Apple has admitted that it had inadvertently paid a blacklisted software company, violating U.S. sanctions. The company has rectified the situation though, paying a settlement of $467,000 to acknowledge its violation of U.S. sanctions, according to the Treasury Department.
Apple had paid Slovenian software company SIS d.o.o., owned by Savo Stjepanovic. SIS has been implicated in an international steroid trafficking network, which earned the company a spot on the U.S. Treasury’s List of Specially Designated Nationals.
Apple had entered into an app development agreement with SIS, and had paid them 47 times over the course of two years, says a Wall Street Journal report. The payments were for the company’s blocked apps. Apple collected around $1.2 million from SIS customers. Apple had voluntarily disclosed the alleged violations, according to the OFAC.
“In 2017, we found that we had inadvertently paid a developer on [the] U.S. Treasury’s List of Specially Designated Nationals,” an Apple spokesman said in a statement Monday. “We reported it to the authorities and fully cooperated with their investigation, which has now been completed.”
The U.S. Office of Foreign Assets Control (OFAC) says the payments demonstrated multiple points of failure within Apple’s sanctions compliance program, and showed “reckless disregard for U.S. sanctions requirements,” according to the agreement.
Apple had listed Stjepanovic’s company as “SIS DOO,” rather than “SIS d.o.o,” as it read on the OFAC’s list. Apple also failed to identify Stjepanovic as a blacklisted individual. Apple also allegedly helped transfer ownership of two SIS apps to two other companies after the designation had been made.
Although Apple had identified the company as a blacklisted entity in February 2017, suspending payments to the company, it continued to make payments to the other company that owned some of the SIS apps.