The illegal shipments, which were valued at $3,433,495, occurred between May 2012 and February 2016, OFAC said.
On Jan, 1, 2012, Glenview, Ill.-based Illinois Tool Works (ITW) acquired AppliChem, which manufactures chemicals and reagents for the pharmaceutical and chemical industries.
While performing its preacquisition due diligence, ITW discovered references to countries subject to U.S. economic and trade sanctions on AppliChem’s website. On Dec. 19, 2011, ITW warned AppliChem management that it must cease all Cuban transactions after the acquisition.
AppliChem claimed to share U.S. export compliance details with all its European branches upon completing the acquisition. However, the company’s Spanish branch continued to facilitate orders to Cuba through 2012.
However, on Jan. 27, 2016, an anonymous report was made through the ITW ethics helpline alleging that AppliChem continued sales to Cuba via an intermediary in Berlin. ITW conducted an investigation and found that AppliChem’s former owners had concealed this activity, OFAC said.
OFAC said this case demonstrates the importance for companies to implement “risk-based controls,” which include conducting routine audits and follow-ups with their overseas management, to ensure subsidiaries are complying with U.S. sanctions regulations.