Esco Corp. Pays $2.1 Million to Settle Sanctions Violations

Esco Corp., a manufacturer of products for mining, oil and construction companies, agreed to pay about $2.1 million to settle allegations that it violated U.S. sanctions on Cuba.

The Portland, Ore.-based company bought nickel briquettes made or derived from Cuban-origin nickel between November 2007 and June 2011, the U.S. Treasury Department said in a penalty notice issued Thursday. The total value of the transactions violating U.S. sanctions were $6.2 million, Treasury said, noting its Office of Foreign Assets Control determined the company voluntarily self-disclosed the violations.

Esco “caused significant harm” to the U.S. sanctions program on Cuba by conducting large-volume and high-value transactions in products made from Cuban-origin nickel, “which were ultimately sourced” from people on the U.S. blacklist, the notice said.

“Esco proactively contacted OFAC immediately upon learning that one of our suppliers had used Cuban-origin nickel,” said Rob Cornilles, vice president of investor, government relations and communications, in an emailed statement. “Right away, we stopped purchasing from this distributor, halted production at the site where the nickel was in use and removed all inventory containing Cuban material.”

Cuba has the fifth-largest nickel reserves in the world, and is the 10th largest nickel producer, accounting for about 2.7% of the world’s output of the metal in 2013, according to the U.S. Geological Survey.

Nickel is widely used in stainless steel, giving the alloy strength, corrosion resistance and reducing warping that can occur under elevated heat and pressure. Nickel-alloy steel is widely used in industrial applications such as mining and oil and gas equipment, as well as car exhausts.

 

http://blogs.wsj.com/riskandcompliance/2014/11/13/esco-corp-pays-2-1-million-to-settle-sanctions-violations/

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