OFAC sanctioned Turkish citizen Evren Kayakiran for allegedly directing a U.S. company’s foreign subsidiary staff to violate U.S. sanctions against Iran and then attempted to conceal those violations.
“This is the first time that OFAC has designated an individual as a foreign sanctions evader while resolving an enforcement matter and is a marked change to how we will counter these acts of deception,” said Sigal Mandelker, Treasury’s undersecretary for terrorism and financial intelligence, in a statement.
“This action is a clear warning that anyone in supervisory or managerial positions who directs staff to provide services, falsify records, commit fraud or obstruct an investigation into sanctions violations exposes themselves to serious personal risk,” he added.
OFAC’s Foreign Sanctions Evaders (FSE) list is separate from the agency’s Specially Designated Nationals and Blocked Persons (SDN) List, and it identifies foreign individuals and entities that have “violated, attempted to violate, conspired to violate, or caused a violation of U.S. sanctions against Iran or Syria.” Any U.S. business transactions involving Kayahiran are now prohibited, OFAC said.
In March 2013, Radford, Va.-based Kollmorgen Corp. acquired Elsim, which subjected the foreign subsidiary to the U.S. government’s Iranian Transactions and Sanctions Regulations.
“Before and after the acquisition, the U.S. company undertook a wide range of proactive compliance measures designed to ensure that the newly acquired Turkish company complied with U.S. sanctions, including those against Iran,” the agency said.
“Despite the U.S. company’s extensive efforts, for two years after the acquisition, Kayakiran — in his role as the managing director of the Turkish company — directed employees to service machinery located in Iran,” OFAC explained. “Employees were threatened with termination if they refused to travel to Iran to provide the services, and upon returning from the trips, employees were directed to falsify corporate records by listing the travel as vacation rather than business.”
OFAC also said Kayakiran fraudulently certified to Kollmorgen that no products or services were being exported to Iran. “It was only after an employee filed an internal complaint with the U.S. company via the company’s ethics hotline in late October 2015 that the violations and associated conduct came to light. The U.S. company subsequently investigated the matter,” the agency said.