According to the latest civil penalty information released by the Office of Foreign Assets Control (“OFAC”), the Center for Cross-Cultural Studies (“CC-CS”), a Massachusetts-based company specializing in arranging university study programs abroad, agreed to pay $15,000 to settle allegations that it violated the U.S. embargo on Cuba. Interestingly, the fine appears to relate to activities conducted by CC-CS in connection with otherwise licensed activity.

As usual, the abbreviated squib provided by OFAC provides few details of what actually happened, but Jerry Guidera, a director of CC-CS, sent details of the situation to the website Havana Journal. According to Guidera, the dispute between CC-CS and OFAC centered on a program conducted by CC-CS and Willamette University in Salem, Oregon from 1997 to 2004 (In 2004 tightened OFAC regulations on educational activities in Cuba resulted in the elimination of most U.S. educational programs in Cuba.) CC-CS designed the program and handled the logistics using its staff in the U.S. and in Cuba.

An article from the journal Higher Education, also reprinted at the Havana Journal website, provides even more detail:

It was when the government blocked an attempted wire transfer, intended to cover program costs, in January 2004 … that Guidera said CC-CS came under governmental scrutiny.

“We’ve been dealing with this for almost five years now,” said Guidera, who added … that, in reaching the settlement, there was no finding of fault. He believes the regulations then in place allowed for subcontractors to act on licensees’ behalf. “We’re convinced that we would have won in court.”

“If we had infinite resources we would have kept fighting this one forever.”

Actually, I don’t think CC-CS is on very strong ground here. The Cuban Assets Control Regulations are generally quite specific in detailing what sorts of transactions incident to licensed transactions are permitted, and there isn’t a broad exception for activities of subcontractors or agents of licensees. Moreover, section 515.565(a)(2)(vii) of those regulations, which was not changed by the 2004 amendments, seems to be quite clear that “the organization of and preparation for” licensed educational activities is permitted only “by a full–time employee of a [licensed] U.S. academic institution.” That would seem to suggest pretty clearly that CC-CS’s provision of logistics to Willamette with respect to its Cuba study program required a separate license.

Permalink


Copyright © 2008 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)