11:25, July 21 67 0 abajournal.com

2017-07-21 11:25:07
ExxonMobil fined $2M for Russia deals under Tillerson; oil giant sues US Treasury in repsonse

Citing “reckless disregard” for sanctions levied against Russia while current Secretary of State Rex Tillerson led Exxon Mobil Corp., the oil giant was fined $2 million on Thursday by the Treasury Department.

Exxon Mobil responded by filing a lawsuit that named Treasury Secretary Steven Mnuchin as the lead defendant, the Washington Post reports.

The fine relates to eight business agreements Exxon Mobil entered into in 2014 with Igor Sechin, the chief executive of Rosneft, a large energy company mostly owned by the Russian government. The deals were made less than a month after the United States banned companies from doing business with Sechin, according to the Washington Post. The ban was a result of Russia’s actions in the Ukraine and Crimea.

The lawsuit (PDF), filed in the U.S. District Court for the Northern District of Texas, argues that Sechin was subject to sanctions only in his individual capacity, and that White House guidance at the time made it clear that the sanctions only applied to personal assets of sanctioned individuals, not business with companies those individuals managed, Reuters reports.

We’re challenging OFAC’s retroactive finding which contradicts specific guidance from WH & Treasury https://t.co/bYN2V5QKpW

“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 U.S. persons could continue to conduct or engage in business with such individuals,” according to enforcement information (PDF) released by the Treasury Department.

“I can’t think of another case where that’s happened, where you’ve had a senior government official on both sides of the ‘v,’ essentially,” Adam Smith, a former top official in the Treasury Department’s Office of Foreign Assets Control, told the Washington Post.

Tillerson did not personally sign the documents in question, and he has promised to recuse himself from anything involving Exxon Mobil, a State Department spokesperson told the Washington Post. The paper reports that the agency would not answer questions regarding whether Tillerson was involved in any 2014 business deals with Rosneft.

According to the New York Times, Tillerson has personal business interactions with Sechin. Tillerson also received Russia’s Order of Friendship in 2013 after he signed deals with Rosneft that allowed oil drilling in the Arctic Ocean’s Kara Sea.

Also, he was the only American official to join President Donald Trump in a meeting with Russian President Vladimir Putin, at the G20 summit earlier this month in Hamburg, Germany.

The fine shows that staff members in the Treasury Department’s Office of Foreign Assets Control will not be intimidated, Hal Eren, a former agency official, told the New York Times.

“It gives the message that they’re going to do what they have to even though Rex Tillerson is secretary of state,” Eren said. “Perhaps it was a bit of assertion of independence by the staff of O.F.A.C.”