A small penalty and a clean example of a control that checked at one point in time.
What happened
Two UAE-based aircraft-parts suppliers, Flavic FZE and Mirage Air Craft Services, had been ordinary SkyGeek customers. OFAC designated Flavic on 2 November 2023 for operating in the technology sector of the Russian economy; at the time, the release says, it was certified to work with the Russian Ministry of Defense. It designated Mirage on 23 February 2024 for operating in the aerospace sector.
- Flavic. SkyGeek screened Flavic’s orders on the day of designation, but its screening software had not yet loaded that day’s update. When Flavic asked for a refund on 28 December 2023, SkyGeek’s procedure was not to re-screen previously approved parties, and it initiated a $16,842.21 refund on 10 January 2024, which a downstream bank blocked.
- Mirage. After the designation, between 4 and 8 March 2024, SkyGeek shipped four orders of basic goods (paints, coatings, film release agents and tapes) worth $3,429.76, then on 18 March initiated a $669.42 refund. A downstream bank blocked that too. SkyGeek had started re-screening before refunds in February 2024 but did not catch Mirage.
The penalty
Not egregious. Four of the six violations were voluntarily self-disclosed, so their base was half the transaction value, and two were not, so their base was the schedule amount: $27,715 in all. The settlement was $22,172. OFAC noted that Flavic had been listed for 56 days before it asked for the refund, and that the value was low but the goods went to a company in sectors that “enable its illegal war in Ukraine”. SkyGeek and its parent stopped sales to 45 jurisdictions and now re-screen customers, including billing and shipping names and addresses, before refunds.
What the record shows
- A refund is a payment. It needs the same check as a sale.
- Screening is a moving target. An order screened on the day of designation, before the list update loaded, passed.
See aviation parts procurement and the UAE page.