OFAC ANNOUNCES SETTLEMENTS WITH EXPEDIA AND HOTELBEDS USA
July 17, 2019
On June 13, 2019, OFAC announced a $325,406 settlement with Expedia Group, Inc. (Expedia) to settle potential civil liability for providing Cuba-related travel services in violation of the CACR. Specifically, between 2011 and 2014, Expedia had dealings in property owned by Cuba or Cuban nationals by assisting 2,221 persons — some of whom were Cuban nationals — with travel or travel-related services for travel within Cuba or between Cuba and locations outside the United States. The apparent violations were voluntarily self-disclosed to OFAC.
The apparent violations occurred because certain Expedia foreign subsidiaries were not familiar with U.S. economic sanctions laws, and Expedia employees allegedly overlooked certain aspects of Expedia’s business that presented risks of noncompliance with U.S. sanctions. Specifically, electronically booked travel to Cuba resulted from failures or gaps in Expedia’s technical procedures and other measures to avoid CACR violations. For at least one foreign subsidiary, Expedia failed to inform the subsidiary until approximately 15 months after Expedia had acquired the subsidiary that it was subject to U.S. jurisdiction and law. Expedia failed to quickly integrate the subsidiary into the Expedia corporate family, and did not fully brief the subsidiary regarding compliance obligations with U.S. sanctions. The subsidiary therefore continued operating independently during the integration period, resulting in the above-referenced violations.
OFAC separately announced on June 14 a $222,705 settlement with Hotelbeds USA, Inc. for similar violations.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Alexander Matthews (amatthews@eckertseamans.com or 202-659-6633).
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