OFAC fines Texas offshore oil supplier

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Just as the Obama Administration is cautiously engaging Cuba in talks over safety of offshore oil drilling in Cuban waters near Florida, a federal agency announced that Irving, Tx.-based Flowserve Corp. agreed to pay a $502,000 fine to settle allegations of having violated U.S. sanctions against Iran, Sudan and Cuba.

The company designs, delivers and supports integrated flow management systems, including for offshore drilling platforms.

Flowserve voluntarily disclosed that domestic and foreign affiliates had exported  $2.1 million worth of pumps, valves and related parts to Iran, Sudan and Cuba; a press release by the Office of Foreign Assets Control (OFAC) didn’t say whether the equipment was for offshore oil operations. In the case of Cuba, a foreign affiliate of Flowserve “engaged in transactions involving property in which Cuba or a Cuban national had an interest,” the press release said, without providing more details. The transactions in question were made — without obtaining U.S. licenses — in 2005 and 2006. 

Spain’s Repsol YPF, which is about to begin another drill in Cuba with an Italian-owned platform, recently said in response to a critical letter from 34 U.S. legislators that it “scrupulously” complies with U.S. embargo laws. The Italian-owned Scarabeo 9 platform was assembled in China and Singapore; however, the blowout preventer — a crucial component for safety — is U.S.-made.

Flowserve will also pay $2.5 million to the Department of Commerce’s Bureau for Industry and Security (BIS) to settle violation allegations of U.S. Export Administration regulations. The company is implementing a “market withdrawal program” for the sanctioned countries, OFAC said.

“OFAC and BIS have a responsibility to ensure that U.S. sanctions programs and export laws are implemented to the fullest extent of the law,” said OFAC Director Adam J. Szubin in a press release. 

From a Flowserve sales brochure

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