- Penalties imposed for violations of U.S. sanctions on Russia and Ukraine
- Violations identified during pre-acquisition due diligence on contractor
- Denied persons screening was conducted but missed prohibited parties
In late November 2018, the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) announced that Cobham Holdings, Inc. agreed to pay $87,507 to settle violations of U.S. sanctions on Ukraine and Russia.
Violations Identified During Pre-acquisition Due Diligence
According to OFAC, the violations were committed by Cobham’s former subsidiary, Metelics, prior to the sale of Metelics to MACOM. It was MACOM that identified the violations during due diligence related to its acquisition of Metelics. And it was presumably MACOM that required Cobham to make the voluntary disclosure to OFAC that led to the penalty in this matter.
The penalty is small by recent OFAC standards. (For example, it is about 620 times less than Societe Generale paid to OFAC as part of its global settlement of sanctions violations.)
But as a cautionary tale, the Cobham matter is important to any exporter.