October 30, 2020
Warren Buffett’s company, Berkshire Hathaway, has agreed to pay $4.14 million as punishment for a Turkish subsidiary selling goods to Iran, the US Treasury Department announced October 20.
There was no suggestion that Buffett or anyone at Berkshire Hathaway’s headquarters in Omaha, Nebraska, knew anything about what was going on at the Turkish subsidiary of a company owned by Berkshire Hathaway.
The Office of Foreign Assets Control (OFAC) said Iscar Turkey sold 144 shipments of cutting tools and related inserts worth $383,443 to two Turkish distributors from December 2012 to January 2016, knowing they would be shipped to a distributor in Iran for resale, including to Iran’s government.
OFAC said the sales occurred under the direction of some senior managers of Iscar Turkey after the firm’s general manager concluded it was “inevitable” that US and European Union sanctions against Iran would be lifted and he sought to be “well positioned” to capitalize.
OFAC also said Iscar Turkey took steps to “obfuscate” its dealings with Iran and conceal them from Berkshire Hathaway.
Berkshire voluntarily reported the apparent violations to OFAC in May 2016 after receiving a tip from an employee who saw an Iranian address in a string of emails concerning a sale.
Iscar Turkey is a unit of IMC International Metalworking Cos, a maker of metal cutting tools. IMC is Buffett’s largest acquisition of a non-US company.