USA*Engage recently released a report on foreign countermeasures that have been applied to the extraterritorial application of unilateral U.S. sanctions. Most of the incidents covered in the report have been discussed here — such as the eviction of a Cuban oil delegation from an American-owned hotel in Mexico City and the eviction another Cuban delegation from a American-owned hotel in Oslo. But I missed one interesting story from April of this year. Of course, I blame Google.

The incident in question was the cancellation by BAWAG, an Austrian bank, of all accounts held by Cuban nationals at the bank in advance of the expected takeover of the bank by American-owned Cerberus Capital. Lawyers for Cerberus had evidently advised that it could not close the transaction as long as Cuban nationals had accounts at the bank. In response to the cancellations, Austria instituted proceedings under E.U. Council Regulation 2271/96 which prohibits compliance with U.S. sanctions on Cuba. BAWAG faced a 73,000 euro fine under the Austrian proceeding.

Two things are interesting about this. First, this is the first instance I am aware of where a proceeding has actually been brought by an E.U. member state under Regulation 2271/96. Second, BAWAG applied for a license from OFAC to reinstate the accounts. And the license was granted.
So companies that find themselves caught between the rock of U.S. sanctions and the hard place of foreign countermeasures should consider seeking a license based on the foreign countermeasure.

While reading some of the news accounts of the BAWAG matter, I also discovered the interesting story of Maria Cajigal-Ramirez, whose accounts at BAWAG were initially cancelled. Ms. Cajigal-Ramirez was a naturalized Austrian citizen who had been born in Cuba. Problem is that Cuba doesn’t allow renunciation of Cuban citizenship. Section 515.201 of the Cuban Assets Control Regulations prohibit transactions with Cuban “nationals.” Are banks, and other businesses, in the U.S. violating the CACR by dealing with first-generation Cuban immigrants since they are still Cuban nationals? And, in answering this question, don’t forget the application of section 515.303 of the CACR that says that dual nationals are considered nationals of both countries for purposes of the regulations.

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