That list comprises entities and subentities under the control of the Cuban military, intelligence, and security services or personnel. Direct financial transactions with those entities and subentities are prohibited (bar a few exceptions) on the basis that they would disproportionately benefit those services or personnel at the expense of the Cuban people or private enterprise in Cuba – see the Cuban Assets Control Regulations, 31 CFR §515.209.
Today, OFAC has announced a $5,263,171 settlement with JPMorgan Chase Bank, N.A., to settle its potential civil liability for 87 apparent violations of the Cuban Assets Control Regulations, the Iranian Transactions and Sanctions Regulations, and the Weapons of Mass Destruction Proliferators Sanctions Regulations. In particular, the bank processed 87 net settlement payments with a total value of $1,022,408,149, of which approximately $1,500,000 (0.14%) appears to have been attributable to interests of sanctioned-airlines appearing under the SDN List.
Separately, OFAC has issued a Finding of Violation to JPMorgan Chase & Co for violating the Foreign Narcotics Kingpin Sanctions Regulations and the Syrian Sanctions Regulations. Specifically, OFAC has determined that from approximately 2007 to October 2013, the bank processed 85 transactions totalling $46,127.04 and maintained eight accounts on behalf of six customers who were contemporaneously identified on the SDN List. There is no monetary penalty associated with a Finding of Violation. See OFAC Enforcement Information.
BCC Corporate SA (BCCC), a Belgium-based credit card issuer and corporate service company, has admitted to 1,818 violations of the Cuban Assets Control Regulations.
In particular, BCCC had “failed to implement controls to prevent BCCC-issued credit cards from being used in Cuba”. Between April 2009 and February 2014, it had processed 1,818 transactions totalling $583,649.43 for more than 100 distinct corporate customers of BCCC whose cards were used in Cuba or that otherwise involved Cuba.
American Express Company (AMEX), a parent company of BCCC, has agreed to remit $204,277 to OFAC in order to settle the violations. For the full enforcement information, released on 17 November 2017, click here.
OFAC has announced that it is amending the Cuban Assets Control Regulations in order to implement the National Security Presidential Memorandum, “Strengthening the Policy of the United States Toward Cuba,” signed by President Trump in June 2017.
The amendments, which come into effect today, implement changes to the authorisations for travel to Cuba and related transactions, and restrict certain financial transactions with particular entities that are “under the control of, or act for or on behalf of, the Cuban military, intelligence, or security service or personnel”.
OFAC has stated that the regulatory changes are “intended to channel economic activities away from the Cuban military, intelligence, and security services, while maintaining opportunities for Americans to engage in authorised travel to Cuba and support the private, small business sector in Cuba.”
The UN General Assembly has adopted a resolution calling for an end to the US trade embargo on Cuba. A total of 191 UN member states approved the non-binding resolution, whilst the US and Israel voted to oppose it.
The US ambassador to the UN, Nikki Haley, said that the embargo would remain in place “as long as the Cuban people continue to be deprived of their human rights and fundamental freedoms”. Only the US Congress can lift the trade embargo. Click here for the UN press release.
President Trump has given his first address to the UN General Assembly, in which he made several comments relating to sanctions. He again criticised the JCPOA nuclear deal with Iran, describing it as “an embarrassment to the US” and creating further uncertainty about the deal’s future. World leaders have called on President Trump not to undermine the deal, which enjoys near-universal support among UN Member States.
The President also said that he would not lift the US trade embargo on Cuba until Cuba made “fundamental reforms”. In June, President Trump reinstated some of the sanctions on Cuba that were lifted by President Obama (see previous blog), chilling a relationship that had begun to thaw under the previous administration. In addition, he warned that the US was prepared to take further action against the administration of President Maduro of Venezuela, which the US describes as a dictatorship (see previous blog).
At the end of last month, OFAC fined US insurance and financial services company AIG $148,698 for violating US sanctions on Cuba, Iran, and Sudan. OFAC said that although AIG’s compliance programme included recommendations for when to use exclusion clauses in its insurance policies where US sanctions were involved, the scope of most of those exclusion clauses was too narrow. As a result, AIG provided insurance coverage to parties that were engaging in shipments to or from Cuba, Iran, and Sudan, primarily under global insurance policies.
OFAC’s enforcement notice is here.
On Friday President Trump signed an Executive Order introducing new sanctions measures against Cuba, reinstating some of the measures that had been lifted by President Obama. The new sanctions do not re-impose the trade embargo but increase US restrictions on travel to Cuba, prohibiting privately planned trips and limiting travel again to authorised educational trips. The measures prohibit transactions between US travellers in Cuba and entities related to the Cuban military, intelligence, or security services, including the Grupo de Administración Empresarial (GAESA), which is in involved in many sectors of the Cuban economy.
OFAC has published a new set of FAQs on the changes here.