OFAC SANCTIONS: A Synopsis for the Travel Industry Can a travel agent in the United States... o make travel arrangements to, from, or within Cuba? Not without an authorization from the U.S. Treasury Department. o arrange transactions for anyone with a Cuban address? Not without a specific license from Treasury. o handle transactions for the governments of Cuba, or Sudan? Not without a specific license from Treasury. o do business with Aero Continente, Aerocaribbean Airlines, Cubana Airlines, or Vinales Tours? Not those companies, nor any of the other 2,400 individuals and organizations on a U.S. Government Specially Designated Nationals list. Why not? Such transactions violate U.S. laws enforced by the Treasury Department's Office of Foreign Assets Control (OFAC). And what if a travel agent DOES do any of these things? Criminal violations of the statutes administered by OFAC can result in corporate and personal fines of up to $1 million per count and, in the case of individuals, a maximum of 10 to 12 years in jail per count. OFAC also has independent authority to impose civil penalties from $11,000 to $1,075,000 per count depending upon the sanctions involved. Is there anything else that a travel agent can do which would violate U.S. sanctions and embargoes? Yes! General information can be found in the material that follows or at OFAC's website "," or by dialing OFAC's fax-on-demand service at (202)622-0077, or calling OFAC Compliance at (202) 622- 2490. The Office of Foreign Assets Control administers sanctions programs involving the Balkans, Cuba, Iraq, North Korea, Libya, Iran, Syria, Sudan, Burma (Myanmar), Zimbabwe, designated international terrorists and narcotics traffickers, Foreign Terrorist Organizations, and designated foreign persons who have engaged in activities related to the proliferation of weapons of mass destruction. It is critical that travel service providers (travel agents, ticket agents, tour operators, etc.) be aware of the programs with restrictions applicable to their industry in order to avoid violations and costly fines. This overview is intended as a quick synopsis for reference by the travel industry. For legal guidance as to what is permitted, you must consult the regulations promulgated by OFAC for each sanctions program, or, prior to the promulgation of regulations, the applicable Executive Order or statute. CUBA BACKGROUND - Cuba travel-related transactions are severely restricted under the Cuban Assets Control Regulations (the "Regulations") promulgated under The Trading With The Enemy Act. Under these Regulations, spending money relating to Cuban travel is prohibited unless the traveler is licensed. The restrictions include spending money (in any currency) whether travelers go directly to Cuba or via a third country and providing services of any kind to Cuba or a Cuban national or within Cuba. The restrictions apply to all U.S. citizens (including dual nationals) and permanent resident aliens wherever located. Additionally, any foreign person in the United States is subject to these restrictions while physically present in the United States. Criminal penalties for violating the Regulations, which are enforced by the Department of the Treasury, Office of Foreign Assets Control ("OFAC"), range up to 10 years in prison, $1,000,000 in corporate and $250,000 in individual fines. Civil penalties up to $65,000 per violation may also be imposed. CUBA-RELATED TRAVEL TRANSACTIONS - Only persons whose travel transactions fall into the categories discussed below may be authorized to spend money related to travel to, from, or within Cuba. Persons traveling to Cuba to visit immediate family members pursuant to a specific license may spend no more than $50 per day on non-transportation-related expenses in Cuba, and up to an additional $50 per trip to pay for transportation-related expenses in Cuba. Persons licensed to engage in other travel-related transactions in Cuba may spend up to the State Department Travel Per Diem Allowance for Havana, Cuba for purchases directly related to travel in Cuba, such as hotel accommodations, meals, local transportation, and goods personally used by the traveler in Cuba (travelers can check the current per diem rate on the Internet at <>). Most licensed travelers may also spend additional money for transactions directly related to the activities for which they received their license. For example, journalists traveling in Cuba under the journalism general license (described below) may spend money over and above the current per diem for extensive local transportation, the hiring of cable layers, and other costs that are directly related to covering a story in Cuba. Purchases of services unrelated to travel or a licensed activity, such as non-emergency medical services, are prohibited. The purchase of publications and other informational materials is not restricted. WHO CAN GO - The following travelers are authorized, under OFAC general license, to engage in travel transactions while in Cuba: * Journalists and supporting broadcasting or technical personnel (regularly employed in that capacity by a news reporting organization and traveling for journalistic activities). * Official government travelers (traveling on official business). * Members of international organizations of which the United States is also a member (traveling on official business). * Travelers who have received specific licenses from OFAC prior to going. * Full-time professionals whose travel transactions are directly related to professional research in their professional areas, provided that their research: (1) is of a noncommercial academic nature, (2) comprises a full work schedule in Cuba, and (3) has a substantial likelihood of public dissemination. * Full-time professionals whose travel transactions are directly related to attendance at professional meetings or conferences in Cuba organized by an international professional organization, institution, or association that regularly sponsors such meetings or conferences in other countries. The organization, institution, or association sponsoring the meeting or conference may not be headquartered in the United States unless it is specifically licensed to sponsor the meeting. The purpose of the meeting or conference cannot be the promotion of tourism in Cuba or other commercial activities involving Cuba, or to foster production of any biotechnological products. SPECIFIC LICENSES TO VISIT IMMEDIATE FAMILY MEMBERS IN CUBA - OFAC will issue specific licenses authorizing travel-related transactions incident to one visit lasting no more than 14 days to immediate family members who are nationals of Cuba per three-year period. A "member of the immediate family" is defined as a spouse, child, grandchild, parent, grandparent, or sibling of the remitter or that remitter's spouse, as well as any spouse, widow, or widower of any of the foregoing. For those who emigrated to the United States from Cuba, and have not since that time visited a family member in Cuba, the three year period will be counted from the date they left Cuba. For all others, the three year period will be counted from the date they last left Cuba pursuant to the pre- existing family visit general license, or from the date their family visit specific license was issued. Travelers wishing to visit an immediate family member in Cuba who is authorized to be in Cuba but not a national of Cuba may be granted a specific license in exigent circumstances provided that the U.S. Interests Section in Havana concurs in the issuance of such a license. Status of current family visit specific licenses: All current family visit specific licenses are valid only through June 30, 2004, after which they are revoked. SPECIFIC LICENSES FOR EDUCATIONAL INSTITUTIONS - Specific licenses may be issued by OFAC to authorize travel transactions related to certain educational activities by students or employees at U.S. undergraduate or graduate institutions. Such licenses must be renewed after a period of one year. Once an academic institution has applied for and received such a specific license, the following categories of travelers affiliated with that academic institution are authorized to engage in travel-related transactions incident to the following activities without seeking further authorization from OFAC: * Undergraduate or graduate students participating in a structured educational program lasting at least 10 weeks in Cuba as part of a course offered at a U.S. undergraduate or graduate institution. Students planning to engage in such transactions must carry a letter from the licensed institution stating: (1) the institution's license number, (2) that the student is enrolled in an undergraduate or a graduate degree program at the institution, and (3) that the travel is part of an educational program of the institution. * Persons doing noncommercial Cuba-related academic research in Cuba for the purpose of qualifying academically as a professional (e.g. research toward a graduate degree). Students planning to engage in such transactions must carry a letter from the licensed institution stating: (1) the institution's license number, (2) that the student is enrolled in a graduate degree program at the institution, and (3) that the Cuba research will be accepted for credit toward that graduate degree; * Undergraduate or graduate students participating in a formal course of study lasting at least 10 weeks at a Cuban academic institution, provided the Cuban study will be accepted for credit toward a degree at the licensed U.S. institution. A student planning to engage in such transactions must carry a letter from the licensed U.S. institution stating: (1) that the individual is a student currently enrolled in an undergraduate or graduate degree program or a full-time permanent employee at the institution, (2) that the Cuba-related travel is part of a structured educational program of that institution that will last at least 10 weeks, and (3) citing the number of the institution's license. * Persons regularly employed in a teaching capacity at a licensed U.S. undergraduate or graduate institution who plan to teach part or all of an academic program at a Cuban academic institution for at least 10 weeks. An individual planning to engage in such transactions must carry a letter from the licensed institution stating: (1) the U.S. institution's license number, and (2) that the individual is regularly employed by the licensed institution in a teaching capacity. * Cuban scholars teaching or engaging in other scholarly activities at a licensed college or university in the United States. Licensed institutions may sponsor such Cuban scholars, including payment of a stipend or salary. The Cuban scholar may carry all such stipends or salary payments back to Cuba. * Full-time employees of a licensed institution organizing or preparing for the educational activities described above. An individual engaging in such transactions must carry a letter from the licensed institution stating: (1) the institution's license number, and (2) that the individual is regularly employed by the institution. Status of current educational institution licenses: Licensed educational institutions that have already planned Cuba trips that will not meet the new requirements issued in June 2004 may still engage in all transactions incident to such trips provided that the trips and all associated transactions are completed by August 15, 2004. SPECIFIC LICENSES FOR RELIGIOUS ORGANIZATIONS - Specific licenses may be issued by OFAC to religious organizations to authorize individuals affiliated with the organization to engage in travel transactions under the auspices of the religious organization. Applications by religious organizations for such licenses should include examples of the religious activities to be undertaken in Cuba. All individuals traveling pursuant to a religious organization's license must carry with them a letter from the licensed organization citing the number of the license and confirming that they are affiliated with the organization and that they are traveling to Cuba to engage in religious activities under the auspices of the organization. OTHER SPECIFIC LICENSES: Specific licenses may be issued by the Office of Foreign Assets Control on a case-by-case basis authorizing travel transactions by the following categories of persons in connection with the following activities: * Humanitarian Projects and Support for the Cuban People - (1) Persons traveling in connection with activities that are intended to provide support for the Cuban people, such as activities of recognized human rights organizations; (2) Persons whose travel transactions are directly related to certain humanitarian projects in or related to Cuba that are designed to directly benefit the Cuban people. Licenses authorizing transactions for multiple trips over an extended period of time are available. * Free-Lance Journalism - Persons with a suitable record of publication who are traveling to Cuba to do research for a free- lance article. Licenses authorizing transactions for multiple trips over an extended period of time are available for applicants demonstrating a significant record of free-lance journalism. * Professional Research and Professional Meetings - Persons traveling to Cuba to do professional research or to attend a professional meeting that does not meet the requirements of the relevant general license (described above). Licenses authorizing transactions for multiple trips over an extended period of time are available. * Religious Activities - Persons traveling to Cuba to engage in religious activities that are not authorized pursuant to a religious organization's specific license. Licenses authorizing transactions for multiple trips over an extended period of time are available. * Public Performances, Athletic or Other Competitions, and Exhibitions - Persons traveling to participate in a public performance, athletic or other competition (that does not meet the requirements of the general license described above), or exhibition. The event must be open for attendance, and in relevant situations participation, by the Cuban public, and all profits from the event after costs must be donated to an independent nongovernmental organization in Cuba or a U.S.-based charity, with the objective, to the extent possible, of promoting people-to- people contacts or otherwise benefiting the Cuban people. * Amateur or semi-professional athletes or teams traveling to Cuba to participate in an athletic competition held under the auspices of the relevant international sports federation. The athletes must have been selected for the competition by the relevant U.S. sports federation, and the competition must be one that is open for attendance, and in relevant situations, participation, by the Cuban public. * Activities of Private Foundations or Research or Educational Institutions - Persons traveling to Cuba on behalf of private foundations or research or educational institutes that have an established interest in international relations to collect information related to Cuba for noncommercial purposes. Licenses authorizing transactions for multiple trips over an extended period of time are available. * Exportation, Importation, or Transmission of Information or Informational Materials - Persons traveling to engage in activities directly related to the exportation, importation, or transmission of information or informational materials. * Licensed Exportation - Persons traveling to Cuba to engage in activities directly related to marketing, sales negotiation, accompanied delivery, or servicing of exports of food and agricultural commodities, medical products or other exports that are consistent with existing Department of Commerce regulations and guidelines with respect to Cuba, including certain exports engaged in by U.S.-owned or -controlled foreign firms. Applying for a specific license: Persons wishing to travel to Cuba under a specific license should send a letter specifying the details of the proposed travel, including any accompanying documentation, to David W. Mills, Chief of Licensing, Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 Pennsylvania Ave., NW, Washington, DC 20220. Academic institutions wishing to obtain one of the two-year specific licenses described above should send a letter to the same address requesting such a license and establishing that the institution is accredited by an appropriate national or regional accrediting association. Religious organizations wishing to obtain one of the two-year specific licenses described above should send a letter to the same address requesting such a license and setting forth examples or religious activities to be undertaken in Cuba. Provision of travel services: U.S. travel service providers, such as travel agents and tour operators, who handle travel arrangements to, from, or within Cuba must hold special authorizations from the Office of Foreign Assets Control to engage in such activities. These authorizations are issued based on written applications from the service providers, subject to appropriate checks by the Treasury Department. A traveler should not use any U.S.-located travel service provider that does not hold valid Treasury authorization. An up-to-date list of authorized service providers is maintained on OFAC's website. If in doubt about the status of a service provider's authorization, travelers should call the Office of Foreign Assets Control at 305/810-5140. Only carrier service providers that have been authorized by OFAC may operate direct passenger charter flights between Miami and Havana. Unauthorized travel-related transactions: Unless otherwise authorized, any person subject to U.S. jurisdiction who engages in any travel-related transaction in Cuba violates the Regulations. WHAT CAN BE BROUGHT BACK - If U.S. travelers return from Cuba with Cuban origin goods, such goods, with the exception of informational materials, may be seized at Customs' discretion. [Section 515.204 of the Regulations]. There are no limits on the import or export of informational materials. [Section 515.206 of the Regulations]. Such materials are statutorily exempt from regulation under the embargo and such items as books, films, tapes and CDs may be transported freely. However, blank tapes and CDs are not considered informational materials and may be seized. VESSELS - All persons on board vessels, including the owner, must be authorized travelers, as listed above, to engage in travel- related transactions in Cuba. If you are not an authorized traveler, you may not purchase meals, pay for transportation, lodging, dockage or mooring fees, cruising fees, visas, entry or exit fees and you may not bring any Cuban origin goods back to the United States. Any payment to the Marina Hemingway International Yacht Club is considered a prohibited payment to a Cuban national and therefore in violation of the Regulations. Vessel owners are prohibited from carrying travelers to Cuba who pay them for passage if the owner does not have a specific license from OFAC authorizing him to be a Service Provider to Cuba. EMERGENCIES - In case of emergencies requiring financial transactions such as emergency repair of vessels or medical treatment, travelers are urged to contact OFAC at (202)622-2480, to discuss necessary authorizations. HUMANITARIAN DONATIONS - There is joint OFAC and Commerce Department ("USDOC") administration over export of gift parcels and humanitarian goods to Cuba to meet basic human needs. If an export is licensed by USDOC, OFAC authorizes certain financial and other transactions related to that export. [See part 746 of the USDOC's Export Administration Regulations (15 C.F.R. Chapter 7), which are available on-line at http://w3.access.gpo.gov/bis/ear/ear_data.html, for the relevant USDOC regulations.] Please note that travel-related transactions incident to humanitarian donations must be separately licensed by OFAC. EXPORTATION OF ACCOMPANIED BAGGAGE þ Authorized travelers to Cuba are limited to 44 pounds of accompanied baggage per traveler unless a specific license from OFAC or the Department of Commerce's Bureau of Industry and Security authorizes a higher amount. LIBYA The Libyan Sanctions Regulations [31 CFR Part 550], authorized under the International Emergency Economic Powers Act and the International Security and Development Cooperation Act of 1985 established economic sanctions against Libya in January 1986. The Regulations, which are administered by the U.S. Treasury Department's Office of Foreign Assets Control, affect all U.S. citizens and permanent residents wherever they are located, all people and organizations physically in the United States, and all branches of U.S. organizations throughout the world. There have been numerous amendments to the Libyan Sanctions Regulations. The most recent changes occurred in February and April 2004 when two general licenses were issued which together allow most new transactions with Libya by U.S. persons. The first general license ) was issued on February 26, 2004, and amended on April 2, 2004. It allows U.S. persons to travel to Libya and to pay for their residence and maintenance while in Libya. (Note: restrictions on the payment for travel and travel-related services to and from Libya were lifted by the issuance of the second general license). General License 1 also permits travel-related services, such as the booking of travel to, from or within Libya for U.S. persons by U.S. travel service providers. The second general license (), signed on April 23, 2004, lifts most remaining prohibitions against Libya with the following exceptions: - All Libyan property and interests in property blocked by a U.S. person prior to the effective date of the second general license remain blocked. - The exportation of goods, software or technology (including technical data or other information) to Libya from the United States is authorized, provided that the exportation is licensed or otherwise authorized by the Department of Commerce's Bureau of Industry and Security under the Export Administration Regulations. - Certain travel-related services remain prohibited. This includes flights to or from Libya by U.S. air carriers, code-sharing involving flights to or from Libya, and flights to or from the United States by Libyan air carriers. IRAN TRAVEL TO IRAN - Transactions associated with travel to or from Iran, including the importation of accompanied baggage for strictly personal use, payment of maintenance and living expenses, and the acquisition of goods or services for personal use are permitted. Certain transactions related to the arrangement or facilitation of such travel, including nonscheduled air, sea, or land voyages, are permitted. Also permitted are certain travel-related transactions with Iranian carriers by U.S. travelers and those involving group tours. IMPORTING FROM IRAN - Other than "gifts valued at $100 or less, household and personal effects of persons moving to the United States, Iranian-origin publications and similar informational materials, foodstuffs intended for human consumption which are classified under chapters 2-23 of the Harmonized Tariff Schedule of the United States, and carpets and other textile floor coverings and carpets used as wall hangings which are classified under chapter 57 or heading 9706.00.60 of the Harmonized Tariff Schedule of the United States," goods, or services of Iranian origin may not be imported into the United States, either directly or through third countries. SUDAN The Sudanese Sanctions Regulations, 31 C.F.R. Part 538, do not restrict travel, but they prohibit the importation into the United States of any goods or services of Sudanese origin, other than information or informational materials. They also prohibit the exportation or reexportation, directly or indirectly, to Sudan of any goods, technology (including technical data, software, or other information), or services from the United States or by a U.S. person. The only exceptions to the export prohibition are donations of articles intended to relieve human suffering (such as food, clothing, or medicine) and informational materials. The Regulations also prohibit the performance by any U.S. person of any contract in support of an industrial, commercial, public utility, or governmental project in Sudan, any transaction by a U.S. person relating to transportation of cargo to or from Sudan, or the provision of transportation of cargo to or from the United States by any vessel or aircraft of Sudanese registry. SPECIALLY DESIGNATED NATIONALS Merely being aware of country-specific restrictions is not enough. There is also an absolute prohibition against engaging in transactions with individuals or entities on OFAC's list of Specially Designated Nationals and Blocked Persons (the "SDN List"), named parties owned or controlled by, or acting for or on behalf of, targetted governments or groups such as international narcotics traffickers or terrorists. For example, Aero Continente, Aerocaribbean Airlines, Cubana Airlines, and Vinales Tours referred to on the first page of this brochure are four of over 2,400 SDNs. These names are published in the Federal Register, an official publication of the U.S. Government. Helpful information also may be obtained by calling OFAC at (202)622-2420, or by logging on to OFAC's Home Page site (), or by dialing OFAC's fax-on-demand service at (202)622-0077. The listing is considered partial because every U.S. individual or organization engaging in transactions with foreign nationals must take reasonable care to make certain that such foreign nationals are not owned or controlled by or acting for or on behalf of the targetted governments or groups. Travel service providers and individuals who transact business with SDNs may be subject to criminal prosecution or civil monetary penalties. OFAC CHECKLIST Before you conduct business, you should ensure that the arrangements you are making do not involve: * an individual or entity which appears on OFAC's SDN list; * an individual or entity with a Cuban address; * a national of Cuba, regardless of address (unless the national is a permanent resident of the United States or is unblocked by an OFAC specific license); * travel to Cuba (unless your firm is specially authorized by OFAC to arrange such travel for persons traveling under OFAC general or specific licenses); or * the government of Cuba or Sudan. If you encounter any of these situations, you should contact OFAC at (202)622-2490. ADDITIONAL INFORMATION Whenever there is an update to any OFAC regulation, an addition or removal of an SDN, or any other announcement from OFAC, the information is quickly made available electronically via many different sources. All of OFAC's program "brochures," as well as SDN information, are available free in downloadable camera-ready Adobe Acrobat "*.PDF" format over the Treasury Department's World Wide Web Server. OFAC's Home Page site is . The Page also contains a self-extracting ASCII file of the SDN list in DOS, delimited, fixed-field, and country-specific versions, a free Adobe Acrobat Reader to view and print "*.PDF" files, access to all OFAC-related Executive Orders, U.N. Resolutions, statutes, regulations, and the Code of Federal Regulations as well as to brochures in ASCII format, and a wealth of other material. All of OFAC's "forms," including its Annual Report on Blocked Property, Cuban Remittance Affidavit, and license application are electronically available on the site. The Treasury Department provides two E-mail subscription services--one to OFAC's Financial Operations Bulletin updates and the other to OFAC's "What's New" file. In addition, whenever there is a change involving urgent information requiring immediate implementation, the [DATE] changes on the face of the primary Page; users can automate their compliance by structuring their Internet connection to use a Web browser to watch for that date change, check a "Bulletin" file to get the details about changes, and download OFAC's latest information for incorporation, for example, into interdiction software. There is a separate date-indicator for OFAC's SDN list.. OFAC's secondary Page on the site entitled "Recent OFAC Actions of Interest" contains date-specific "What's New" files with their own dates. Those not directly involved in operations areas can automate their ability to keep current with OFAC's general information by structuring their Internet connection to use their Web browser to watch for those date changes on the secondary Page to check the "What's New" file to get the details about changes, and download OFAC's latest information. There may be times when the date on the secondary Page will be later than the date on the primary Page because some OFAC "Actions of Interest" may not rise to the level of an urgent bulletin. Call OFAC Compliance at 1-800- 540-6322 with any questions. OFAC operates a free automated fax-on-demand service, which can be accessed 24 hours a day, seven days a week, by dialing 202/622-0077 from any touchtone phone and following voice prompts. OFAC documents kept up to date on the system include program and general brochures, listings of Specially Designated Nationals and Blocked Persons, including changes to the listings, licensing guidelines, and Federal Register notices (even those filed but not yet printed in the Federal Register). The Index of Available Documents is date-specific. The free Federal Bulletin Board of the U.S. Government Printing Office, which is linked to the Federal Register and Code of Federal Regulations, carries all OFAC brochures in ASCII and Adobe/Acrobat "*.PDF" format, as well as the entire Code of Federal Regulations containing OFAC regulations, all Federal Register notices that OFAC puts out, and OFAC's extended electronic reading room (FAC_MISC). For information on the Federal Bulletin Board call 202/512-1530 or dial 202/512-1387 to connect. The information is also available over the Internet via GPO ACCESS at . Information is disseminated by links from the web sites of the International Financial Services Association in New York () the International Banking Operations Association in Miami (). Major announcements are also distributed to U.S. financial institutions through Fedwire bulletins and CHIPS system broadcasts, as well as, from time to time, in printed format through the various Federal bank supervisory agencies. The U.S. Maritime Administration's Web site at contains a special link to OFAC's brochures and information, including a flashing indicator of late- breaking updates. The U.S. Customs Service maintains a free Customs Electronic Bulletin Board geared especially toward Customs House Brokers (OFAC's information is available as a date-specific self- extracting DOS file, "OFAC*.EXE" under "Files," and then "Customs Extra!," via the Internet at or "cebb.customs.treas.gov." Numerous other industry groups link to OFAC's website, among them: the National Association of Securities Dealers (), the Securites and Exchange Commission (), the Securities Industry Association (), the American Society of Travel Agents (), the Institute of Real Estate Management (), and the Commercial Investment Real Estate Institute (). date: 06-30-04