Trump Treasury Dept. Fines Exxon For Russian Deals Okayed By Obama Administration In 2014

Trump Treasury Dept. Fines Exxon For Russian Deals Okayed By Obama Administration In 2014

The Trump administration on Thursday announced $2 million in fines against Exxon for Russian energy deals okayed by the Obama administration in 2014.

Donald Trump’s Treasury Department announced $2 million in penalties against ExxonMobil for violating sanctions related to Russia in May of 2014. Exxon’s U.S. subsidiaries “dealt in services of an individual whose property and interests in property were blocked,” Treasury said in a press release announcing the fines.

Exxon signed eight legal documents related to oil and gas projects in Russia with Rosneft, a company that U.S. interests are allowed to do business with. But because the documents were signed on the Russian end by Igor Sechin, an individual who is sanctioned by the U.S. government in his personal capacity, the Trump administration retroactively decided the actions were in violation of sanctions imposed against Russians for their actions taken in Ukraine.

This is a much tougher approach on Russian sanctions than the Obama administration used.

On March 17, 2014, a fact sheet issued by the Obama White House specifically said the focus of the sanctions is to identify “individuals and target their personal assets, but not companies that they may manage on behalf of the Russian state.” At a briefing that day, the White House again said that the focus of the sanctions was these individuals’ “personal assets and wealth, rather than the business entities and industries that they may manage or oversee.”

In April of that year at a Treasury briefing, it was explicitly stated that sanctions were applicable to Igor Sechin “individually,” not in his capacity as the head of a Russian government-owned corporation. White House Deputy National Security Advisor Tony Blinken said on PBS Newshour that Sechin was sanctioned in his “individual capacity” and that Rosneft, the Russian government-owned oil giant managed by Sechin, was not designated because the Obama administration wanted to “minimiz[e] any impact or consequences on American companies.”

A New York Times story that month quoted a Treasury Department official saying, “U.S. persons are not prohibited from dealing with Rosneft, including participating in meetings of the company board on which Mr. Sechin sits.” Foreign Policy magazine reported “Sechin’s personal assets will be frozen, but Treasury officials said the designation wouldn’t impact U.S. companies’ ability to do business with Rosneft because Sechin does not control the firm.”

And a May 2014 report from the Wall Street Journal said that BP’s CEO, an American, “may participate in board meetings with Mr. Sechin as long as they are conducting Rosneft’s, and not Mr. Sechin’s, personal business, the Treasury Department said.”

So while the Obama administration was much more lax in its approach, the Trump administration is taking a much harder line stance on the Russian sanctions. “OFAC determined that ExxonMobil did not voluntarily self-disclose the violations to OFAC, and that the violations constitute an egregious case,” Treasury announced.

Exxon plans to challenge the action.

Mollie Ziegler Hemingway is a senior editor at The Federalist. Follow her on Twitter at @mzhemingway
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