U.S. Fines Amazon for the Annexed Crimea Orders

The United States has fined e-commerce giant Amazon for delivering goods to individuals or entities subject to US sanctions, including ones on the Russian-annexed Crimean peninsula, Kyiv Post writes.

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 foreign offices in Cuba, North Korea and Sudan. The total cost of such transactions was about $270,000 (USD).

These violations were mainly due to shortcomings in Amazon’s automated screening processes, the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury said on 8 July.

“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 said.

Altogether, the e-commerce giant has made hundreds of deals that violate US sanctions, including 362 transactions to Crimea.

The United States generally has prohibited the import and export of goods and services to or from Crimea unless permitted by licenses since 2014, when Russia annexed the peninsula.

Amazon has agreed to pay a $135,000 fine for settling the dispute.

For reference, the company has a market volume of about $1.5 trillion. The statutory maximum fine for such violations is more than $1 billion. OFAC, however, decided that since the company had voluntarily disclosed its violations and since they were an “inefficient case,” mostly for low-value goods, it refrain from imposing such a high fine.

According to Amazon spokeswoman Halle Gordon, Amazon self-disclosed possible violations back in 2016, “and the company has made great efforts to improve the sanctions compliance programme.”

“The vast majority of blatant violations are challenges to compliance with standards common to other global companies (such as shipments to embassies in third countries where the government does not publish a list of known embassy addresses),” Gordon wrote on 9 July in her statement to Kyiv Post.

“Obvious violations concern the sale of low-consumption goods,” she said.

In 2018, Ukraine called on Amazon to stop selling products with the symbols of Russian fighters operating in Donbas, which was eventually done.

Natalia Tolub