A California-based corporation settled a potential civil liability with OFAC for dealing in the property or interests of a Slovenian software company that was previously designated by OFAC for being a "significant" foreign narcotics trafficker ("SDNTK").
In the Enforcement Information, OFAC stated that Apple, Inc. ("Apple") violated the Foreign Narcotics Kingpin Sanctions Regulations by hosting, selling and aiding in the transfer of applications and associated content of Slovenian company, SIS, d.o.o. ("SIS"). Specifically, on February 24, 2015, SIS and its director and majority shareholder were designated by OFAC under the Foreign Narcotics Kingpin Designation Act, but Apple continued to make payments associated with SIS's blocked apps in connection with a development deal originally signed in 2008.
According to OFAC, Apple claimed that it failed to recognize that SIS had been designated due to certain sanctions screening tool failures. In 2017, after making improvements to its sanctions screening tool, Apple identified SIS as a potential SDNTK and immediately stopped payments related to SIS. OFAC found that, overall, Apple (i) made 47 payments associated with SIS's apps while it was designated and (ii) received $1,152,868 from customers that downloaded SIS-created apps.
To settle the potential civil liability, Apple agreed to pay $466,912.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.