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Exxon Fined $2 Million For Violating Russia Sanctions While Tillerson Was CEO

(Photo by Brian Harkin/Getty Images)

James Burton Contributor
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ExxonMobil was fined $2 million for violating Ukraine-related sanctions in 2014, while current U.S. Secretary of State, Rex Tillerson, was CEO, the Treasury Department announced.

The sanctions, signed by former President Barack Obama in an executive order, came as Russian troops had been deployed in the Ukrainian region of Crimea, further escalating the situation between the two countries. The executive order sought to block any American property holdings by any Russian official or person acting on behalf of the Russian government.

In violation of these sanctions against Russia, ExxonMobil made various deals with Rosneft OAO, an oil company owned by the Russian government, the Treasury Department said. Igor Sechin, president of Rosneft, had been on the department’s List of Specially Designated Nationals and Blocked Persons list (SDN), establishing a clear violation of the sanctions by ExxonMobil.

Sechin had been added to the list of blocked persons under the Treasury’s directive in April of 2014 but in May of the same year, ExxonMobil signed eight legal documents pertaining to oil and gas projects in Russia with Resneft.

ExxonMobil claimed that there was confusion over Sechin’s “professional and personal capacity” as an agent of the Russian government, but due to the lack of such a distinction in both the executive order and original Ukraine-Related Sanctions, the Treasury determined the fine was justified.

“OF AC determined that ExxonMobil did not voluntarily self-disclose the violations to OF AC,” read the Treasury report, “and that the violations constitute an egregious case.”

Treasury stated that “ExxonMobil’s senior-most executives knew of Sechin’s status as an SDN when they dealt in the blocked services of Sechin.”

“ExxonMobil demonstrated reckless disregard for U.S. sanctions requirements,” Treasury said, “when it failed to consider warning signs associated with dealing in the blocked services of an SDN.”

One mitigating factor in the penalty against Exxon, however, may be due to the fact that the Treasury’s Office of Foreign Assets Control (OFAC) had not penalized or found violation against the American oil giant in the five years preceding Exxon’s first illicit transaction.