Airbnb, a flagship of U.S. engagement with Cuba, fined for ‘apparent’ embargo violations
Once the symbol of U.S. economic engagement with Cuba under the Obama administration, vacation rental company Airbnb has been fined by the Treasury Department for apparent violations of the U.S. embargo, the Office of Foreign Assets Control said Monday.
OFAC said in a statement that the company agreed to pay $91,172.29 to settle “its potential civil liability for apparent violations of sanctions against Cuba.” The violations included accepting reservations from guests traveling to the island outside the current 12 authorized categories and failing to keep certain records.
Currently, Americans can travel to Cuba under 12 authorized categories: family visits, educational and religious activities, some athletic competitions, support for the Cuban people, and humanitarian projects. Traveling for other professional activities such as journalism or research is also authorized.
The fine amount was lowered from a maximum of $600 million because Airbnb disclosed the potential violations and cooperated with OFAC, the agency said.
“Airbnb operates in more than 220 countries and regions around the world and we take sanctions compliance very seriously,” Airbnb spokesperson Christopher Nulty said. “We are pleased to have reached this agreement with OFAC.”
But OFAC’s enforcement action is also a reminder of how much U.S. policy towards Cuba has changed in the past six years. After a short opening period under Obama, President Donald Trump hit the Cuban government with a flurry of new sanctions and many of the changes to the embargo regulations made by his predecessor were reversed. So far, little has changed under President Joe Biden, who has repeatedly criticized the Cuban government for its crackdown on dissidents and anti-government protesters.
Back in 2016, Airbnb’s president and co-founder, Brian Chesky, traveled to Cuba as a member of President Obama’s delegation. The company had started doing business in Cuba the previous year, and it was the flagship for the new U.S. policy of engagement and support to Cuban entrepreneurs. In 2019, Airbnb reported 36,400 listings in Cuba, according to the U.S.-Cuba Trade and Economic Council.
The Obama administration also touted Airbnb’s success in Cuba to encourage American companies to do business with the island.
But in its Monday press release, OFAC took the opposite view, stating Airbnb’s apparent violations of the embargo “undermined” U.S. foreign policy towards Cuba. It also warned American companies from doing business with sanctioned countries.
“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,” OFAC said.
OFAC said after Airbnb started doing business in Cuba, the scaling up of its services “outpaced the company’s ability to manage the associated sanctions risks via its technology platforms.”
According to the release, Airbnb has put in place new “sanctions compliance” measures to prevent residents in Cuba from using the platform as guests and a screening process to ensure Cuban hosts are not government officials or communist Party members, among other steps.
Airbnb received criticism after reports that Vilma Rodríguez, Raúl Castro’s granddaughter, was renting a mansion through the company’s platform.
This story has been updated to correct the maximum penalty for the violations. The correct number is $600,601,408.
This story was originally published January 3, 2022 at 3:57 PM.