In a recent securities filing, Avianca Holding SA, a Panama-based airline holding company, disclosed that the US Department of the Treasury’s Office of Foreign Assets Control concluded an investigation into the company’s dealings with Cuba and Iran and chose to issue a Cautionary Letter rather than pursue a civil monetary penalty or other enforcement action against the company. According to the Form 6-K that was filed on August 13, 2021, the Cautionary Letter, published on June 16, 2021, is OFAC’s final enforcement response to these apparent violations; however, the letter does not constitute a final decision regarding the existence of any sanctions violations and does not preclude OFAC from pursuing future enforcement action should additional information arise.
While Avianca did not provide details related to the Iran-related investigation, Avianca indicated that the Cuba investigation was launched after Avianca voluntarily self-disclosed possible US sanctions violations in September of 2019 that were inadvertently made following an ownership change initiated by its parent company in 2018, that subjected Avianca to US sanctions laws. As a result, Avianca discovered regular passenger flights between cities in Central and South America and Havana, Cuba that may have violated the US Cuban Assets Control Regulations (CACR) following the ownership change. Since the discovery, Avianca not only made three voluntary self-disclosures to OFAC regarding the flights, but also commenced a campaign to terminate all Cuba-related activities and made comprehensive enhancements to its compliance program worldwide, that include an improved sanctions compliance program.
Avianca reports that, as of the date of this August 2021 filing, it no longer maintains a physical presence in Cuba, has terminated all flights in and out of Cuba, and has kept OFAC apprised of their progress. The company also revealed that other ongoing investigations continue. While the nature of the ongoing investigations were not specifically revealed in its most recent securities filing, Avianca previously disclosed in a November 2019 securities filing, that the US Department of Justice, Securities and Exchange Commission and the Columbian Financial Superintendence had launched investigations into possible Foreign Corrupt Practices Act violations by Avianca. According to Avianca, the investigations were in connection with free and discounted airline tickets that company employees may have provided to government officials in various countries, following voluntary disclosures made by Avianca in August 2019. The company also more recently revealed in June 2021 that the SEC concluded its corruption investigation and chose not to pursue an enforcement action against the company.