Decolar.com, Inc. OFAC Settlement: $2.8M (2014)

From March 2, 2009, through March 31, 2012, Decolar appears to have dealt in property in which Cuba or Cuban nationals had an interest when its foreign subsidiaries assisted 17,836 persons with flight reservations for travel between Cuba and countries other than the United States and/or hotel reservations for stays in Cuba, without authorization from OFAC, in apparent violation of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR). Based upon the number of apparent violations and the length of time over which they occurred, the apparent violations appear to have resulted from a pattern or practice of conduct.

OFAC determined that Decolar voluntarily self-disclosed this matter and that the apparent violations occurred prior to agency notice. Under the Cuba Penalty Schedule, 68 Fed. Reg. 4429 (Jan. 29, 2003), the base penalty for the apparent violations is $4,460,000. The settlement amount of $2,809,800 reflects OFAC's consideration of the facts and circumstances pursuant to the General Factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A.

The case illustrates the risk of relying on a third party's oral assurances that conduct does not require an OFAC license in lieu of independently ascertaining applicable U.S. sanctions requirements. With appropriate due diligence, Decolar's senior management reasonably should have been aware of the applicable prohibitions under the CACR. Decolar had no OFAC risk-based compliance program at the time of the apparent violations. Upon discovering the apparent violations, Decolar immediately ceased offering Cuba-related travel services to any of its customers and recently adopted OFAC compliance policies and procedures.

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