home Cuba, sanctions US Treasury OFAC Cracks Down on P2P Cuba Travel, Sanctions Violations

US Treasury OFAC Cracks Down on P2P Cuba Travel, Sanctions Violations

It is starting to appear that the U.S. Treasury Department Office of Foreign Assets Control (OFAC) is cracking down on more travel agencies offering people-to-people (P2P) travel services to Communist Cuba. Just yesterday OFAC announced that a Delaware corporation, with offices in Argentina, will pay close to three million dollars for alleged violations of U.S.-Cuba sanctions.

Although it is a voluntary disclosure, the OFAC civil penalties memo says that “Decolar demonstrated reckless disregard for U.S. sanctions requirements when it failed to ascertain the U.S. sanctions requirements applicable to its business operations, relying instead upon a third party’s oral assurances that Decolar’s conduct did not require an OFAC license.” The OFAC memo is available here.

Less than a month ago, OFAC released civil penalties information that a European company –  Carlson Wagonlit Travel – was fined $6 million to settle potential civil liability for apparent violations of the Cuban Assets Control Regulations (the “CACR”). We have a post on the CWT matter, here.

There are scores of Travel Service Providers (TSPs) that appear to be abusing the “people-to-people” or P2P travel regulations. I’ve read ads in travel magazines, in the United States, that clearly cross the line from P2P travel to outright tourism. I’ve never been a huge a fan of P2P travel. It undermines overarching U.S. policy goals and is, mostly, tourism in name only.

The Communist regime uses P2P travel to prop up Cuba’s fledging tourism sector. Through front companies in South Florida, New York, and elsewhere in the United States, Europe, and Latin America, companies with indirect and direct links to Cuba’s military circumvent the P2P regs. They also abuse the information and media exceptions to the CACR to advertise and promote alleged P2P travel.

Cuba’s ongoing efforts to evade U.S. sanctions should surprise no one. They’ve been at it for decades. Tourism, artwork, high tech, industrial espionage, and much more, are part of Cuba’s foreign policy. If their efforts falter, so does the Communist Party’s grip on the country.

If the U.S. had even a scintilla of cooperation by allies, we’d have an INTERPOL watchlist rainbow of cases requiring arrest and prosecution. Up until recent years, including during Republican Administrations, the United States has given allies in Europe, Latin America, the Middle East, and certain Asian countries, a free pass on Cuba. That should change, fast.

Are these two cases, and a few others, pointing to an enforcement trend by the U.S. government? Too early to know; however, it is good to see the uptick.

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