Travelocity.Com Fined For Cuba Trips

In a first for an online travel company, Travelocity.com has been fined by federal regulators for booking trips between the United States and Cuba, in violation of a 45-year-old U.S. embargo.

Travelocity.com paid $182,750 this month to settle a complaint brought by the U.S. Treasury Department's Office of Foreign Assets Control, which said the company violated the sanctions rules almost 1,500 times between January 1998 and April 2004.

Treasury's complaint said Travelocity "provided travel-related services in which Cuba or Cuban nationals had an interest by arranging air travel and hotel reservations to, from, with or within Cuba without an OFAC license."

The federal embargo-enforcement office has granted licenses to dozens of travel service providers for approved trips to and from Cuba for academic, religious or journalistic activities, humanitarian projects, family visits.

Travelocity spokesman Joel Frey said Wednesday the company had not applied for a license and did not intend to. "In no way did the company intend to allow bookings for trips to Cuba, and the company has fully cooperated with OFAC and implemented corrective measures."

"The trips to Cuba were unintentionally permitted to be booked by consumers online because of some technical failures several years ago, and it's just now being finally settled with OFAC," Frey wrote in an e-mail. "In no way did the company intend to allow bookings for trips to Cuba, and the company has fully cooperated with OFAC and implemented corrective measures."

Treasury spokeswoman Molly Millerwise said any individual or business that violates the Cuban sanctions can face civil or criminal penalties. She would not say whether the Travelocity investigation had been closed.

Travelocity did not voluntarily disclose the alleged violations but cooperated with OFAC's investigation, according to the agency's enforcement section.

The travel agency, based in Texas, is owned by Sabre Holdings Corp., which was taken private this year by affiliates of Silver Lake Partners and Texas Pacific Group. Its major competitors include Orbitz Worldwide Inc. and Expedia Inc., which owns Expedia.com, hotels.com and Hotwire.

None of those companies appear on OFAC's approved list of travel service providers for Cuba.

A Mexican subsidiary of American Express Travel Related Services Co. Inc. also agreed to pay $16,625 to settle OFAC allegations of violations involving Cuba travel. In December 2002 and October 2003, the Mexican company made sales of group travel packages to Cuba, according to the government.

American Express voluntarily disclosed the information to OFAC, according to the enforcement action.

Elsewhere, OFAC fined one unidentified individual $999.45 and another person $510 for buying Cuban cigars for sale on the Internet.