January 4, 2022

OFAC reaches $91,000 settlement with money services business to resolve apparent violations of CACR

On January 3, 2022, the US Department of the Treasury’s Office of Foreign Assets Control announced a $91,000 settlement that was reached with Airbnb Payments, Inc., a registered money services business that is a wholly owned subsidiary of Airbnb, Inc., to resolve potential civil liability for apparent violations related to Cuba-related sanctions administered by OFAC.  The apparent violations involved the processing of payments for customers traveling for reasons outside of the 12 categories authorized by OFAC and failing to keep records of its Cuba-related transactions as required by OFAC regulations.  OFAC ultimately determined that the apparent violations were voluntarily self-disclosed and non-egregious in nature and indicated that the settlement amount reflects these findings.

Based on a forensic review conducted by Airbnb Payments, between September 28, 2015 and March 1, 2020, the company processed 3,464 transactions related to traveler lodgings that were for reasons outside of OFAC’s authorized categories and 3,076 transactions related to traveler activities for which Airbnb Payments failed to keep records in accordance with OFAC regulations.  Airbnb Payments also processed payments for 44 transactions involving non-US persons who travelled to Cuba before OFAC issued a special license authorizing the conduct.  OFAC concluded that Airbnb Payments violated the Cuban Assets Control Regulations (CACR), 31 CFR § 515.201 and § 515.572(b) when it processed these payments.

OFAC reports that the apparent violations most likely occurred because Airbnb’s global customer base grew in response to the new services provided in Cuba in a manner that outpaced its ability to manage the sanctions risks related to its internet-based platform.  However, OFAC acknowledged that Airbnb Payments discovered the apparent violations on its own during an internal review of its sanctions compliance program, then voluntarily reported its findings to OFAC and implemented remedial measures in order to improve its compliance program and prevent future deficiencies.  In addition, Airbnb Payments fully cooperated with OFAC investigators and agreed to toll the statute of limitations resulting in a settlement with a reduced civil monetary penalty.

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