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HavanaJournal.com: Cuba Politics

Travel to Cuba and the possible OFAC fines

Posted June 27, 2006 by publisher in Cuba Politics.
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By Mona Birch | The Triton

Here’s the scenario: You are American. You crew on a foreign-owned, foreign-flagged yacht headed to the Caribbean. The itinerary includes Cuba. Can you go?

Last year, Capt. James Smith (not his real name) had just this dilemma. Capt. Smith skippers a yacht that is registered in the Cayman Islands. He is British, but two members of his crew are American. The yacht spent much of 2005 in the United States, and during part of that time traveled the Caribbean islands, including Cuba, American crew and all.

As a foreign-registered, privately owned pleasure vessel, there were only minor restrictions on the yacht itself. (For example, the visit to Cuba needed to be sandwiched between foreign ports to avoid a direct line of contact between the two countries.) Generally, regulations stemming from the United States� embargo against Cuba apply only to U.S. vessels, or vessels assimilated without nationality.

So Capt. Smith�s boat was free to make the itinerary, as were he and his foreign crew.

A question arose over his American crew members.

Since the yacht�s owner is based in Asia, he applied for Cuban visas for all crew members from there; the American crew members received visas just like the rest of the crew. The visa was in the form of a piece of paper, not a passport stamp.

Americans, adhering to the embargo, are not forbidden from visiting Cuba, but they are forbidden from engaging in any transactions with Cuba or Cuban nationals. Under U.S. law, they cannot exchange any money, receive any services, or aid in any commerce with Cuba. That means, technically, that they cannot pay even the stamp tax needed to purchase a visa.

So the owner of the yacht obtained the visas for the crew. In addition, he gave each of the two Americans $500 to make �purchases on behalf of the vessel.� The boat, which traveled to Cuba via the Bahamas and returned back to Florida via the Cayman Islands, faced no �rigorous customs� on its return to Florida, Capt. Smith said.

“It actually was pretty straightforward,” he said. “I didn’t hide anything. They knew where we had been. The way I understand it, there is no prohibition in American law against going to Cuba; you just can �give succor to the enemy.��

U.S. embargo controls money, not people

Capt. Smith’s understanding of the law is technically correct. The embargo is about controlling dollars. That is why the regulations and their enforcement are handled by the U.S. Treasury Department, not the State Department. Specifically, it is the Office of Foreign Assets Control (OFAC) that administers the sanctions, and issues licenses and permits to travel and/or spend money in Cuba.

Over the past two years, since President Bush signed Presidential Proclamation 7757 in February 2004 that specifically targets vessels traveling to Cuba from U.S. ports, those licenses and permits have been harder to come by.

Once, groups traveled legally to Cuba for reasons of academic research or humanitarian aid under a category called “fully hosted travel,” meaning the individual participants had no financial dealings with the country. Their expenses were hosted by a third party, presumably doing business with Cuba legally.

In 2004, the language �fully hosted travel� was removed as a travel category, slimming an applicant�s chances of obtaining a license.

Accompanying these challenges is a stricter interpretation of laws. According to Molly Millerwise, spokeswoman for the Public Affairs office of the U.S. Treasury Department, the 2004 rule changes can be simplistically defined this way: “As an American, you can swim to Cuba, touch the shore and come back, and as long as you don’t spend any money, you won’t be breaking any laws. That’s about the extent of it.�

Therefore, the word from OFAC is: A U.S. citizen or U.S. Permanent Resident Alien may not provide crewing services “neither as captain nor crew” on any vessel, including a foreign-owned vessel, en route to or from Cuba unless that individual or the vessel�s trip is licensed by OFAC.

According to a lawyer at the Treasury Department, the very fact that they were working on a vessel that is trading with Cuba makes them culpable. They are seen as trading with the enemy by providing support to a vessel, or assisting a vessel that is bringing travelers to and from Cuba, and therefore may be prosecuted.

Enforcement differs from letter of law

OK, so that�s the law. What about enforcement? What about people like Capt. Smith who made the trip with American crew and had no problems? What is this murky water that sits between law and luck?

�Unfortunately, there�s no cookie-cutter answer to that,� said one yacht manager in Ft. Lauderdale. �But the boats we manage [foreign-flagged, some with American owners] do go back and forth to Cuba without any problem.�

Another yacht manager in Ft. Lauderdale who has worked with several boats traveling to Cuba, advises her foreign-flagged boats with American crew to anchor out (thereby avoiding paying for dockage that might be construed as helping Cuba) and leave the American crew onboard.

One American captain says he just won�t go to Cuba, and recommends the same to any American crew. It�s just not worth it, he said.

�Before Bush, it was kind of like a don�t-ask, don�t-tell policy regarding Cuba,� he said. �You know, don�t go waving a cigar under customs� nose, that sort of thing.�

Now there are fines and threats of jail.

Exchanges between Cuba and the United States increasingly have come under challenge since President Bush came to office in 2000, helped in no small way by the Cuban-American vote.

That year, according to an article in the Washington Times newspaper, OFAC sent out 188 pre-penalty notices, which is essentially a letter entitled �Requirement to Furnish Information,� asking for the purpose of the trip, activities and expenditures in Cuba.

Pre-penalty notices do not necessarily lead to penalties � at that time, most did not, the newspaper reported � but they can.

In 2001, 697 notices were sent out. In 2002, 447 notices were sent, and in 2003, 350 notices were sent. Carter concluded that the increase in numbers was attributed to enforcement, and the decline in numbers of notices was attributed to the fact that word was getting out. Violations of the travel ban were subsiding.

At the same time, it appears prosecutions are on the rise. In 2004, the Treasury Department announced the appointment of three Administrative Law Judges to start reviewing cases dating back to 1999 and sometimes later. In the first quarter of 2005, OFAC fined 307 Americans for violating the embargo, almost the same amount that had been prosecuted in all of 2004, which saw 316 Americans get fined.

Since 2004, visits from Americans down

The Bush Administration is using all the available resources of the Homeland Security Department for aggressive enforcement of the regulations � and it appears to be having the desired effect, at least according to the government of Cuba, which complained about the embargo in a recent report to the United Nations.

The report claimed that only 57,145 Cuban Americans visited Cuba in 2004, fewer than half the 115,050 who visited in 2003. Also, according to the report, 85,809 �other Americans� (that is, non-Cuban Americans) visited Cuba in 2003, and 51,027 visited in 2004. The figures do not distinguish between legal and illegal American visitors, since, other than for public relations purposes, that is not a Cuban concern.

The U.S.-Cuba Trade and Economic Council, a nonpartisan group based in New York that monitors trade with Cuba, estimates that about 30,000 Americans traveled to the island nation illegally in 2003, but that number may have dropped by about 20 percent since then.

So it appears that the aggressive enforcement of regulations that began in 2004 seems to be having an effect.  Or perhaps it is the �fear factor� that is doing all the work. There is no doubt that the Bush administration has Cuba in its crosshairs, and has made embargo enforcement a national priority.

At the same time, even some within the Republican Party complain that attempting such enforcement diverts already stretched resources.  Others insinuate that letter-of-the-law enforcement is impossible; there is neither the man-power nor the inclination to do it effectively.

But that�s not a solution: that�s the murky water.

Calculating the risk

So, what are the options? What are the circumstances under which an American crew member or even an American vessel can travel to Cuba? The answer is the bottom line: What are the risks?

Here is the American government�s position on the matter:

U.S. vessels wanting or needing to have transactions with Cuba must apply for three sets of licenses or permits: A cruising permit from the U.S. Coast Guard (http://www.uscg.mil); a license from OFAC, the Office of Foreign Assets Control (http://www.ustreas.gov/ofac); and a Bureau of Industry & Security Export License from the Department of Commerce (http://www.bis.doc.gov).

In conjunction with these licenses, concerned captain and crew of pleasure yachts need to be aware of two sets of regulations � one put forth by the Coast Guard, and one put forth by OFAC.

The Coast Guard regulations are relatively simple: They state that all U.S. vessels (as well as vessels without nationality) that are less than 328 feet in length must obtain a Coast Guard permit when they leave the 12-mile U.S. territorial waters and thereafter enter Cuban territorial waters, regardless of intervening entry into or passage through any other territorial waters.

In order to obtain the Coast Guard permit, however, applicants must have a license from OFAC � and that�s where things get complicated.

OFAC rules, while they affect lives, generally focus on the exchange of money: First, no vessel � regardless of flag � that enters a port or place in Cuba to engage in the trade of goods or the purchase or provision of services may enter a U.S. port for the purpose of loading or unloading freight for a period of 180 days from the date the vessel departed from a port or place in Cuba.

However, if the vessel is coming into a U.S. port for a purpose other than loading or unloading freight, the 180-day rule does not apply.

Second, no vessel carrying goods or passengers to or from Cuba or carrying goods in which Cuba or a Cuban national has an interest may enter a U.S. port with such goods or passengers on board. This rule is usually limited to vessels carrying goods in commercial quantities and to vessels carrying passengers to or from Cuba as a ferrying service as opposed to a pleasure boat.

So what about pleasure vessels? Well, U.S.-flagged vessels cannot go without the proper permits and licenses from OFAC. Do such documents exist? Yes, but they are becoming increasingly harder � some cruisers say impossible � to get.

What about an emergency? A boat with U.S. crew forced to head to Cuba because of an emergency at sea is supposed to (and should) contact OFAC Licensing Division (+1-202-622-2480) or have someone contact OFAC on their behalf as soon as possible to obtain a proper license.

Foreign vessels don�t have issues

Foreign pleasure vessels that cruise U.S. waters as well Cuban waters fare far better. They are subject to some minor regulations � such as the aforementioned intervening port stops � but are free to include both U.S. ports and Cuban ports on their itinerary.

According to a U.S. Coast Guard officials who declined to be identified, they need not fear any retaliatory measures regarding future cruising permits and the like, assuming the vessels are privately owned pleasure vessels. It is unlikely that they would get caught up in a legal tangle merely for exercising their right, as non-Americans, to travel between the two countries.

The U.S. Coast Guard and OFAC work independently of each other. One is a governmental office and the other is part of the military. The Coast Guard issues cruising permits for foreign vessels, and the laws regarding their issuance (and renewal) are not matters within OFAC�s jurisdiction.

So what about the original question: As an American crew on a foreign-flagged yacht, can you go to Cuba or not? What�s the bottom line, and what happens if you get caught?

The scenarios are many and, however they play out, the risk is potentially high.

Chances are, like with Capt. Smith�s crew, there will be no repercussions. On the other hand, just because no one saw fit to report the fact that the Americans onboard had broken the law, it doesn�t exclude a different outcome.

As Capt. James Maes, head sector commander for the U.S. Coast Guard�s Sector Miami explained, when you make the decision to break the law, �you have to consider the unexpected.� It well may be that as crew you will clear back into the United States without problems.

On the other hand, if something comes up, if there is an unexpected problem that draws an officer�s attention, then consequences � particularly future consequences in terms of black lists, never mind the fines � can be serious.

Rule No. 1: don�t lie

What if you get caught? The International Bicycle Fund (IBF), which defines itself as �a non-governmental nonprofit advocacy organization promoting � international understanding,� devotes several pages of its Web site to this predicament (http://www.ibike.org).

The primary rule to remember is to be honest � to a point. Lying to the U.S. government is a felony for Americans, and will get you what it got Martha Stewart: jail time. Remember that technically it is not illegal to go to Cuba.

If it wants to prosecute you, the U.S. government must prove that you spent money in Cuba, were an unlicensed traveler to Cuba, and that you knew it was illegal, according to IBF. After confirming that you have been to Cuba (which is not illegal), you have a right to refuse to say anything more. The onus is on the government to prove you have broken the law.

Keep in mind, however, that OFAC does have written regulations that presume that anyone traveling to Cuba has spent money there. Therefore, they may seek � and reportedly have obtained � civil fines in an administrative proceeding, forcing the offender to agree to settlement.

Here�s how it could happen: Somebody � an official from U.S. Customs and Border Protection perhaps � reports you to OFAC. OFAC will then send you a letter asking you about it. Although it might go away with no follow-up on your part, there is a five-year statute of limitations on violations, so the threat hangs around awhile.

It is best to respond with your own letter stating that you did not violate any federal law or regulation. IBF offers a sample response letter on its Web site.

If you get another letter notifying you that a civil penalty will be imposed, respond within the time stated. And again, says IBF, don�t lie but don�t admit you violated the law, and don�t waive defense rights.

What often happens next is an OFAC official may contact you to negotiate a settlement, which you may decide to pay. The maximum fine paid by a violator, up to this time, is about $7,500, but the full fury of the law can subject the violator to almost 10 times that amount, and include prison time. Alternatively, you may request a hearing. At that point, though, it is time to find a lawyer.

Mostly, the waters around the United States are woven with friendly international partners, and the rules of exchange are pretty straightforward. But Cuba, since the first arms embargo of 1958, remains problematic. Just how problematic, ebbs and flows � like politics, like the tide.

Freelance writer Mona Birch lives in Dania beach. Her last story for The Triton was on cave diving in Andros Island in the April issue. Contact her through .(JavaScript must be enabled to view this email address)

Member Comments

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On June 27, 2006, Bernie wrote:

All the persons who have visited Cuba legally or otherwise should remember
WHO is denying the privilage of going to Cuba to them.  Since it is a political
issue, then the most likely defence would be to vote in the next election against
these people who deny your right to the freedom to travel where you wish.
So get out and vote these republicans out of office.  If you don’t like the dumbocrats vote third party.  Go on the offense and remove the parasites out of office.  Tell your families, friends whoever you meet in the streets tell them of thiis denial odf your freedoms.

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On June 28, 2006, Boat owner wrote:

’” Foreign pleasure vessels that cruise U.S. waters as well Cuban waters fare far better. They are subject to some minor regulations � such as the aforementioned intervening port stops , but are free to include both U.S. ports and Cuban ports on their itinerary. “

What happens if I go directly between a Cuban and American port. Say
Havana to Key West ?
Pleasure vessel, foreign owned.

Can I claim that I didnt know the regulations ?

Where can I find the regulations for foreign owned vessels ?

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On June 28, 2006, redwood wrote:

you need a license from OFAC to trade with the enemy.  that rule applies to all American nationals.  not knowing only spares you criminal penalties.

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On June 30, 2006, Boat owner wrote:

What enemy ? Criminal ?
I am not american thats why I ask.
Why should I be affected by the war between the two clowns.
I am afraid thats how we see it and we also see who suffer.
The people and every one else that become involved.
If I go from Mexico to Florida.  Why cannot I visit Havanna on the way.
Bahamas is a long way for nothing.

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On July 04, 2006, MiamiCuban wrote:

Reading this article only makes it all the more obvious how ridiculous these sanctions are.

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On July 09, 2006, floridarob wrote:

they quote the decline in US visitors…has Cuba ever thought that the reason is. like myself….I’ve been to Cuba many times, each time progressively worse and I tell my friends here, I haven’t been back in 6 months, have no intentions of returning and try to tell all my friends how bad it has gotten…..but no, the Cuban government will always place blame at someone else’s doorstep ....I guess like all governments do, especially the USA.