Feds slap Exxon Mobil with $2 million fine for violating Russian Federation sanctions

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.

Treasury said executives of Exxon Mobil's US subsidiaries signed legal documents with Igor Sechin, President of Rosneft, a Russian Federation state-owned oil giant that describes itself as "the world's largest publicly traded petroleum company".

In a statement e-mailed to RFE/RL, Exxon Mobil took exception to the accusations, saying the Treasury Department's Office of Foreign Assets Control was trying to "retroactively enforce" an earlier order. Sechin was among those sanctioned by the USA after Russia's occupation of Crimea and incursion into eastern Ukraine. Exxon sued the US government to stop the fine. And, it said the company's "senior-most executives" were aware of the sanctions when two of its subsidiaries signed deals with Russian oil magnate Igor Sechin.

Exxon-which made almost $8 billion in profit past year and could perhaps afford better lawyers-called the action "fundamentally unfair". The U.S. says Exxon caused "significant harm" to the sanctions program.

Exxon's defense was that the documents were signed with Sechin in his "personal" capacity, but Treasury said Thursday that no such distinction exists and that Exxon should know that.

In its statement explaining the fine, OFAC said that the Treasury representative's comments did not address ExxonMobil's conduct.

"ExxonMobil demonstrated reckless disregard for USA sanctions requirements when it failed to consider warning signs associated with dealing in the blocked services", the statement said.

Publicly available guidance on Treasury's website at the time of Exxon's dealings with Sechin said Americans should ensure they do not enter into contracts signed by sanctioned individuals, OFAC said.

The same year that Exxon is accused of breaching the sanctions, Tillerson was unambiguous about his opposition to the penalties.

The same month that Exxon signed the deals, Tillerson said the company generally opposes sanctions and finds them "ineffective".

Sechin was Tillerson's main partner in Exxon's bid to drill in the Arctic's Kara Sea, with its vast untapped potential.

Before he became Secretary of State, Mr Tillerson knew both Mr Sechin and Russian President Vladimir Putin for more than a decade.

President Obama signed an executive order establishing sanctions on Russian Federation on March 16, 2014.

The violation, which the Treasury Department announced July 20, occurred in May 2014, just weeks after President Barack Obama announced the sanctions against Moscow for its annexation of Ukraine's Crimea Peninsula.

  • Rogelio Becker