Thai plastics firm will pay $20 million to settle with US over Iran sanctions violation

“We will continue to deploy our sanctions authority to counter Iran with further actions in the days and weeks ahead," Treasury Secretary Janet Yellen said.

A Bangkok -based plastics firm has agreed to pay $20 million to settle with the US over 467 “egregious” violations of Iran sanctions, the US Treasury announced on Friday.

SCG Plastics Co. used US banks to process USD291 million in sales of Iranian high-density polyethylene resin from 2017 to 2018, according to the signed settlement agreement between the firm and Treasury's Office of Foreign Assets Control.

The resin, used for product bottles and industrial items, was manufactured by an Iranian joint venture owned in part, by SCG Plastics' parent company, SCG Chemicals and the National Petrochemical Company of Iran, which is a government entity.

The settlement states that SCG Plastics used “shipping and documentation practices that obfuscated the product's Iranian origin and Iranian parties' involvement,” which caused banks to unknowingly process transfers in violation of OFAC's sanctions on Iran.

“As a result of these transactions, significant economic benefits were conferred to Iran's petrochemical sector, a major source of revenue generation for the Iranian regime,” Treasury says. OFAC determined that the 467 violations of Iran sanctions were “egregious” and fined the company USD20 million, which is to be paid within 90 days.

While SCG Plastics is no longer in operation, a signed agreement between OFAC and the firm releases SGC Plastics from any liability related to the sanctions violations.

The fines come as US administration officials have announced plans to impose more sanctions on Iran after Tehran launched an unprecedented attack on Israel that could fuel a wider war in the Middle East.

On Thursday, the US and UK imposed a new round of sanctions on Iranian people and firms associated with drone production.

“We will continue to deploy our sanctions authority to counter Iran with further actions in the days and weeks ahead," Treasury Secretary Janet Yellen said.

"We have also vigorously enforced our sanctions, including by levying historic fines and exposing sanctions evasion schemes and networks. Our actions make it harder and costlier at every turn for Iran to continue its destabilizing behaviour.”