A California-based registered money services business (an "MSB") settled potential civil liability for alleged violations of the Cuban Assets Control Regulations.
According to OFAC, the MSB, which is the wholly owned subsidiary of a global online travel services platform, (i) processed payments related to guests traveling for reasons outside of OFAC's authorized categories, (ii) failed to keep certain required records associated with Cuba-related transactions and (iii) processed payments related to transactions involving non-U.S. persons engaging in Cuba travel transactions on the parent company's platform prior to OFAC issuing a specific license to engage in such conduct. According to OFAC, the parent company's scaling up of services in Cuba outpaced that company's ability to manage associated sanctions risks on its technology platforms, which led to some of the apparent violations.
OFAC stated that the MSB voluntarily self-disclosed the relevant conduct, which constituted a non-egregious case. OFAC cited as a mitigating factor the company's agreement to implement, as part of its sanctions compliance program, an IP blocking regime capable of discerning between (i) individuals located in Cuba who are seeking to act as "Hosts" on the parent company's platform (which may be permissible) and (ii) individuals located in Cuba who are seeking to transact as "Guests" (which generally is not permissible). The MSB also committed to the collection of country of residence information and payment instrument information in order to determine whether users are nationals or residents of Cuba.
To settle the charges, the company agreed to pay $91,172.29.
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