- Company committed multiple apparent violations of U.S. sanctions on North Korea
- Penalty imposed in part because of company’s “non-existent” sanctions compliance program
- Settlement underscores need to address supply chain risks
On January 31, 2019, U.S. Treasury Department, Office of Foreign Assets Control (OFAC)announced a $996,080 settlement agreement with e.l.f. Cosmetics, Inc. (ELF) to settle ELF’s potential civil liability for 156 violations of the North Korea Sanctions Regulations. According to OFAC, fake eyelash kits that ELF believed to be from China were in fact supplied from North Korea.
Presumably very few Americans awake in the middle of the night worrying that North Korean fake eyelashes pose a threat to U.S. national security. Yet in pursuing this action vigorously, OFAC made clear that it is willing to seek penalties against any U.S. business that directly or indirectly benefits the North Korean economy. In announcing the settlement, OFAC highlighted the importance of conducting “full-spectrum supply chain due diligence when sourcing products from overseas, particularly in a region in which the DPRK, as well as other comprehensively sanctioned countries or regions, is known to export goods.”