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Tillerson made it clear that he only believes in letter of the law sanctions, whereas Senator Merkley tried to get him to understand the concept of sanctions being related to US Policy Goals. This is where we see the real Tillerson, in contrast to the laid-back Texan who we want to like.

Henry Kissinger, as Secretary of State, tried to help Turkey find loopholes in Congressional sanctions re Cyprus. So, Tillerson advising countries on undermining Congressional sanctions is actually a real risk.

Kissinger’s consulting firm, Kissinger Associates, is part of the US-Russia Business Council. Kissinger supports Tillerson.

A bigger problem than Tillerson, however, is loopholes in the sanctions. Why are there loopholes? Properly written and applied sanctions would have prevented or shortened World War II, and made it far less destructive, at least in Europe.

@7.30 min Tillerson claimed that Exxon Sakhalin Island activities are not subject to sanctions, but appears to deceive on this topic. He says that Rosneft contains individuals which are subject to sanctions. However, Rosneft itself is on the list of those subject to sanctions. It appears that Exxon Neftegaz is possibly not subject to sanctions at Sakhalin because Exxon Neftegaz is registered in the Bahamas. Or, perhaps it is subject to sanctions but nothing can be done about it? It is strange that no one is addressing this point.

Some other big names which participated in the Sakhalin oil and gas 2016 conference are Shell, METI (apparently Japan METI), Deloitte, Oxford U, Fluor (of Texas, also active in nuclear waste), Caterpillar, Emerson, GE, Alstom, Mitsubishi, JAPEX.

The only clarity on this issue is found from German journalists:
Russian state owned oil company Rosneft is also involved with Exxon Neftegaz. Rosneft is under US and EU sanctions due to the Russian annexation of the Crimean peninsula. The Obama administration also sanctioned the Rosneft boss Igor Setschin, who is said to have great influence in the Kremlin and like President Putin is a former KGB employee. See the original here: http://www.sueddeutsche.de/politik/exklusiv-trumps-aussenminister-im-steuerparadies-1.3299793

Thus, it seems that sanctions are being evaded due to the offshore status, though it’s still not 100% clear. No one seems concerned about Sakhalin which appears the biggest question of all.

Video notes:
NAFTA TPP (video 1 to 1.10 min)
Tillerson says he would do something if in violation of sanctions. Senator Merkley says he’s not talking about technicalities but rather if a company is acting in a manner inconsistent with the goals of US policy.
@ approx. 1.10 min – Sanctions and Infinium (Exxon Euro subsidiary)
SEC Sanctions bypass disclosure Iran
2.19 min hypothetical sanctions discussed (approx 2 to 4.19 min)
Tillerson – if violate sanctions [i.e.letter of the law]
Merkley – not technicality [Rather] inconsistant with goals of US policy.

At 3 min Merkley states that the European subsidiary Infinium was set up to by-pass sanctions. Back and forth they went with Merkley saying there is a difference between inquiring if aware of actions and the integrity of US sanctions goal.

At approx 4 min Tillerson saying that there is a difference between expressing concern and saying someone is breaking the law.

At approximately 4.30 sec discussion about Exxon lobbying on sanction – Tillerson claims he didn’t know.

Merkley wonders if Tillerson would have issues with other CEOs following letter of sanction laws but avoiding the intention of the sanctions and Tillerson hedges.

@5 min – Merkley says documents show Tillerson doesn’t support sanctions generally. Widespread pattern of Exxon Mobil weighing in about sanctions against Russia. Tillerson alleges Exxon Mobil didn’t lobby against sanctions. [And yet Open Secrets shows otherwise. These lobbying efforts occurred both in 2014 and for the more recent 2015 to 16 Congress, according to Open Secrets. There may be a confusion between White House visits and Congressional lobbying. There were over 20 lobbying efforts listed by Open Secrets by Exxon re Ukraine-Russia-Crimea.]

@7.30 min Tillerson claims that Exxon Sakhalin Island activities are not subject to sanctions, but appears to deceive on this topic. He says that Rosneft contains individuals which are subject to sanctions. However, Rosneft itself is on the list of those subject to sanctions. There is some blah, blah in the sanctions regarding 50 percent ownership. Thus, it is not totally clear if this is a loophole such that since Rosneft isn’t 50% owner of Sakhalin I that Exxon walzed through or if it is not subject to sanctions simply because Exxon Neftegaz is registered in the Bahamas. What’s more, Sakhalin I may be used to circumvent other parts of the Sakhalin project. Much of the equipment appears to have been moved prior to sanctions, which may be one way they have avoided them.

Exxon lobbied re:
H.R.5094 – STAND for Ukraine Act
114th Congress (2015-2016)

H.R.5094: Stability and Democracy for Ukraine Act

Exxon 2014 lobbying re Ukraine, Russia, etc. : https://www.opensecrets.org/lobby/clientbills.php?id=D000000129&year=2014

Exxon Subsidiaries as submitted to the US SEC. Arrows for Bahamas registered ones, but many others are tax havens, depending on definitions, and could be used to avoid sanctions and taxation. Any foreign subsidiary apparently could be used to avoid sanctions.
2013 Exxon Subsidiaries exhibit 21, p. 1
2013 Exxon Subsidiaries exhibit 21, p. 2
2013 Exxon Subsidiaries exhibit 21, p. 3
Details re sanctions:
413. For the purposes of Directive 4, how does OFAC define “deepwater” projects that have the potential to produce oil?
A project is considered to be a deepwater project if the project involves underwater activities at depths of more than 500 feet. [9-12-2014]

414. Does Directive 4 apply to projects that have the potential to produce gas?
If a deepwater, Arctic offshore, or shale project in the Russian Federation, or in maritime area claimed by the Russian Federation and extending from its territory, and involving a person named under Directive 4 has the potential to produce oil, then the prohibition applies, irrespective of whether the project also has the potential to produce gas. If the project has the potential to produce gas only, then the prohibition does not apply. [9-12-2014]

415. For persons determined to be subject to multiple Directives, how do the prohibitions and exemptions listed under one Directive affect prohibitions and exemptions under the other Directives?
Each Directive operates independently of the others. If a transaction involves a person subject to two Directives, for example, a U.S. person engaging in that transaction must comply with the requirements of both Directives. Exemptions in one Directive apply only to the prohibitions contained in that Directive and do not carry over to another Directive. For example, if a person is subject to both Directive 2 and Directive 4, the exemption for the provision of financial services by U.S. persons or in the United States under Directive 4 does not supersede the prohibition in Directive 2 on dealing in debt of longer than 90 days maturity of such a person. For these reasons, when OFAC references a prohibition involving an “SSI entity” in these FAQs or in other guidance, it is referring to an entity subject to the Directive(s) at issue in a particular FAQ or piece of guidance. [9-12-2014]



German original quote re Exxon Neftegas:
An Exxon Neftegas ist auch der staatliche russische Ölkonzern Rosneft beteiligt. Rosneft ist infolge der russischen Annexion der Halbinsel Krim mit Sanktionen der EU und der USA belegt. Die Regierung Obama sanktionierte auch den Rosneft-Boss Igor Setschin, der großen Einfluss im Kreml haben soll und wie Präsident Putin ehemaliger KGB-Mitarbeiter ist.http://www.sueddeutsche.de/politik/exklusiv-trumps-aussenminister-im-steuerparadies-1.3299793