In a statement the U.S. Treasury Department said, Berkshire Hathaway Inc had agreed to pay a sum of $4.14 million to settle civil allegations that its Turkish subsidiary had made “egregious” violations and was non-compliant with U.S. sanctions against Iran.
The Treasury Department Office of Foreign Assets Control stated, Iscar Turkey had sold 144 shipments of cutting tools and related inserts worth $383,443 to two Turkish distributors from December 2012 to January 2016, knowing that they would be shipped to a distributor in Iran for resale, including to the Iranian government.
“The sales occurred under the direction of some senior managers, after Iscar Turkey’s general manager concluded it was inevitable that U.S. and European Union sanctions against Iran would be lifted and sought to be well positioned to capitalize,” said OFAC.
Further, Iscar Turkey had also taken steps taken steps to “obfuscate” its dealings with Iran and had concealed them from Berkshire, despite warnings that the sales would violate its compliance policies.
Berkshire had voluntarily reported the violations in May 2016 after receiving an anonymous tip; it had replaced the employees who were involved, and had upgraded compliance procedures for its foreign subsidiaries, said OFAC.
Berkshire did not immediately respond to requests for comments.
Iscar Turkey, also known as Iscar Kesici Takim Ticareti ve Imalati Limited Sirket, is a unit of IMC International Metalworking Cos, a maker of metal cutting tools.
In 2006, Berkshire had paid $4 billion for 80% of Israel-based IMC as well as $2.05 billion for the remainder in 2013.
IMC remains Buffett’s largest acquisition of a non-U.S. company.
Berkshire also owns dozens of other companies including the BNSF railroad and the Geico auto insurer.
The U.S. State Department had designated Iran as a state sponsor of terrorism in January 1984.