoman refused to make any comment Exxon in its brief comment lauds the judgement as a confirmation of their compliance with the applicable sanction.
Though OFAC pointed to a response on its FAQ page regarding sanctions program on Burma that cautioned US persons while dealing with a Burmese Ministry but Exxon countered it stating the guidance was in related to Burma programs and not Ukraine program and the court agreed with Exxon. The court also revealed a contradiction in statements from US officials and White House fact sheets on Sechin sanctions. A Senior Research Scholar at Columbia University, Richard Nephew advised Treasury to be more transparent in its guidance department to avoid unnecessary embarrassment and undermining of its directives. Douglas Jacobson, a partner at the international trade-focused firm Jacobson Burton Kelley PLLC in his words expects OFAC to appeal the ruling as the issue at hand has an important role to play in the reputation of the agency.
