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by Stephanie M.
Horvath
Wall Street Journal, July 3, 2002
WASHINGTON -- The U.S. government
disclosed it has fined 86 companies, including Ikea, CNA Insurance Cos.
and the Los Angeles Dodgers, for violating a law that bars companies from
doing business with an "enemies" list of nations that includes Iran, Iraq,
Cuba and North Korea.
The Treasury Department's Office of
Foreign Assets Control released a list of 115 fines totaling $5.8 million
for violations of the Trading With The Enemy Act dating back to 1998. The
list adds to information it disclosed in March, but doesn't include all
fines during the period.
In the case of the Dodgers, the
professional baseball team reached a $75,000 settlement in 1999 with OFAC
for signing two Cuban players. Patrick Courtney, a spokesman for Major
League Baseball, said the players joined the Dodgers' organization in the
Dominican Republic and claimed to be citizens of that Caribbean nation.
Mr. Courtney said when the matter
came to light, the players, whom he didn't identify, were declared free
agents and the Los Angeles club was fined.
CNA, a unit of CNA Financial Corp.,
Chicago, had the costliest settlements -- nearly $2.4 million -- for
trading with Cuba. In a written statement, CNA said the settlements were
the result of the actions of two British subsidiaries that "engaged in
conduct inconsistent with OFAC rules." The company said it brought both
violations to the Treasury's attention.
In the case of Ikea, Treasury found
the Swedish home-furnishings retailer ordered rugs from a
Taliban-controlled part of Afghanistan. Ikea spokesman Clive Cashman said
the region wasn't under Taliban control at the time Ikea placed its order
for 150 rugs.
Mr. Cashman said the Taliban took
control of the area after the rugs had been shipped out of the country in
November 1999, and it wasn't Ikea's intent to violate U.S. rules. The
company reached an $8,000 settlement, and has since stopped trading with
Afghanistan, he said.
Other companies that reached
settlements include Goodyear Tire & Rubber Co., Akron, Ohio, which traded
with Cuba and settled for $195,000, and GRE Insurance Group, now owned by
Liberty Mutual Insurance Co., Boston, which settled for $244,250 for
trading with Iraq. Representatives from both companies said they had no
information on the matter.
Mary Eshet, a spokeswoman for First
Union Bank, now part of Wachovia Corp., Charlotte, N.C., which paid
$360,000 to settle allegations it traded with Iran, said she couldn't
comment on individual transactions. She said the bank has "stringent
policies and procedures" that are in place to prevent violations.
Treasury spokeswoman Tasi Scolinos
said OFAC analysts consider a number of factors when determining
settlement amounts, including the value of the illegal transaction and
whether the company is a repeat offender. Ms. Scolinos said she couldn't
comment on individual cases.
The administration began releasing
information on illegal trading this March after being sued under the
Freedom of Information Act by Public Citizen and the Corporate Crime
Reporter, a newsletter that earlier reported these settlements. Treasury
is planning to make such settlements public on a regular basis.
The Treasury's latest list didn't
include Halliburton Co., Dallas, the oil services company formerly run by
Vice President Dick Cheney. Halliburton opened an office in Tehran in
2000, when Mr. Cheney was chief executive officer. When the news became
public last year, the company denied its office violated the U.S. law.
The Treasury is expected to
disclose more settlements later this year.
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