DawgTalkers.net Forums DawgTalk Palus Politicus ExxonMobil has been fined for an 'egregious' violation of Russia sanctions while Tillerson was CEO

The Treasury Department has fined the oil and gas giant Exxon Mobil $2 million for violating US sanctions on Russia — and the violations occurred while Secretary of State Rex Tillerson was CEO of the company.

The Treasury said that Exxon violated the sanctions between May 14 and May 23, 2014 "by signing eight legal documents related to oil and gas projects in Russia with Igor Sechin, the President of Rosneft OAO, and an individual identified on OFAC's [Office of Foreign Asset Control] List of Specially Designated Nationals and Blocked Persons."

The Obama administration previously issued an executive order that imposed sanctions on Russia in response to the country's invasion of eastern Ukraine and seizure of the Crimean peninsula. Some of the sanctions leveled on Russia include the prohibition of technology transfers in Russian energy projects in the Arctic, Siberia, and the Black Sea. Sanctions also prohibit dealings with Rosneft CEO Igor Sechin.

"OFAC determined that ExxonMobil did not voluntarily self-disclose the violations," the Treasury said, " and that the violations constitute an egregious case."

According to the Treasury, Exxon's defense was that the company believed the sanctions established a "distinction between Sechin's 'professional' and 'personal' capacity," but the department insists that "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."

The Treasury concluded that Exxon "demonstrated reckless disregard" when it dealt with Sechin, who was known to ExxonMobil's senior-most executives as a sanctioned entity. The department added that Exxon "caused significant harm to the Ukraine-related sanctions program objectives by engaging the services" of Sechin, who is "contributing to the crisis in Ukraine."

Exxon said in a statement that "OFAC’s action is fundamentally unfair" because it is "trying to retroactively enforce a new interpretation" of the initial executive order.

"ExxonMobil followed the clear guidance from the White House and Treasury Department when its representatives signed documents involving ongoing oil and gas activities in Russia with Rosneft — a non-blocked entity — that were countersigned on behalf of Rosneft by CEO Igor Sechin in his official representative capacity," the company said.

The Wall Street Journal reported in April that Exxon had applied to the Treasury Department for a waiver from sanctions on Russia in an effort to restart its joint venture with Rosneft. The firm applied for a waiver to proceed in the Black Sea, according to people familiar with the matter.

It is unclear whether the waiver request to the Treasury Department came before or after Tillerson joined the administration. But Tillerson has close personal ties with Russia and has struck several major deals with Rosneft in the past. He also received the Order of Friendship award from President Vladimir Putin in 2013.

Exxon and Rosneft signed a landmark deal in 2012 under Tillerson's leadership to explore Russia's arctic and its portion of the Black Sea, as well as drill in Siberia.

One key casualty of the sanctions on Russia ended up being the Kara Sea inside the Arctic Circle. Back in September 2014, Rosneft discovered oil there with Exxon; however, due to the sanctions, they could not continue the landmark joint exploration. This proved to be problematic for both parties: Rosneft does not have the technological ability to drill in cold offshore conditions by itself, while Russia was Exxon's second-biggest exploration area at the time.

Tillerson's close relationship with Russia and Putin has previously led to speculation that as secretary of state he could push for sanctions on Russia to be lifted — allowing Exxon's Arctic agreement with Rosneft, reported to be worth $500 billion, to proceed. Meanwhile, the head of Exxon's operations in Russia, Glenn Waller, said last April that the company will return to its joint project with Rosneft once sanctions against Moscow are lifted.

In his confirmation hearing, Tillerson testified, "I never lobbied against the sanctions. To my knowledge, Exxon Mobil never lobbied against the sanctions. Exxon Mobil participated in understanding how the sanctions were going to be constructed. And was asked and provided information regarding how those might impact American business interests."

A "person familiar with the matter" told the Journal that Exxon has been seeking permission from the US to drill in areas affected by sanctions since late 2015.

Regarding the Black Sea region, the Journal also reported that Exxon "needs" a discovery of oil in the area by the end of the year in order to receive a license from the Russian government to drill under the terms of the Rosneft deal, according to the Journal. A "person briefed with the company's waiver application" said that "Exxon is worried it could get boxed out of the Black Sea by the Italians."

http://www.businessinsider.com/exxon-mobil-fined-violating-russia-sanctions-tillerson-ceo-2017-7

Draining the swamp?

Why does it always involve Russia with this administration?

I mean seriously, do trump supporters not see how odd that is that it's never really any link to other countries but Russia?

And didn't this loser get rewarded a medal by Putin himself or something like that?

They believe that multiple lies on disclosure forms by several in his administration, Trump threatening Mueller about looking into his finances, now the disclosure of Exon violating Russian sanctions are just a giant list of coincidences. That there's "nothing to see here". That it's "a witch hunt".

Now I'm not saying that they are guilty, but what some call a steady drip, drip, drip, is turning into a steady stream.

for a big picture comment, why is it that none of these CEO's face any jail for this?

it's like these corporations operate like "ok, this deal is gonna bring in so much money, we can take a government fine and it'll be nothing"

what is 2 mill to a company like Exxon?

It's almost nothing to them.

I've said this many times but I'll repeat it. The rich can afford the best lawyers. They get what I call "Just Us". The rest of us get whatever we can afford and they call it "Justice".

i've always agreed with that.

but why? i mean if the government has enough to drop a 2 million dollar fine, nothing about what exxon did could be considered criminal?

i mean look at wells fargo. they committed fraud, and nobody went to jail? when it comes to corporations, is it really the lawyers, or something in the law book that keeps CEO's from facing jail time? i truly don't know.

Thats a good question, I looked it up.

http://blogs.findlaw.com/blotter/2014/04/what-happens-when-a-company-gets-indicted.html

thanks for the info Eve.

and holy crap, so a corporation can get charged for a crime, but the actual PEOPLE running the corporation can't, unless they commit a crime while under investigation for tampering?

maaaaaannnn that's some crap. so corporations are people...until all of a sudden, they aren't.

Looking it up!
Wow! What a radical and brilliant idea!

Whoda thunkit?

Good show Eve.

Its kinda crazy. Its like a legal excuse to commit a crime, and get away with it.

there you have it.

By 2016 the oil industry was taking a big hit and revenues were way down.. but in 2012, Exxon Mobil made a profit of almost $45 billion.. hopefully they put some away for a rainy day..

I mean, that is almost a .0045% fine of what they made in profit just a few years before... so by comparison, if you made $100K a year net after taxes and all expenses were paid, it would be like fining you $4.50. Kind of makes me wonder how "egregious" they really considered this.

I'm not sure that's entirely true.

I think it's much more difficult for the government to successfully prosecute an individual vs fining the whole company. I think that you need to establish that that person had knowledge and understanding of what's going on in order to gain a guilty verdict.

That is significantly tougher to do than to establish that 'the company' did something wrong.

I did some contract work for a med device company out here in California. The company was fined, but the CEO and VP of Quality were also personally fined by the FDA. I don't remember the back story to that. There may be a different set of rules for companies selling in highly-regulated markets.

See Jimmy Haslam.