Risky Business: Amex to Pay Fine for Cuba Violations Jul 24th 2013, 16:27
The U.S. Treasury Department accepted a settlement with American Express Travel Related Services for “apparent violations of the Cuban Assets Control Regulations from Dec. 15, 2005, to Nov. 11, 2011.” The violations were defined as having “dealt in property in which Cuba or its nationals had an interest when its foreign branch offices and subsidiaries issued 14,487 tickets for travel between Cuba and countries other than the United States, many of which had adopted ‘antidote’ measures (blocking statutes) prohibiting compliance with the CACR, without authorization from OFAC [Office of Foreign Assets Control].”
According to the Treasury Department’s statement, Amex “voluntarily self-disclosed” the violations. The statement also noted that the apparent violations occurred “subsequent to agency notice” in 1995, when the company was investigated “in 1995 and 1996 for similar apparent violations of the CACR arising from the provision of travel services to and from Cuba by a recently acquired subsidiary at the time.”
The settlement took place as Cuba is increasingly in the news for the rush of Americans to seize any opportunity to visit the forbidden Caribbean island, quarantined for U.S. citizens by the government for more than half a century, and the difficulty of tour operators to navigate through the Treasury Department’s complicated system of regulations prohibiting Americans from spending any money in Cuba.
A spokesperson for American Express released a statement regarding the incident. “American Express identified certain travel transactions made on behalf of our clients for tickets booked outside of the United States for travel between non-U.S. countries and Cuba. We voluntarily self-disclosed these bookings to OFAC, and put in place robust controls to ensure it would not recur.”
Tour operators approached by TravelPulse about the Amex incident declined to comment. When American Express, one of the most trusted brands in the travel industry, finds itself on the wrong side of the law, it underlines the extreme difficulty and the high stakes for tour operators trying to serve the potentially robust market for travel to Cuba. However anyone may feel about the justification or lack of it for an embargo stretching back to the years of John F. Kennedy, the law remains in force and running afoul of the regulations is very serious business. A violation may result in not only civil penalties, but also criminal charges.
Ronen Paldi, president of Ya’lla Tours, which has been a licensed Travel Services Provider (TSP) for travel to Cuba since 2002, told TravelPulse in 2012 that government restrictions on travel to Cuba are still very strict, and mistakes, even well-meaning errors, can be extremely costly. Paldi said he believed some tour operators offering programs were in violation of the law without even knowing it, and that they may also be unknowingly putting travel agents and their clients in violation of the law. “If I tell you it’s okay and you rob a bank,” said Paldi, “we have both committed a felony.”
The difficulty of navigating through the U.S. Treasury regulations is reflected in the ongoing reports of one tour operator after another getting into the market, then dropping out, getting licenses, then losing them, then getting them again. As Paldi suggested, the news that is floating to the surface is only the tip of the iceberg of the difficulties taking place behind the scenes.
Some tour operators have expressed off the record their frustration and their questioning of whether booking Cuba is worth the potential hassle. And then, on the other hand, there is the irresistible lure of Cuba, attracting millions of eager Americans.
YOUR COMMENT
