The United States has fined e-commerce giant Amazon for delivering goods to individuals or entities subject to U.S. sanctions, including to ones on the Russian-annexed Crimean peninsula.
In 2011–2018, the company still operated in Iran, Syria and Crimea. Amazon would also accept and process orders on its websites for people located in or employed by the foreign missions of Cuba, North Korea, and Sudan.
The total transaction value accounted for about $270,000.
These violations occurred primarily due to deficiencies in Amazon’s automatic screening processes, the Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury stated on July 8.
“Amazon’s screening processes did not flag orders with address fields containing an address in ‘Yalta, Krimea’ for the term ‘Yalta,’ a city in Crimea, nor for the variation of the spelling of Crimea,” the statement reads.
All together, the e-commerce giant carried out hundreds of transactions that violated U.S. sanctions, including 362 transactions to Crimea.
The U.S. generally prohibits the import and export of goods and services to or from Crimea, unless allowed under licenses since 2014, when Russia annexed the peninsula.
Amazon has agreed to pay a $135,000 fine to settle the dispute. For reference, the company has a market cap of about $1.5 trillion.
The statutory maximum penalty for such violations, meanwhile, is more than $1 billion. OFAC, however, determined that since the company voluntarily self-disclosed the violations, and that they constitute “a non-egregious case,” mostly for low-value goods, it would refrain from collecting such a high fine.
According to Amazon spokeswoman Halle Gordon, Amazon self-disclosed the potential violations back in 2016 “and undertook extensive efforts to improve its sanctions compliance program.”
“The vast majority of apparent violations present compliance challenges that are common to other global businesses (e.g., shipments to embassies in third countries where the government does not publish a list of known embassy addresses),” Gordon wrote in a message to the Kyiv Post on July 9.
“The apparent violations relate to sales of low-level consumer goods,” she said.
In 2018, Ukraine urged Amazon to stop selling products featuring the symbols of Russian-backed militants that operate in the Donbas, which it eventually did.
