Exxon Fined $2 Million For Violating Russia Sanctions While Tillerson Was CEO

Feds fine Exxon $2M for violating Russia sanctions while Tillerson was CEO
ExxonMobil Given $2 Mln Fine for Breaching Anti-Russia Sanctions in Dealing With Sechin
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21 July, 2017

Exxon violated US sanctions on Russia during May 2014 when it signed eight documents relating to oil and gas projects in Russia with Igor Sechin, the president of Russian state-oil firm Rosneft, Treasury said in an enforcement notice posted to its website.

In April 2014, in response to its "continuing provocations in Ukraine", the Obama administration expanded its economic sanctions against Russia, freezing the assets of 17 Russian companies and seven Russians linked to Vladimir Putin, as well as prohibiting USA dealings with those parties.

"Exxon Mobil followed the clear guidance from the White House and Treasury Department when its representatives signed documents involving ongoing oil and gas activities in Russian Federation with Rosneft - a nonblocked entity - that were countersigned on behalf of Rosneft by CEO Igor Sechin in his official representative capacity", said William Holbrook, a company spokesman.

Exxon's US subsidiaries "dealt in services of an individual whose property and interests in property were blocked", Treasury said in a press release announcing the fines. That same month, Neil Duffin, president of subsidiary Exxon Mobil Development, signed several deals to continue their work on the massive Sakhalin oil and natural gas project on Russia's eastern coast. "OFAC's action is fundamentally unfair".

Exxon's defense was that the documents were signed with Sechin in his "personal" capacity, but Treasury said Thursday that no such distinction exists and that Exxon should know that. It also determined that Exxon had not voluntarily disclosed the violations, which it said was "an egregious case".

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"OFAC seeks to retroactively enforce a new interpretation of an executive order that is inconsistent with the explicit and unambiguous guidance from the White House and Treasury", Exxon said in the suit.

But while he was at Exxon, Tillerson opposed the sanctions levied on Moscow for its annexation of Crimea. It leveled the statutory maximum civil penal of $2 million for the breaches. The State Department said it wasn't involved in the decision to punish Exxon for violating the sanctions.

Tillerson established close relations with Russian officials, including President Vladimir Putin, while he was CEO of Exxon Mobil. The sanctions had exposed Exxon to up to $1bn in losses by the end of 2014, Exxon said. Tillerson visited the White House numerous times as CEO to protest the sanctions, but they remained in place.

As a diplomat, Tillerson has struck a different tone on sanctions and sought to maintain pressure on Russian Federation to stop interfering in eastern Ukraine.


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