Exxon Mobil violated US sanctions against Russia by signing oil and gas deals with a close ally of Vladimir Putin while Rex Tillerson, the secretary of state, was running the company.
Exxon’s “senior-most executives” knew that Igor Sechin, president of Rosneft, the Russian state-controlled energy company, was on a sanctions list when they signed eight deals with him in 2014, the Office of Foreign Assets Control said yesterday.
The office described the breach as an egregious case that caused significant harm to its Ukraine sanctions programme as it fined Exxon $2 million, the maximum penalty available.
Exxon exhibited “reckless disregard” for US sanctions requirements when it failed to consider warning signs around the deals and failed to voluntarily disclose its violations to the office.
Mr Tillerson was chief executive of Exxon until the end of last year, when he joined the Trump administration. He was questioned about links to the Kremlin during congressional hearings before his confirmation. OFAC’s ruling, published yesterday, did not name him or any other Exxon executives.
Advertisement
Exxon said that OFAC’s ruling was “fundamentally unfair” as it filed a court case in an attempt to overturn the decision. A spokesman said that the company had complied with sanctions guidelines.
OFAC was “trying 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 issued before the relevant conduct”, the spokesman added.
Shortly after Russia annexed Crimea in 2014, the White House told OFAC, a division of the US Treasury, to compile sanctions lists, targeting Russian government officials and their allies.
The Treasury said that the focus of the sanctions against “high-level Russian cronies” was to “identify individuals and target their assets instead of the companies they manage . . . US persons are prohibited from doing business with persons who had been designated”. Mr Sechin was added to one of the sanctions lists in April that year.
“No materials issued by the White House or the Department of the Treasury asserted an exception or carve-out for the professional conduct of designated or blocked persons, nor did any materials suggest that US persons could continue to conduct or engage in business with such individuals,” OFAC said yesterday.
Advertisement
It said that Exxon executives signed the deals with Mr Sechin and another individual on the sanctions list in May 2014. “Despite these prohibitions and Exxon Mobil’s global market and sophistication, Exxon Mobil moved forward with signing the legal documents with . . . Igor Sechin,” the office said.
The State Department declined to comment.