European subsidiary incurs liability under US-Cuba sanctions for travel services
By Nancy A Fischer, Aaron R Hutman and Stephanie J Rohrer
On 18 April 2014, the Office of Foreign Assets Control (OFAC) announced a settlement of nearly $6m (£3.5m) with CWT for violations of the Cuban Assets Control Regulations (CACR), 31 CFR Part 515. CWT is a travel service company based in the Netherlands but majority-owned by US persons and consequently was subject to US jurisdiction. CWT provided travel services to 44,430 persons travelling to and from Cuba in violation of the US embargo.
The CACR prohibit persons subject to US jurisdiction (including non-US companies owned or controlled by US persons) from entering transactions involving property in which Cuba or its nationals have an interest. This language is interpreted expansively to prohibit transactions or services relating to Cuba, including travel and tickets to or from that country. CWT has been majority-owned by US persons since 2006 and thus is subject to US jurisdiction under the CACR.
The US has opened avenues for travel to Cuba under specified circumstances and authorised travel service providers (TSPs) are permitted to provide services in support of such travel. This support includes reservations, ticketing and payment for charter flights to Cuba and flights between a third country and Cuba operated by a third-country carrier. However, such activities are limited to travel authorised by US general licences or specific licences issued under the CACR. Tourist travel is not authorised by the existing OFAC general licences…
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