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Enforcement of Travel Rules - Cuba - Will History Repeat?


Rob - that was the point. There were groups that objected to the travel restrictions which advised that anyone who received a penalty from OFAC should request a hearing - on the basis that OFAC did not have the budget to hold those hearings.

There were large fines on banks during the GWB era - some related to international banks handling USD notes for Cuba and they prompted Cuba to impose the 10% penalty on exchanging USD cash.And some of those big fines may have taken some time to settle, so the action may have started before Obama.


Thank you for the background.
I have only looked closely at a small number of the many penalties.
What I found interesting was that in relation to large penalties imposed on banks and reported by Treasury, there were significant additional penalties in some cases paid to US States, and to other Departments of State. Here is a insightful read: http://www.lexology.com/library/detail.aspx?g=7dd2412e-c7b5-453d-b70b-e240d8b4608f
Most of the banks now seem to have cleaned up their acts and the last major penalty was in October, 2015 - a $329,593,585 settlement with Credit Agricole.
So now OFAC is gunning for other corporations. The biggest recent (March 2017) fish was Zhongxing Telecommunications Equipment Corporation which settled with OFAC for about $100,000 but was slugged by various other US government agencies for over US$ 1bn.
Given what they can extract from the big players, it does not seem sensible they would consider diverting much by way of resources to penalising individuals.
Perhaps they might make an early example and then go Bush.


Oh my goodness reading all of this makes me feel like I am back in school (hated school).
Am I correct in thinking that if Trump puts back restrictions that Canadians, Brits etc will go back to being fussed over again?
Have observed in the last few years that the Cubans sure put allot of fuss and effort into preparing for the American invasion, despite the so called claims on how much they disliked them, also noticed that with that confidence of more income and so forth there was a wee bit of arrogance and less customer service ethic. Kind of like ignoring ole faithful when fresh meat comes into the picture.
On our last vacation to Cuba the Sunwing tour rep was having a rant on the bus about how we could all try a Casa the next time; that was brass balls considering this was a total conflict with his living and company he served. He did not like it when I spoke up and told him that there was a reason why many of us choose a hotel with everything included. He then got snarky and said that he was giving us options, but sure shut up when I asked him how Sunwing would feel about that. (No I did not report this to Sunwing).

Sorry Folks I am coming totally from a vacation point of view and it would be nice to see some good prices and effort put into fixing up the older hotels and focus put into fixing any water/towel issues that they claim to have.


If they didn’t fix the issues for the expected hordes, don’t expect the issues to be rectified for the forgiving usuals that put up with them for years.


I hear ya. But…Since a crap load of money was sunk into new hotels, fixing up roads and overall making the towns look nicer, all in all to cater to the expected hoards of Americans. Would it not make sense that in order to fill these hotels and attract back the ole faithfuls as per say, then would the Cuban Gov’t not put the money into fixing and ensuring that their laundry services and supplies are going to be in order. Bottom line even ole dogs move on if they are not being fed.


Beardo pointed out earlier that we could not find any individuals penalised for breaching OFAC when they had asked to go to a “hearing”.
For those inclined to some twisted reading, I will look at what OFAC is up against if your travel is covered by § 515.574 Support for the Cuban People, viz:
(a)General license. The travel-related transactions set forth in § 515.560© and other transactions that are intended to provide support for the Cuban people are authorized, provided that:
(1) The activities are of: (iii) Individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba; and
(2) The traveler’s schedule of activities does not include free time or recreation in excess of that consistent with a full-time schedule.
Lets assume I am an individual and intend to comply. I will look at only point (2) to see how it can be interpreted.
First, what constitutes a “schedule of activities”? By definition it includes those things done when you are “active”, which is effectively when you are not sleeping. So, as I am staying at a casa, and this “promotes” civil society, my schedule will include all my activities after I am awake and until I am ready to leave the casa. For argument I will accord this as 2 hours. I depart the casa at 9am, take lunch at a paladar for an hour, and return to the casa at 5pm. At the casa I am active for another 5 hours before going to sleep. I will deem a full-time schedule as 8 hours and it shall include the 7 “active” hours at the casa, plus an hour at the paladar promoting the independent activity of its owner. Thus, for this day I have a schedule of my activities covering 8 “active” hours.
My remaining 7 hours is less than the 8 hours of the schedule I am required to keep to be compliant, and therefore is allowable “free time or recreation”.
OFAC could challenge my schedule, but without precise definitions in the regulations they would not have a convincing case.


I like your thought train. Like my Church visit schedule, it follows the existing rules or at least could be argued in court. If you want to go to court.
Until the new rules are published, it’s hard to guess whether intent will prevail over the exact wording.


They can write whatever regulations they want. The big question is whether or not any of it will be enforced.


As you say, enforcement will be key, Griz. In that regard there are some options up OFAC’s sleeves.
One is to use individual card transaction data - and do the whole enforcement using algorithms (Australia’s Social Security Department is presently using this type of approach). Although this is easily tracked, the problem is that very few (by comparison) Americans will be using their credit cards in Cuba, and most likely if they do - or can - it will be to withdraw cash. Such an option would be most powerfully used to on card transactions for purchases of accommodation before travel.
Another option is to place OFAC staff at the borders, and seek itineraries from returning travellers. This could be costly and cumbersome, but maybe something which they could do selectively as a deterrence.
No doubt there are lots of other things they could try - my pick would be a limited “random” selection from each returning carrier - and yes, I realise this is mere speculation.
I am writing from afar, and don’t have a sense of US sentiment on the issue. From the information arriving on our shores it does seem, however, that the Donald has other big ticket items attracting his attention and maybe this will be one he is happy to let simmer on the backburner.
Time will tell:smile_cat: