American Cosmetic Company Murad Fined Millions for Violating Iran Sanctions

The American skincare company Murad has agreed to pay approximately $3.3 million to the U.S. to resolve allegations against the company related to circumventing sanctions against Iran and exporting goods to Iran. Murad was founded in 1989 by Howard Murad, an Iraqi-American dermatologist, and its products are well-known in Iran as 'Dr. Murad.' Murad's skincare products were available in Iran for a period. The U.S. Treasury Department states that the company, based in El Segundo, California, had contracts with a distributor in Iran to sell its products in the Middle East. These contracts, which were established between 2009 and 2018, resulted in at least 62 instances of Murad's products and services being exported to Iran, estimated to be worth over $11 million. The Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department indicates that the company voluntarily disclosed the violations. OFAC reported that a former senior executive of the company, who was involved in contracts with the Iranian distributor, agreed that the distributor would first sell Murad products in Iran through a company based in Iran and then through a company in the United Arab Emirates. Due to extensive sanctions against Iran, American individuals and companies are prohibited from exporting goods, technology, and services to Iran unless OFAC has exempted them. OFAC states that Murad applied for specific licenses but did not receive any permits allowing such exports. In September 2015, Murad was acquired by the large company Unilever, which continued exports to Iran until January 2018, despite Unilever being informed of the trade with Iran two months after acquiring Murad. After a bank inquired whether some financial transfers might involve Iran, the export of these products was halted. A spokesperson for Murad stated in an email published by the Wall Street Journal that the company is committed to complying with U.S. economic sanctions laws and has implemented policies to control exports, expressing its willingness to fully cooperate with U.S. authorities to resolve the issue. OFAC noted that the approach of the company's senior executives in facilitating exports to Iran and the lack of a structure to ensure compliance with U.S. sanctions led to this violation.