Travel Services Provider Fined $5.9 Million for Cuba Sanctions Violations
By Dylan Tokar
Generali Global Assistance Inc. agreed to pay nearly $5.9
million to resolve apparent violations of U.S. sanctions on Cuba,
in a settlement that the U.S. Treasury Department said underscored
the need for companies to be cognizant of indirect sanctions
The self-reported case stems from Cuba-related insurance
reimbursements that the San Diego-based travel services provider
routed through a Canadian affiliate in an attempt to avoid U.S.
sanctions, the department's Office of Foreign Assets Control said
The total value of the prohibited transactions was low, but the
apparent violations were intentional, making it an egregious case,
OFAC said. Generali had codified the indirect payment process for
Cuba-related payments in its procedures manual, according to the
"[Generali] has worked diligently with OFAC to provide detailed
information about these prior practices and has made a substantial
investment of time and resources to further improve its sanctions
compliance program," a company spokesman said in a statement.
The apparent violations occurred between 2010 and 2015, when
Generali discovered the issue while reviewing its compliance
protocols and reported the transactions to the Treasury, the
During that time, Generali served as a provider to two Canadian
insurers that offered medical expense reimbursement and other
travel services to Canadians traveling to Cuba, according to
For reimbursement claims submitted by individual travelers, the
company would process the claims much as it did for travelers to
other countries, OFAC said. Direct payments requested by Cuban
service providers, however, were referred to Generali's Canadian
affiliate, which the company would later reimburse, it said.
Both forms of reimbursements violated U.S. sanctions on Cuba,
according to the settlement.
The case demonstrates the importance of ensuring that compliance
programs capture direct and indirect sanctions risks, including the
risk of implementing a procedure that allows a company to process
in a roundabout way a transaction that would otherwise be
prohibited, OFAC said.
The office also acknowledged the abrupt changes to U.S. policy
on Cuba that occurred between the administrations of Presidents
Obama and Trump. Cuba sanctions were at some point revised in a way
that authorized some of Generali's problematic conduct, OFAC said.
That was a mitigating factor, it said.
President Obama in December 2014 said he would begin discussions
with Cuba on normalizing relations. Shortly after in 2015 the U.S.
began easing trade and travel rules and removing Cuban individuals
and entities from U.S. blacklists.
But the Trump administration in June 2017 moved to reverse some
of the changes and has since incrementally tightened sanctions on
the island nation.
In the five years that have lapsed since the company disclosed
the payments, Generali has signed multiple extensions to a tolling
agreement, which pushes back the deadline by which authorities must
bring their claim, so that OFAC could continue its investigation --
another mitigating factor, according to OFAC.
Generali also established a formal structure for compliance
personnel, and rolled out new sanctions training for its employees,
San Diego-based Generali is part of Italian insurance
conglomerate Assicurazioni Generali SpA, also known as the Generali
Write to Dylan Tokar at firstname.lastname@example.org
(END) Dow Jones Newswires
October 01, 2020 18:25 ET (22:25 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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