The United States on Thursday admonished Exxon Mobil Corp for "reckless disregard" of USA sanctions in dealings with Russian Federation in 2014 when Secretary of State Rex Tillerson was the global oil company's chief executive, and fined it $2 million.
The US Treasury said the oil company had shown "reckless disregard" for sanctions imposed by the Obama administration in 2014 over Russia's annexation of Crimea.
"ExxonMobil demonstrated reckless disregard for US sanctions requirements", Treasury said, "when it failed to consider warning signs associated with dealing in the blocked services of an SDN".
Exxon Mobil, whose chief executive at the time is now the USA secretary of state, pushed back strongly, calling the action "fundamentally unfair".
Not so, said the Treasury Department, arguing that the government never gave Exxon or anyone else a reason to believe there was an exception for professional dealings. The company said the eight legal documents it signed were related to ventures with Rosneft, not Sechin personally.
Exxon did not disclose the activities, the Treasury Department said. Igor Sechin, president of Rosneft, had been on the department's List of Specially Designated Nationals and Blocked Persons list (SDN), establishing a clear violation of the sanctions by ExxonMobil.
Tillerson had played a central role over the years in developing that multibillion dollar deal. It leveled the statutory maximum civil penal of $2 million for the breaches.
Tillerson recused himself from actions by the State Department related to ExxonMobil after he took office in February.
The Rosneft venture was a crowning achievement of Tillerson's career, but the partnership was quickly frozen by the sanctions placed on Russian Federation in 2014. The State Department said it wasn't involved in the decision to punish Exxon for violating the sanctions.
Publicly available guidance on Treasury's website at the time of Exxon's dealings with Sechin said Americans should ensure they do not enter into contracts signed by sanctioned individuals, OFAC said. State Department spokeswoman Heather Nauert told reporters on Thursday that the agency was alerted to the fine on Wednesday.
So while the Obama administration was much more lax in its approach, the Trump administration is taking a much harder line stance on the Russian sanctions.
ExxonMobil entered into a business arrangement with him two weeks after the Treasury Department said USA companies could no longer do business with him.