The U.S. Treasury Department Office of Foreign Assets Control ("OFAC") assessed a civil monetary penalty of over $5 million against a Germany-based company for allegedly violating Cuban Assets Control Regulations ("CACR").
Between May 2012 and February 2016, OFAC stated that AppliChem GmbH ("AppliChem") violated the CACR by selling chemical re-agents to Cuba on 304 occasions. The transaction value of the shipments made was over $3 million.
The alleged violations took place after AppliChem was acquired by Illinois Tool Works, Inc. ("ITW") in January 2012. Although ITW voluntarily self-disclosed certain Cuba sales the following year, OFAC asserted the company incorrectly represented that such business had been terminated. Instead, OFAC alleged that sales to Cuba continued thanks to so-called "Caribbean Procedures" put into place by AppliChem's local management without the knowledge of ITW. OFAC also alleged that one ITW manager received "some indications of AppliChem's continued sales to Cuba," but that the manager only reminded local employees of ITW's sanctions policy, rather than initiate a full investigation. OFAC assessed the monetary penalty after concluding that these, and other, circumstances constituted egregious violations of the CACR.
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