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3M settles $9.6 million probe over sales to Iran

By Nithya Bose in US business news, posted September 22, 2023

3M has agreed to pay over $9.6 million to resolve an investigation by the US Treasury Department over its sales to an Iranian entity controlled by Iran's law enforcement forces.

Treasury’s Office of Foreign Assets Control said a 3M subsidiary allegedly sold reflective license plate sheeting to a sanctioned Iranian entity.

The sale to the police foundation Bonyad Taavon Naja happened between September 2016 and September 2018.

It happened despite prior flags raised by external due diligence staff regarding potential issues.

3M proactively disclosed the misconduct and fully cooperated throughout the investigation, as acknowledged by OFAC.

The company took corrective actions like terminating several employees.

It also discontinued its business relationship with a Germany-based intermediary associated with the sales.

The Switzerland-based subsidiary, 3M East, reportedly shipped 43 product consignments to a German reseller.

However, it was aware that the goods were intended for an Iranian customer.

The total value of the transactions linked to the alleged sanctions violations amounted to approximately $10 million.

OFAC also revealed that one US individual employed by a 3M overseas subsidiary played a role in these sales.

54 alleged violations of Iranian sanctions

The settlement addresses 54 alleged violations of sanctions imposed on Iran.

3M responded to the settlement by acknowledging that in 2019, the company had identified a limited number of employees responsible for these violations.

It promptly reported the matter to the government and disclosed it in filings with the Securities and Exchange Commission.

The company conducted its internal investigation, and cooperated with US authorities.

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It implemented corrective actions, including personnel changes and policy adjustments to ensure future compliance.

This settlement comes on the heels of 3M's agreement last month to pay over $6.5 million to settle a probe by the Securities and Exchange Commission (SEC).

It was related to marketing employees of a China-based subsidiary.

These employees had organized undisclosed trips for healthcare officials to the US and Australia, violating the Foreign Corrupt Practices Act.

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