RCMP in Calgary, along with Canada Border Service Agency Criminal Investigation Section has laid charges against a Red Deer-based company accused of shipping products illegally to Iran.
On May 1, 2011, CBSA officers at Calgary International Airport intercepted a number of Viton O-rings in a cargo shipment destined for Iran.
Viton O-rings are a prohibited commodity under the Special Economic Measures Act because of their use in nuclear applications.
"The item itself can be used in a variety of different applications. They can also be used in a nuclear application. It definitely raises a lot of concerns. We treat it very seriously, basically," said RCMP Const. Ben Simon.
Viton is a brand of synthetic rubber which has a high temperature and chemical resistance. It has a number of applications in the oilfield or nuclear program.
They are specifically mentioned in the Special Economic Measures (Iran) Regulations and cannot be shipped or sold to any person or company in the Islamic Republic of Iran.
Charges were laid against Lee Specialties Ltd., in Red Deer, under the Act after three search warrants were issued in February 2013.
The company's lawyer says there was a mixup with the order and it was essentially sent to the wrong address.
“That’s absolutely, in our view, what happened here. You have an accounting system that allows for multiple addresses to go in. Each of these entities, that were going to be the ultimate destination, they have the same company name, two different addresses, one in Tehran and one in Dubai and so when it should have gone to Dubai, it went to Tehran,” said Lawyer Kristine Robidoux.
Robidoux says Lee Specialties deals with a number of international clients. “There were a number of companies that our client did business with throughout the Middle East and these two companies, one in the emirates, as you’ve heard, and one in Iran, were related companies, our client as well knew that Viton was a prohibited material however, as was made clear in court today, sanctions compliance is very complex, the legislative regime is very complex, and there’s not only a list of countries and prohibited persons and entities, but there’s a list, multiple pages long, on what are prohibited materials and so at some point there was a difficulty in a shipment and a shipment that you intend to go to the Middle East or UAE ends up going to Iran and regardless, as his honour said, regardless of the fact that this was a $15 transaction, obviously Canada takes the enforcement of the sanction laws very, very seriously.”
She says the company has been operating since 1995 and the sanction laws have changed at least six times since then. She says the company became aware that Viton was banned in 2011.
“The shipment involved a number of assemblies so equipment that was manufactured for export to Iran but the material in question is a synthetic rubber, it’s a fluoroelastomer, called Viton, is the trade name for it and it really is just a type of rubber that is not susceptible to break down through high heat or different chemicals and so because it is capable of being used in a nuclear application, that’s what make it dual-use or prohibited.”
Officials say this is the first time charges have been laid under the Special Economic Measures Act, and the third time United Nations Act charges have been laid in Canada.
"Just because of the complex nature, it’s the type of investigation that doesn’t come along very often. It’s utilizing acts which are not very often used, in this case the charges under the Special Economic Measures Act, it will be the first time in Canadian history that these charges have been laid. And for the United Nations Act, the third time. Its not a very common type of investigation," said Simon.
Police say the initial shipment was part of an oil field system when it was intercepted.
"We want companies within Alberta and Canada to be aware that a lot of these sanctioned countries are not able to acquire items legally that they want. They will go around and approach companies, requesting these items be shipped to them. It’s a big part of what we want to do, to make companies aware that they might be approached in this way, to acquire goods that are controlled," said Simon.
A court date has been set for April 14, 2014.
