Exxon to Challenge Treasury Department Ruling on Russia Sanctions

Glen Mclaughlin
July 21, 2017

Sechin had been added to the list of blocked persons under the Treasury's directive in April of 2014 but in May of the same year, ExxonMobil signed eight legal documents pertaining to oil and gas projects in Russian Federation with Resneft.

In a statement e-mailed to RFE/RL, Exxon Mobil took exception to the accusations, saying the Treasury Department's Office of Foreign Assets Control was trying to "retroactively enforce" an earlier order.

Former U.S. President Barack Obama signed an executive order that imposed sanctions on Russian Federation in March 2014 and the Treasury Department included Sechin on the list a month later, the OFAC said. During that time, current Secretary of State Rex Tillerson was still Exxon's CEO.

"ExxonMobil followed the clear guidance from the White House and Treasury Department when its representatives signed documents involving ongoing oil and gas activities in Russian Federation with Rosneft - a non-blocked entity - that were countersigned on behalf of Rosneft by CEO Igor Sechin in his official representative capacity". "OFAC's action is fundamentally unfair", Exxon said.

In a statement, Exxon countered that it had done nothing wrong and complained that the fine was "fundamentally unfair".

While at Exxon Mobil, Tillerson generally opposed sanctions because he thought they were usually ineffective. As an official of the Russian government, Sechin was "contributing to the crisis in Ukraine", Treasury said.

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OFAC said it had considered and rejected Exxon's explanation that it had believed from press accounts of the sanctions that there was a distinction between Sechin acting in a "professional" rather than a "personal" capacity.

The U.S. said that the presidents of two Exxon's subsidiaries and Sechin had signed eight legal documents in May 2014.

The energy giant's request to return to Russian Federation for oil and gas activities was rejected in April by the Treasury because of existing sanctions.

Sechin signed the documents on behalf of Rosneft, Jeffers said. Tillerson visited the White House numerous times as CEO in the immediate aftermath of the sanctions being announced, but they remained in place.

Tillerson left ExxonMobil to become secretary of state after 10 years at the helm of the global energy power. Tillerson, "knew of Sechin's status as an SDN (Specially Designated National) when they dealt in the blocked services of Sechin" and that "ExxonMobil is a sophisticated and experienced oil and gas company that has global operations and routinely deals in goods, services, and technology subject to U.S economic sanctions and US export controls" and therefore should have known better.

The State Department declined to comment, referring questions to Exxon.

Other reports by MaliBehiribAe

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