U.S. Fines Exxon $2 Million Over Russia Sanctions Breaches

By Samuel Rubenfeld and Lynn CookFeaturesDow Jones Newswires

The U.S. Treasury Department imposed a $2 million fine on Exxon Mobil Corp. for violating sanctions on Russia while Secretary of State Rex Tillerson was the oil giant's chief executive.

Exxon violated U.S. sanctions on Russia during May 2014 when it signed eight documents relating to oil and gas projects in Russia with Igor Sechin, the president of Russian state-oil firm Rosneft, Treasury said in an enforcement notice posted to its website.

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President Barack Obama signed an executive order in March 2014 targeting those involved in an escalating conflict along the Russia-Ukraine border, including Russia's annexation of Crimea. Mr. Sechin was added to the U.S. sanctions list in April of that year, with U.S. officials stressing his "utter loyalty" to President Vladimir Putin, though he shrugged at them at the time.

Mr. Tillerson, who has deep ties to Russia and received an Order of Friendship from Moscow, left the firm to become U.S. Secretary of State. The $2 million fine, Treasury said, was the maximum amount it could fine the firm. Exxon showed "reckless disregard for U.S. sanctions requirements" when failing to consider the warning signs associated with dealing in the blocked services of someone under U.S. sanctions, Treasury said.

A spokesman for Exxon called the fine "outrageous" and said Treasury's findings are a complete 180-degree turn from previous guidance handed down by the Obama administration at the time the sanctions were enacted.

"ExxonMobil followed the clear guidance from the White House and Treasury Department when its representatives signed documents involving ongoing oil and gas activities in Russia with Rosneft -- a non-blocked entity -- that were countersigned on behalf of Rosneft by CEO Igor Sechin in his official representative capacity," the company said in a statement Thursday.

The State Department declined to comment, referring questions to Exxon.

Write to Lynn Cook at lynn.cook@wsj.com

(END) Dow Jones Newswires

July 20, 2017 13:29 ET (17:29 GMT)