Author: Dr. Angelika Hellweger
18 January 2023
2 min read
Angelika Hellweger of Rahman Ravelli details the company’s resolution of allegations of sanctions violations and the issues involved.
Danish multinational company Danfoss has settled a case with OFAC for apparent violations of the Iran, Syria and Sudan sanctions programmes due to the facilitation of prohibited financial transactions.
The company manufactures and sells refrigeration products, operates 69 factories globally, employs approximately 42,000 people worldwide, and serves customers in more than 100 countries, including the United States. It has agreed to pay $4,379,810 over allegations that it failed to exercise sufficient caution or care in complying with US sanctions requirements over four years.
The alleged violations, of which there are more than 225, occurred when Danfoss’ wholly-owned UAE subsidiary, Danfoss FZCO, directed customers in Iran, Syria and Sudan to make payments to its bank account at the UAE branch of a US financial institution, and made payments from that same account to entities in Iran and Syria. Danfoss FZCO, therefore, facilitated - through its US branch account - financial transactions to sanctioned jurisdictions.
The case highlights the risks faced by non-US persons and entities when dealing with OFAC-sanctioned countries using US financial institutions.
OFAC noted in the settlement that the violations occurred as a consequence of the following facts and circumstances:
The main points of the case for corporates, from a compliance and governance perspective, are:
Angelika is a specialist in international, high-level economic crime investigations and large-scale commercial disputes. She has widely-recognised expertise in representing corporates and conglomerates in Europe, the Middle East, Africa and United States.