Exxon Fined $2M for Tillerson-Era Breach of Russia Sanctions

U.S. fines Exxon Mobil over Ukraine-related sanctions violations

In May 2014, the presidents of Exxon's US subsidiaries "dealt in services" with Russian oil tycoon Igor Sechin by signing "eight legal documents" with him linked to Russian oil and gas projects, the Treasury Department said.

Treasury said in a statement that Exxon under Tillerson's leadership had shown "reckless disregard" for sanctions that the Obama administration imposed on Russian entities in 2014 over Russia's annexation of Crimea.

In its announcement, the Treasury Department said Exxon officials claimed they did not think the sanctions targeted Mr Sechin in his professional role.

According to OFAC, ExxonMobil deliberately failed to disclose its dealings to regulators in order to bypass the restrictions.

ExxonMobil had "demonstrated reckless disregard for USA sanctions requirements" by signing the deals with Sechin just weeks after the United States blacklisted him, OFAC said in an unusually lengthy three-page statement laying out its reasoning. That same month, Neil Duffin, president of subsidiary Exxon Mobil Development, signed several deals to continue their work on the massive Sakhalin oil and natural gas project on Russia's eastern coast.

The enforcement action announced Thursday did not give further details about the dealings with Sechin, nor about which Exxon executives worked with him.


"Despite these prohibitions and ExxonMobil's global market and sophistication, ExxonMobil moved forward with signing the legal documents with designated person Igor Sechin between on or about May 14, 2014 and on or about May 23, 2014", the filing read.

The Treasury Department called the violation an "egregious case" and noted that Exxon "is a sophisticated and experienced oil and gas company that has global operations" and should know better when it comes to US sanctions.

Tillerson, whom Putin personally awarded Russia's Order of Friendship in 2013, reportedly argued at the time that he was not in favor of sanctions because he believed them to be ineffective, which is definitely the case if you choose to ignore them. It leveled the statutory maximum civil penal of $2 million for the breaches.

The State Department declined to comment, referring questions to Exxon. A few days later, Tillerson was unambiguous about Exxon's opposition to the sanctions during his company's annual meeting.

Exxon stock traded slightly up late in the afternoon.

As a diplomat, Tillerson has struck a different tone on sanctions and sought to maintain pressure on Russian Federation to stop interfering in eastern Ukraine.

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