ExxonMobil Corp. is challenging a US Department of the Treasury penalty for dealings that the Office of Foreign Assets Control (OFAC) says violated sanctions against Russia.
The OFAC on July 20 cited agreements the company signed with Igor Sechin, chief executive officer of OAO Rosneft, in its assessment of a $2-million penalty.
It had identified Sechin as a “specially designated national” (SDN) added in April 2014 to an executive order issued by former US President Barack Obama a month earlier precluding business dealings with specific Russians.
The order, which did not include Rosneft, expanded economic sanctions imposed in response to Russian militancy in Ukraine.
The OFAC said ExxonMobil signed eight legal documents involving oil and gas projects with Sechin in May 2014.
It rejected ExxonMobil’s assertion of a distinction between Sechin’s professional and personal affairs and said the company had adequate warning that its dealings with Sechin fell subject to the sanctions.
ExxonMobil responded to the OFAC’s penalty announcement with a legal challenge and said in a statement that it “followed authoritative and specific guidance from the Obama administration that OFAC retroactively changed a year later.”
The company said a White House fact sheet issued with the executive order established the professional-personal distinction of SDNs and cited later instances when officials alluded to it.
ExxonMobil also said OFAC issued an administrative subpoena to its relevant subsidiary on July 22, 2014, but 8 days later acknowledged it hadn’t made a legal decision on whether Sechin’s signature violated sanctions.
It said OFAC issued a prepenalty notice in June 2015 and in a September 2016 meeting with company officials rejected the importance of the White House guidance.
The company filed its challenge in the US District Court for the Northern District of Texas, Dallas Division.
