Schlumberger Oilfield Holdings, the world’s largest oil field services company, has pleaded guilty to one count of conspiring to violate U.S. economic sanctions against Iran and Sudan. As part of its plea arrangement, Schlumberger has agreed to pay a fine of $232.7 million, and three years of corporate probation. The plea agreement concludes an investigation by the U.S. Department of Justice and the Bureau of Industry and Security of the U.S. Commerce Department.
Schlumberger is registered in Curaçao, and can legally conduct business in Iran and Sudan, so long as it does so without involving U.S. persons. Schlumberger had a policy requiring compliance with U.S. sanctions, as well as procedures to ensure that U.S. employees did not participate in activities involving sanctioned countries. The plea agreement notes, however, that Schlumberger failed to provide adequate training to all relevant employees, and that Schlumberger employees in the United States did not consistently follow the company’s internal procedures. Among other violations, Schlumberger employees in the United States had approved capital expenditures for projects in Iran and Sudan; made decisions regarding Schlumberger strategy for its operations in the two countries; and provided technical advice with respect to projects in Iran and Sudan.
To avoid violating U.S. sanctions, non-U.S. companies need to ensure that all U.S. employees ae fully insulated from activities involving sanctioned countries. If you do business in countries subject to U.S. sanctions, you should:
- Have a clear policy requiring compliance with U.S. sanctions laws.
- Implement concrete procedures for compliance, including identifying when U.S. persons must recuse themselves.
- Identify in advance all U.S. persons who are employees (including non-U.S. nationals who are physically located in the United States).
- Provide all relevant employees, including all U.S. persons, with detailed training on what they are and are not allowed to do.
- Ensure that compliance with these procedures, including the provision of training, is periodically reviewed and tested.