NY Company Fined $5.9 Million for Violating Cuba Sanctions
The Office of Foreign Assets Control fined a New York travel services company nearly $5.9 million for violating U.S. sanctions against Cuba, OFAC said in an Oct. 1 notice. The company, Generali Global Assistance, Inc. (GGA), used a Canadian affiliate to evade U.S. sanctions, OFAC said.
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OFAC said GGA worked as a travel services provider for two Canadian medical and travel insurers that sold insurance policies to Canadian customers traveling to Cuba. GGA illegally provided post-travel claim reimbursements directly to the Canadian travelers and organized “indirect payments” of claims to Cuban service providers through its Canadian affiliate. The company did this by “intentionally” referring the Cuban payments to its affiliate, which was intended to avoid U.S. sanctions, OFAC said. “GGA would then reimburse the Canadian affiliate after it had paid the Cuban service providers,” the agency said.
OFAC said GGA “codified” this process in its procedures manual, which told employees how to service Canadian travelers. The scheme resulted in more than 2,500 illegal Cuban transactions worth more than $285,000, OFAC said. And although GGA has a sanctions compliance policy that screened against people and entities of OFAC’s Specially Designated Nationals List, OFAC said the company did not require screening against countries or regions subject to OFAC sanctions.
GGA voluntarily self-disclosed the violations, which constituted an egregious case, OFAC said. Aggravating factors included the “recklessness” of GGA’s payment scheme “when it knew that it would be illegal,” that GGA was aware the conduct would lead to violations and codified it in its procedures, and that GGA is part of a “large and sophisticated global organization.”
Mitigating factors included that OFAC later amended its Cuban sanctions regulations to authorize some of GGA’s “problematic conduct,” the value of the transactions was “relatively low,” and GGA had not received a penalty within the past five years. The company also took “remedial action” and agreed to improve its compliance procedures in a settlement agreement, which includes issuing an annual compliance certification for the next five years. GGA also cooperated with OFAC’s investigation and ended the conduct that led to the violations.