Berkshire Hathaway to pay $4.1 million over alleged Iran sanctions violations

The US Treasury Department says one of Berkshire's Turkish subsidiaries shipped goods that it knew would be resold to Iran.

al-monitor Warren Buffett, CEO of Berkshire Hathaway, speaks to the press as he arrives at the 2019 annual shareholders meeting in Omaha, Nebraska, May 4, 2019. Photo by JOHANNES EISELE/AFP via Getty Images).

Oct 20, 2020

Warren Buffett's Berkshire Hathaway has agreed to pay $4.1 million to settle its potential civil liability relating to allegations that one of its Turkish subsidiaries violated US sanctions against Iran, the Treasury Department announced on Tuesday.

The department said that between December 2012 and January 2016, Iscar Turkey exported 144 shipments of cutting tools and related disposable inserts worth $383,443 to third-party Turkish distributors. The Berkshire subsidiary knew that the goods would then be resold to Iranian end-users, including the government of Iran, the Treasury Department said.

It also says that management at Iscar Turkey believed US sanctions would eventually be lifted. The subsidiary established a small-volume relationship with an Iranian distributor “to capitalize on this potential easing of sanctions,” the statement said.

The department accused Iscar Turkey of trying to “obfuscate” its alleged sanctions violations and conceal the transactions from Berkshire Hathaway by using fake email addresses and false names in internal reports. After receiving an anonymous tip in May 2016, the Omaha-based conglomerate voluntarily disclosed its subsidiary’s apparent violations to the US government.

The Treasury Department statement accused Iscar Turkey of violating US sanctions on Iran “at a time when those prohibitions were intended to impose sustained pressure on Iran, having the effect of undermining US leverage in negotiations with Iran.”

Since withdrawing the United States from the nuclear deal in 2018, the Trump administration has pursued a “maximum pressure” campaign of sanctions against Tehran. This month, the United States slapped sanctions on 18 Iranian banks in an effort to further isolate the country from the global financial system.

In September, the Trump administration blacklisted Iran’s Defense Ministry and dozens of individuals and entities accused of conducting cyberattacks and malware campaigns.

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