The Treasury Department on Thursday said it was fining ExxonMobil $2 million for violating sanctions against Russia by entering into banned business agreements while Secretary of State Rex Tillerson led the company.
Treasury said the improper business dealings came in May 2014, shortly after the U.S. government had sanctioned numerous Russian business executives and companies as part of its response to Russia’s support for violent separatists in Ukraine and the annexation of Crimea.
Treasury said one of the Russian executives who was under sanctions at the time was Igor Sechin, 57, president of Rosneft OAO, an energy company partially owned by the Russian government. Rosneft is one of the world’s largest oil companies, and Sechin is a former senior adviser to Russian President Vladimir Putin. When Treasury sanctioned Sechin in 2014, it wrote that he “has shown utter loyalty to Vladimir Putin – a key component to his current standing.”
ExxonMobil entered into a business arrangement with him two weeks after the Treasury Department said U.S. companies could no longer do business with him.
In assessing the $2 million fine, Treasury said of the ExxonMobil that “the presidents of its U.S. subsidiaries dealt in services of an individual whose property and interests in property were blocked” by the U.S. government, referring to Sechin.
ExxonMobil, in a statement, called the Treasury Department’s fine “fundamentally unfair” and said that it was following “clear guidance from the White House and Treasury Department” at the time.
It added that Treasury’s Office of Foreign Assets Control, which imposes sanctions, was “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.”
But the Treasury Department said “ExxonMobil demonstrated reckless disregard for” the sanctions. It also said the company’s “senior-most executives knew of Sechin’s status” and that the company “caused significant harm to the Ukraine-related sanctions” by engaging in the business agreement with Sechin. It doesn’t say whether Tillerson played any role in the business deal or had any involvement, however.
Requests for comment from the State Department were not immediately returned.
Treasury had instituted the sanctions against Sechin on April 28, 2014, when it said “transactions by U.S. persons or within the United States involving the individuals and entities designated today are generally prohibited.”
Treasury alleges ExxonMobil signed the documents with Sechin two weeks later. ExxonMobil didn’t deny that it entered into the business agreement with Sechin, but it says that guidance from the Obama administration at the time allowed such an arrangement. In 2014, the Obama administration did not sanction Rosneft, the energy company, but it did sanction Sechin, who led the company.
President Donald Trump selected Tillerson to serve as his first secretary of state, even though the two appeared to have little history together. Tillerson faced scrutiny from lawmakers in both parties because of his close ties to Putin and past business dealings in Russia, but he was confirmed for the cabinet position by a 56-to-43 vote. In 2013, Tillerson won an award from the Russian government called the “Order of Friendship” after signing deals with Rosneft that began a drilling program in the Arctic’s Kara Sea.
(c) 2017, The Washington Post · Damian Paletta, Carol Morello