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Travel services company fined $6 million for illegal Cuba trade

The U.S. Treasury Department announced its settlement with the Dutch company CWT B.V., fining it nearly $6 million for apparent violations of U.S. trade sanctions against Cuba.

CWT is the parent of the Carlson Wagonlit Travel group that operates around the world.

Treasury’s Office of Foreign Asset Controls (OFAC) said the “apparent violations” began in 2006 after CWT became “majority-owned by U.S. persons” and were thus subject to U.S. jurisdiction pursuant to the Trading With the Enemy Act.

OFAC called the offenses “alleged violations” because CWT cooperated and negotiated the resolution.

OFAC said that between August 2006 and November 2012 CWT “dealt in property in which Cuba or its nationals had an interest when its business units mostly outside the United States provided services related to travel to or from Cuba, assisting 44,430 persons.”

CWT failed to exercise a minimal degree of caution or care regarding its obligations to comply with OFAC sanctions against Cuba by processing unauthorized travel-related transactions for more than four years before realizing it was subject to U.S. jurisdiction.

OFAC noted that CWT maintained no compliance program or an inadequate compliance program at the time of these violations.

CWT voluntarily self-disclosed the violations it had detected, OFAC said.

The base penalty for the apparent violations was $11,093,500 but the lower settlement reflected OFAC’s consideration of mitigating facts and circumstances.

OFAC took into account:

  • The transactions were CWT’s first violation and no Finding of Violation or penalty notice had been issued to CWT in the five years preceding these transactions; 
  • CWT provided substantial cooperation during OFAC’s investigation by agreeing to toll the statute of limitations and providing detailed and well-organized documents and information; and
  • CWT took significant remedial action in response to the violations.

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Julie DiMauro is the executive editor of FCPA Blog and can be reached here.

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