Berkshire Hathaway to pay $4.14 million to settle Iran sanctions violations claims

imageStock Markets12 hours ago (Oct 20, 2020 12:45PM ET)

(C) Reuters. Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc’s annual shareholder meeting in Omaha

By Jonathan Stempel and Susan Heavey

WASHINGTON (Reuters) – Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) Inc agreed to pay $4.14 million to settle civil allegations that a Turkish subsidiary committed “egregious” violations of U.S. sanctions against Iran, the U.S. Treasury Department said on Tuesday.

The department’s Office of Foreign Assets Control said Iscar Turkey sold 144 shipments of cutting tools and related inserts worth $383,443 to two Turkish distributors from December 2012 to January 2016, knowing they would be shipped to a distributor in Iran for resale, including to Iran’s government.

OFAC said the sales occurred under the direction of some senior managers, after Iscar Turkey’s general manager concluded it was “inevitable” that U.S. and European Union sanctions against Iran would be lifted and sought to be “well positioned” to capitalize.

It also said Iscar Turkey took steps to “obfuscate” its dealings with Iran and concealed them from Berkshire, despite warnings that the sales would violate its compliance policies.

Berkshire voluntarily reported the apparent violations in May 2016 after receiving an anonymous tip, replaced employees who were involved, and upgraded compliance procedures for its foreign subsidiaries, OFAC said.

The Omaha, Nebraska-based conglomerate did not immediately respond to a request for comment.

Iscar Turkey, also known as Iscar Kesici Takim Ticareti ve Imalati Limited Sirket, is a unit of IMC International Metalworking Cos, a maker of metal cutting tools.

Berkshire paid $4 billion for 80% of Israel-based IMC in 2006, and $2.05 billion for the remainder in 2013.

IMC remains Buffett’s largest acquisition of a non-U.S. company. Berkshire also owns dozens of other companies including the BNSF railroad and the Geico auto insurer.

The U.S. State Department designated Iran a state sponsor of terrorism in January 1984.

Berkshire Hathaway to pay $4.14 million to settle Iran sanctions violations claims

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