Amazon Will Pay $135,000 To Settle Alleged US Sanction Violations (techcrunch.com) 37
In a statement (PDF) issued this week, the U.S. Treasury Department notes that Amazon has agreed to pay $134,523 to settle potential liability over alleged sanctions violations. TechCrunch reports: The charges specifically pertain to goods and services sent to people located in Crimea, Iran and Syria, which are covered by Office of Foreign Assets Control (OFAC) sanctions, between November 2011 and October 2018. The Treasury Department also states that the retail giant failed to report "several hundred" transactions in a timely manner.
The department adds: "Amazon also accepted and processed orders on its websites for persons located in or employed by the foreign missions of Cuba, Iran, North Korea, Sudan, and Syria. Additionally, Amazon accepted and processed orders from persons listed on OFAC's List of Specially Designated Nationals and Blocked Persons (the "SDN List") who were blocked pursuant to the Narcotics Trafficking Sanctions Regulations, the Weapons of Mass Destruction Proliferators Sanctions Regulations, the Transnational Criminal Organizations Sanctions Regulations, the Democratic Republic of the Congo Sanctions Regulations, the Venezuela Sanctions Regulations, the Zimbabwe Sanctions Regulations, the Global Terrorism Sanctions Regulations, and the Foreign Narcotics Kingpin Sanctions Regulations." The department doesn't believe there was anything malicious going on, rather an issue with Amazon's system, which failed to flag shipments to sanctioned areas.
The department adds: "Amazon also accepted and processed orders on its websites for persons located in or employed by the foreign missions of Cuba, Iran, North Korea, Sudan, and Syria. Additionally, Amazon accepted and processed orders from persons listed on OFAC's List of Specially Designated Nationals and Blocked Persons (the "SDN List") who were blocked pursuant to the Narcotics Trafficking Sanctions Regulations, the Weapons of Mass Destruction Proliferators Sanctions Regulations, the Transnational Criminal Organizations Sanctions Regulations, the Democratic Republic of the Congo Sanctions Regulations, the Venezuela Sanctions Regulations, the Zimbabwe Sanctions Regulations, the Global Terrorism Sanctions Regulations, and the Foreign Narcotics Kingpin Sanctions Regulations." The department doesn't believe there was anything malicious going on, rather an issue with Amazon's system, which failed to flag shipments to sanctioned areas.
Big Woop... (Score:3)
One would think that simply 'paying a fine' wouldn't be an option under such security-driven regulations. Alas, security-driven regulations are a joke, and the beat goes on.
So in other words (Score:5, Insightful)
$135,000?
So in other words, about 20 or 30 milliseconds of profit.
Sheesh. That's not even a rounding error for Amazon.
Re:So in other words (Score:4, Insightful)
Fines should be proportional to the crime, not proportional to the money available to the accused.
There was a handful of illegal transactions that were almost certainly inadvertent.
Amazon should not be disproportionately punished just because "they can afford it" and you don't like them.
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When dealing with a structure designed to dissipate responsibility, the appropriate approach is to concentrate the punishment on those most responsible for the creation of said structure.
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Those responsible successfully implemented processes to comply with the law, put in place monitoring and review mechanisms to validate those processes and spent company resources on trying to follow regulations.
It went wrong. Big fucking surprise. But it went wrong because of flaws in the process, not because they were ignoring or trying to break the law.
So a mild spanking and admonition not to do it again is appropriate.
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If the intention of the fine is to persuade the perp to not be a jerk again, it won't work if the guilty one is swimming in cash. It's yet another flaw of Corporate Personhood.
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It just has to be high enough for Amazon not to have made a profit or make a loss on said transactions. Fulfilling a few hundred transactions doesn't earn them all that much money, it's not like you can buy guns and ammo or nuclear missiles on Amazon and get them with Prime.
They were basically selling them cheap stuff from China and didn't check they were on the list of sanctioned people or countries, $135k and attorney costs is probably far beyond the amount of profit these transactions got them.
Re:So in other words (Score:5, Insightful)
Fines should be proportional to the crime, not proportional to the money available to the accused.
There was a handful of illegal transactions that were almost certainly inadvertent.
Amazon should not be disproportionately punished just because "they can afford it" and you don't like them.
Why? fines exist to change peoples behavior they should be large enough that Amazon changes their behavior and the offences do not reoccur. Otherwise they would be a fee not a fine. Since this is a settlement I'm sure the fine print covers changes to Amazon's systems and higher amounts for repeat offences.
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If the profit in violating the law is X, then the fine should be somewhat greater than X/P, where P is the probability of getting caught.
The size of the company is irrelevant, only the size of the transgression matters, which in this case was minimal.
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Selling (what - USB cables and Red Bull?) to North Koreans is way low down on the list of ways Amazon shits on its birth country.
The idea that fines are based on the crime and not the wealth of the criminal sounds fair on its face (setting aside the deterrence aspect). We tax you on your ability to pay instead. Well... not that the US actually does either - which is what's been supercharging the growth of wealth disparity. Add in the ceaseless march of automation, multitudinous mechanisms locking t
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I imagine Amazon will change it behaviour because A) $135,000 is big enough for their business to care about and B) if they don't it will be worse next time because the violation will have gone from inadvertent to wilful.
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So every time you get a parking or speeding ticket, we will fine you 3% of your yearly income as that is the ratio of the highest speeding/parking ticket fine to the lowest guaranteed income wage in the US. Sounds fair? $3000 for parking 15m in front of your coffee shop?
That would incentivize the government to pursue every infraction, you'd be out of money by the end of the day.
Re:So in other words (Score:4, Insightful)
Fines should be proportional to the crime, not proportional to the money available to the accused.
This is a recipe for abuse, as has been shown over and over.
It turns out that if people can afford to pay the fine, it's just another line-item expense, the cost of doing business or whatever. They actually come to regard it as justification rather than a deterrent. "Yeah I littered, here's your $5 or $50 or $500 or whatever, now run along officer."
A $300 fine is devastating to someone on minimum wage, but for a $500,000/year exec it's just a minor inconvenience and is unlikely to change their behavior.
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But putting it higher would incentivize the government to follow up on every infraction. If you make the average US income: change lanes without blinker, here's your $3000 fine. How about letting your parking meter expire: here's a $500 fine.
You'd be out of money by the end of the day and everyone would be destitute and in debt to the government.
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That's your theory. Meanwhile reality says otherwise; a number of countries actually have systems like this and they haven't fallen apart.
Example: https://www.bbc.co.uk/news/blo... [bbc.co.uk]
Finland seems to do OK with this system.
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When I worked for an international US company, every year we had to reread documents about not violating export laws even though we weren't involved in any sales, because that's how seriously the company took the law.
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He could walk up with two briefcases with $135k in cash in each and set one on fire and walk away.
Fines need to be a percentage of gross profits. They need to STING if they are meant to discourage inappropriate behavior.
Gimme a minute (Score:4, Insightful)
Comment removed (Score:5, Insightful)
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The US rarely arrests senior businesspeople, US or foreign, for alleged crimes committed by their companies. Corporate managers are usually arrested for their alleged personal crimes (such as embezzlement, bribery, or violence) rather than their company's alleged malfeasance. Yes, corporate managers should be held to account for their company's malfeasance, up to and including criminal charges; but to start this practice with a leading Chinese businessperson, rather than the dozens of culpable US CEOs and C
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There is a difference though. Huawei basically got notice that they were violating the law and they said: up yours, we have immunity because we're part of another government where these things are legal.
That's what got their CFO arrested, they willfully broke US sanctions and channeled everything through China.
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I wonder if she could use this in her defence.
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IKR? and this pittance fine...
Anyone with half a clue knows the Huawei thing is a politically motivated spectacle that's part of the new US Pivot to Asia propaganda.
We'll get a couple of generations of this bullshit and then our kids who won't know any better will support some sort of contrived conflict involving China.
Much like the 70's and 80's and 90's kids were propagandised with Boris and Natasha and Libyan Terrorist vans..
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Nice defense of the USSR there you Russian Troll. 7-digit ID too. If you understood anything about history, you'd know why communism is evil and there was a cold war and why China going down the same path is a bad thing for the world.
so punish, much fine (Score:2)
That will sure set them back (Score:3)
$135,000 to Amazon is like ... (Score:2)
Voluntary disclosure drastically reduces the fines (Score:5, Insightful)
The fine amount may seem very very low. If Amazon had not voluntarily disclosed their violations to OFAC and had been caught, the maximum fines they faced would have been in the hundreds of millions or billions.
Given that, and how drastically the fine was reduced, Amazon has a very high incentive to self-report its violations (which it did) and to institute changes that ensure this will not happen again (only the future knows). OFAC wants companies to self-police and build compliance into their regular operations. It does that by reducing the fines.
It is also worth noting that, small fine aside, Amazon has to admit to the world that they sent goods to parties and countries they shouldn't have and had inadequate controls to prevent that from happening. When is the last time you read an article where a company admitted its guilt? Almost all the time it comes to a lawsuit with a big fine but no admission of guilt. This is the opposite. If sometime down the road we find out that whatever it was Amazon moved to those sanctioned countries is used for nefarious purposes (e.g., used in a terrorist attack, used in government scandal, or similar), it makes Amazon look complicit. That's also a really bad look for them. It may not affect Amazon long-term, but you could imagine how that could permanently harm a smaller business.
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Given that, and how drastically the fine was reduced, Amazon has a very high incentive to self-report its violations,
This is just bullshit, and buying into bullshit arguments from corporations that they don't believe themselves.
No matter how big the fine is, Amazon will always have a greater incentive to self-report because not doing so will mean they will be banned from exporting, and potentially jail time for some execs. There is almost no fine big enough that will disincentivize them to self-report, because violating sanctions is a big fucking deal.
This is just like buying into corporate bullshit arguments that t
Still come out good. (Score:2)
Ah business logic rules (Score:2)