Iowa-based fish processor Stoller Fisheries was recently assessed $931.25 by the Office of Foreign Assets Control (OFAC) for shipping 20 grams of carp pituitary glands (valued at $4,900) to Iran without an OFAC license. Carp pituitary glands are believed to be beneficial to the spawning and fertility of farmed fish. The violation was not voluntarily disclosed.

The penalty notice issued by OFAC indicated that the company made both a written presentation and a verbal presentation to OFAC, which prompted OFAC to reduce it’s proposed penalty of $3,725 to the $931.25 actually assessed. The $3,725 represents a substantial reduction from the $11,000 penalty that could have been imposed, assuming, as seems the case, that only one export was involved.

So what prompted this significant reduction for a company that, after all, didn’t voluntarily disclose the violation?

To begin with, Stoller’s case presented all the other factors that would normally be used for mitigation. As the penalty notice stated:

Company alleged that it was not aware of regulations prohibiting sales to Iran and that its primary business is in the processing of fresh water fish for human consumption and particularly kosher fish products. Moreover, Company alleged that the sale of carp pituitary glands is a by-product of the primary business.

In support of its request for a waiver, Company has submitted its current compliance policy instructing employees to check and verify exportations to countries prior to packaging any shipment to such country and to contact the U.S. Customs and Border Patrol if any questions arise. . . .

Company took affirmative steps to prevent further unlicensed shipments to Iran and that some relief is warranted in consideration of the fact that this constitutes Company’s first offense on record at OFAC, Company instituted a new compliance policy, and evidence that such activity may have been licensable.

First offense? Check. Inexperienced exporter? Check. Unintentional violation? Check? Licensable? Check. Implemented steps to prevent similar exports? Check. Adopted new compliance program? Check.

One part of the compliance program adopted by Stoller, however, is something that I don’t recommend. As noted above, Stoller’s program advises employees to contact Customs if they have questions about a shipment. If Customs thinks it is being used as compliance counsel, it may well decline to provide assistance beyond saying: “Ship it and we’ll seize it and prosecute if there’s a problem.”

In addition to the mitigation factors mentioned above, there is one intangible reason, which I’ll call the good guy factor, that I think may also explain why Stoller was treated well here. I can’t help but think that Company officials made quite a personal impression during their verbal presentation to OFAC. This suspicion is based on the Company’s website which is, frankly, simple, charming and appealing. Even though I have no particular use for the plate-frozen blocks of mechanically-deboned minced fish sold by the Company, the website made even me consider, if only for a moment, whether I might find some use for plate-frozen fish blocks. Okay, let’s be honest, I even wondered whether I could find some use for the carp pituitary glands.

I think what sold me on the Company, among other things, was this memorable phrase from the website:

Don’t ask if the carp is good enough for you to eat. Ask instead if you’re good enough to eat carp.

Words to live by indeed.