Exxon Says "Egregious" Sanctions Violations Were Just a Misunderstanding

Exxon Says

In May 2014, USA subsidiaries of Exxon inked legal papers related to Russian oil and gas projects with Rosneft CEO Igor Sechin, who had been under US sanctions since the month before.

Exxon, in its lawsuit, noted that the former Obama administration had said the sanctions strategy was to target individuals like Sechin who were contributing to the Ukraine crisis — not the companies they might manage on Russia's behalf.

The Treasury's Office of Foreign Assets Control said Exxon didn't voluntarily disclose its dealings with Sechin to the US government, and called the violations egregious.

The Treasury Department slapped Exxon with a $2 million fine - the maximum allowed under current law - and said the company had "demonstrated reckless disregard" for the requirements of the sanctions.

The documents, which Treasury said Exxon Mobil failed to "voluntarily self-disclose", were related to oil and gas projects in Russian Federation.

Exxon-which made almost $8 billion in profit a year ago and could perhaps afford better lawyers-called the action "fundamentally unfair".

No White House or Treasury statements asserted "an exception or carve-out for the professional conduct of designated or blocked persons, nor did any materials suggest that USA persons could continue to conduct or engage in business with such individuals", OFAC said. It also determined that Exxon had not voluntarily disclosed the violations, which it said was "an egregious case".

Exxon called the $2 million penalty "fundamentally unfair", saying in a statement that it is "inconsistent with the explicit and unambiguous guidance" issued at the time by the White House and Treasury about the sanctions.

But while he was at Exxon, Tillerson opposed the sanctions levied on Moscow for its annexation of Crimea.

Exxon officials contended that they believed the sanctions against Sechin left room for "personal" business deals and only applied to "professional" conduct.

Tillerson established close relations with Russian officials, including President Vladimir Putin, while he was CEO of Exxon Mobil. Exxon's suit asks the court to set aside the fine.

After the Ukraine-related sanctions put in place under President Barack Obama, Tillerson saw Exxon's stake in a lucrative offshore drilling project with Rosneft come under threat.

The State Department directed further questions to Treasury and Exxon. Tillerson visited the White House numerous times as CEO in the immediate aftermath of the sanctions being announced, but they remained in place.

"The secretary continues to abide by his ethical commitments, including that recusal from Exxon-related activities", Nauert said.

The US imposed sanctions against Russian Federation amid rising tension in Ukraine.

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