In a case outlining the corporate disruption caused by badly clarified sanctions placed upon Russia by the United States government, Texas based oil company Exxon has counter-sued the US Treasury Department’s Office of Foreign Assets Control (OFAC) for US$2 million in damages after it placed a fine on Exxon for signing a joint venture with Russia’s Rosneft in “reckless disregard” of Ukraine-related trade sanctions. In response, Exxon’s lawsuit argues that it had guidance from the government that its action would be legal under existing law and OFAC rules.
The confusion comes from the wording of the sanctions and its intended reach. The OFAC said that Exxon executives signed eight documents with Igor Sechin, the head of state-run Rosneft, after OFAC listed him as a “blocked” person under the sanctions.
“ExxonMobil demonstrated reckless disregard for U.S. sanctions requirements when it failed to consider warning signs associated with dealing” in blocked services by Sechin, OFAC said.
In its counterclaim against the OFAC, Exxon said the fine was “arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law” and that Igor Sechin “was subject to sanctions only in his individual capacity.”
The company said guidance from the Obama administration was that the sanctions applied only to the personal assets of sanctioned individuals and didn’t restrict doing business with companies they managed.
The lawsuit continues, underlining the increasingly awkward relationship between anti-Russian hawks in Washington and corporate America among allegations of improper use of law in America to impose them.
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