Berkshire to pay K14mil over sanctions violations

WASHINGTON: Warren Buffett’s Berkshire Hathaway Inc agreed to pay US$4.14 milion (K14.3mil) to settle civil allegations that a Turkish subsidiary committed “egregious” violations of United States sanctions against Iran, the US Treasury Department said on Tuesday (local time).
The department’s office of foreign assets control said Iscar Turkey sold 144 shipments of cutting tools and related inserts worth US$383,443 (K1.43mil) to two Turkish distributors from December 2012 to January 2016, knowing they would be shipped to a distributor in Iran for resale, including to Iran’s government.
The office of foreign assets control said the sales occurred under the direction of some senior managers, after Iscar Turkey’s general manager concluded it was “inevitable” that US and European Union sanctions against Iran would be lifted and sought to be “well-positioned” to capitalise on this.
It said Iscar Turkey took steps to “obfuscate” its dealings with Iran and concealed them from Berkshire, despite warnings that the sales would violate its compliance policies.
Berkshire voluntarily reported the apparent violations in May 2016 after receiving an anonymous tip.
The company replaced employees who were involved and upgraded compliance procedures for its foreign subsidiaries.
The Omaha, Nebraska-based conglomerate did not immediately respond to a request for comment.
Iscar Turkey, also known as Iscar Kesici Takim Ticareti ve Imalati Limited Sirket, is a unit of IMC International Metalworking Cos, a maker of metal cutting tools.
Berkshire paid US$4 billion (K14.9bil) for 80 per cent of Israel-based IMC in 2006. – Al Jazeera