By: Danielle Hatch
PACCAR, a Washington company that manufactures and sells trucks and related goods and services (including under the DAF nameplate) has agreed to pay $1,709,325 for 63 violations of the Iranian Transactions and Sanctions Regulations. DAF sells trucks through its network of more than 300 independent dealers that enter into dealer agreements which govern the relationship between the two. DAF dealers usually purchase trucks from DAF and then resell them to their customers. DAF builds most trucks based on specific orders from their dealers, based on their customers’ needs, and they then resell them to their customers after production.
DAF sold 63 trucks to customers in Europe that it knew or had reason to know were ultimately for buyers in Iran between October 2013 and February 2015 in violation of the Iranian Transactions and Sanctions Regulations. The value of the trucks was approximately $5 million.
A DAF dealer in Hamburg, Germany requested a price quote with DAF via its wholly owned subsidiary in Germany (DAF Germany) for 51 trucks for a company located in Iran, the then-employee/manager of DAF Germany told the Hamburg dealer that DAF Germany could not sell trucks destined for Iran. That same day, the Hamburg dealer placed another quote for the same type of trucks as the Iran quote except this time the trucks were destined for a customer in Russia. DAF Germany processed the quote and then eventually the order. The Hamburg dealer received the 51 trucks and resold them to the buyer in Iran, with knowledge that the transaction was prohibited.
On another occasion, in October 2013, DAF Trucks Frankfurt, a directly owned DAF dealer received two trucks from DAF after the original buyer cancelled the order. DAF Trucks Frankfurt sold the trucks to a dealer in the Netherlands who ultimately sold the trucks to two buyers in Iran. An investigation later showed that the employee who handled the sale knew or had reason to know that the Netherlands-based trader planned on selling the trucks to buyers in Iran (his invoices referenced buyers in Iran to the DAF Trucks Frankfurt employee).
In June 2014, a DAF sales dealer in Sofia, Bulgaria sold and delivered 10 DAF trucks to an affiliated rental company who then sold the trucks to a buyer in Iran. A DAF investigation found that the Bulgarian authorized dealer’s parent company disclosed that a used truck sales manager employed by DAF introduced the authorized dealer to the Iranian buyers of the 10 trucks and knew that the trucks were intended for Iran prior to introducing the parties.
PACCAR voluntarily disclosed the violations and OFAC determined that the violations established a non-egregious case. The base penalty for the violations is $2,713,214 and the imposed violation of $1,709,325 reflects this.
Full Enforcement Details: https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20190806_paccar.pdf