The Office of Foreign Assets Control (“OFAC”) has made sort of a name for itself by issuing cryptic penalty announcements where it is a considerable challenge to figure out what went on and why the unfortunate company that has been whacked with an “agreed” fine got itself tangled up with OFAC in the first place. But the recent penalty slapped on Gil Tours Travel for some vague violation of the Cuba sanctions takes the cake or, I suppose, el pastel.

According to the penalty announcement, Gil was being fined because “dealt in property in which Cuba or Cuban nationals had an interest, by providing Cuba travel-related services involving 191 individuals, without authorization from OFAC,” which is pretty much like saying Gil broke the rules when it broke the rules. But here’s the kicker. In discussing aggravating factors, OFAC says this:

Gil Travel had some awareness that it was providing Cuba-related travel services, and that its conduct could be in violation of the CACR [Cuban Assets Control Regulations]

Say what? It had “some awareness” that it was providing Cuba-related travel service and that this “could” be in violation of the rules? What on earth does that mean? How can you not know whether you are providing Cuba-related services? Close only counts in horseshoes and hand grenades, not rule violations. It’s a binary thing: you either are or are not providing those services and, if you are, you know it. Don’t count on any clarification from OFAC to help anyone figure out what happened here.

Apparently the owner of Gil Tours told (subscription required) Law360 sort of what was going on, although his explanation is not a model of clarity either.

Gil’s president and CEO Igal Hami told Law360 on Wednesday by email that … its only involvement with the trips under investigation was in referring nonprofit agencies that had OFAC licenses to arrange Cuban travel to another tour operator that also had a license.

So, apparently (if this is true), OFAC thinks you violate the CACR if you refer someone to a licensed tour operator unless you have a license to make that referral. In other words, if I included a link here to a licensed provider of people-to-people tours to Cuba, I would be breaking OFAC rules because I don’t have a license to make that referral. No wonder OFAC didn’t want to let on what happened here.

(I’m really, really, really hoping someone at OFAC clicked the link above to see if I had committed this violation. Explanation here.)

With the corpses of banks skewered by OFAC strewn around everywhere you look, it is not altogether surprising that banks are terrified of the agency and are scared to death that the slightest misstep might bring the wrath of the agency down upon them. The latest instance of acute ofacaphobia, reported here in an excellent Miami Herald article, involves banks in a panic that travelers to Cuba on one of the general licenses might be fibbing and might really be going to Cuba to drink mojitos in Old Havana and hang out on the beach.

Before travelers can arrive in Cuba, the airline or charter company needs to pay $194 per passenger for landing fees and mandatory health insurance. According to the article, now that passengers self-certify their eligibility under the twelve categories covered by the general license for travel, banks are trying to verify that these self-certifications are accurate, asking for itineraries and other information to assure themselves that they won’t be the next cow in the OFAC abbatoir.

Meanwhile, analysts said perhaps the biggest reason banks are wary of Cuba business are the huge — and recent — fines aimed at banks that have done business with sanctioned countries. Just last month, France’s Crédit Agricole bank paid nearly $800,000 [sic – $800,000,000] to U.S. state and federal agencies to settle allegations it tried to hide or obscure references to transactions involving U.S.-sanctioned nations, including Cuba.

The result has been that travelers arrive at the airport only to learn that they aren’t going to Cuba, that the flight has been cancelled, and that they have to go home because necessary fees had not been transferred by the U.S. banks. Apparently they are so irritated that charter companies have gone to the airport with “police escorts” to deliver the bad news.

This should come as no surprise to OFAC. And there is a simple solution: issue guidance to the banks that they can rely on the traveler’s self-certification of their eligibility under the general license. If Justin Whiteshoes says he’s going to Cuba on a people-to-people tour and is, in fact, going on a bar-to-bar tour, it is going to be Justin Whiteshoes who gets whacked and not the bank that wired his $194 fee to Cuba.