By: Brooke Driver
Red Bull might give you wings, but that doesn’t mean you should fly (without a license). The energy drink company Red Bull North America, Inc. has agreed to settle with OFAC for $89,775 over its alleged seven violations of the Cuban Assets Control Regulations. Specifically, the company violated 31 C.F.R. part 515 of the CACR when it authorized seven Red Bull representatives to travel to Cuba in order to film a documentary between the dates of June 8 and June 18, 2009.
While the maximum penalty in this instance is $455,000, the base penalty is $105,000, and OFAC chose even to significantly reduce that fine despite the facts that:
- Red Bull did not disclose its violations
- Red Bull had prior knowledge of U.S. sanctions on Cuba and took steps to conceal the transactions
- Red Bull is a U.S. subsidiary of a sophisticated multinational company with extensive experience in international trade (in other words, “you should have known better!”)
And considering the facts that:
- The case was deemed non-egregious
- Red Bull had not committed a violation in the five years prior to the incident
- Red Bull immediately took remedial action in implementing an OFAC compliance program
Red Bull’s mishap acts as a forceful reminder that “export” applies to many more situations than a clear cut shipment of an item and that companywide training is essential for your protection. Marketing, in this case, and many other seemingly unrelated departments often perform or are involved in some form of exporting. Be sure to arm them with at least a high level awareness of the compliance risks they face.