US Fines Exxon $2 Million Over Russia Sanctions Breaches

U.S. Secretary of State Rex Tillerson left arrives in the prime minister's official residence to meet Japanese Prime Minister Shinzo Abe in Tokyo Japan Thursday

ExxonMobil has been handed a fine of $2 million for breaching anti-Russia sanctions, the Office of Foreign Assets Control (OFAC) said Thursday in an online statement.

OFAC says ExxonMobil violated sanctions against Russian officials in May 2014, by "signing eight legal documents related to oil and gas projects in Russia with Igor Sechin, the President of Rosneft", Russia's state-owned oil company.

The sanctions were originally put into place by the administration of former President Barack Obama after Russia's annexation of Crimea.

Exxon signed the agreements between May 14 and 23, 2014. Mr. Sechin was added to the USA sanctions list in April of that year, with US officials stressing his "utter loyalty" to President Vladimir Putin, though he shrugged at them at the time.

"Based on the Enforcement Information published today, OFAC is 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".

Exxon-which made almost $8 billion in profit a year ago and could perhaps afford better lawyers-called the action "fundamentally unfair".

He added: the "action is fundamentally unfair".

Not so, said the Treasury Department, arguing that the government never gave Exxon or anyone else a reason to believe there was an exception for professional dealings. Sechin is on Treasury's list of "Blocked Persons".

The energy giant's request to return to Russian Federation for oil and gas activities was rejected in April by the Treasury because of existing sanctions. It noted that Rosneft was not subject to sanctions at the time and maintained it understood transactions with Sechin in his personal capacity as an individual were not covered.

Sechin is the CEO of Russian state oil giant Rosneft and a close ally of Russian President Vladimir Putin. The sanctions had exposed Exxon to up to $1bn in losses by the end of 2014, Exxon said. Tillerson visited the White House numerous times as CEO in the immediate aftermath of the sanctions being announced, but they remained in place. Tillerson has recused himself from any decisions regarding his former employer for his first two years as Secretary, according to the State Department. Earlier this year, the Trump administration said it would not let any USA company, including ExxonMobil, drill in areas prohibited by US sanctions on Russian Federation.

The State Department referred questions about the fine to ExxonMobil and the Treasury.

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