Published: Fri, July 21, 2017
Health Care | By Gwendolyn Kim

After Exxon Fine for Sanctions Violations, Calls for Rex Tillerson to Resign

After Exxon Fine for Sanctions Violations, Calls for Rex Tillerson to Resign

OFAC says ExxonMobil violated sanctions against Russian officials in May 2014, by "signing eight legal documents related to oil and gas projects in Russia with Igor Sechin, the President of Rosneft", Russia's state-owned oil company.

Exxon, in its lawsuit, noted that the former Obama administration had said the sanctions strategy was to target individuals like Sechin who were contributing to the Ukraine crisis — not the companies they might manage on Russia's behalf.

Treasury's enforcement action said that the executive order, its guidance for companies and the administration's public statements "all clearly put ExxonMobil on notice that OFAC would consider executing documents with [people subject to sanctions] to violate the prohibitions in the Ukraine-Related Sanctions Regulations".

ExxonMobil had "demonstrated reckless disregard for US sanctions requirements" by signing the deals with Sechin just weeks after the United States blacklisted him, OFAC said in an unusually lengthy three-page statement laying out its reasoning.

Exxon did not disclose the activities, the Treasury Department said.

As head of the oil company, he signed deals with Rosneft, leading Russian Federation to award him the Order of Friendship in 2013.

Exxon's filing in USA court said the OFAC action is "fundamentally unfair and constitutes a denial of due process under the Constitution".

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No White House or Treasury statements asserted "an exception or carve-out for the professional conduct of designated or blocked persons, nor did any materials suggest that USA persons could continue to conduct or engage in business with such individuals", OFAC said.

Sechin is the CEO of Russian state oil giant Rosneft and a close ally of Russian President Vladimir Putin. It leveled the statutory maximum civil penal of $2 million for the breaches.

"We do not support sanctions, generally, because we don't find them to be effective unless they are very well implemented comprehensibly and that's a very hard thing to do", Tillerson said at Exxon's 2014 annual meeting.

Tillerson left ExxonMobil to become secretary of state after 10 years at the helm of the global energy power.

The State Department declined to comment, referring questions to Exxon.

The Treasury Department "is trying to retroactively enforce a new interpretation of an executive order" inconsistent with its prior guidance, Jeffers said.

"The U.S. and European Union sanctions on Russian Federation will remain in place until Moscow reverses the actions that triggered these particular sanctions", Tillerson said earlier this month during a visit to Ukraine.

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