By: Michelle Cook, Summer Law Student
On Thursday of last week, the Treasury Department fined Exxon Mobil a meagre $2 million for violating sanctions that the U.S. had imposed on Russia. However, the political cost of this violation is much higher for U.S. Secretary of State Rex Tillerson and Donald Trump’s presidency. These violations occurred in 2014 when Rex Tillerson was the company’s President and Director and further adds to the allegations swirling around Russia’s association with President Donald Trump’s campaign. The 2014 sanctions were put in place after Russia’s annexation of the Ukrainian peninsula of Crimea and have only been strengthened after it became clear that Russia was attempting to undermine the U.S. presidential election.
Exxon Mobil chose to disregard these clear sanctions by allowing their American subsidiaries to do business with individuals whose assets were blocked by the United States. In particular, legal documents were signed for oil and gas projects with Igor Sechin, the head of Russia’s state oil company, Rosneft. Rex Tillerson and Igor Sechin had a strong friendship preceding 2014. In fact, Rex Tillerson was awarded with the Russian government’s Order of Friendship after he signed deals with Rosneft opening the Kara Sea in Russia’s north-western Arctic to oil drilling. Rex Tillerson’s strong ties to Russia were known before President Trump confirmed his appointment, amid large opposition.
While there has been suspicion of President Trump’s collusion with the Russian government even before he was elected President, the Presidency has been stymied after it was revealed his son had an undisclosed meeting with a Russian government lawyer to obtain information that would “incriminate Hillary and her dealings with Russia” as “part of Russia and its government’s support for Mr. Trump.” Instead of trying to keep clear of anything that would associate himself with Russia, President Trump took a secret almost one-hour one-on-one meeting with Putin of which the U.S. government has no records of. Rex Tillerson was the only other U.S. public official in the room besides President Trump.
While Rex Tillerson has officially left Exxon Mobil to join the Trump government, it is clear that Exxon Mobil has been attempting to influence the U.S. government to get special exemptions in relation to Russia. For example, in April Exxon asked the Treasury for a waiver from sanctions against Russia so it could drill in the Black Sea with Rosneft. This waiver was denied.
Amidst all of this, instead of admitting liability, Exxon Mobil has chosen to challenge the fine. Ultimately, they believe that there were no sanctions against Rosneft, just Mr. Sechin, and therefore they should not have been blocked against doing business with him when he is working in an official, not personal, capacity. Interestingly, Exxon Mobil pointed the finger at BP oil’s American chief executive, who also had several meetings with Rosneft and their board.
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