Richemont North America has settled a civil court case relating to exports of Cartier luxury goods in contravention of Foreign Narcotics Kingpin Sanctions Regulations.
The company has agreed to pay $334,800 to settle its potential civil liability for four apparent violations of the regulation in 2010 and 2011 when exported four shipments of jewellery to Shuen Wai Holding Limited in Hong Kong (“Shuen Wai”), an entity the US Office of Foreign Assets Control added to the List of Specially Designated Nationals and Blocked Persons in 2008.
The enforcement action highlights the risks for luxury goods retailers engaging in international transactions, specifically including businesses that ship their products directly to customers located outside of the United States.
OFAC encourages companies to develop, implement, and maintain a risk-based approach to sanctions compliance, and to implement processes and procedures to identify and mitigate areas of risks.
On four separate occasions, an individual purchased jewellery from one of Richemont’s Cartier boutiques located in California or Nevada and provided Shuen Wai’s name and mailing address to Richemont as the ship-to party.
Although the information and documentation provided to Richemont contained the same name, address, and country location for Shuen Wai as they appear on the SDN List, Richemont did not identify any sanctions-related issues with the transaction prior to shipping the goods.
OFAC determined that Richemont did not voluntarily self-disclose the apparent violations, and that the apparent violations constitute a non-egregious case. Accordingly, the base penalty amount for the apparent violations equals the sum of the applicable schedule amount for each apparent violation, which in this case totals $620,000.