A plastics firm based in Bangkok, SCG Plastics Co., has agreed to pay $20 million to settle with the U.S. over 467 violations of Iran sanctions. These violations involved the processing of $291 million in sales of Iranian high-density polyethylene resin through U.S. banks from 2017 to 2018. The resin was manufactured by an Iranian joint venture in which SCG Plastics’ parent company, SCG Chemicals, and the National Petrochemical Company of Iran were involved. The company used shipping and documentation practices to hide the Iranian origin of the product, causing banks to unknowingly process transfers in violation of OFAC sanctions.
These violations of Iran sanctions were deemed “egregious” by OFAC, which fined SCG Plastics $20 million for its actions. The company has 90 days to pay the fine, although it is no longer in operation. A signed agreement between OFAC and the firm released SCG Plastics from any further liability related to the sanctions violations. The fines come as the U.S. administration announced plans to impose more sanctions on Iran following an attack on Israel that could escalate tensions in the Middle East. The U.S. and U.K. imposed a new round of sanctions on Iranian individuals and firms associated with drone production.
Treasury Secretary Janet Yellen stated that the U.S. will continue to deploy its sanctions authority to counter Iran with further actions in the coming days and weeks. The U.S. has been enforcing sanctions vigorously, including levying historic fines and exposing sanctions evasion schemes and networks. These actions aim to make it harder and costlier for Iran to engage in destabilizing behavior. The fines imposed on SCG Plastics are part of these efforts to hold entities accountable for violating Iran sanctions and supporting Iran’s petrochemical sector, a key revenue source for the Iranian regime.
The settlement agreement between SCG Plastics and OFAC reveals the company’s involvement in activities that conferred significant economic benefits to Iran’s petrochemical sector. By obfuscating the product’s Iranian origin and the involvement of Iranian parties, SCG Plastics facilitated transactions that violated OFAC sanctions on Iran. The fines imposed on the company reflect the severity of these violations and OFAC’s commitment to enforcing sanctions to prevent entities from supporting Iran’s destabilizing activities. The settling of the case with SCG Plastics highlights the U.S. government’s efforts to crack down on violations of Iran sanctions and punish those who seek to evade them for economic gain.
The enforcement of fines and penalties against SCG Plastics underscores the U.S. government’s commitment to holding companies accountable for engaging in activities that undermine national security interests. By targeting companies that violate Iran sanctions and enabling transfers that benefit Iran’s petrochemical sector, the U.S. aims to disrupt the flow of revenue to the Iranian regime and prevent entities from supporting destabilizing behavior in the region. The settlement agreement between SCG Plastics and OFAC represents a significant step in the enforcement of sanctions against Iran and highlights the government’s efforts to curb illicit activities that support Iran’s petrochemical sector.
