One of the smallest penalties documented on this site, and one of the more instructive: the control that failed was a single English-language email, sent once, to a subsidiary that did not speak English as its first language.
The acquisition and the general licence
Rice Lake, a Wisconsin scale manufacturer, acquired Italy’s Dini Argeo S.r.l. in November 2016. Dini had an existing relationship with Pand Weighing Control (“Pandtec”), an Iranian weighing systems company, and — under a general licence then in effect for entities owned or controlled by a US person — kept selling to it directly after the acquisition. That licence was revoked on 27 June 2018, after the 8 May announcement that the US would withdraw from the Iran nuclear deal.
On 8 August 2018, Rice Lake’s import-export coordinator emailed Dini’s general manager, in English, with no translation: “you are prohibited from any transactions involving Iran, or a citizen of Iran, no matter where located.” Dini stopped selling to Pandtec directly. Its staff did not understand that selling to Pandtec indirectly was equally prohibited.
The UAE route
Between June 2019 and November 2021, Dini filled eight orders worth about $121,527 for a UAE distributor, knowing the goods would be re-exported to Iran. The sales documents never named Pandtec — but on at least five occasions, Pandtec employees emailed Dini directly asking technical questions about the products, with every email signature naming Iran. Dini kept selling.
How it was caught
In late 2021, Rice Lake received an outside tip that its products were turning up in Iran, investigated immediately, and found the UAE diversion. It cut off the distributor and self-disclosed.
The penalty
OFAC found Dini’s conduct reckless — it should have known indirect sales were as prohibited as direct ones — and found Rice Lake itself had failed to exercise due care by giving “insufficient explanation” of the indirect-dealing risk and no evident training or monitoring afterward. OFAC’s compliance guidance states the general point the case illustrates: training and guidance must account for “key differences such as local language and business customs,” and companies with counterparties in a jurisdiction known for diversion risk, like the UAE, need particular attention to indirect dealings.
What the record shows
- One instruction is not a control. Rice Lake told Dini once, in a language its staff read as a second language, and never checked whether the instruction was understood or followed.
- The re-export signal was on the correspondence, not hidden. A signature block naming Iran, on emails Dini itself received, was the same kind of plain-paperwork signal seen elsewhere on this site.
See acquisition integration gaps and third-country transshipment.