June 14, 2019

U.S. Treasury Settles With Travel Companies Amid Increasing Pressure on Cuba

By Samuel Rubenfeld

The U.S. Treasury Department on Thursday announced three settlements concerning violations of sanctions on Cuba.

The settlements all involve travel arrangements from 2011 to 2014 years before easing on travel restrictions took place during the Obama administration in 2016. The U.S. has reinstated many of its measures against Cuba, and tightened some further, since President Donald Trump took office.

In one of the cases, the Treasury fined an unnamed individual, who later identified himself as Jonathan Showe, the president of Cubasphere, in an interview, according to the Wall Street Journal. The Treasury said in May in a sanctions-compliance guidance document that it would consider bringing enforcement cases against individuals who “have played integral roles in causing or facilitating violations” of sanctions regulations.

Pittsburgh-based Cubasphere Inc. and the individual agreed to pay $40,320 to settle civil liability for providing unauthorized Cuba travel-related transactions and travel services to 104 people on four separate trips, the Treasury said. Cubasphere and the individual organized trips for travelers from U.S. religious organizations that didn’t match the itineraries offered to them, according to the notice.

The actual trips involved sightseeing and tourism, rather than humanitarian and religious activities, the Treasury said. Cubasphere and the individual told their customers to conceal the conduct, directing them in writing to minimize contact with U.S. government officials upon their return, to not bring back any receipts, and to give false statements if asked about the nature of their activity in Cuba, according to the Treasury notice.

In another case, Expedia Group Inc., based in Bellevue, Wash., agreed to pay $325,406 to settle civil liability for helping 2,221 people with Cuba-related travel services, the Treasury said. The violations occurred because certain foreign subsidiaries didn’t understand and weren’t familiar with U.S sanctions laws, as well as technical implementations that didn’t account for the U.S. measures against Cuba, according to the Treasury notice.

One Expedia subsidiary wasn’t told until 15 months after it was acquired that it was subject to U.S. laws, the notice said, part of a slow integration that led the subsidiary to continue operating independently during the process.

In the final action, Hotelbeds USA, Inc., a Florida-based subsidiary of the Spanish company Hotelbeds Group, agreed to pay $222,705 to settle civil liability for helping 703 people with Cuba-related travel services, the Treasury said. The company knowingly sold hotel accommodations and gave clients specific instructions to direct payments for Cuba-related transactions to an account in Spain, from which Hotelbeds USA was reimbursed, according to the Treasury notice.

Various Hotelbeds USA employees and supervisors appeared to have knowledge of, and participated in the conduct, the Treasury notice said. It came as a result of a misunderstanding across the company that it could engage in Cuba-related transactions if the bookings involved foreign clients and if payments were made to foreign bank accounts, according to the Treasury. In addition, a senior manager knew that a U.S. bank had blocked a payment related to a Cuba-travel transaction and that the Treasury had denied a license application filed by the company to unblock funds related to an authorized Cuba-related transaction, the notice added.


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