Airbnb Compliance 'Deficiencies' Led to Cuba Sanctions Violations, OFAC Says
The Office of Foreign Assets Control fined Airbnb just over $91,000 for violating U.S. sanctions against Cuba, the agency said Jan. 3. OFAC said the company’s subsidiary, Airbnb Payments, illegally processed payments for guests traveling in Cuba and failed to keep certain records related to those payments.
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Between 2015 and 2020, Airbnb processed payments for nearly 3,500 stays in Cuba for guests traveling outside OFAC’s “authorized” categories, the agency said, which include family visits and government travel. The company also processed payments for more than 3,000 “experiences transactions” wherein Airbnb “failed to keep records in accordance with the OFAC’s regulations,” and processed 44 transactions involving non-U.S. persons “engaging in Cuba travel transactions” before OFAC issued a specific license, the agency said.
OFAC said Airbnb committed the violations mostly because it established business operations in Cuba “without fully addressing the complexities of operating a Cuba-related sanctions compliance program for internet-based travel services.” The company launched its Cuba business in 2015 shortly after the U.S. shifted its policy toward Cuba, OFAC said, adding that “the scaling up of its services in Cuba appears to have outpaced the company’s ability to manage the associated sanctions risks via its technology platforms.”
OFAC said Airbnb used a manual process to screen hosts and guests for sanctions issues when it first launched in Cuba. The agency also said Airbnb’s recordkeeping issues were caused by “technical defects involving an older version of the Airbnb, Inc. mobile application that remained operational for Cuba-related travel.” The older version didn’t effectively allow guests to “make an attestation regarding their reason for travel to Cuba.”
Airbnb voluntarily disclosed the violations to OFAC after “proactively” beginning a review of its sanctions compliance program, the agency said. The company also “implemented subsequent remedial measures” to “address its sanctions compliance deficiencies.”
OFAC pointed to two aggravating factors, including that the violations took place during a change in U.S. policy toward Cuba and “undermined U.S. foreign policy.” The agency also said Airbnb is a “large and sophisticated U.S.-based technology company.”
Mitigating factors included that Airbnb hadn’t received a penalty notice in the previous five years and began its own review of its sanctions compliance program. The company also substantially cooperated with OFAC and agreed to further improve its compliance procedures, including through an IP “blocking regime.” The company also agreed to collect countries of residence and payment instrument information from customers and to screen hosts in Cuba.
OFAC said the case highlighted the risks of “entering new commercial markets” without “fully anticipating the complexities of legally operating in a U.S.-sanctioned jurisdiction.” It also shows the benefits of cooperating with OFAC and voluntarily disclosing violations. OFAC said it could have imposed a maximum penalty of more than $600 million if Airbnb hadn’t disclosed the violations and if OFAC determined the violations to be egregious.
An Airbnb spokesperson said the company was "pleased to have reached this agreement" with OFAC. "We take sanctions compliance very seriously," the spokesperson said in a Jan. 3 email. The company has recently come under criticism from at least one U.S lawmaker for listing more than a dozen homes for rent on land owned by a sanctioned paramilitary Chinese entity in China’s Xinjiang province (see 2112070062). Airbnb has said it doesn't believe the home rentals violate U.S. sanctions laws.