PACCAR Settles $1.7 Million OFAC Penalty For DAF Misstep

[kscarbel2]

Yahoo Finance  /  August 7, 2019

The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) on Aug. 6 announced a $1.7 million settlement agreement with Bellevue, Washington-based PACCAR to settle allegations that the truckmaker's European subsidiary illegally engaged in the sale of 63 trucks from Europe to Iran between October 2013 and February 2015.

According to OFAC, DAF Trucks in Eindhoven, the Netherlands, sells trucks through a network of more than 300 independent dealers.

The agency said the U.S. Iranian Transactions and Sanctions Regulations (ITSR) violations specifically involved orders that were received by DAF from dealers in Hamburg (51 trucks) and Frankfurt (two trucks), Germany, and Sofia, Bulgaria (10 trucks). The trucks were then resold to customers in Iran. OFAC noted that the truck sales were valued at about $5.4 million.

OFAC said PACCAR could have received a base penalty amount of $2.7 million for the alleged violations, but the agency considered a number of mitigating factors in the case, including that PACCAR disclosed the violations and DAF, upon learning of three dealers' activities, launched an investigation, fired the responsible employees and since 2015 mandated in-person and annual compliance training for its headquarters and subsidiary staff.

DAF also established a corporate policy that allows only direct sales agreements to final end customers and banned the resale of new trucks acquired through those agreements unless it approves an exception.

In addition, PACCAR's Dutch truck manufacturer sent certified letters to its dealers reminding them of their obligation to comply with U.S. and other trade sanctions.

OFAC said both PACCAR and DAF cooperated with the investigation, adding that the "apparent violations constitute a non-egregious case."

However, the agency warned this case demonstrates that foreign subsidiaries and their U.S. parent corporations must comply with the U.S. Iranian Transactions and Sanctions Regulations or risk exposure to civil penalties.

[james j neiweem]

Patriotic Paccar. The dollar rules.