Ofac Kollmorgen Settlement Agreement

The Office of Foreign Assets Control (OFAC) recently announced a settlement agreement with Kollmorgen Corporation, a company that specializes in advanced motion control products for aerospace and defense industries. The agreement highlights the importance of compliance with U.S. sanctions programs and the penalties for failing to do so.

According to the settlement agreement, Kollmorgen violated multiple sanctions programs by exporting products to countries like Iran, Russia, and China. The company did not have adequate compliance procedures in place to prevent these violations, which resulted in penalties totaling over $13 million.

OFAC’s sanctions programs are in place to prevent U.S. businesses from conducting business with countries, entities, or individuals who pose a threat to U.S. national security or foreign policy interests. These programs include economic and trade sanctions, as well as targeted sanctions that specifically target individuals or businesses.

The Kollmorgen settlement agreement serves as a reminder of the importance of implementing effective compliance procedures to avoid sanctions violations. U.S. businesses should conduct regular risk assessments to identify potential sanctions risks and take steps to mitigate these risks. This may include training employees on sanctions compliance, developing internal controls, and implementing screening processes to ensure that transactions do not violate sanctions programs.

In addition to the financial penalties, sanctions violations can also result in reputational damage and loss of business opportunities. Companies that violate sanctions programs may be added to OFAC’s Specially Designated Nationals and Blocked Persons list, which can limit their ability to conduct business with other U.S. companies.

Overall, the Kollmorgen settlement agreement highlights the serious consequences of failing to comply with U.S. sanctions programs. U.S. businesses should take steps to ensure they are in compliance with these programs and avoid the costly penalties that can result from violations.