OFAC Announces Settlement With Spain-Based Company on Cuba Sanctions Violations

The Treasury’s Office of Foreign Assets Control announced a more than $220,000 settlement with Spain-based Hotelbeds USA for helping more than 700 people with Cuba-related travel services that violated the Cuba Assets Control Regulations, OFAC said in a June 13 enforcement notice.

Between 2011 and 2014, Hotelbeds “provided unauthorized Cuba-related travel services” to 702 non-U.S. residents, the notice said, which involved “knowingly” selling hotel rooms and giving “clients specific instructions to direct their payments for the Cuba-related transactions to an account in Spain.” OFAC said Hotelbeds was later reimbursed from that account.

Employees and supervisors appeared “to have had actual knowledge” of the violations, the notice said. During the violations, OFAC said, a senior manager was aware that a U.S. bank had blocked a payment related to a “Cuba-travel transaction” and that OFAC denied a “specific license application” filed by Hotelbeds “seeking the unblocking of funds” related to the transaction.

OFAC said some of the violations occurred because of a “reported misunderstanding and misinterpretation of the CACR” in which Hotels believed Cuba-related services were permitted “if the bookings involved only non-U.S. clients and payments were made to non-U.S. bank accounts.” In addition, Hotelbeds employees sent invoices and emails with disclaimers that said payments for the services “should not be sent to Hotelbeds USA or the United States,” OFAC said.

Hotelbeds did not self-disclose violations, the notice said. OFAC said aggravating factors included the fact that Hotelbeds employees were aware of the violations, Hotelbeds “caused harm” to U.S. sanctions violations, the company is “large” and "sophisticated," and that it did not have an adequate compliance program. OFAC said mitigating actors included the fact that the violations composed less than 1 percent of the company’s “overall business over the same period of time,” Hotelbeds had not committed a violation in the previous five years, and the company took “remedial action” to address the violations. Hotelbeds agreed to implement an “enhanced third-party IT solution with a sanctions screening tool,” to pour more resources into compliance, and to hire and train more compliance personnel, the notice said.