Exxon fined $2M for Tillersonera breach of Russia sanctions

\WASHINGTON The Treasury Department hit Exxon Mobil Corp. with a $2 million fine Thursday for violating Russia sanctions while Secretary of State Rex Tillerson was the oil company’s CEO.

Treasury said in a statement that Exxon under Tillerson’s leadership had shown “reckless disregard” for sanctions that the Obama administration imposed on Russian entities in 2014 over Russia’s annexation of Crimea. And, it said the company’s “seniormost executives” were aware of the sanctions when two of its subsidiaries signed deals with Russian oil magnate Igor Sechin. Sechin is the chairman of Russian oil giant Rosneft and is on a U.S. blacklist that bars Americans from doing business with him.

In a statement, Exxon countered that it had done nothing wrong and complained that the fine was “fundamentally unfair.” The State Department declined to comment on Tillerson’s role, referring all questions to Exxon.

Treasury’s Office of Foreign Assets Control, or OFAC, said Exxon caused “significant harm” to the sanctions program by engaging in transactions with a person who is “an official of the government of the Russian Federation contributing to the crisis in Ukraine.”

OFAC said it had considered and rejected Exxon’s explanation that it had believed from press accounts of the sanctions that there was a distinction between Sechin acting in a “professional” rather than a “personal” capacity. It also determined that Exxon had not voluntarily disclosed the violations, which it said was “an egregious case.”

In its statement, Exxon maintained its innocence, saying that it had “followed clear guidance” from the White House and Treasury Department when it went ahead with the deals with Rosneft that Sechin then countersigned. It noted that Rosneft was not subject to sanctions at the time and maintained it understood transactions with Sechin in his personal capacity as an individual were not covered.