The U.S. Treasury Department on Thursday fined ExxonMobil for “reckless disregard” of U.S. sanctions in dealings with Russia in 2014, which was when Secretary of State Rex Tillerson was the oil producer’s chief executive.
The fine was for $2 million, a veritable drop in the bucket, considering that the company made $7.84 billion in profit last year. Still, Exxon has decided to sue.
The government is charging that weeks after Washington imposed sanctions on Moscow for annexing Ukraine’s Crimea region, Exxon signed a deal with Igor Sechin, the president of Rosneft, a Russian government-owned oil company.
The Treasury’s Office of Foreign Assets Control (OFAC) shows on its website that U.S.-based Exxon executives signed eight documents with Sechin between May 14 and May 23, 2014. In cutting those deals with Sechin after he was blacklisted, Exxon had “demonstrated reckless disregard for U.S. sanctions requirements.”
The OFAC put out a three-page statement detailing Exxon’s offense (see: bit.ly/2vnvQf2).
The sanctions imposed on Sechin in April 2014 were part of measures taken to pressure Russia over its intervention in Ukraine. Sechin was targeted because he had shown “utter loyalty” to Russian President Vladimir Putin.
Exxon, which is based in Irving, Texas, stated that the OFAC’s action was “fundamentally unfair” and is suing the U.S. government in an effort to overturn the decision.
Exxon’s lawsuit says that Sechin “was subject to sanctions only in his individual capacity” and that guidance from the Obama administration at the time made clear that the sanctions “applied only to the ‘personal assets’ of the sanctioned individuals and emphasized that the sanctions did not restrict business with the companies those individuals managed.”
Exxon claims that the OFAC is trying to “retroactively enforce a new interpretation of an executive order that is inconsistent with the explicit and unambiguous guidance from the White House and Treasury issued before the relevant conduct and still publicly available today.”
Tillerson has recused himself from any matters involving the company for which he worked.
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