$5.2 million settlement
American Express Travel Related Services Company, Inc. (“Amex“) has entered into a settlement agreement to pay US$5.2 million to settle potential civil liability for apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. §§515.201(b)(2) (“CACR“). The CACR broadly prohibit trade and investment with Cuba by any person subject to the jurisdiction of the U.S.
Dealing with funds from Cubans
Amex dealt with property (money) owned or controlled by Cuban nationals contrary to the prohibitions in the CACR. Specifically, Amex arranged for travel for Cuban nationals and accepted their money to do so over a five-year period. Amex had previously been fined for sanctions violations for apparently similar, if not identical, facts.
Pursuant to the notice issued by the U.S. Department of the Treasury in respect of the settlement, Amex demonstrated reckless disregard for the CACR and suffered from a lack of oversight by its U.S. management over its foreign employees and offices and failed to implement effective compliance measures after its first sanctions issues in 1995 and 1996 despite having represented to the Office of Foreign Assets Control (“OFAC“) that it would do so.