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Toll pays $6m settlement for widespread sanctions violations

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While Toll ultimately took extensive actions to remedy its compliance gaps, limiting the total fine, inadequate compliance resources led to systemic failure over several years.

Ofac settles for a comparatively small fine after Toll voluntarily concedes 2,958 separate violations over a six-year period related to Iran, Syria and North Korea sanctions regimes.

TOLL Holdings, the Australian freight forwarding and logistics giant, has agreed to pay the US Treasury’s Office of Foreign Assets Control $6.1m to settle nearly 3,000 separate violations of Iran, North Korea and Syria sanctions.

The settlement relates to 2,958 individual payments totalling $44m made in connection with maritime trades as well as air freight and rail shipments that occurred between February 2013 and February 2019.

Despite the scale and length of time of the violations, the $6.1m settlement was comparatively small when measured against recent settlements.

In 2014 France’s largest bank, BNP Paribas, agreed to a record $9bn settlement over allegations of sanctions violations spanning a similar timeframe.

A statement issued by Ofac on April 25 noted that the settlement amount reflected its determination that the apparent violations were voluntarily self-disclosed and not egregious.

It criticised Toll’s lack of adequate compliance resources and noted that even after Toll decided to cease all business with US-sanctioned countries in June 2016, it was not until February 2017 that the company put in place “hard controls” to prevent shipments to or from sanctioned countries, according to Ofac.

“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,” the agency said.

Under the settlement, Toll Group will pay the aggregate amount of $6,131,855 and maintain enhanced sanctions compliance and screening measures to continue to ensure full compliance. 
 
The settlement addresses a series of freight forwarding transactions from 2013-2019, most of which occurred early during this period, although Toll has pointed out that the transactions comprise a minute fraction of Toll Group’s overall transactions during that time.
 
“Regrettably, this situation occurred because of a misunderstanding about regulations regarding payments through the US financial system related to otherwise permissible shipments,” said Toll Group managing director, Thomas Knudsen.
 
“We take compliance seriously and have acted to keep this from happening again, instituting rigorous control systems and enhanced training and accountability. None of the individuals involved in the transactions at issue are employed any longer by Toll Group,” he continued.

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