Treasury Office Settles With Airbnb For Violating Cuban Embargo

Treasury Office Settles With Airbnb For Violating Cuban Embargo
Police officers walk near Havana Capitol in Cuba, on Nov. 15, 2021. (Yamil Lage/AFP via Getty Images)
Naveen Athrappully
1/4/2022
Updated:
1/4/2022

The U.S. Treasury Department has reached a settlement with Airbnb for apparent violations of sanctions against Cuba by the company that included unauthorized processing of payments and failure to maintain specific Cuba-related records.

Airbnb agreed to remit $91,172.29 and settle its potential civil liability with the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). Based on a forensic review, the Silicon Valley company was penalized for allowing Airbnb guests to travel outside OFAC’s authorized categories along with failing to maintain certain key records associated with transactions regarding Cuba. Although the initial calculation of the settlement was vastly larger, the department made certain accommodations for Airbnb.

“The statutory maximum civil monetary penalty applicable in this matter is $600,601,408. However, OFAC determined that Airbnb Payments voluntarily self-disclosed the Apparent Violations and the Apparent Violations constitute a non-egregious case,” said the report released Monday.

According to OFAC, traveling to Cuba for tourism purposes is prohibited by statute. There are 12 reasons an American can visit Cuba, including familial visits, official business of the U.S. government, journalism, professional research, education, religion, public performances, humanitarian purposes, supporting Cuban people, activities of private foundations, transmission of informational materials, and for conducting certain authorized export transactions.

OFAC found that Airbnb could not manage its scaling of business in the country after opening shop in 2015 when the American government announced regulatory changes regarding business dealings with Cuba.

Technical and accounting defects eventually led to violations, which the company investigated internally and reviewed against the sanctions compliance program. Airbnb Payments voluntarily submitted the findings to OFAC to prevent future recurrences and fully cooperated with authorities, leading to the reduction in penalties.

Airbnb has now agreed to several initiatives as part of the settlement that includes setting up an IP blocking system that disallows users to register as hosts or guests on the platform while based in Cuba, and detailed information screening to identify whether users are Cuban residents, ensuring hosts are not Cuban government officials or communist party members.

There were reports in April last year that Vilma Rodriguez, the granddaughter of the former president of Cuba, Raul Castro, was renting a mansion through Airbnb, for which the company had received backlash.

The U.S. embargo against Cuba stipulates that no American entities shall engage in business transactions with Cuban interests. Started in the 1960s, it is the most long-lasting trade embargo in modern history.

Last month, Airbnb was in hot water for hosting rental properties in China’s Xinjiang region where Uyghurs are being subject to harsh conditions and forced into slave labor for Chinese and international, including American, companies.

The properties were owned by a Chinese paramilitary force accused of aiding Beijing’s genocide against Uyghurs. Sen. Marco Rubio (R-Fla.) had urged the company to delist the properties in a letter sent to Airbnb CEO Brian Chesky on Dec. 7.

“By maintaining these listings, Airbnb is complicit in enriching an organization facilitating horrific human rights abuse and risks violating U.S. sanction law that prohibits such transactions from occurring,” he wrote.

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