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ExxonMobil Sues Treasury Department Over Russia-related Fines

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FILE - The sign for the ExxonMobil Torrance Refinery in Torrance, California, Jan. 30, 2012.

Oil giant Exxon-Mobil is suing the U.S. Treasury Department to stop a $2 million fine for violating sanctions against Russia while Secretary of State Rex Tillerson was Exxon CEO.

Exxon said the decision is “fundamentally unfair” and insists it did nothing wrong. It is challenging the Treasury action in U.S. District Court in Texas.

The Treasury Department said Exxon signed a contract in 2014 with Igor Sechin, head of Russia’s state-owned Rosneft oil company and a longtime businesses associate of Tillerson.

Sechin was on a list of Russian officials sanctioned because of the Russian annexation of Ukraine’s Crimea region.

FILE - Russia's President Vladimir Putin, left, and Rosneft CEO Igor Sechin attend a signing ceremony at the St. Petersburg International Economic Forum 2014 in St. Petersburg, May 24, 2014.
FILE - Russia's President Vladimir Putin, left, and Rosneft CEO Igor Sechin attend a signing ceremony at the St. Petersburg International Economic Forum 2014 in St. Petersburg, May 24, 2014.

Treasury said Exxon-Mobil “demonstrated reckless disregard for U.S. sanctions” when it signed the deal with Sechin for oil and gas projects in Russia.

It also said Exxon failed to “voluntarily self-disclose” the agreement.

Exxon said the blacklist against Sechin only applies to any personal dealings with him and did not apply to Roseneft.

Treasury officials said they never gave anyone reason to believe the sanctions did not cover professional business deals with blacklisted individuals, too.

The State Department would not comment and referred all questions to Treasury.

FILE - Exxon Chairman and chief executive officer Rex Tillerson speaks at a news conference in Dallas, Texas, May 28, 2008.
FILE - Exxon Chairman and chief executive officer Rex Tillerson speaks at a news conference in Dallas, Texas, May 28, 2008.

Secretary of State Tillerson was head of ExxonMobil from 2006 until 2016 and developed deep ties with Russia, including a friendship with President Vladimir Putin. Tillerson has said he would recuse himself from Exxon-related matters for his first two years as secretary.

While at Exxon, Tillerson said he did not support sanctions, because “we don’t find them to be effective unless they are very well implemented comprehensively and that’s a very hard thing to do.”

But during a visit to Ukraine a few weeks ago as secretary of state, Tillerson said, “U.S. and EU sanctions on Russia will remain in place until Moscow reverses its actions that triggered these particular sanctions.”

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