- California company accused of sanctions violations challenges U.S. Treasury Department
- Appeals court generally sides with government but remands because of arbitrary and capricious decision related to five alleged violations
- Traditional interpretation of “inventory exception” is considered by Court
It is rare for companies to go to court to fight penalties imposed by the Office of Foreign Assets Control (OFAC) for violations of U.S. sanctions. It is even more rare for a court to make any sort of finding against the agency. Yet that is exactly what happened when the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) recently considered OFAC’s imposition of penalties against Epsilon Electronics (Epsilon) for alleged violations of U.S. sanctions against Iran.