Third-party distributors send Texan company’s video production products to Iranian broadcaster, triggering sanctions violations


NewTek Inc., a Texas-based video production hardware and software company, exported goods to third-party distributors that it knew or should have known intended to sell to Iran, according to a regulation released Thursday by the US Treasury Department.

Between December 2013 and May 2018, NewTek exported 49 products from the United States to two third-country distributors destined for an Iranian reseller, according to the settlement notice from the Treasury’s Office of Foreign Assets Control (OFAC). The Iranian dealer then sold three of the products to Islamic Republic of Iran Broadcasting (IRIB), which was sanctioned by the United States in 2013, according to OFAC. On at least three occasions, NewTek has provided support, software updates, reseller training or other services to Iranian customers, OFAC said.

NewTek did not have any export control or sanction compliance policies or procedures in place during the period, and did not provide staff training regarding compliance, according to OFAC. Since then, the company has implemented a sanctions and export control compliance program, hired a compliance manager, provided training, received an official export classification from the US Department of Commerce, and implemented procedures. filtering, said OFAC.

The company, which agreed to pay nearly $ 200,000 to resolve the allegations, voluntarily self-disclosed the conduct and OFAC deemed the matter not to be blatant. Neither NewTek nor its parent company, Vizrt Group, seemed to have a public response at the time of writing.

NewTek had authorized the distribution of its products to the Iranian reseller under two successive agreements, according to OFAC’s opinion. Each distributor had explicitly identified Iran as part of its Middle East sales territory, OFAC said. The first, with a French company, was in effect until October 2014; the second, with a company based in Dubai, United Arab Emirates, lasted the remainder of the relevant period, according to the notice.

The total value of the affected transactions was $ 583,024, or a profit of about $ 61,070, which is small compared to the company’s overall revenue, according to OFAC.

NewTek mistakenly believed that its product sales through third-party distributors complied with applicable sanctions regulations because it did not deal directly with Iran, OFAC said.

“Companies should also ensure they have a clear understanding of US sanctions regulations, especially when selling in global markets using sales models where potentially violating behavior may be more likely,” he said. declared OFAC.

Source link


About Author

Leave A Reply