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Embargo against Cuba
bans U.S. money, not
Americans |
U.S. crew on
foreign-flagged
megayachts run the risk
of prosecution. Not a
big risk, but a risk
just the same.
By
Mona Birch
Here’s the scenario: You
are American. You crew
on a foreign-owned,
foreign-flagged yacht
headed to the Caribbean.
The itinerary includes
Cuba. Can you go?
Last year, Capt. James
Smith (not his real
name) had just this
dilemma. Capt. Smith
skippers a yacht that is
registered in the Cayman
Islands. He is British,
but two members of his
crew are American. The
yacht spent much of 2005
in the United States,
and during part of that
time traveled the
Caribbean islands,
including Cuba, American
crew and all.
As a foreign-registered,
privately owned pleasure
vessel, there were only
minor restrictions on
the yacht itself. (For
example, the visit to
Cuba needed to be
sandwiched between
foreign ports to avoid a
direct line of contact
between the two
countries.) Generally,
regulations stemming
from the United States’
embargo against Cuba
apply only to U.S.
vessels, or vessels
assimilated without
nationality.
So Capt. Smith’s boat
was free to make the
itinerary, as were he
and his foreign crew.
A question arose over
his American crew
members.
Since the yacht’s owner
is based in Asia, he
applied for Cuban visas
for all crew members
from there; the American
crew members received
visas just like the rest
of the crew. The visa
was in the form of a
piece of paper, not a
passport stamp.
Americans, adhering to
the embargo, are not
forbidden from visiting
Cuba, but they are
forbidden from engaging
in any transactions with
Cuba or Cuban nationals.
Under U.S. law, they
cannot exchange any
money, receive any
services, or aid in any
commerce with Cuba. That
means, technically, that
they cannot pay even the
stamp tax needed to
purchase a visa.
So the owner of the
yacht obtained the visas
for the crew. In
addition, he gave each
of the two Americans
$500 to make “purchases
on behalf of the
vessel.” The boat, which
traveled to Cuba via the
Bahamas and returned
back to Florida via the
Cayman Islands, faced no
“rigorous customs” on
its return to Florida,
Capt. Smith said.
“It actually was pretty
straightforward,” he
said. “I didn’t hide
anything. They knew
where we had been. The
way I understand it,
there is no prohibition
in American law against
going to Cuba; you just
can ‘give succor to the
enemy.’”
U.S. embargo controls
money, not people
Capt. Smith’s
understanding of the law
is technically correct.
The embargo is about
controlling dollars.
That is why the
regulations and their
enforcement are handled
by the U.S. Treasury
Department, not the
State Department.
Specifically, it is the
Office of Foreign Assets
Control (OFAC) that
administers the
sanctions, and issues
licenses and permits to
travel and/or spend
money in Cuba.
Over the past two years,
since President Bush
signed Presidential
Proclamation 7757 in
February 2004 that
specifically targets
vessels traveling to
Cuba from U.S. ports,
those licenses and
permits have been harder
to come by.
Once, groups traveled
legally to Cuba for
reasons of academic
research or humanitarian
aid under a category
called “fully hosted
travel,” meaning the
individual participants
had no financial
dealings with the
country. Their expenses
were hosted by a third
party, presumably doing
business with Cuba
legally.
In 2004, the language
“fully hosted travel”
was removed as a travel
category, slimming an
applicant’s chances of
obtaining a license.
Accompanying these
challenges is a stricter
interpretation of laws.
According to Molly
Millerwise, spokeswoman
for the Public Affairs
office of the U.S.
Treasury Department, the
2004 rule changes can be
simplistically defined
this way: “As an
American, you can swim
to Cuba, touch the shore
and come back, and as
long as you don’t spend
any money, you won’t be
breaking any laws.
That’s about the extent
of it.”
Therefore, the word from
OFAC is: A U.S. citizen
or U.S. Permanent
Resident Alien may not
provide crewing services
– neither as captain nor
crew – on any vessel,
including a
foreign-owned vessel, en
route to or from Cuba
unless that individual
or the vessel’s trip is
licensed by OFAC.
According to a lawyer at
the Treasury Department,
the very fact that they
were working on a vessel
that is trading with
Cuba makes them
culpable. They are seen
as trading with the
enemy by providing
support to a vessel, or
assisting a vessel that
is bringing travelers to
and from Cuba, and
therefore may be
prosecuted.
Enforcement differs from
letter of law
OK, so that’s the law.
What about enforcement?
What about people like
Capt. Smith who made the
trip with American crew
and had no problems?
What is this murky water
that sits between law
and luck?
“Unfortunately, there’s
no cookie-cutter answer
to that,” said one yacht
manager in Ft.
Lauderdale. “But the
boats we manage
[foreign-flagged, some
with American owners] do
go back and forth to
Cuba without any
problem.”
Another yacht manager in
Ft. Lauderdale who has
worked with several
boats traveling to Cuba,
advises her
foreign-flagged boats
with American crew to
anchor out (thereby
avoiding paying for
dockage that might be
construed as helping
Cuba) and leave the
American crew onboard.
One American captain
says he just won’t go to
Cuba, and recommends the
same to any American
crew. It’s just not
worth it, he said.
“Before Bush, it was
kind of like a
don’t-ask, don’t-tell
policy regarding Cuba,”
he said. “You know,
don’t go waving a cigar
under customs’ nose,
that sort of thing.”
Now there are fines and
threats of jail.
Exchanges between Cuba
and the United States
increasingly have come
under challenge since
President Bush came to
office in 2000, helped
in no small way by the
Cuban-American vote.
That year, according to
an article in the
Washington Times
newspaper, OFAC sent out
188 pre-penalty notices,
which is essentially a
letter entitled
“Requirement to Furnish
Information,” asking for
the purpose of the trip,
activities and
expenditures in Cuba.
Pre-penalty notices do
not necessarily lead to
penalties – at that
time, most did not, the
newspaper reported – but
they can.
In 2001, 697 notices
were sent out. In 2002,
447 notices were sent,
and in 2003, 350 notices
were sent. Carter
concluded that the
increase in numbers was
attributed to
enforcement, and the
decline in numbers of
notices was attributed
to the fact that word
was getting out.
Violations of the travel
ban were subsiding.
At the same time, it
appears prosecutions are
on the rise. In 2004,
the Treasury Department
announced the
appointment of three
Administrative Law
Judges to start
reviewing cases dating
back to 1999 and
sometimes later. In the
first quarter of 2005,
OFAC fined 307 Americans
for violating the
embargo, almost the same
amount that had been
prosecuted in all of
2004, which saw 316
Americans get fined.
Since 2004, visits from
Americans down
The Bush Administration
is using all the
available resources of
the Homeland Security
Department for
aggressive enforcement
of the regulations – and
it appears to be having
the desired effect, at
least according to the
government of Cuba,
which complained about
the embargo in a recent
report to the United
Nations.
The report claimed that
only 57,145 Cuban
Americans visited Cuba
in 2004, fewer than half
the 115,050 who visited
in 2003. Also, according
to the report, 85,809
“other Americans” (that
is, non-Cuban Americans)
visited Cuba in 2003,
and 51,027 visited in
2004. The figures do not
distinguish between
legal and illegal
American visitors,
since, other than for
public relations
purposes, that is not a
Cuban concern.
The U.S.-Cuba Trade and
Economic Council, a
nonpartisan group based
in New York that
monitors trade with
Cuba, estimates that
about 30,000 Americans
traveled to the island
nation illegally in
2003, but that number
may have dropped by
about 20 percent since
then.
So it appears that the
aggressive enforcement
of regulations that
began in 2004 seems to
be having an effect. Or
perhaps it is the “fear
factor” that is doing
all the work. There is
no doubt that the Bush
administration has Cuba
in its crosshairs, and
has made embargo
enforcement a national
priority.
At the same time, even
some within the
Republican Party
complain that attempting
such enforcement diverts
already stretched
resources. Others
insinuate that
letter-of-the-law
enforcement is
impossible; there is
neither the man-power
nor the inclination to
do it effectively.
But that’s not a
solution: that’s the
murky water.
Calculating the risk
So, what are the
options? What are the
circumstances under
which an American crew
member or even an
American vessel can
travel to Cuba? The
answer is the bottom
line: What are the
risks?
Here is the American
government’s position on
the matter:
U.S. vessels wanting or
needing to have
transactions with Cuba
must apply for three
sets of licenses or
permits: A cruising
permit from the U.S.
Coast Guard (www.uscg.mil);
a license from OFAC, the
Office of Foreign Assets
Control (www.ustreas.gov/ofac);
and a Bureau of Industry
& Security Export
License from the
Department of Commerce (www.bis.doc.gov).
In conjunction with
these licenses,
concerned captain and
crew of pleasure yachts
need to be aware of two
sets of regulations –
one put forth by the
Coast Guard, and one put
forth by OFAC.
The Coast Guard
regulations are
relatively simple: They
state that all U.S.
vessels (as well as
vessels without
nationality) that are
less than 328 feet in
length must obtain a
Coast Guard permit when
they leave the 12-mile
U.S. territorial waters
and thereafter enter
Cuban territorial
waters, regardless of
intervening entry into
or passage through any
other territorial
waters.
In order to obtain the
Coast Guard permit,
however, applicants must
have a license from OFAC
– and that’s where
things get complicated.
OFAC rules, while they
affect lives, generally
focus on the exchange of
money: First, no vessel
– regardless of flag –
that enters a port or
place in Cuba to engage
in the trade of goods or
the purchase or
provision of services
may enter a U.S. port
for the purpose of
loading or unloading
freight for a period of
180 days from the date
the vessel departed from
a port or place in Cuba.
However, if the vessel
is coming into a U.S.
port for a purpose other
than loading or
unloading freight, the
180-day rule does not
apply.
Second, no vessel
carrying goods or
passengers to or from
Cuba or carrying goods
in which Cuba or a Cuban
national has an interest
may enter a U.S. port
with such goods or
passengers on board.
This rule is usually
limited to vessels
carrying goods in
commercial quantities
and to vessels carrying
passengers to or from
Cuba as a ferrying
service as opposed to a
pleasure boat.
So what about pleasure
vessels? Well,
U.S.-flagged vessels
cannot go without the
proper permits and
licenses from OFAC. Do
such documents exist?
Yes, but they are
becoming increasingly
harder – some cruisers
say impossible – to
get.
What about an emergency?
A boat with U.S. crew
forced to head to Cuba
because of an emergency
at sea is supposed to
(and should) contact
OFAC Licensing Division
(+1-202-622-2480) or
have someone contact
OFAC on their behalf as
soon as possible to
obtain a proper license.
Foreign vessels don’t
have issues
Foreign pleasure vessels
that cruise U.S. waters
as well Cuban waters
fare far better. They
are subject to some
minor regulations – such
as the aforementioned
intervening port stops –
but are free to include
both U.S. ports and
Cuban ports on their
itinerary.
According to a U.S.
Coast Guard officials
who declined to be
identified, they need
not fear any retaliatory
measures regarding
future cruising permits
and the like, assuming
the vessels are
privately owned pleasure
vessels. It is unlikely
that they would get
caught up in a legal
tangle merely for
exercising their right,
as non-Americans, to
travel between the two
countries.
The U.S. Coast Guard and
OFAC work independently
of each other. One is a
governmental office and
the other is part of the
military. The Coast
Guard issues cruising
permits for foreign
vessels, and the laws
regarding their issuance
(and renewal) are not
matters within OFAC’s
jurisdiction.
So what about the
original question: As an
American crew on a
foreign-flagged yacht,
can you go to Cuba or
not? What’s the bottom
line, and what happens
if you get caught?
The scenarios are many
and, however they play
out, the risk is
potentially high.
Chances are, like with
Capt. Smith’s crew,
there will be no
repercussions. On the
other hand, just because
no one saw fit to report
the fact that the
Americans onboard had
broken the law, it
doesn’t exclude a
different outcome.
As Capt. James Maes,
head sector commander
for the U.S. Coast
Guard’s Sector Miami
explained, when you make
the decision to break
the law, “you have to
consider the
unexpected.” It well may
be that as crew you will
clear back into the
United States without
problems.
On the other hand, if
something comes up, if
there is an unexpected
problem that draws an
officer’s attention,
then consequences –
particularly future
consequences in terms of
black lists, never mind
the fines – can be
serious.
Rule No. 1: don’t lie
What if you get caught?
The International
Bicycle Fund (IBF),
which defines itself as
“a non-governmental
nonprofit advocacy
organization promoting …
international
understanding,” devotes
several pages of its Web
site to this predicament
(www.ibike.org).
The primary rule to
remember is to be honest
– to a point. Lying to
the U.S. government is a
felony for Americans,
and will get you what it
got Martha Stewart: jail
time. Remember that
technically it is not
illegal to go to Cuba.
If it wants to prosecute
you, the U.S. government
must prove that you
spent money in Cuba,
were an unlicensed
traveler to Cuba, and
that you knew it was
illegal, according to
IBF. After confirming
that you have been to
Cuba (which is not
illegal), you have a
right to refuse to say
anything more. The onus
is on the government to
prove you have broken
the law.
Keep in mind, however,
that OFAC does have
written regulations that
presume that anyone
traveling to Cuba has
spent money there.
Therefore, they may seek
– and reportedly have
obtained – civil fines
in an administrative
proceeding, forcing the
offender to agree to
settlement.
Here’s how it could
happen: Somebody – an
official from U.S.
Customs and Border
Protection perhaps –
reports you to OFAC.
OFAC will then send you
a letter asking you
about it. Although it
might go away with no
follow-up on your part,
there is a five-year
statute of limitations
on violations, so the
threat hangs around
awhile.
It is best to respond
with your own letter
stating that you did not
violate any federal law
or regulation. IBF
offers a sample response
letter on its Web site.
If you get another
letter notifying you
that a civil penalty
will be imposed, respond
within the time stated.
And again, says IBF,
don’t lie but don’t
admit you violated the
law, and don’t waive
defense rights.
What often happens next
is an OFAC official may
contact you to negotiate
a settlement, which you
may decide to pay. The
maximum fine paid by a
violator, up to this
time, is about $7,500,
but the full fury of the
law can subject the
violator to almost 10
times that amount, and
include prison time.
Alternatively, you may
request a hearing. At
that point, though, it
is time to find a
lawyer.
Mostly, the waters
around the United States
are woven with friendly
international partners,
and the rules of
exchange are pretty
straightforward. But
Cuba, since the first
arms embargo of 1958,
remains problematic.
Just how problematic,
ebbs and flows – like
politics, like the tide.
Freelance writer Mona
Birch lives in Dania
beach. Her last story
for The Triton was on
cave diving in Andros
Island in the April
issue. Contact her
through
editorial@the-triton.com.
One crew member’s
perspective:
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