Tillerson's Exxon violated Russian Federation sanctions, Treasury says

Jerome Frank
July 21, 2017

Exxon Mobil has been fined $2m for violating sanctions against Russian Federation while US Secretary of State Rex Tillerson was its CEO.

The OFAC said Exxon's top executives knew Sechin was under sanctions, and the company demonstrated "reckless disregard" for the USA sanction program and hindered the US government in its efforts to punish Russian Federation for its actions in Crimea.

In a statement Thursday, ExxonMobil claimed it "followed the clear guidance from the White House and Treasury Department when its representatives signed the documents", and that "OFAC is trying to retroactively enforce a new interpretation" of the sanctions, adding, "OFAC's action is fundamentally unfair".

The State Department said Thursday that Tillerson remained committed to the goals of the sanctions program and that he had recused himself from all Exxon-related matters.

- Robbie Gramer (@RobbieGramer) July 20, 20172/ Exxon and Treasury for comment.

Tillerson has taken a tough line with Ukraine-related sanctions as secretary of state, saying earlier this month on a trip to Kiev that the sanctions would not be lifted until Russian Federation met its obligations.

President Obama signed an executive order establishing sanctions on Russian Federation on March 16, 2014. The company said the eight legal documents it signed were related to ventures with Rosneft, not Sechin personally.

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Exxon Mobil, whose chief executive at the time is now the USA secretary of state, pushed back strongly, calling the action "fundamentally unfair".

Yet the Treasury Department said that Exxon's "senior-most executives" knew Sechin was blacklisted when two of its subsidiaries signed deals with him.

Authorities suggested Exxon should have known better than to deal with Sechin because it's a "sophisticated and experienced" company that "routinely" deals with sanctions issues.

"You could have Sechin standing over the guy's shoulder", said Mortlock, now an attorney at Willkie Farr & Gallagher LLP in Washington.

While he was at Exxon, Mr Tillerson opposed the sanctions, saying at the company's annual meeting in 2014: "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".

Nevertheless, in May 2014 Tillerson chose not to attend an oil industry forum in Moscow, instead sending top lieutenant Neil Duffin, who signed an agreement with Sechin to explore for oil in the Arctic Ocean.

"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.

Other reports by Guamnewswatch

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