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Syed Rahman of financial crime specialists Rahman Ravelli considers the charges that Airbnb faced over sanctions violations

Author: Syedur Rahman  12 January 2022

A subsidiary of the accommodation rental website Airbnb is to pay $91,000 to settle civil charges that it violated US sanctions on Cuba.

Announcing the settlement, the US Office of Foreign Assets Control (OFAC) said that from 2015 to 2020 Airbnb processed around 3,500 transactions by those travelling to Cuba for reasons not allowed by the US. Travel to Cuba for tourism is banned by the US, although it allows visits under 12 categories, which include visiting relatives or carrying out research.

OFAC added that Airbnb failed to keep a proper record of around 3,000 Cuba-related transactions and processed 44 payments before the agency had given permission to the website to handle them. 

The violations happened, according to OFAC, because Airbnb was quick to conduct Cuba-related business once the US lifted some trade and travel restrictions on the country in 2015.  Airbnb did not fully take into account the continued risk of violating US sanctions.

In a statement, OFAC said: “Scaling up of its services in Cuba appears to have outpaced the company’s ability to manage the associated sanctions risks via its technology platforms, leading to some of the apparent violations.

“This action highlights the risks associated with entering new commercial markets, particularly one that has elevated sanctions risks such as Cuba, without fully anticipating the complexities of legally operating in a US-sanctioned jurisdiction and fully implementing appropriate sanctions compliance controls.”

An Airbnb spokesperson said it took sanctions compliance ‘’very seriously” and was pleased to have reached the agreement with OFAC. The company originally disclosed the sanctions investigation two years ago, when it stated it had avoided a penalty over its business in Crimea and was under investigation by the UK’s Financial Conduct Authority in relation to its anti-money laundering compliance.

OFAC considered a number of factors when concluding this settlement. Airbnb is a large US company and the violations followed a US foreign policy change in relation to Cuba. But the company did not assess the changes to Cuban Asset Control Regulations (CACR), which provided specific restrictions. But it is clear that various mitigating factors were also taken into account, such as Airbnb conducting an internal investigation of its sanctions programme and volunteering its findings to OFAC, and the remedial measures it introduced to ensure sanctions compliance going forward.

This article originally featured on Mondaq, it can be read here.

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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, civil recovery, cryptocurrency and high-stakes commercial disputes.

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