Oct

5

OFAC Fines U.S. Paper Company for “Discussing” Exports to Sudan


Posted by at 9:34 pm on October 5, 2017
Category: OFACSudan

White Birch Paper Mill via https://whitebirchpaper.com/about-us/our-mills/papier-masson/ [Fair Use]Today the Office of Foreign Assets Control (“OFAC”) announced that it was fining White Birch Paper $372,465 to settle charges arising from exports of $354,602.26 of Canadian-origin paper from a White Birch mill in Canada to a customer in Sudan. Ah, yes, the doctrine of facilitation strikes again, although OFAC has some difficulty explaining that clearly:

Various personnel within White Birch USA and its Canadian subsidiary, White Birch Paper Canada Company NSULC (“White Birch Canada”), were actively involved in discussing, arranging, and executing the export transactions to Sudan.

This makes it appear that the violation arises equally from employees of White Birch Canada being involved in the exports, which, of course, was neither illegal nor facilitation.

The violation arises, of course, from the U.S. employees, rather than the Canadian employees being involved in the exports, certainly to the extent that the U.S. employees “arranged and executed” the exports.  However, if “discussing” the exports is facilitation, as this also seems to state, OFAC would be expanding the scope of the facilitation doctrine far beyond any prior conception of the scope of that doctrine. That would mean that if a U.S. employee said to the Canadian subsidiary “We can’t be involved in the exports to Sudan,” then that discussion would violate OFAC’s rules. Even if the employee were to stick his/her fingers in his ears and chant “la la la la la” every time a Canadian employee mentioned Sudan, that might still be a discussion as well since “la la la la la” means, of course, “I can’t be involved in these exports.”

Of course, it is more likely that this is just sloppy draftsmanship by OFAC — something we’ve seen before — than it is an effort to expand the scope of the facilitation doctrine to any discussion of the transaction whatsoever. Still, OFAC could have avoided this issue if it simply noted that the U.S. employees were actively involved in “arranging and executing” the exports, both of which can clearly constitute facilitation.

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Copyright © 2017 Clif Burns. All Rights Reserved.
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2 Comments:


OFAC mentions the information submitted by White Birch USA was materially inaccurate, incomplete, and/or misleading to OFAC. Then towards the end of their conclusion it says “…..persons who submit information to OFAC regarding potential violations should take steps to ensure that such information is both accurate and complete”. Could it be that OFAC fined them based on misleading/inaccurate information submitted and initially not wanting to cooperate rather then for facilitation?

Comment by Lorena on October 6th, 2017 @ 10:50 am

    No, they made it clear the fine was for facilitation. Providing misleading information was an aggravating factor the affected the size of the fine.

    Comment by Clif Burns on October 6th, 2017 @ 11:27 am

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