SCG Plastics, a Thai company will pay about $20 million to settle allegations it used the U.S. financial system to receive hundreds of millions of dollars for products made in Iran, in violation of U.S. sanctions, according to the Wall street Journal.https://www.wsj.com/articles/u-s-fines-thai-company-scg-plastics-20-million-over-alleged-iran-sanctions-violations-537df255?mod=hp_minor_pos10
The U.S. sanctions prohibit any U.S. companies from dealing with the government of Iran and and non-U.S. companies using dollar transaction processed by U.S. banks.
Since 2009, SCG Plastics allegedly purchased, marketed and resold plastic resin products made by an Iranian joint venture, owned in part by its parent company and the National Petrochemical Company of Iran, which is part of the government, to its customers in East Asia, according to Treasury’s Office of Foreign Assets Control, which implements and enforces U.S. economic sanctions. OFAC also alleged that to process these payments, SCG used certain shipping and documentation practices that obfuscated the fact that the products were made in Iran. These included listing “Middle East” as the country of origin instead of Iran, and listing shipments as being from the United Arab Emirates, rather than Iran, on commercial invoices.
Treasury said these are seen as “hallmarks of deceptive practices” used by people to obscure Iran’s involvement in prohibited transactions and intended to evade detection by the U.S. financial institutions processing the transactions.
Jeffrey Newman is a whistleblower lawyer whose firm represents whistleblowers in healthcare fraud cases under the False Claims Act (FCA) and also under the Securities and Exchange, FINCEN and CFTC whistleblower programs. He can be reached at Jeff@JeffNewmanLaw.com or at 617-823-3217
