OFAC fines Cartier parent company under drug kingpin sanctions
Tuesday, September 26, 2017 at 11:08AM
Richard L. Cassin in Cartier, OFAC, Office of Foreign Assets Control, Sanctions

The Treasury Department's Office of Foreign Assets Control penalized Richemont North America, Inc., the owner of the Cartier luxury brand, for shipping jewelry to a Hong Kong company that OFAC had blocked.

New York City-headquartered Richemont agreed Tuesday to pay $334,800 to settle "its potential civil liability for four apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations," OFAC said.

In 2010 and 2011, Richemont exported four shipments of jewelry to Shuen Wai Holding Limited in Hong Kong.

OFAC put Shuen Wai on its SDN List, or List of Specially Designated Nationals and Blocked Persons, on November 13, 2008. Kingpin Act designations are tagged on the SDN List by “[SDNTK].”

 The entry said:

SHUEN WAI HOLDING LIMITED, Room 3605 36/F Wu Chang House, 213 Queen's Road E, Wan Chai, Hong Kong, Hong Kong; Business Registration Document # 15895496 (Hong Kong); Certificate of Incorporation Number 330330 (Hong Kong) [SDNTK]

OFAC said Tuesday, "On four separate occasions, an individual purchased jewelry from one of Richemont’s Cartier boutiques located in California or Nevada and provided Shuen Wai’s name and mailing address to Richemont as the ship-to party."

"Although the information and documentation provided to Richemont contained the same name, address, and country location for Shuen Wai as they appear on the SDN List, Richemont did not identify any sanctions-related issues with the transaction prior to shipping the goods," OFAC said.

Businesses in the United States aren't allowed to do any business with people or companies designated under the Kingpin Act. The law targets "significant foreign narcotics traffickers," as identified by the President. 

Richemont didn't voluntarily self-disclose the apparent violations. And it didn't "exercise a minimal degree of caution or care with respect to the conduct that led to the apparent violations," OFAC said.

Nevertheless, the offenses were "a non-egregious case," OFAC said.

Richemont had a clean record with OFAC for the prior five years. It cooperated with OFAC during its investigation, including by agreeing to toll the statute of limitations. And Richemont "took remedial action to correct the deficiencies giving rise to the apparent violations."

OFAC discounted the penalty down from $620,000 to $334,800.

OFAC said in the release for the enforcement action that it "encourages companies to develop, implement, and maintain a risk-based approach to sanctions compliance, and to implement processes and procedures to identify and mitigate areas of risks."

Compliance programs should include an assessment of the products and services, frequency and volume of international transactions and shipments, client base, and size and geographic locations, OFAC said.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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