S&P Global Inc. agreed to settle allegations it violated U.S. sanctions when it continued to extend credit to
after the Russian oil producer faced debt and equity restrictions beginning in 2014, the Treasury Department said Friday.
S&P, a New York-based provider of financial and business analytics, will pay $78,750 as part of the civil settlement with Treasury’s Office of Foreign Assets Control, which enforces U.S. sanctions.
OFAC alleges S&P and an energy-sector research firm it acquired reissued and redacted multiple invoices to continue extending credit to Russia state-owned Rosneft, on which the U.S. imposed debt and equity restrictions in 2014 after Russia annexed Crimea. The sanctions prohibited transactions or other dealings in new debt of longer than 90 days maturity.
The civil settlement, while relating to transactions made in 2016 and 2017, illustrates how the U.S. could seek to crack down on sanctions evasion as it implements an economic and financial pressure campaign against Russia after its invasion of Ukraine in February.
“While this matter resulted from transactions in 2016 and 2017, S&P Global remains committed to complying with all sanctions obligations and will continue to enhance our compliance program,” an S&P Global spokesperson said in an email Friday.
Representatives for Rosneft didn’t immediately respond to a request for comment.
S&P Global acquired Petroleum Industry Research Associates Inc., which provided energy and commodity research and forecasting products and services, in September 2016. The company at the time had contracts with Rosneft and had issued an invoice for $82,500 to Rosneft in 2015 for an ongoing subscription service that provided both tailored advisory services and market analysis, according to the settlement agreement. S&P integrated PIRA’s business during the acquisition.
The invoice had a payment due date of October 2015, but Rosneft didn’t pay it by that date and had attempted to make payments that were either rejected by PIRA’s bank, in compliance with the sanctions program in place at the time, or met with a request for additional information from the U.S. bank, OFAC said. Rosneft also attempted to pay the overdue invoice by check in July 2016 following PIRA’s suggestion.
S&P Global employees then reissued and redacted the 2015 invoice four times with new dates and sent the revised invoice to Rosneft in 2016 and 2017, OFAC said. S&P’s management also wrote to Rosneft, emphasizing the importance of timely payment. S&P wrote that “when the payment is made against an old invoice (as recent ones were), the bank may perceive that to be ‘extending credit’ to a Russian company, which we cannot do by law,” according to the settlement agreement. Rosneft eventually paid the invoice in October 2017.
OFAC determined S&P Global didn’t voluntarily self-disclose the alleged violations and that it failed to act with “a minimal degree of caution or care” when it reissued the invoices to extend the payment date. OFAC credited S&P Global for remediating measures, such as enhancing its compliance program and for cooperating with OFAC’s investigation.
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