The Conventional Wisdom
When Rice Lake Weighing Systems paid $60,700 to settle charges for its subsidiary's indirect sales to Iran, many pointed to language barriers as the problem. The company sent its Italian subsidiary an English-only directive to stop doing business with Iran. Despite this, the subsidiary continued selling through a Dubai distributor for three more years. The initial takeaway seemed straightforward: invest in translation technology, convert directives into local languages, and prevent these issues.
This is often framed as a "communication failure" solved by "multilingual compliance messaging." It's a neat solution, but it misses the real issue.
Why We Disagree
Translation is the easy part. The real challenge is creating compliance instructions that change behavior, and that can't be done with Google Translate.
Consider what Rice Lake's import-export coordinator sent to Dini Argeo's general manager in 2018: "You are prohibited from any transactions involving Iran, or a citizen of Iran, no matter where located." The message even included an excerpt from the Iranian Transactions and Sanctions Regulations. This was clear English, not ambiguous.
Dini understood it. They stopped selling directly to their Iranian customer. What they didn't grasp was how to apply that rule to their existing business relationships. They continued selling to a Dubai distributor who re-exported to Iran, received emails from Iranian end-customers, and were eventually told the goods were going to Iran.
This wasn't a translation problem. It was a gap between a legal instruction and operational reality. Dini needed guidance on handling their Dubai distributor, verifying where goods ended up, and identifying red flags.
These are judgment calls, not vocabulary issues. No translation software can address them.
The Evidence
OFAC's settlement order highlights the real issue. After sending the initial message, "Rice Lake does not appear to have taken sufficient steps to ensure its subsidiary understood the prohibitions, took steps to comply with them, or monitor their adherence to the renewed restrictions."
Understanding isn't just about reading comprehension. It's about connecting rules to decisions. When your Dubai distributor places an order, do you ask where it's going? When you get an email from an Iranian company, do you report it? When a customer suddenly wants to route everything through a third country, do you question it?
Rice Lake's compliance team sent a rule but didn't provide a decision framework. They didn't explain what changed in Dini's daily work or verify that Dini had stopped the business relationship in all forms. They didn't monitor transactions with resellers in jurisdictions known for re-export to Iran.
Dini employees had evidence they were dealing with Iran. They received emails from Iranian customers and were told the end-use customer was in Iran. But they didn't connect these facts to the prohibition because no one explained what "indirect dealings" looked like in practice.
What to Do Instead
Start with the operational question: "What will this person need to do differently tomorrow?" Then build your directive around that question.
When communicating a sanctions restriction to a subsidiary, outline practical scenarios:
- Don't sell to customers in [country].
- Don't sell to distributors who resell into [country].
- Don't sell to anyone who won't disclose the end destination.
- Report inquiries from [country] nationals to compliance.
- Flag if a distributor changes shipping patterns or routes through a third country.
Provide red flags to watch for, like Dubai-based distributors ordering products typically sold in Iran, email signatures with Iranian addresses, requests to ship to free trade zones, or payments from banks in sanctioned jurisdictions.
Verify understanding through conversation, not just confirmation. Instead of asking "Do you understand?" ask "How will you handle your existing Dubai relationship under this new restriction?" Listen to see if they grasp the indirect transaction risk.
Finally, monitor high-risk relationships. Rice Lake knew Dini had been selling into Iran and about the Dubai distributor. These should have been flagged for ongoing review, not assumed resolved because a directive was sent.
This isn't about translation. It's about translating legal requirements into operational procedures. That requires dialogue, examples, and follow-up. You can do all of that in English with an English-speaking subsidiary and still fail if you skip those steps.
When the Conventional Wisdom IS Right
Language matters when front-line employees need to recognize prohibited conduct in real time. If factory workers need to spot safety violations, they need instructions in their working language. If your sales team needs to identify corruption red flags, they need examples in terminology they use with customers.
Translate your policies. A Standards of Business Conduct in English-only is useless to employees who don't read English fluently. But that's just the starting point, not a compliance strategy.
The real value of multilingual communication is ensuring people can ask questions and report concerns in their own language. Your speak-up channels need to accommodate the languages your workforce speaks. Your compliance team needs to have a conversation, not just broadcast a directive.
Don't confuse making information accessible with making it actionable. Rice Lake could have sent that 2018 message in flawless Italian and still faced the same OFAC settlement if they didn't explain what indirect dealings looked like, verify Dini's understanding, and monitor the Dubai relationship.
The lesson isn't "translate your compliance messages." It's "design compliance instructions that connect rules to decisions, verify understanding through dialogue, and monitor high-risk relationships." Translation helps you have that conversation. It doesn't replace having it.
