The reference case for aviation parts, and a useful corrective to the assumption that these schemes are exotic. This one was a maintenance business filling orders.
The conduct
Between approximately 16 November 2005 and 1 September 2010, Fokker Services B.V., of Hoofddorp in the Netherlands, committed 1,112 alleged violations of the Iranian sanctions regulations and 41 of the Sudanese regulations.
OFAC’s description of the mechanism is short: on 1,112 occasions FSBV “indirectly exported or reexported aircraft spare parts to Iranian customers, that FSBV either procured or had repaired in the United States specifically to fill an Iranian customer’s order, or that were U.S.-origin and subject to export license requirements.” The Sudanese count follows the same pattern.
What “specifically to fill an order” means
That clause is the case. This was not a company that happened to hold US-origin stock and shipped some of it to the wrong customer. The orders came first: a customer in Iran or Sudan needed a part, and FSBV went to the United States to buy it or to have it repaired, knowing where it was going.
The word the notice uses for the routing is “indirectly.” Parts moved through the Netherlands, which made every individual US transaction a domestic or European one on its face.
Why aviation produces cases like this
Aircraft are maintained on a schedule and the schedule does not stop for a sanctions programme. A fleet needs a continuous supply across hundreds of part numbers, for years. That converts what would otherwise be a one-off procurement problem into a standing commercial relationship, and standing relationships leave records.
It also explains OFAC’s aggravating findings: that FSBV “is a sophisticated and experienced aerospace services provider,” that it “knew that it was shipping U.S.-origin parts, and parts supplied from or repaired in the United States, to customers in Iran and Sudan,” and that it “had no formal OFAC compliance program in place during most of the five-year period.”
Reading the numbers
This case is a good illustration of why a headline penalty figure needs unpacking. The base penalty was $145,492,023. The settled potential civil liability was $50,922,208. What FSBV actually paid was a $10.5 million civil penalty to OFAC and BIS plus a $10.5 million forfeiture under a deferred prosecution agreement with the US Attorney’s Office — three different numbers, all correct, describing the same case.
FSBV voluntarily self-disclosed, which normally halves a base penalty, and OFAC still found the conduct egregious. Self-disclosure mitigates; it does not characterise.