Exxon Wins U.S. Lawsuit against Russia-Related Sanctions

U.S. energy giant Exxon Mobil Corp. has won a lawsuit against a $2 million fine imposed on it by the U.S. Treasury Department after the company made a series of oil and gas deals in Russia which allegedly violated Ukraine-related sanctions, Bloomberg reports. 

According to U.S. District Judge Jane Boyle, U.S. authorities had not duly notified Exxon that the contracts with Russian oil giant Rosneft, headed by a powerful ally of Russian President Vladimir Putin, would violate restrictions put in place after Russia annexed the Crimea region of Ukraine.

“ExxonMobil recognizes the court’s decision, which confirms that we have complied with the applicable sanction,” the company said.

The U.S. Treasury Department notified Exxon of the violation of the sanctions regime in the summer of 2014 and fined the company in the summer of 2017. This is due to sanctions against the head of Rosneft, Igor Sechin, introduced in April 2014.

Exxon argued in the lawsuit that it was being wrongfully penalized for doing business with Rosneft, which wasn’t under sanction, simply because Sechin signed the deals. The company said the agency’s interpretation of a 2014 executive order by former President Barack Obama violated the Administrative Procedure Act because it was “arbitrary and capricious.”

In 2019, ExxonMobil faced “administrative barriers” in Russia and asks to remove them. In particular, the company wants to obtain the right to use vessels flying a foreign flag for seismic exploration and drilling in Russia.