Last week the Office of Foreign Assets Control announced that it whacked Carlson Wagonlit with a massive $5,990,490 fine for doing business in Europe as an American. Specifically, the massive fine was levied because Carlson was involved in arranging travel for Europeans to Cuba. Carlson became subject to U.S. sanctions on Cuba in 2006 when French hotel chain Accor sold its 50 percent stake in Carlson Wagonlit to Carlson and JPMorgan Chase, resulting in control of Carlson Wagonlit by U.S. companies.
In justifying the massive fine OFAC tut-tuts that Carlson Wagonlit was a sophisticated international company that processed Cuba travel for “four years before recognizing that it was subject to U.S. jurisdiction” and that it had either no compliance program or an “inadequate” one. Of course, OFAC omits from its chastisement of Carlson Wagonlit one significant fact: the 900-pound E.U. Council Regulation that made it illegal for Carlson Wagonlit to refuse to book travel to Cuba
In essence, and as I’ve said before, OFAC’s enforcement of the Cuba Sanctions against U.S. companies in Europe in these circumstances is tantamount to making it illegal for American companies to do business in Europe. This is particularly true for travel companies which simply cannot avoid being requested to book travel for Cuba. If the Company refuses, it violates E.U. law; if it complies, it violates U.S. laws. Sanctioned if you do; sanctioned if you don’t.