Latest OFAC Overreach Hits American Express

US Treasury Civil Penalties Release

American Express Travel Related Services Company, Inc. (“TRS”), New York, NY, has agreed to pay $5,226,120 to settle potential civil liability for apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (the “CACR”).

From on or about December 15, 2005, through on or about November 1, 2011, TRS dealt in property in which Cuba or its nationals had an interest when its foreign branch offices and subsidiaries issued 14,487 tickets for travel between Cuba and countries other than the United States, many of which had adopted “antidote” measures (blocking statutes) prohibiting compliance with the CACR, without authorization from OFAC.

OFAC determined that TRS voluntarily self disclosed this matter to OFAC and that the apparent violations occurred “subsequent to agency notice” in 1995.

TRS was investigated by OFAC in 1995 and 1996 for similar apparent violations of the CACR arising from the provision of travel services to and from Cuba by a recently acquired subsidiary
at the time. OFAC provided written notice to TRS that such conduct constituted apparent violations of the CACR. Under the Cuba Penalty Schedule, 68 Fed. Reg. 4429 (Jan. 29, 2003), the base penalty for the apparent violations is $3,629,250.

The settlement amount reflects OFAC’s consideration of the following facts and circumstances, pursuant to the General Factors under OFAC’s Economic Sanctions Enforcement Guidelines, 31
C.F.R. part 501, App. A (the “Guidelines”):

(1) TRS demonstrated reckless disregard for the CACR, as evidenced by the apparent violations occurring subsequent to notice by the agency in 1995, the lack of oversight by U.S. management
of TRS’ foreign offices, and the continuing failure to implement effective mechanisms for detecting Cuba travel bookings until late 2010, after having informed OFAC in OFAC’s investigation of TRS in 1995 and 1996 that it would do so;

(2) TRS’ U.S. management should have known that the conduct resulting in the apparent violations would or might take place;

(3) the apparent violations caused significant harm to U.S. sanctions program objectives regarding Cuba;

(4) TRS is one of the largest and most sophisticated travel service providers (TSPs) for authorized Cuba travel;

(5) TRS has a significant sanctions history during the five years preceding these apparent violations;

(6) at the time of the apparent violations, TRS’ compliance program was inadequate, given the nature of TRS’ operations, to detect and prevent Cuba travel bookings, particularly from
countries that had adopted antidote measures;

(7) without authorization from OFAC, TRS continued to book travel to and from Cuba for many of its corporate clients during a “wind-down period,” following its 2010 disclosure of the
apparent violations to OFAC; therefore, TRS’ initial remedial response to the apparent violations was inadequate;

(8) a substantial civil monetary penalty in this case is warranted to clearly communicate to participants in OFAC’s Cuba TSP program the seriousness with which OFAC takes compliance
with the CACR;

(9) TRS has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the date of the transactions giving rise to the apparent violations;

(10) while TRS implemented a number of remedial measures in response to the apparent violations, including measures to prevent unlicensed Cuba travel bookings, the mitigating effect of these remedial measures is diminished by TRS’ representations to OFAC in OFAC’s 1995 and 1996 investigation of TRS that it would implement similar remedial measures, which TRS apparently never implemented;

(11) TRS provided substantial cooperation to OFAC by agreeing to toll the statute of limitations in this case, by producing records and information to OFAC in a clear and organized fashion,
by cooperating with OFAC’s requests for supplemental information, and by engaging in numerous conversations with OFAC regarding the transactional data;

(12) OFAC also considered as a relevant factor the legal obligations placed on TRS by U.S. law and antidote measures adopted by many of the jurisdictions in which TRS’ foreign branch offices and subsidiaries operate, but, given the facts and circumstances of this case, did not assign any mitigating or aggravating weight to this factor under the Guidelines.

Abercrombie & Kent to Offer Cuba Travel

July 18, 2013By: Newswire

 

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This September, Abercrombie & Kent USA will begin offeringConnections small group journeys, limited to just 24 guests, that enable Americans to discover Cuba through a combination of authentic and surprising personal encounters designed to transform their understanding of the people of this enigmatic country. Abercrombie & Kent USA has been granted a license by the U.S. Department of the Treasury Office of Foreign Assets Control to offer People-to-People educational exchange programs to Cuba.

Abercrombie & Kent’s inaugural departure of Cuba: People to People is Sept 6-15, 2013, followed by additional departures throughout 2013 and into 2014. All departures are guaranteed to operate with a minimum of 2 guests. Land arrangements for 10 days from $4,995 per person, double occupancy (when booked by August 15, 2013*), plus international charter air ($525) and visa ($75).

“Much of Cuba’s allure comes from the mystery surrounding an island lost in time,” explains Abercrombie & Kent USA President Phil Otterson. “But from my own personal experience, I can say its real charm is found in the culture, art, cuisine, music and personal stories shared by the people who live there.”

The program will go beyond Havana to Caibarién in northern Cuba, and west to the rural countryside and lush farmland ofViňales with the chance to experience Cuban culture, architecture, agriculture, music and cuisine during one-to-one educational exchanges with local residents.

Guests will meet the artists of the Proyecto de Arte Por la Costa, local musicians during a private Buena Vista Social Club-style concert and cultural discussion and participate in a private salsa lesson and one-on-one talk with a Cuban salsa instructor, as well as with artist Salvador Gonzales.

In Havana, guests will explore on foot with a local architect and dine at a paladar (family-run restaurant), where they can discuss what is involved in running a private business in Cuba - an opportunity that, historically, was all but unheard of, Abercrombie & Kent said. Travelers will also join Cuban painter and ceramicist, José Fuster on a neighborhood walk, followed by a discussion of the role of the arts in contemporary Cuban culture over dinner at his home.

Guests can also pay an interactive visit to a cigar factory, where local craftsmen teach guests their craft; then, discuss how life is actually lived on a working tobacco farm during a discussion with the farmers. Explore La Terraza eco-community with resident specialists for a better understanding about Cuba’s environmental commitments at this unique UNESCO Biosphere Reserve. Engage in a conversation on fishing practices with a local fisherman, an experience revealing the industry’s impact on the local community.

Compare the distinct differences and similarities between Cuba and the United States with a briefing on the history of U.S.-Cuban relations by a Foreign Service scholar in Havana. Gain insight into Cuba’s well-regarded public health care system during an informal, yet engaging conversation with a local physician; discuss everything from physician training to research and production during an exchange of ideas or issues around the subject. Learn about Cuba and America’s great shared passion — baseball — at a game where you meet the players and have the opportunity to play a few innings with them.

Visit www.abercrombiekent.com/cuba

Prostitution Controversy Provoked by Miami Herald Article

Prostitution exists everywhere in the world where there are people with more money who pay people with less money to have sex with them. However, let's not forget that anonymous complaints could easily be fabricated or orchestrated by forces who wish to disrupt Cuba's tourism industry. The whole point of the bombing of Cuban hotels was to discourage travel to Cuba for tourism. The purpose of protests in Miami against tourist travel to countries who have normal relations with Cuba is to punish countries which maintain normal ties with Cuba.

Walter Lippman
http://groups.yahoo.com/group/CubaNews/

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Re: Notes on Canadians in Cuba and Island Prostitution

This story was released on the morning (July 16) and so far has been picked up by 48 news outlets and blogs using the same headline. It has another 51 citations using variations on the headline.

What is the story? Juan O. Tamayo of the Miami Herald trolls TripAdvisor and discovers a bunch of very recent, negative reviews posted anonymously. He then reports it as news.

How do we know these anonymous reviews weren't planted in an effort to fabricate a story? Such an approach is typical of the Miami Herald and its handful of shill "independent journalists" in Cuba. Many of these "journalists" are in the employ of the U.S. Interests Section in Havana, rightwing NGOs in Europe, and USAID (United States Agency for International Development), the latter of which operates via rightwing anti-Cuba groups based in Florida and other U.S. states.

TripAdvisor has great reports on foreign destinations posted by smart, sensitive travelers willing to sign their names to their stories. The site also has a ton of schlock posted by unnamed sources; anybody can complain about any touristic issue anonymously. There are zero guidelines in place to prevent abuse. The only posts on TripAdvisor that should be taken seriously are those by contributors willing to identify themselves.

Juan O. Tamayo's article is part of a long orchestrated series going back to March 2013 attempting to damage Cuba's reputation as the tourist destination of choice for Canadians. Canadians go to Cuba because it is warm, friendly and economical. We go to escape our protracted freezing winters. We go with our families because it is safe, drug free, and less dangerous than visiting the United States. Canadians go to have a deserved good time and to warm up. We represent the biggest sector of foreign travelers to Cuba, about 1.2 million a year -- nearly half of all international travelers to Cuba. In fact, one in thirty Canadians go to Cuba every year. That means nearly one in ten Canadians have been to Cuba this century.

What could be more effective in damaging the Canadian travel market to Cuba than suggesting the island is overrun by foreign (mostly Canadian) pedophiles, youth prostitutes and potential child sex slaves?

There is no doubt that among the 1.2 million annual Canadian visitors to Cuba there are some bad guys. But it is a minuscule fraction of the tourists that travel there each year. Certainly the overwhelming majority of travelers do not condone the exploitation of Cuban youth for sex for pay. We abhor it.

Juan O. Tamayo's fabricated story serves three purposes:

1. Scare away Canadian visitors to Cuba.

2. Accuse Canada of sending pedophiles to Cuba to abuse local youth so the U.S. government will put pressure on the Canadian government to condemn Cuba. Canada is the only country in the world that has had unbroken normal diplomatic and trade relations with Cuba this century and last.

3. To give the Obama administration ammunition to recharge the blockade against Cuba.

Prostitution, like Walter says, is a sad reality for many impoverished people who are forced to sell themselves to survive. The Cuban government recognizes the harm caused by human exploitation, and goes after the pimps and johns who abuse, torture, and harm victims of both sexes and all ages.

Our experience working in Cuba over the past 16 years gives us reason to question the motives and sources behind Juan O. Tamayo's Miami Herald series. What he describes has not been the experience of our staff (Canadian, American and Cuban) nor of the thousands of North Americans that we have sent to Cuba over the past several years.

I encourage you to take a critical look at the posts on TripAdvisor quoted in Tamayo's article. I am confident you will see what I did: all posts are recent, anonymous, and written in a manner that is too elaborate for the first time Cuba visitor. This article is but one more piece of the U.S. campaign against Cuba.

Marcel Hatch, Education Director
Cuba Education Tours

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MIAMI HERALD

Posted on Tue, Jul. 16, 2013
Cuban hotel guests complain of prostitution

By Juan O. Tamayo
jtamayo@ElNuevoHerald.com<mailto:jtamayo%40ElNuevoHerald.com>

Most online guest reviews of beach resorts mention the quality of the sand, the water, the food and the towels and linens. And the Club Marea del Portillo and adjoining Club Farallón on Cuba's southeastern coast are no different.

But many of their guests also have complained about the young Cuban prostitutes at the three-star hotels, favored by Canadians looking for a cheap vacation - as little as $645 for a flight and one week's stay, all-inclusive.

The Marea del Portillo, in the municipality of Pilón, a remote part of Granma province, was home to James McTurk, 78, a Canadian convicted of child sex tourism with Cuban girls as young as three, for seven visits between 2009 and his arrest in Toronto last July.

Following are some of the guests' complaints about prostitution, most of them written anonymously. Two hotel administrators hung up the phone when asked about the complaints.

* "The worst part was the sex trade. I am used to seeing prostitution in Cuba now, but when they are 13 & 14 year old girls ... that's just gross."

* "If you don't want to watch obvious prostitution happen right in front of your eyes do not book at this resort."

* "Very young prostitutes are allowed to be brought in as guests for some older customers. They kiss openly and behave seductively in public."

* "The resort has some sort of arrangement with local prostitution, as we saw more than a couple 'escorting&#39; guests at both hotels. They wandered the premises quite comfortably."

* "[<* Repeat customers "consist of old men returning often to visit their young Cuban girlfriends that have their children and in some cases another on the way © If you like witnessing young women being exploited then you might enjoy your stay."

* "Is it prostitution? What you see at Marea you're going to see anywhere in Cuba. The rules have changed and Cubans are now allowed in the hotels. If they're paid for, they have every right to be there."

* "Now that Cubans are allowed to visit the resort (and I am happy about this, any new freedom for them is welcome) a lot of Canadians are hiring prostitutes and bringing them to the resort, often to stay on-site with them for the full week. This activity wasn't limited to fat old ugly men either, there were a lot of women of all ages with their boy toys.

"I find this behaviour absolutely disgusting! What the hell is the matter with these Canadians that they have to fly to Cuba to take advantage of these people, make them sell their souls, just so they can have a romp in the hay?"

Read more here: http://www.miamiherald.com/2013/07/16/v-print/3501723/cuban-hotel-guests-complain-of.html#storylink=cpy

Special Situation of Artists

Cuba's '1 percent' is not who you think it is

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 Published: Friday, 19 Jul 2013 | 7:00 AM ET

By: Michelle Caruso-Cabrera | CNBC Chief International Correspondent

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Justin Solomon | CNBC

In most parts of the world, artists struggle to make a living. In Cuba, they're part of the wealthiest 1 percent of the population.

Two quirks of fate have led to an explosion of well-paid artists on the island: an exception to the U.S. embargo on Cuban goods that allows Americans to spend money on Cuban art, and an accident of Cuban history that lets artists keep the money they earn.

Dionel Delgado, 29, is emblematic of financially successful Cuban artists. His new gallery is in an apartment he just bought in a prime ground-floor location in old Havana that gets lots of tourist foot traffic.

As he painted a large, lush landscape of the Cuban countryside, he told CNBC, "A big part about my work is about the landscape. The love of my country, my space, my dream space."

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CNBC's Michelle Caruso-Cabrera is one of the few business journalists who has been asked to visit Cuba. Why would the socialist government extend the invitation? She has the latest from Havana.

Don't try to buy the work however—it's already sold to a Mexican gallery for $10,000. He said that, on average, he sells a painting every two months.

Thousands of Americans travel legally to Cuba every year under what the Treasury calls "people to people" licenses. Remember Jay-Z and Beyoncé's trip? On such junkets, American tourists are prohibited from buying any kind of souvenir—except for books, music and art.

As a result, as one moves through old Havana, some of the most prevalent items for sale aren't T-shirts, hats or magnets, but paintings. In fact, the government put up a new building a few years ago expressly for art vendors.

An accident of Cuban history

Justin Solomon | CNBC

A false magazine cover painting from Cuban painter Dionel Delgado

Vendors there don't have to be as successful as Delgado to make a good living. Most of the paintings for sale to tourists are $100 or less. Selling just one a month, a painter makes more than double the average Cuban, who earns only $19 in a government job.

Artists have held a special place in the Cuban economy since the early 1990s—an extremely difficult period in which the Soviet Union cut off the billions of dollars in subsidies it had supplied to Fidel Castro's government. Even food was hard to come by. During that time, the government carved out a special exemption for musicians and artists, allowing them to travel freely in and out of the country and, more importantly, to be self-employed as artists and to keep the money they made.

The exemptions made them rich compared with other members of Cuban society, as well as more cosmopolitan.

Play Video

Cuba on the verge of change?

Though Cuba is allowing a small private sector to exist, Ted Henken of Baruch College discusses whether the nation is really on the verge of change.

Abel Barroso Arencibia, 46, who specializes in wood carvings, agrees that artists are lucky to hold a special place in the Cuban economy.

Barroso is in the middle of a major renovation on his apartment. Two museums in New York—the Whitney Museum of American Art and Museum of Modern Art—hold his pieces in their collections. He has traveled all over the world, from the U.S. to Japan, and was able to do so long before other Cubans, who received that right only at the beginning of this year.

Critical of the government? It's up to the viewer

Justin Solomon | CNBC

A Delgado magazine-cover painting

Also remarkable is that the Cuban government seems willing to tolerate art that could be interpreted as critical of it. Barroso, for example, is working on a woodcut of a tablet computer. It obviously doesn't work, but the "apps" on the wooden machine are all related to emigrating from Cuba.

Barroso makes many woodcuts of communication devices. He calls the work an "ironic" commentary on technology. When asked if it's a criticism of the government—given that most Cubans don't have a cellphone or access to the Internet—he responds, "How it's interpreted is up to the viewer."

Besides landscapes, Delgado has created a series of large-format paintings that depict fake magazine covers. He said he was inspired by Norman Rockwell, famous for painting real magazine covers that portray an idyllic American life.

One of Delgado's magazine cover paintings shows people preparing to jump over the malecon—the famous seawall in Havana—in inner tubes. It's a scene repeated by thousands of Cubans who, desperate to leave, took to the open ocean.

When asked if the painting is intended as a criticism of the government, Delgado said no, adding that "it talks about the troubles of Cuba."

"It's normal for all the Cubans to have this constant on our minds," he said. For a Cuban, the sea means "one way to take his dreams out there, the American dream," he added. "It's a reflection of ... how many people take this option, you know? For finding a way, you know?"

—By CNBC's Michelle Caruso-Cabrera

Editor's note: Michelle Caruso-Cabrera owns works of Dionel Delgado, among works of several other Cuban artists.

University of Alabama Alumni Association Has License

UA Alumni Association plans trip to Cuba

Posted: Jul 19, 2013 8:13 AM EDTUpdated: Jul 19, 2013 8:13 AM EDT

By WBRC Staff BIRMINGHAM, AL (WBRC) -

For most Americans, what they know about Cuba is from what they've seen on TV or what they have read, due to travel restrictions.

A group with the University of Alabama will soon get an opportunity most people never get. The University of Alabama Alumni Association is now what they believe to be the only license holder in the state of Alabama to travel to Cuba in this way.

The alumni association says it took about a year to get the license from the U.S. Government and it comes with restrictions. The weeklong trip in November is in the planning stages right now, and it's open not just to UA alums, but also their friends and family. It has to be clear that it is not a vacation, but a cultural exchange. Commercial flights do not travel into Cuba, so the plane will be a charter. All the payments have to be made up front, because U.S. credit cards are not accepted in Cuba and exchanged U.S. money is tightly controlled in Cuba.

"The license actually comes from the U.S. Treasury from the Department of Foreign Assets Control. It took almost a year for us to apply," said Tour coordinator Ashley Clayton. "We did a lot of research. We basically have to prove that we are a legitimate educational interest and that we are not going there on a vacation."

The University of Alabama actually has a decade long relationship with the University of Havana and this idea grew out of that. Spots are still available on the trip. If you're interested, you can contact the UA Alumni Association.

Copyright 2013 WBRC. All rights reserved.

http://www.myfoxal.com/story/22883466/ua-alumni-association-plans-trip-to-cuba

Legal Travel by Ship

Company plans people to people Cuba trip by ship

By BETH J. HARPAZ, AP Travel Editor

Updated 2:59 pm, Thursday, July 18, 2013

NEW YORK (AP) — A U.S.-based tour company on Thursday announced the launch of new people-to-people trips to Cuba that would transport U.S. citizens there by ship.

Road Scholar, a Boston-based company, is offering the trips from Jamaica and Miami, with stops in Havana and other parts of Cuba.

Most travel by U.S. citizens to Cuba is outlawed, but tens of thousands of Americans now visit the island legally each year on people-to-people tours, which are licensed by the U.S. Treasury Department. People-to-people trips must have educational and cultural exchange itineraries in order to be approved by the U.S. government.

Typically people-to-people tours fly from U.S. airports to Havana on chartered planes. But Road Scholar's director of international programs, Yves Marceau, said in a phone interview that "there's nothing in the regulations or guidelines" that preclude traveling by ship on a people-to-people tour.

The U.S. Treasury Department confirmed in an email that transportation "whether by bus, boat or taxi" in Cuba is permitted as part of the people-to-people programs as long as it does not detract from a "full-time schedule of educational activities that will result in meaningful interaction between the travelers and individuals in Cuba."

Marceau said Road Scholar had "designed all the port programs to be consistent" with those regulations, including a visit to an agricultural cooperative and meetings with artists.

The Road Scholar trips are among several seaborne voyages planned by U.S.-based entities to Cuba. This fall, Semester at Sea plans its first stop in Cuba since 2004, according to Semester at Sea spokesman Andrew Centofante. Semester at Sea allows college students to earn credit on multi-country study abroad programs that take place on a ship, and Centofante said the Cuba stop was approved by the U.S. government as part of an itinerary in which students will visit various ports around the Atlantic.

The Metropolitan Museum of Art in New York had advertised a people-to-people cruise from Jamaica to Havana this past April, but it did not take place. A spokesman for Academic Arrangements Abroad, which was organizing the museum trip, did not immediately respond to a request for comment, but it's not unusual for tours sponsored by museums or universities to be cancelled if they don't get enough participants.

The Road Scholar trip will use a cruise ship operated by a Canadian company, with Canadians and Europeans making up most of the other 1,000 passengers on the ship, Marceau said. The Road Scholar group has room for 24 participants and will adhere to its own itinerary in Cuban ports.

One of the Road Scholar tours is an 11-night trip beginning in Montego Bay, Jamaica, which heads to Punta Frances, located on a small Cuban island south of Havana called Isla de la Juventud, and concludes with five nights in Havana. A second 10-night trip starts in Miami, then heads to Cuba, with stops including rural areas and the western part of the country, and a final stop in Montego Bay. The third Road Scholar voyage runs 12 nights, traveling from Miami to Havana and around the island before returning to Havana. The Road Scholar seaborne trips to Cuba have departure dates in December through March 2014.

The people-to-people cultural exchange licenses were reinstituted by the Obama administration in 2011, after being halted by the Bush administration. But requirements were tightened last year after criticism that many of the trips were masking recreational tourism to the Communist island. Cuban-American Republican Sen. Marco Rubio of Florida criticized the government for approving licenses for groups that included activities like salsa dancing

http://www.sfgate.com/news/article/Company-plans-people-to-people-Cuba-trip-by-ship-4673265.php

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Troy University Travels from Alabama

TROY – Four Troy University students will become the first to plant the Trojan Flag on Cuban soil in late July when they participate in a study abroad trip to the island nation.

Just 90 miles off the tip of Florida, Cuba has long been off-limits to Americans, but recent changes by the federal government have opened the way for students to travel there for organized learning experiences.

“We will expose our students to the culture, geography and history of a land that has been largely off-limits to the average American since 1960,” said David “Doc” Kirby, a journalism lecturer who has made five trips to the country as a musician. “The musical heritage of Cuba has been an enormous influence on American music of the last 70 years, for example.”

The students will also attend lectures at Cuban universities and participate in cultural immersion opportunities.

“For our foreign-language students, they’ll get to experience first-hand a very diverse Latin American culture that has been somewhat insular. This means the language has developed in different ways than in other Central and South American nations,” he said.

The 12-day trip – 10 of which are in Cuba – actually begins with students visiting the Cuban-American Ybor City community in Tampa, Fla. to familiarize themselves with Cuba’s culture. The study-abroad tour will land the group, also guided by Dr. Johanna Alberich, an assistant professor of Spanish, in Havana, Holguin and Santiago.

In Havana, the students will visit historical sites, observe rehearsals of the National Concert Band and the National Symphony Orchestra and pay a call to the Plaza de la Revolucion before heading to Holguin. There, the group will see historical sculptures on city squares and visit radio stations. Not to escape attending classes, faculty will conduct classes on Playa Guardalavaca, the beach where Christopher Columbus landed.

They will observe the rehearsals of the Province Band and the Holguin Symphony Orchestra, and have lunch with music directors of both. The group will also observe classes at the University of Holguin. Heading to Santiago, the Trojans will take San Juan Hill and have class on the War for Cuban Independence from Spain. Observation of classes at the University of Santiago de Cuba and visit to cultural and historical sites are also planned.

Joining Kirby and Alberich as chaperones are Dr. Shari Hoppin, an associate professor in the Hall School of Journalism and Communication and Lisa Vardaman, an education subject specialist in the Wallace Library.

Making the trip are students:

• Rachel Wallace, a junior broadcast journalism major from Helena;
• Phillip James, a junior Spanish major from Fort Walton Beach, Fla.;
• Haley Rae Davies, a senior Spanish and anthropology major from Fort Collins, Colo.; and
• Joseph Mitchell Markett, a student from Opelika.

Kirby also said the team will be establishing connections in governmental and education venues so that future trips could be offered with expanded areas of study.

The team leaves on July 29 and returns to Alabama on Aug. 9.

http://www.wtvy.com/home/headlines/Troy-U-Students-Make-Trip-to-Cuba-215102811.html