Danfoss A/S (“Danfoss”), a multinational Danish company that manufactures and sells refrigeration products, air conditioners, compressors, and other cooling products, has agreed to pay $4,379,810 to settle its potential civil liability for 225 apparent violations of multiple OFAC sanctions programs. The apparent violations occurred when Danfoss FZCO, Danfoss’s wholly owned UAE subsidiary, directed customers in Iran, Syria, and Sudan to make payments to its bank account at the UAE branch of a U.S. financial institution (“U.S. Branch Account”) and when Danfoss FZCO made payments from that same account to entities in Iran and Syria. As a result of this conduct, Danfoss FZCO caused the U.S. financial institution to facilitate prohibited financial transactions and export financial services to sanctioned jurisdictions. The settlement amount reflects OFAC’s determination that the apparent violations were non-egregious and not voluntarily self-disclosed.
Description of the Apparent Violations
Between approximately November 21, 2013, and August 28, 2017, Danfoss FZCO sold cooling and heating equipment and related components to customers in Sudan, Syria, and Iran. During this period, Danfoss FZCO employees directed these customers to remit payments to at least three accounts at banks located in the UAE, including Danfoss’s U.S. Branch Account. Danfoss FZCO’s customers in Iran, Syria, and Sudan used third-party agents such as money exchangers in nonsanctioned jurisdictions (“third-party payers”) to pay Danfoss FZCO at this account. Danfoss FZCO also used third-party payers to make five transfers from its U.S. Branch Account to parties in Syria and Iran. The use of third-party payers disguised the originator or beneficiary of these transactions. As a result, the payments at issue were not stopped by the bank’s transactional screening filters. The total value of all transfers was approximately $16,959,683.