Airbnb Payments, Inc. OFAC Settlement: $91.2K (2022)

Pursuant to communications with OFAC, Airbnb Payments conducted a forensic review based on an approved and statistically significant sampling of "Stays" (i.e., traveler lodging provided by Airbnb, Inc. "Hosts") and "Experiences" (i.e., traveler activities provided by Airbnb, Inc. Hosts) transactions involving Cuba. By extrapolating the results of that sampling review to the total transactions processed between September 28, 2015 and March 1, 2020, it was determined that Airbnb Payments processed payments related to 3,464 extrapolated Stays transactions in Cuba by Airbnb, Inc. "Guests" traveling for reasons outside of OFAC's 12 authorized categories. The extrapolated average transaction amount processed for each such Stay was $139.52. Airbnb Payments also processed payments related to 3,076 extrapolated Experiences transactions where Airbnb Payments failed to keep records in accordance with OFAC's regulations. The extrapolated average transaction amount processed for each such Experience was $78.40. Airbnb Payments also processed payments related to 44 confirmed transactions involving non-U.S. persons engaging in Cuba travel transactions on Airbnb, Inc.'s platform prior to OFAC issuing a specific license to Airbnb, Inc. to engage in such conduct. The average transaction amount processed for those transactions was $111.09. As a result, Airbnb Payments processed payments on behalf of customers on Airbnb, Inc.'s platform in apparent violation of the Cuban Assets Control Regulations (CACR), 31 C.F.R. § 515.201 and § 515.572(b).

These Apparent Violations occurred primarily because Airbnb, Inc. launched its Cuba business in April 2015, which would eventually extend to a global customer base, without fully addressing the complexities of operating a Cuba-related sanctions compliance program for internet-based travel services. The scaling up of its services in Cuba appears to have outpaced the company's ability to manage the associated sanctions risks via its technology platforms. When Airbnb, Inc. first launched in Cuba, Airbnb Payments used a manual process to screen Hosts and Guests for potential sanctions issues until Airbnb Payments was able to implement a customized Internet Protocol blocking system designed to permit Cubans to act as Hosts on Airbnb, Inc.'s platform while simultaneously preventing Cubans from transacting as Guests on the platform. The recordkeeping Apparent Violations related to the Experience transactions were primarily due to technical defects involving an older version of the Airbnb, Inc. mobile application that remained operational for Cuba-related travel. The older version of the application did not maintain complete functionality for Guests to make an attestation regarding their reason for travel to Cuba.

The statutory maximum civil monetary penalty applicable in this matter is $600,601,408. OFAC determined that Airbnb Payments voluntarily self-disclosed the Apparent Violations and that the Apparent Violations constitute a non-egregious case. Accordingly, under OFAC's Economic Sanctions Enforcement Guidelines, the base civil monetary penalty amount equals the sum of one-half of the transaction value for each apparent violation, which is $364,689. The settlement amount of $91,172.29 reflects OFAC's consideration of the General Factors under the Enforcement Guidelines.

This action highlights the risks associated with entering new commercial markets, particularly one that has elevated sanctions risks such as Cuba, without fully anticipating the complexities of legally operating in a U.S.-sanctioned jurisdiction and fully implementing appropriate sanctions compliance controls. A failure to fully implement appropriate risk-based sanctions compliance measures into a company's infrastructure at the time of a new product launch or entry into a new business line, particularly one involving internet-based services, could lead to apparent violations of OFAC regulations. Moreover, financial institutions that are processing transactions for companies that operate worldwide, including transactions involving individuals and entities ordinarily resident in, or doing business in, countries subject to U.S. sanctions, should understand the sanctions risks associated with those services and should take steps necessary to mitigate those risks. Finally, this case also highlights the importance of proactively identifying sanctions compliance deficiencies and implementing appropriate remedial measures, as well as the benefits of voluntary self-disclosure and cooperation with OFAC.

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