[Ccs] FW: US Treasury Blocks Travel to Cuba, suspends licenses, reviews "promising criminal cases"

Barrios, Maura barrios at iac.usf.edu
Tue Feb 10 12:27:12 EST 2004


 
 
 
-----Original Message-----
From: Art Heitzer [mailto:aheitzer at igc.org] 
Sent: Tuesday, February 10, 2004 1:17 AM
To: nlgcuba; uscsca listserve
Subject: US Treasury Blocks Travel to Cuba, suspends licenses, reviews "promising criminal cases"


Pls. review this OFAC announcement of their progress in cracking down on US travel and trade with Cuba. 
 
Here are a few most notable of its claims:
 
1) 275 people about to board U.S. charter flights to Cuba were barred (generally at the last minute) by agents who decided they really were not entitled to go.
 
2) OFAC is openly considering removing or limiting the longstanding $100 importation allowance of Cuban goods for licensed travelers, including rum and cigars.
 
3) Re the unprecedented start of administrative prosecutions and hearing process: for those charged with violations (in which OFAC has relied on its own regulations which purport to allow it to presume guilt prior to a hearing, and mandate that virtually all of the hearings will only be held in the Washington, D.C. area), it states that a significant majority have agreed to make settlement payments rather than proceed with their ostensible hearing rights.
 
4) OFAC's announcement further indicates its rather blatant presumption of guilt by repeatedly referring to the people who have requested hearings as being "violators," as in its description on the role of its judges: "Administrative Law Judges - OFAC now has 3 ALJs in place to hear civil penalty cases and the ALJs have begun issuing orders of hearing to violators. . . . One hundred eleven violators have been given acknowledgments of timely hearing requests along with advisories that orders instituting proceedings before the ALJs will be forthcoming in short order absent settlement of the case."  
 
5) OFAC boasts that it has suspended the licenses of two religious and humanitarian groups, and is investigating whether they exceeded the parameters of their licenses, and that it has four other groups for identified for possible suspension.
 
6) Even more ominously, OFAC boasts of working with the U.S. Federal Prosecutor's office in South Florida to pursue criminal prosecutions: "3 cases have been referred for criminal investigation by OFAC Enforcement directly to federal law enforcement agencies . . .  OFAC is working with special agents and Assistant U.S. Attorneys on a number of potential criminal cases. . . .  The U.S. Attorney [for the Southern Dist. of Florida] voiced the support of his Office.  It was agreed that working groups from participant agencies will meet quarterly, beginning in March 2004, to review promising criminal cases."
 
Please forward this information widely, and share your concerns with your representatives and the media.
Art Heitzer, chair, NLG Cuba Subcommittee, www.nlg.org/cuba
aheitzer at igc.org
 
 
FROM THE OFFICE OF PUBLIC AFFAIRS

February 9, 2004
JS-1161


Treasury Designates & Blocks 10 Entities for Cuban Embargo Violations



MIAMI--Today Treasury Secretary John Snow announced that Treasury's Office of Foreign Assets Control ("OFAC") is identifying ten entities, listed below, that it has determined are owned or controlled by the Government of Cuba or Cuban nationals. These ten include entities organized and located in Cuba as well as entities located in Argentina, the Bahamas, Canada, Chile, the Netherlands, and England. Nine of the ten are travel companies specializing in Cuba travel, and one is a gift forwarder to Cuba.

All property of these entities that is in the possession of persons subject to U.S. jurisdiction is blocked and no persons subject to U.S. jurisdiction may engage in any transactions with these entities unless authorized by OFAC.

OFAC is taking action today in furtherance of President Bush's October 2003 initiative to strengthen enforcement of U.S. laws prohibiting transactions related to travel to Cuba and to hasten the arrival of a new, free, democratic Cuba. The foreign travel companies identified today provide easy access to Cuba to those U.S. individuals who choose to break the law. Many of these entities use the Internet to advertise and sell Cuban tourism to the U.S. public. U.S. law enforcement officials have intercepted a number of unauthorized travelers whose tour packages were purchased through one of these entities.

ENTITIES PROPOSED FOR DESIGNATION

Cimex Companies (6):

1.  2904977 CANADA INC.
Montréal, Québec, Canada
(http://www.caribesol.ca)
2904977 CANADA INC., a.k.a. Caribe Sol, a.k.a. Havanatur Canada Inc., is a travel agency owned by Cimex, a holding company of the Government of Cuba.  

2.  CORPORACION CIMEX S.A.
Havana, Cuba (and all other locations worldwide)
(http://www.cimexweb.com)
CORPORACION CIMEX S.A., a.k.a. Cimex, a.k.a. Cimex Cuba, a.k.a. Comercio Interior, Mercado Exterior, has approximately 107 offices throughout Cuba. A holding company, CIMEX S.A., is owned by the Government of Cuba and owns travel service providers.  It was organized to promote new products and services in Cuba. 

3.  HAVANATUR S.A.
Havana, Cuba (and other cities in Cuba)
(http://www.havanatur.cu)
HAVANATUR S.A. is the leading tour operator in Cuba, with offices throughout Cuba.  Its corporate parent is CIMEX.  

4.  HAVANATUR S.A.
Buenos Aires, Argentina
HAVANATUR S.A. is a travel agency specializing in trips to Cuba.  It is owned by Cimex. 

5.  HAVANATUR BAHAMAS LTD.
Nassau, Bahamas
HAVANATUR BAHAMAS LTD. is a travel agency specializing in trips to Cuba. It is controlled by the Government of Cuba.

6.  HAVANATUR CHILE S.A. 
Santiago, Chile
HAVANATUR CHILE S.A., f.k.a. Guamatur S.A., is a travel operation specializing in trips to Cuba.  It is controlled by Cimex.

Cubanacan Companies (4):

1.  LA COMPAÑÍA TIENDAS UNIVERSO S.A. 
Cuba
(http://www.cuba-shop.net)
LA COMPAÑÍA TIENDAS UNIVERSO S.A, which is owned by the Cubanacan Group, operates the e-commerce portal CUBA-SHOP.NET.  
Through CUBA-SHOP.NET, U.S. persons may purchase a wide range of products, including but not limited to televisions, refrigerators, ovens, food, perfume, cosmetics and bicycles for friends and family in Cuba.  Prices are in U.S. dollars.

2.  CUBANACAN GROUP
Havana, Cuba
CUBANACAN GROUP, owned by the Government of Cuba, is a tourism and trading business, hosting approximately 40% of all visitors to Cuba.

3.  CUBANACAN INTERNATIONAL B.V. 
Zevenhuizen, Netherlands
CUBANACAN INTERNATIONAL B.V. specializes in organizing trips and accommodations for travel to Cuba.

4.  CUBANACAN U.K. LIMITED
London, England, United Kingdom
CUBANACAN U.K. LIMITED is a travel agency specializing in travel to Cuba and is a promoter and representative of CUBANACAN GROUP. 


OFFICE OF FOREIGN ASSETS CONTROL
STATUS REPORT ON IMPLEMENTATION OF ENHANCED CUBA TRAVEL ENFORCEMENT

Date:  February 9, 2004

On October 10, 2003, President Bush directed the Departments of Treasury and Homeland Security ("DHS") to step-up enforcement of Cuba embargo travel restrictions by increasing inspections of travelers and shipments to and from Cuba, and by targeting those who travel to Cuba illegally through third countries and by private vessel for illegal business or tourism purposes or to carry unlicensed currency to Cuba. 

The Office of Foreign Assets Control ("OFAC") reports the following actions and progress to date to fully implement and enforce the President's initiative.  

Inspection of Cuba Flights 

DHS committed Bureau of Customs and Border Patrol ("Customs") to inspecting up to 100% of direct flights at Miami, JFK and LAX for a 90-day period.  After 90 days, the level of future inspections will be reviewed and evaluated.  

OFAC's staff in Miami, augmented by staff from Washington, worked hand-in-hand with Customs inspectors in Miami during the first 90-day period to provide daily post-October 10 coverage of direct charter flights that depart several times each day for Cuba.

Since October 10, OFAC has participated with Customs to inspect the weekly charter flights at LAX and JFK twice at each port and we are in direct communication with DHS as questions arise.  

Inspection Activity to Date:

569 aircraft with passengers destined for Cuba, mostly direct charter flights, were targeted for outbound inspection.  Over 44,000 passengers were screened as they departed the United States for Cuba and over 50,915 passengers were screened on their return to the United States on charter flights.

275 travelers were denied travel on charter flights after examination revealed they did not qualify under any OFAC license category.

1007 aircraft with passengers returning to the United States from Cuba were targeted for inbound inspections.   This number includes returning charter flights and other flights arriving in the United States from third countries.  Over 50,915 passengers and crew were subjected to extensive examination.

376 OFAC-related seizures were accomplished, most of which related to the unlicensed importation of Cuban cigars and alcohol.  

Training 

Since October 10, OFAC has provided on-site training on Cuba embargo travel restrictions to over 500 DHS Customs inspectors.  We have accomplished this training on-site in Miami, Los Angeles and JFK, the ports of departure for direct charter flights, and we are now expanding our training efforts to reach Customs inspectors stationed at U.S. Customs Preclearance Facilities in the Caribbean and Canada.  This training will assist inspectors in their efforts to detect illegal U.S. tourist travelers to Cuba.  OFAC has already completed training in Bermuda, Nassau and Aruba.  In the next few weeks, OFAC will provide training to inspectors at 6 Preclearance Facilities in Canada.

In addition to these training sessions, OFAC provides training to Customs inspectors on a monthly basis at the Federal Law Enforcement Training Center in Brunswick, GA.

OFAC's Miami Office is working with the Coast Guard to provide Cuba embargo travel training for its personnel.

OFAC fully expects that these training initiatives will result in a significant number of travel referrals from Customs to OFAC for civil penalties.   


Travel Enforcement Investigations 

Civil - 

264 cases have been opened to date by OFAC's Enforcement Division for investigation of alleged post October 10, 2003, travel to Cuba. 

Criminal -  

3 cases have been referred for criminal investigation by OFAC Enforcement directly to federal law enforcement agencies, primarily the Bureau of Immigration and Customs Enforcement.  OFAC is working with special agents and Assistant U.S. Attorneys on a number of potential criminal cases. 

On December 4, 2003, OFAC hosted a highly successful meeting in Miami with the U.S. Attorney for the Southern District of Florida, Commander of the 7th U.S. Coast Guard District, DHS (ICE and Bureau of Customs and Border Patrol), and Department of Commerce, to coordinate efforts to implement the President's initiative.  The U.S. Attorney voiced the support of his Office.  It was agreed that working groups from participant agencies will meet quarterly, beginning in March 2004, to review promising criminal cases.  The Commander, USCG 7th District, stated that his organization will (1) redraft the Security Zone Permit to capture the OFAC and Commerce licensing category of the applicant, and will (2) step-up their boarding of pleasure vessels going to and from Cuba.  OFAC agreed to provide Cuba travel training to USCG personnel in South Florida and to implement a feedback program for Customs and USCG to report the status of Cuba travel cases those agencies refer to OFAC for civil penalties.  

Penalties 

OFAC's Civil Penalties Division plans to expedite action on those violations occurring after the President's Rose Garden directive to increase enforcement while continuing to issue penalties on currently ongoing cases.   

-- OFAC's Civil Penalties Division currently has a docket of nearly 2,000 actions relating to Cuban embargo violations, the majority of which will likely result in monetary penalties paid to OFAC.
      
Increased Initiation of New Penalty Actions - Since the President's announcement on October 10th, the Civil Penalties Division has accelerated the issuance of Prepenalty Notices initiating OFAC's civil penalty cases. By the end of November, all prepenalty notices in the pipeline were issued. Between October 10 and November 30, 2003, OFAC issued a total of approximately 348 new notices opening penalty actions. 

Implementation of Expedited Penalty Process - OFAC's Civil Penalties Division has implemented an expedited civil penalty process.  For all post-Rose Garden announcement violations detected by DHS and referred to OFAC, OFAC's Civil Penalties Division will initiate appropriate civil penalty action within 60 days of the division's receipt of DHS' evidence of violation.  Given the cumulative effect of the enhanced multi-agency enforcement strategy, we anticipate that at least initially an increase of cases by several orders of magnitude will be received in the Civil Penalties Division.  

-- Major Case Squad Set Up for Cuban Commercial Cases - OFAC's Civil Penalties Division has set up a Major Case Squad targeting Cuban commercial cases in response to the President's Rose Garden directive for increased Cuban embargo enforcement.  The Major Case Squad identified cases awaiting OFAC Civil Penalties Division action against banks, companies and other entities involved in commerce with Cuba.  The Squad has contacted more than 60 violators and informed the majority of them of OFAC's pending penalty actions against them.  Settlements totaling nearly $200,000 have already been reached in 20 of the Major Cases.

-- OFAC's Civil Penalties Division publishes details of penalty settlements and assessments on OFAC's website.  This information is updated each month.  Penalties settled by and assessed against Cuban travel ban violators appear in the aggregate for informational purposes on the website.

Administrative Law Judges - OFAC now has 3 ALJs in place to hear civil penalty cases and the ALJs have begun issuing orders of hearing to violators.  To date, OFAC has initiated action in cases by forwarding them to the 3 ALJs residing at the Justice Department and the Federal Mine Safety and Health Commission.  Twelve cases are on the ALJs' docket as the balance has settled their cases with OFAC with penalty payments.  One hundred eleven violators have been given acknowledgments of timely hearing requests along with advisories that orders instituting proceedings before the ALJs will be forthcoming in short order absent settlement of the case.

Of these 111 ALJ hearing-noticed cases, 63 violators have already sent in settlement payments with the deadline to pay in the other cases to run in 2 weeks.  Additional settlements are expected.
  
Other OFAC Actions

Licensing Actions -

- OFAC Licensing and Enforcement Divisions have established internal procedures to quickly suspend and investigate allegations of abuse of licenses issued to humanitarian and religious organizations. 

- Using information derived from charter flight inspections, OFAC has suspended licenses issued to 2 organizations previously authorized to engage in travel transactions related to humanitarian or religious activities in Cuba.  OFAC is investigating allegations that the licensees may have engaged in activities outside the scope of their licenses.  Four other organizational licenses are under review for possible suspension and investigation.

- OFAC has taken action to limit the number of travel days in Cuba for licenses issued for humanitarian purposes, such as for the delivery of donated goods in Cuba.     

Regulatory / Policy Changes:  

  - OFAC is working with the State Department to review the current authorization which allows licensed travelers to import up to $100 worth of Cuban origin goods, including cigars and rum, as accompanied baggage.  A revocation of this authorization would result in a significant decrease in U.S. dollars going directly to the state-owned tobacco and alcohol industry.  Revocation would also serve to reinforce the seriousness of the U.S. Government's Cuba travel enforcement efforts.    

Public Support 

Calls are regularly received at the OFAC hotline in Miami at (305) 810-5170 to report embargo violations. 


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