By: Brooke Driver
A Delaware company with its headquarters in Buenos Aires, Argentina, Decolar.com, recently agreed to pay OFAC $2,809,800 to settle for the charges against it. Apparently, between March 2, 2009 and March 31, 2012, Decolar allowed its foreign subsidiaries to aid 17,836 individuals with flight and hotel reservations for travel to and from Cuba. Of course, Decolar neglected to attain the proper licensure to do so. But, while the cost is high, Decolar must be relieved that OFAC did not enforce the full penalty charge of $4,460,000. In determining the settlement cost, OFAC claims to have considered the follow facts:
• Decolar disclosed the violations and cooperated with OFAC’s investigation
• Decolar has taken measures to develop a working OFAC compliance program
• Upon discovering the violations, Decolar immediately stopped offering Cuba-related travel services
• Decolar demonstrated reckless disregard for U.S. sanctions by failing to ascertain that its activities were not in violation of U.S. law (OFAC states here that Decolar naively took the word of an unidentified third party who assured Decolar management that it was in the clear. OFAC adds that Decolar should have been aware of the CACR restrictions on its activities).
• Decolar’s senior management was aware of its subsidiaries’ Cuba-related travel services
The two main take aways here, folks, are that:
1. When relying on a third party legal/export compliance advisor, do your homework. Before you stake your business’ reputation on his word, be sure that he knows what he’s talking about.
2. Recognize that you will be punished for violating laws you should know about, not just the ones you do know. OFAC made it very clear in this case that Decolar management reasonably should have known that it was in violation of U.S. law—and now the company is facing a fine with an uncomfortable amount of digits.
In other words, an untrained company is an unprotected company. Put in the hours, not the dough.