A Bangkok-based plastics firm has reached a settlement with the U.S. Treasury, agreeing to pay $20 million to resolve 467 violations of Iran sanctions. SCG Plastics Co. utilized U.S. banks to process $291 million in sales of Iranian high-density polyethylene resin between 2017 and 2018.
The resin, commonly used in product bottles and industrial items, was produced by an Iranian joint venture involving SCG Plastics' parent company, SCG Chemicals, and the National Petrochemical Company of Iran, a government entity.
The settlement revealed that SCG Plastics employed shipping and documentation practices to conceal the product's Iranian origin and the involvement of Iranian entities, leading banks to unknowingly facilitate transfers that breached OFAC's sanctions on Iran.
According to the Treasury, these transactions provided significant economic benefits to Iran's petrochemical sector, a key revenue source for the Iranian regime. OFAC deemed the 467 violations as 'egregious' and imposed a $20 million fine on the company, payable within 90 days.
Although SCG Plastics is no longer operational, the agreement absolves the firm of any further liability related to the sanctions breaches. The fines come amidst escalating tensions, with U.S. officials planning additional sanctions on Iran following an attack on Israel that raised concerns of broader conflict in the Middle East.
Recently, the U.S. and U.K. imposed fresh sanctions on Iranian individuals and entities linked to drone production. Treasury Secretary Janet Yellen affirmed the commitment to leveraging sanctions to counter Iran's destabilizing actions, emphasizing the enforcement efforts to deter sanctions evasion and disrupt illicit networks.
