WASHINGTON, D.C. – On Thursday, July 20, key elements of the “Deep State,” specifically bureaucrats yet loyal to President Obama deeply entrenched with the Treasury Department, levied a $2 million fine on ExxonMobil, accusing the company of violating Ukraine-Related Sanctions (31 C.F.R. part 589) during Secretary of State Rex Tillerson’s tenure as chairman and CEO of the company.

This history would suggest that Obama-loyalist Deep State actors within the Treasury Department have decided to target all Trump administration officials with business ties to Russia, trying to find some violation of law or regulations that can keep alive the Democratic Party’s relentless six-month drumbeat alleging the Trump campaign alluded with Russia to rig the 2016 election in Trump’s favor.

The announcement of the Treasury Department’s $2 million fine imposed on ExxonMobil for allegedly violating Ukraine-Related Sanctions while Tillerson headed the company came on the same day Bloomberg reported Special Counsel Mueller was expanding his probe to examine decades-old business transactions Trump may have had with various persons and business entities in Russia.

At the center of the allegations are the interactions ExxonMobil had with the Russian oil company, Rosneft, and with Igor Sechin in his capacity as CEO of Rosneft.

Specifically, the Treasury Department in announcing the fine identified Exxon-Mobil’s violation of the Ukraine-Related Sanctions as involving two agreements signed on or about May 14, 2014, and May 23, 2014, in which the presidents of ExxonMobil’s U.S. subsidiaries “signed eight legal documents related to oil and gas projects in Russia” with Rosneft that were signed by Sechin in his capacity as president of Rosneft.

The fine imposed by Treasury on ExxonMobil almost certainly be tested in the courts given that during the Obama Administration, White House and Treasury Department officials repeatedly clarified that U.S. sanctions imposed by the U.S. Treasury on Russia on April 28, 2014, only applied to Sechin in relationship to his personal affairs, and not to the various companies that Sechin managed or represented, including Rosneft.

The Treasury Department press release dated April 28, 2014, that announced sanctions on Sechin, named a total of seven Russian government officials and 17 business entities that were being placed under sanctions over Russia’s involvement in Ukraine, but specifically noted that Rosneft was not included as one of the Russian businesses placed under sanction.

The Treasury Department press release commented on this point that “Rosneft is a state-owned company and has not been sanctioned.”

The Treasury Department press release issued Thursday, explaining why ExxonMobil was being fined $2 million alleged only that ExxonMobil while Tillerson was chairman and CEO had signed eight legal documents related to oil and gas projects with Rosneft in Russia that had been signed by Sechin as the legal head of the Russian company (that was not then or now under U.S. sanctions).

A legal memorandum on “Ukraine-Related Sanctions” published by the prestigious law  firm Sullivan & Cromwell LLP, dated May 2, 2014, also commented, “Notably, the most recent designations include Igor Sechin, the President and Management Board Chairmen of Rosneft, Russia’s leading petroleum company, but do not include Rosneft itself.”

As further evidence the Treasury Department Ukraine-Related Sanctions announced April 28, 2014, applied only to Sechin personally, and not to Rosneft as a company or to Sechin in his capacity as chairman and CEO of Rosneft, the Treasury Department allowed BP’s American CEO to continue participating in Rosneft board meetings with Sechin, so long as the activity was related to Rosneft’s business and not Sechin’s personal business.

BP’s 2015 Annual Report identifies R. W. Dudley, an American, and a BP board member since 2009, as serving in the capacity of “non-executive director of Rosneft,” commenting: “Between 23 June and 30 September 2010, he [Mr. R. W. Dudley] served as the president and chief executive officer of BP’s Gulf Coast Restoration Organization in the United States.  He was appointed a director of Rosneft in 2013 following BP’s acquisition of a stake in Rosneft.”

In an analysis of the sanctions imposed on Russia in 2014, the Washington law firm Latham & Watkins published an analysis dated April 29, 2014, that noted the following:

“The designated individuals include Igor Sechin, Chief Executive Officer of Russia’s state-controlled energy giant, Rosneft. The US did not impose sanctions against Rosneft directly. While Treasury Department’s Office of Foreign Assets Control (OFAC) has not provided specific guidance on dealings with Rosneft, in past, analogous cases, the agency has articulated that designating a top executive does not generally restrict dealings with the company, unless the company itself is specifically designated or owned 50 percent or more by a designated person.”

In a interview published by the BBC on Sept. 2, 2014, the BBC described Sechin as the second most powerful man in Russia, ranked second only to Russian President Vladimir Putin in the complicated Russian power structure.

The BBC reported Sechin and Putin have known each other since the 1990s, when the two worked together in the St. Petersburg government, with Putin appointing Sechin his deputy chief of staff during Putin’s first term as president, then as deputy prime minister.

The BBC noted Rosneft controls more oil and natural gas reserves than the energy giant ExxonMobil, with Rosneft producing 4.2 million barrels of oil daily, then estimated at almost 5 percent of global consumption.

  • SPIEGEL: Igor Ivanovich, the US government has placed you on the sanctions list and has blocked Rosneft from receiving oil drilling technology from the West. How bothered are you by the fact that you are no longer welcome in the US and Europe?
  • Sechin: Neither I nor my company have anything to do with the crisis in Ukraine. As such, there is no foundation for the sanctions against me and Rosneft. They represent a violation of international law. Rosneft is an international corporation with stockholders in America, Europe and Asia. After the Russian state, BP is our biggest stakeholder with a 20 percent holding. As such, the sanctions also affect our Western partners. I find it curious that Rosneft is on this list even though we work more closely together with American and European companies than any other Russian firm.

In a press release issued late Thursday, ExxonMobil said it has launched a legal challenge to a finding by the Treasury Department’s Office of Foreign Assets Control (OFAC) that it violated U.S. sanctions against Russia in 2014 when the company followed authoritative and specific guidance from the Obama administration that OFAC retroactively changed a year later.

“OFAC seeks to retroactively enforce a new interpretation of an executive order that is inconsistent with the explicit and unambiguous guidance from the White House and Treasury issued before the relevant conduct and still publicly available today,” said ExxonMobil’s filing in the U.S. District Court.

ExxonMobil’s argument filing in federal court argues that OFAC’s action is fundamentally unfair and constitutes a denial of due process under the Constitution and violates the Administrative Procedure Act because market participants, including ExxonMobil, did not have notice of the interpretation OFAC now seeks to retroactively enforce.


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