Cartier parent fined for violating drug kingpin sanction

Cartier owner Richemont North America has been fined for shipping jewellery to a Hong Kong company blocked by the Treasury Department’s Office of Foreign Assets Control (OFAC).

Based in New York City, Richemont has agreed to pay US$334,800 to settle its “potential civil liability” for four apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations, says the OFAC.

Richemont exported four shipments of jewellery to Shuen Wai Holding in Hong Kong in 2010 and 2011.

OFAC had put Shuen Wai on its SDN List (List of Specially Designated Nationals and Blocked Persons) on November 13, 2008. Kingpin Act designations are tagged on the SDN List, reports the FCPA Blog.

“On four separate occasions, an individual purchased jewellery from one of Richemont’s Cartier boutiques in California or Nevada, providing Shuen Wai’s name and mailing address to Richemont as the ship-to party,” says the OFAC.

“Although the information and documentation provided to Richemont contained the same name, address and country location for Shuen Wai as they appear on the SDN List, Richemont did not identify any sanctions-related issues with the transaction before shipping the goods,” OFAC says.

Businesses in the US are prohibited from doing business with people or companies designated under the Kingpin Act. The law targets “significant foreign narcotics traffickers” as identified by the President.

OFAC says Richemont did not voluntarily self-disclose the apparent violations, nor did it “exercise a minimal degree of caution or care with respect to the conduct that led to the apparent violations”.

Nevertheless, says the OFAC, the offences were “a non-egregious case”, and Richemont had had a clean record with the office for the previous five years. It co-operated with the OFAC investigation and took remedial action to correct deficiencies that gave rise to the apparent violations.

OFAC discounted the penalty down from $620,000.


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