We won a complete victory in an action against the U.S. Department of Treasury

Davis Polk won summary judgment for Exxon Mobil Corporation in litigation it filed against the U.S. Department of Treasury and Treasury’s Office of Foreign Assets Control (OFAC) in federal court to vacate a penalty notice imposing a $2 million fine on ExxonMobil for alleged violations of the Ukraine-related sanctions regulations.

In July 2017, OFAC issued the penalty notice for alleged violations of the Ukraine-related sanctions regulations arising out of eight contracts that ExxonMobil had entered into with Rosneft Oil Company in 2014. Those contracts were signed on behalf of Rosneft by Rosneft’s president and board chairman, Igor Sechin, whom Treasury had previously designated as a Specially Designated National (SDN) in his personal capacity. Inconsistent with prior guidance issued by the White House and Treasury, OFAC alleged that because Sechin was an SDN and signed the contracts, ExxonMobil violated the Ukraine-related sanctions regulations. ExxonMobil immediately filed a complaint in federal court under the Administrative Procedure Act challenging the penalty notice.

In December 2019 the court granted ExxonMobil’s motion for summary judgment, denied the government’s cross-motion for summary judgment, and declared that OFAC’s penalty notice violated the due process clause of the Fifth Amendment.

The Davis Polk team included partners Paul J. Nathanson, Antonio J. Perez-Marques and Neil MacBride, counsel Stefani Johnson Myrick and associate Caroline Stern. The members of the Davis Polk team are based in the New York and Washington DC offices.

Copy link to share post