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SGC Plastics, headquartered in Bangkok, Thailand, to pay OFAC $20 million


OFAC has entered into a settlement agreement ( ) with SGC Plastics, part of a multinational enterprise headquartered in Bangkok, Thailand, that sells plastic resins, in which SGC Plastics has agreed to pay $20 million to settle its potential civil liability for 467 apparent violations of OFAC sanctions on Iran.

According to the press release,

  • From 2017 to 2018, SCG Plastics caused US financial institutions to process $291 million in wire transfers for sales of Iranian-origin high-density polyethylene resin (HDPE) manufactured by a joint venture in Iran owned by, among others, SCG Plastics’ parent company and the National Petrochemical Company of Iran (“NPC”), an entity that is part of Iranian Govt.

SCG Plastics allegedly obfuscated the products’ Iranian origin and Iranian parties’ involvement in shipping and payment documentation by listing the country of origin as the “Middle East” or Jebel Ali, UAE, rather than “Iran”.

Compliance considerations:

  • This case highlights the risks of non-US companies using the US financial system to process transactions involving US-sanctioned persons or jurisdictions;

Aggravating factors for the penalty amount:

  • SGC Plastics wilfully engaged in the concealment of the Iranian origin, conferred significant benefits on the Iranian Govt, and was commercially sophisticated at the time of the apparent violations; and

Mitigating factors for the penalty amount:

  • SGC Plastics provided substantial cooperation to OFAC, SGC Plastics is in the process of undergoing liquidation, and TPE, the entity that has purchased SGC Plastics’ assets, has implemented multiple remedial measures to respond to the apparent violations, including adopting a sanctions compliance policy.



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