Oilfield Services Firm Settles Over Violations of U.S. Sanctions Against Iran

China’s Yantai Jereh Oilfield Services Group Co. Ltd. has agreed to pay nearly $3 million to settle a dispute with Washington over its suspected sale of U.S. goods to Iran in violation of American sanctions, the U.S. Treasury Department said.

The $2.77 million settlement with the Treasury Department’s Office of Foreign Assets Control was part of a broader agreement between Jereh Group and the U.S. Department of Commerce, which oversees cases involving violation of U.S. sanctions, according to the Treasury Department’s announcement on Wednesday.

The Jereh case stems from previous U.S. sanctions aimed at forcing Iran to curb its nuclear program, including prohibitions on selling U.S.-made products to Iran. Violation of those conditions caused a crisis earlier this year for telecom-equipment maker ZTE Corp. and is currently at the heart of a similar case involving its chief rival, Huawei Technologies Co. Ltd.

Jereh agreed to the settlement to resolve its potential liability for 11 violations of the sanctions, the Treasury Department said.

“The apparent violations involved the exportation or re-exportation, and attempted exportation or re-exportation of U.S.-origin goods ultimately intended for end-users in Iran by way of China,” it said. “The Jereh Group also exported certain U.S.-origin items with knowledge or reason to know that the items were intended for production of, for commingling with, or for incorporation into goods made in China to be supplied, transshipped, or re-exported to end-users in Iran.”

Goods in question included oilfield equipment such as spare parts, coiled tubing strings, and pump sets, according to the settlement notice. Two of the 11 shipments in the investigation were ultimately seized by U.S. customs agents, it added.

Contact reporter Yang Ge (geyang@caixin.com)