A major Netherlands company that handled the travel of 44,430 people to and from Cuba will pay $5.9 million to the U.S. government to settle a complaint that it violated the trade embargo on the island, the U.S. Treasury Department has announced.
Treasury’s announcement said CWT B.V. had continued to do business in Cuba after it became majority-owned by U.S. entities in 2006, and therefore was subject to the U.S. Trading With the Enemy Act.
The fine appeared to be one of the largest assessed on a travel agency for Cuba embargo violations, although several foreign banks have had to pay hundreds of millions of dollars to settle alleged violations.
CWT B.V. was part of the Netherlands-based Carlson Wagonlit Travel, a global leader in travel. CWT specializes in business travel, operates in more than 150 countries and reported $21.4 billion in total sales volume in 2009, according to its website.
Treasury did not identify CWT’s U.S. buyers in 2006. One Equity Partners II, L.P., a subsidiary of JPMorgan Chase, and JPMorgan’s Chase Travel Investment, were listed in business reports as holding some ownership interests in CWT in 2010.
U.S.-owned companies doing business in Cuba or with Cuban entities are required to have special licenses issued by Treasury’s Office of Foreign Assets Control (OFAC), which enforces U.S. sanctions on all foreign countries.
CWT’s possible violations took place from Aug. 8, 2006 to on or about Nov. 28, 2012, “dealt in property in which Cuba or its nationals had an interest” and involved trips by 44,430 people, Treasury said in a statement Friday.
OFAC said the base penalty for the case was $11,093,500, but that was cut to $5.9 million because CWT voluntarily reported the apparent violations, halted them, cooperated with U.S. investigators and took “significant remedial action.”
CWT is a “commercially sophisticated international corporation and travel services,” the Treasury statement noted, “but failed to exercise a minimal degree of caution or care regarding its obligations to comply with OFAC sanctions against Cuba.”
The large number of Cuba travelers it handled “caused significant harm to the objectives” of the U.S. sanctions on the communist-ruled island under the Cuban Assets Control Regulations (CACR).
JPMorgan Chase Bank agreed to pay $88.3 million in 2011 to settle allegations of “egregious” CACR violations by processing 1,711 wire transfers totaling $178.5 million from Dec. 12 of 2005, and March 31 of 2006 involving Cuba or Cuban nationals.
JPMC investigated a tip from another institution that it could be violating the regulations, confirmed it and yet “failed to take adequate steps to prevent further transfers” and did not voluntarily report the apparent violations, Treasury said at the time.
ING bank in the Netherlands paid $619 million in 2011 to settle allegations of illegal dealing with Cuba, Iran, and other sanctioned countries. Credit Suisse Bank paid $536 million in 2009 and the Swiss-based UBS paid $100 million in 2004 for similar cases.