Travelocity fined for booking Cuba trips

updated 4:39 p.m. ET Aug. 15, 2007

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

Travelocity.com earlier this month paid $182,750 to settle a complaint brought by the U.S. Treasury Department's Office of Foreign Assets Control, which said the company violated the prohibition nearly 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."

Dozens of travel service providers have been granted licenses by OFAC for approved trips to and from Cuba for everything from academic, religious and journalistic activities to humanitarian projects and visits to immediate family.

Travelocity spokesman Joel Frey on Wednesday said the company had not applied for a license and did not intend to.

"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 declined to say if the Travelocity investigation had been closed.

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

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Southlake, Texas-based Travelocity is owned by Sabre Holdings Corp., which was taken private earlier 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 are included on OFAC's approved list of travel service providers for Cuba.

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A Mexican subsidiary of American Express Travel Related Services Co. Inc. also agreed to pay $16,625 to settle OFAC allegations of Cuba-related violations. 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 unnamed individual $999.45 and another person $510 for buying Cuban cigars for sale on the Internet.

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