US Fines Exxon $2 Million Over Russia Sanctions Breaches

Posted July 21, 2017

ExxonMobil signed eight legal documents related to oil and gas projects in Russia with Igor Sechin, president of Russian oil giant Rosneft, OFAC said. The Obama Administration had moved to block USA dealings with Sechin, Rosneft and other Russian officials amid Russia's military aggression in Ukraine.

Tillerson served as CEO from 2006 to 2016 before retiring and joining the Trump administration, and the filing by Treasury makes clear: "ExxonMobil's senior-most executives knew of Sechin's status" on the sanction list when they made the deals.

According to OFAC, ExxonMobil deliberately failed to disclose its dealings to regulators in order to bypass the restrictions.

Exxon's USA subsidiaries "dealt in services of an individual whose property and interests in property were blocked", Treasury said in a press release announcing the fines.

Sechin was at the helm of Rosneft in 2011 when Exxon signed a massive joint venture with the Russian oil company to drill for oil in the Arctic.

In addition to calling for Tillerson's resignation, Kellett said: "At every level, ExxonMobil and the rest of the fossil fuel industry must be held accountable for their abuses. No materials issued by the White House or the Department of the Treasury asserted an exception or carve-out for the professional conduct of designated or blocked persons, nor did any materials suggest that US persons could continue to conduct or engage in business with such individuals".

The Treasury Department called the violation an "egregious case" and noted that Exxon "is a sophisticated and experienced oil and gas company that has global operations" and should know better when it comes to USA sanctions.

Exxon called the $2 million penalty "fundamentally unfair", saying in a statement that it is "inconsistent with the explicit and unambiguous guidance" issued at the time by the White House and Treasury about the sanctions. Tillerson said in 2014 that the company did not support sanctions because they are not effective "unless they are very well implemented".

But while he was at Exxon, Tillerson opposed the sanctions levied on Moscow for its annexation of Crimea. Exxon's suit asks the court to set aside the fine.

The State Department declined to comment, referring questions to Exxon.

Exxon stock traded slightly up late in the afternoon.

"The secretary continues to abide by his ethical commitments, including that recusal from Exxon-related activities", Nauert said. Earlier this year, the Trump administration said it would not let any USA company, including ExxonMobil, drill in areas prohibited by US sanctions on Russian Federation.