OFAC continues to chalk up enforcement actions.  For the year, even with the pandemic slow down, OFAC has reached 13 settlement agreements totaling $18.6 million in penalties.

In its latest enforcement settlement, Generali Global Assistance, Inc. (“GGA”), a US-based travel assistance services company that provides travel and claims services on behalf of clients that offer global medical expense and travel insurance policies, agreed to pay $5.864 million for 2,593 violations of the Cuban Sanctions Program.

Between June 2010 and January 2015, GGA provided travel services to two Canadian insurers for medical expense, travel insurance and emergency travel insurance policies for non-US Canadian subscribers who travelled to Cuba. 

GGA’s violations stemmed from indirect medical expense claim processing and payment services for Canadian travelers insured under a group insurance policy sold by a Canadian insurer.

GGA intentionally referred Cuba-related payments to its Canadian affiliate to avoid directly processing reimbursement payments to Cuban parties and to travelers while they were located in Cuba.  GGA then reimbursed its Canadian affiliate for those payments.  GGA included this indirect payment process in its procedures manual as a formal policy control.

Under this indirect procedure, GGA effectively dealt in blocked property in which Cuba or a Cuban national had an interest by: (1) providing post-travel claim reimbursements to Canadian travelers to Cuba; and (2) providing for indirect payment of claims to Cuban service providers through a Canadian affiliate.

GGA processed claims and made reimbursement payments to the travelers in the same manner as other travel destinations.  GGA referred requests for payments to Cuban service providers to its Canadian affiliate, and would then reimburse the Canadian affiliate.

GGA processed 2,593 transactions with a value of $285,760.

Ironically, GGA had a sanctions compliance policy in place at the time but somehow implemented a formal policy that violated basic Cuban Sanctions Program restrictions.

In weighing its enforcement factors, OFAC noted that GGA voluntarily disclosed the violations, engaged in reckless conduct by implementing an indirect program for conduct that it could not conduct directly, and that GGA is a sophisticated global organization that provides travel services to insurers worldwide.

On the mitigation side of the equation, OFAC noted that it amended its Cuban Sanctions Program in 2015, which then authorized some of GGA’s conduct, and the total transaction value was relatively low.

GGA took remedial action in response to the violations by enhancing its existing OFAC compliance policies and procedures, establishing a formal structure for compliance personnel and conducting new sanctions training for all GGA employees.

GGA terminated the prohibitive conduct; committed to ensuring that its senior management, including senior leadership, executives or the board of directors, support GGA’s OFAC compliance program; and designed and implemented written policies and procedures outlining its sanctions compliance plan and enforcement of its policies and procedures through internal or external audits.