Mid-Ship Group agreed to pay $871,837 to settle violations of sanctions involving financial transactions from charter party agreements between IRISL and two of its ships.
Mid-Ship Group, a shipbroker based in Port Washington, N.Y., has agreed to pay $871,837 for five alleged violations of the U.S. Weapons of Mass Destruction Proliferators Sanctions Regulations.
Specifically, the Treasury Department’s Office of Foreign Assets Control (OFAC) determined that Mid-Ship failed to voluntarily self-disclose the violations to the agency, despite knowledge that they had occurred.
In February and April 2010, Mid-Ship’s subsidiaries in China and Turkey negotiated three charter party agreements between multiple third parties regarding the ship transport of goods between foreign ports. These parties entered into contracts with Islamic Republic of Iran Shipping Lines’ vessels Haadi and Adrian, of which both the ocean carrier and more than 100 of its owned or controlled ships are listed on OFAC’s Specially Designated Nationals and Blocked Persons (SDN) List.
In its settlement agreement, OFAC said “Mid-Ship’s culture of compliance appears to have been deficient at the time of the apparent violations.”
The agency explained how a Mid-Ship senior manager at the time discussed receiving an electronic funds transfer in a non-U.S. dollar currency from a third party after learning a financial institution put a hold on the payment due to detecting the blocked Iranian ocean carrier’s ship name in the transaction.
“Mid-Ship is a global, commercially sophisticated shipping and logistics company that operates in a high-risk industry,” OFAC said.
The five illicit financial transactions handled by Mid-Ship in early 2010 were valued at $472,861, but the violations could have netted the company a maximum civil penalty amount of $1,490,320, the agency said.
OFAC noted, however, that Mid-Ship mitigated the penalty amount by not having committed further U.S. sanctions violations during the five years following the 2010 wrongdoing and that the company cooperated with the investigation. In addition, Mid-Ship has since instituted a compliance program that includes an OFAC compliance officer, U.S. sanctions training for employees, and screening all vessels and parties of wire transfers against OFAC’s SDN list.
