On July 10, 2012, OFAC announced that Great Western Malting Co. ("Great Western"), a U.S. company, agreed to pay $1.35 million to settle apparent violations of the Cuban Assets Control Regulations. Great Western produces malt for the brewing, distilling and food markets. OFAC's settlement announcement indicates that Great Western's U.S.-based personnel provided back-office support for a foreign affiliate's sales of foreign-origin barley malt to Cuba. This case is noteworthy because the liability appears to be based solely on Great Western's facilitation of its foreign affiliates' sales of foreign products.
This enforcement action is a warning to companies operating globally with business in the United States and in U.S.-sanctioned countries -- particularly U.S.-based companies whose foreign affiliates and subsidiaries conduct business in Cuba, Iran, Sudan, or Syria. Companies should consider whether they have sufficient internal controls in place to prevent inadvertent back-office support or other forms of facilitation of their related companies' sales in sanctioned countries.… Continue Reading