Treasury Department Fines Exxon Mobil for Russia Sanctions Violations

Posted July 21, 2017

But because the documents were signed on the Russian end by Igor Sechin, an individual who is sanctioned by the us government in his personal capacity, the Trump administration retroactively decided the actions were in violation of sanctions imposed against Russians for their actions taken in Ukraine. Igor Sechin, president of Rosneft, had been on the department's List of Specially Designated Nationals and Blocked Persons list (SDN), establishing a clear violation of the sanctions by ExxonMobil.

Exxon's USA subsidiaries "dealt in services of an individual whose property and interests in property were blocked", Treasury said in a press release announcing the fines.

The documents, which Treasury said Exxon Mobil failed to "voluntarily self-disclose", were related to oil and gas projects in Russian Federation. The company said the eight legal documents it signed were related to ventures with Rosneft, not Sechin personally.

The enforcement action announced Thursday did not give further details about the dealings with Sechin, nor about which Exxon executives worked with him. Foreign Policy magazine reported "Sechin's personal assets will be frozen, but Treasury officials said the designation wouldn't impact USA companies' ability to do business with Rosneft because Sechin does not control the firm".

"OF AC determined that ExxonMobil did not voluntarily self-disclose the violations to OF AC", read the Treasury report, "and that the violations constitute an egregious case".

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While at Exxon Mobil, Tillerson generally opposed sanctions because he thought they were usually ineffective. It leveled the statutory maximum civil penal of $2 million for the breaches. A few days later, Tillerson was unambiguous about Exxon's opposition to the sanctions during his company's annual meeting.

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.

Tillerson left ExxonMobil to become secretary of state after 10 years at the helm of the global energy power. The State Department said it wasn't involved in the decision to punish Exxon for violating the sanctions.

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

"The U.S. and European Union sanctions on Russian Federation will remain in place until Moscow reverses the actions that triggered these particular sanctions", Tillerson said earlier this month during a visit to Ukraine.

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