Amazon Settles Allegations of U.S. Sanctions Violations
July 08 2020 - 8:18PM
Dow Jones News
By Mengqi Sun
Amazon.com Inc. agreed to settle allegations that it violated
multiple U.S. sanctions regulations, the U.S. Treasury Department
said Wednesday.
The Seattle-based e-commerce giant allegedly provided goods and
services to individuals or entities subject to U.S. sanctions,
primarily due to deficiencies in the company's automatic screening
processes, according to a settlement agreement between Amazon and
the Treasury's Office of Foreign Assets Control, which enforces
U.S. economic and trade sanctions.
An Amazon spokeswoman declined to comment.
The amount Amazon agreed to pay to settle the allegations --
about $135,000 -- is paltry compared with the size of the company,
which has a market cap of about $1.5 trillion. But the agreement
highlights the importance of implementing and maintaining effective
sanctions-compliance tools and programs, and how such tools can
sometimes fail even the largest and most sophisticated
companies.
Apple Inc. last year settled allegations it violated U.S.
sanctions by dealing with a blacklisted entity for more than two
years because the company's sanctions-screening tool failed to
identify a blacklisted entity due to apparent differences in
punctuation and letter cases.
Amazon, which voluntarily disclosed the alleged violations and
took remedial measures -- factors that played a role in the
settlement total, according to OFAC -- had a similar issue.
OFAC said Amazon's automated sanctions-screening processes
failed to fully analyze transaction and customer data, such as
common alternative spellings of a sanctioned jurisdiction, and that
the company's screening system failed to flag orders that could
have run afoul of U.S. regulations.
Amazon accepted and processed these orders of consumer goods and
services for individuals and entities located in regions under U.S.
sanctions, such as Iran and Syria, or that had been blacklisted by
the U.S., such as designated as drug traffickers, global terrorists
or proliferators of mass destruction weapons, according to the
settlement agreement.
In several hundred instances, Amazon's system allegedly failed
to flag the correctly spelled names and addresses of people and
entities on the U.S. blacklist, according to the agreement.
Amazon's sanctions-screening system also failed to flag orders
containing addresses with variation of the spelling of Crimea and
had failed to comply with reporting requirements for certain
transactions involving the Black Sea peninsula, OFAC said. The U.S.
generally prohibits the import and export of goods, services and
technology to or from Crimea, unless allowed under licenses.
OFAC credited Amazon for cooperating with the investigation by
providing data analysis of the alleged breaches and implementing
significant remedial measures to address the sanctions screening
issues. These efforts included adding head count to the company's
compliance team and employing internal and third-party sources to
review its sanctions compliance program.
Write to Mengqi Sun at mengqi.sun@wsj.com
(END) Dow Jones Newswires
July 08, 2020 20:03 ET (00:03 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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