Australian logistics holding TOLL Group has agreed to pay the US Department of the Treasury's Office of Foreign Assets Control (OFAC) USD6.1 million as a settlement for around 3,000 apparent violations of US sanctions on Iran, North Korea, Syria, and others.
OFAC said it had determined that the apparent violations were non-egregious and voluntarily self-disclosed. The investigators pointed out that they resulted chiefly from Toll's corporate overstretching as a result of an acquisition spree.
"Beginning in 2007, Toll began to acquire a number of small, local, or regional freight forwarding companies, including in the Asia Pacific region. By 2017, Toll had almost 600 invoicing, data, payment, and other system applications spread across its various business units. While Toll had a sanctions compliance policy in place, its compliance program, personnel, and associated controls failed to keep up with the pace and complexity of its growing operations, including with respect to the risks associated with the use of US financial institutions to make or receive payments related to US-sanctioned jurisdictions and persons," OFAC said in a statement.
As a result, Toll processed 2,948 payments for its freight forwarding and logistics services that may have been linked to sanctioned entities and individuals through its then recently acquired South Korean and Dubai subsidiaries. The payments were processed through US financial institutions and its overseas branches between January 2013 and February 2019, and amounted to USD48.4 million in total. 424 payments were related to Mahan Air (W5, Tehran Mehrabad), a US-sanctioned Iranian airline accused of acting as a proxy for the Islamic Revolutionary Guards Corps (IRGC), an organisation designated as a terrorist group.
The OFAC has not made a determination that the violations actually occurred and TOLL did not admit guilt through the settlement.
"TOLL Group is pleased to have resolved this matter after having learned of, and voluntarily-self disclosed, potential issues to OFAC. Regrettably, this situation occurred because of a misunderstanding about regulations regarding payments through the US financial system related to otherwise permissible shipments. We take compliance seriously and have acted to keep this from happening again, instituting rigorous control systems and enhanced training and accountability," Managing Director Thomas Knudsen told ch-aviation.
The transactions pertained to non-military or dual-use goods and occurred mostly during the early part of the period under investigation.
The holding owns its own airline, Toll Aviation (TFX, Brisbane Archerfield), with a single in house ATR42-300(F). However, it mostly relies on capacity wet-leased from other cargo specialists, including Pionair Australia, Hevilift Australia, and Airwork Flight Operations, the ch-aviation fleets module shows.
Editorial Comment: Updates with TOLL's statement. - 27Apr2022 - 13:48 UTC