3M Resolves $10M Iranian Sanctions Violations Amid Legal Challenges

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The industrial goods behemoth 3M has reached an agreement involving nearly $10 million to resolve alleged violations of Iranian sanctions, in accordance with information released by the U.S. Office of Foreign Assets Control (OFAC) recently. This highlights a series of high-profile, costly settlements that has placed the manufacturing giant, known for its N95 masks, Post-It notes, Scotch Tape, and other products, in the limelight throughout this year.

The scrutinous probe by the agency identified fifty-four probable violations committed by 3M of OFAC sanctions on Iran. The window for these alleged sanctions violations, ranging from 2016 to 2018, involved the company’s Swiss subsidiary, 3M East, selling reflective licence plate sheeting via a German reseller to Bonyad Taavon Naja, an entity controlled by Iranian law enforcement.

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OFAC also indicated the role of a United States personnel from 3M Gulf, a Dubai-based subsidiary of 3M, who was notably implicated in the sale. This transaction had taken place even after the issuance of an external due diligence report, unearthing direct links to Iran’s Law Enforcement Forces—an organization accused of human rights infringements in Iran and Syria.

Despite its knowledge that the goods would ultimately land in the hands of the Iranian entity, 3M East continued to dispatch forty-three shipments to the German reseller. Furthermore, the OFAC’s report also asserted that senior managers at 3M Gulf willingly breached the sanctions laws, while other employees displayed negligence in handling the sales.

3M, on realizing the sales were unauthorized, voluntarily reported the apparent transgressions. Consequently, liable employees were either expelled or reprimanded. The company also ceased transactions with the German reseller and bolstered its trade compliance counsel, in addition to overhauling sanctions training.

3M’s legal quagmire further deepened in June when it consented to pay out a whopping $10.3 billion spanning 13 years. This sum was to fund public water providers, subjected to the presence of toxic “forever chemicals” in their water supply, alarming health crises across the United States over the years.

Moreover, the fallout from alleged faulty earplugs provided to the military, causing serious injuries including loss of hearing, caused 3M to agree on a $6 billion settlement in August, while contending these cases without accepting liability.

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