Australia’s Toll Holdings to pay US$6m for ‘reckless disregard’ of US sanctions

The Australian firm Toll Holdings should pay US$6.1m for its “reckless disregard” of US sanctions focusing on terrorism, the manufacturing of weapons of mass destruction and regimes in North Korea, Iran and Syria.

Toll dedicated virtually 3,000 obvious violations of the sanctions when it processed $48.4m by the US monetary system between January 2013 and February 2019, the US treasury division stated.

The obvious violations meant folks in “comprehensively sanctioned jurisdictions” have been ready to proceed taking part in worldwide shipments and enterprise, the treasury’s Office of Foreign Assets Control (Ofac) discovered.

In an announcement, Ofac stated the freight and logistics firm had been instructed about “problematic transactions” by a US financial institution in May 2015, however didn’t take instant or satisfactory steps to cease them occurring once more.

It was not till February 2017 – after additional warnings from the identical financial institution, together with a menace that it will cease dealing with funds from the corporate – that “hard controls” have been applied that largely stopped the transactions, Ofac discovered.

Toll self-disclosed the obvious breaches, and Ofac discovered they have been “non-egregious”, however stated the corporate had nonetheless proven a “reckless disregard” for the sanctions.

About 14% of the obvious violations have been for transactions involving entities blocked as a result of of issues over terrorism or weapons of mass destruction.

Ofac discovered that Toll processed 424 funds involving Iran’s Mahan Airlines, which the US has accused of offering funds and transport for Iran’s elite forces and flying weapons to Syria, and 97 involving the Hafiz Darya Shipping Lines Company, which has been sanctioned on suspicion of involvement in transporting elements obligatory for Iran’s nuclear weapons program.

The different funds have been for shipments to, from or by North Korea, Iran or Syria.

Ofac discovered that Toll failed to implement insurance policies and controls making certain it complied with sanctions when it processed funds by the US.

This was partly as a result of Toll’s speedy growth within the years instantly earlier than the breaches had not been matched by “a requisite increase in compliance resources”, Ofac stated.

“While Toll had a sanctions compliance policy in place, its compliance program, personnel, and associated controls failed to keep up with the pace and complexity of its growing operations, including with respect to the risks associated with the use of US financial institutions,” Ofac stated.

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Toll Group’s managing director, Thomas Knudsen, stated in an announcement that the corporate was happy to have resolved the matter after disclosing the potential breaches.

He stated none of the folks concerned within the “transactions at issue” have been nonetheless employed by the corporate.

“Regrettably, this situation occurred because of a misunderstanding about regulations regarding payments through the US financial system related to otherwise permissible shipments.

“We take compliance seriously and have acted to keep this from happening again, instituting rigorous control systems and enhanced training and accountability.”

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Ofac stated the utmost civil penalty relevant within the matter was $826m, however as Toll self-disclosed the obvious violations they usually constituted a non-egregious case, the relevant base penalty was $15m.

Toll’s reckless disregard of sanctions, failure to heed the repeated warnings of the US financial institution, and its place as a significant international freight forwarder have been thought of aggravating components, however Ofac discovered that in mitigation that Toll had not been accountable for related obvious violations within the 5 years earlier than the funds have been made, and had finally taken “extensive actions to remedy its compliance gaps”.

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