Exxon won't have to pay US sanctions fine: Judge

Treasury Secretary Steven Mnuchin issued the fine in 2018, accusing Exxon of violating sanctions on Russia.

Exxon Mobil will not have to pay a $2 million fine for doing business with a Russian state-owned oil company, a federal judge ruled Tuesday.

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Treasury Secretary Steven Mnuchin issued the fine in July 2018, accusing the Texas-based oil giant of violating sanctions on Russia by continuing to do business with Russian-owned Rosneft after the U.S. cracked down on the country following the annexation of Ukraine's Crimea by the Russian Federation in 2014, according to the lawsuit.

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"ExxonMobil acknowledges the court’s decision, which confirms we complied with the applicable sanction," an Exxon spokesperson said in a statement.

An Exxon gas station in Sterling Heights, Michigan. ExxonMobil is a multinational oil and gas company and one of the largest corporations in the world. / iStock

Judge Jane Boyle said the Treasury’s Office of Foreign Assets Control (OFAC) did not give Exxon sufficient notice between the time it started doing business with Rosneft and when the sanctions against its chief executive, Igor Sechin, were issued, Bloomberg reported Tuesday.

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The U.S. imposed sanctions on various Russian individuals, including Sechin, "in response to Russia’s invasion of Ukraine, election interference, other malicious cyber-enabled activities, human rights abuses, use of a chemical weapon, weapons proliferation, illicit trade with North Korea and support to Syria and Venezuela," according to the Federation of American Scientists.

Exxon said it was abandoning its business dealings with Rosneft in 2018 after President Trump denied it waivers to continue its work with the Russian state oil company in spite of U.S. sanctions against Sechin.

Logos of ExxonMobil are seen in its booth at Gastech, the world's biggest expo for the gas industry, in Chiba, Japan April 4, 2017. REUTERS/Toru Hanai

Despite ending its business with Rosneft, Exxon argued against the Mnuchin's fines, saying sanctions were issued against Sechin personally, not the state-run oil company he worked for, though Sechin did sign the business deal between the two companies, according to Bloomberg.

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Boyle said the OFAC's ruling violated due process because it did not share its interpretation of sanctions against Sechin in time for the company to make sufficient changes.

Her ruling highlights the ambiguity of sanctions against individuals versus the companies those individuals are associated with.

Exxon said Mnuchin's interpretation of the 2014 sanctions violated the Administrative Procedure Act because it was "arbitrary and capricious," Bloomberg reported.

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