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12/12/13 - Cuba-L Analysis (Albuquerque) - Cuba, OFAC, Fines and Extraterritoriality: The Need for Discussion


Nelson P Vald├ęs

Those of us who follow events going on in Cuba  as well as Cuba's international relation should discuss the extraterritorial power that the US Treasury Department has to impose huge financial fines on non US foreign financial institutions.

To my knowledge there has been little discussion as to the reasons that foreign financial institutions accept the extraterritorial powers of the United States. For example, the Bank of Scotland is not a small bank. Yet, since it provided the service to Cuba of exchanging old US dollars for new US dollars; the bank was given an extraterritorial fine of $100 million dollars and the bank agreed to pay it.

How come?

What exactly compels foreign financial institutions to accept the extraterritorial power and reach of the US Treasury Department?

Who are the people within the US Treasury Department involved in monitoring Cuba's financial transactions abroad? Are these US employees closely connected with rightwing Cuban Americans? Is there a financial incentive/reward for disclosing such financial transactions to OFAC? Are US embassies around the globe given the task to monitoring Cuba's financial transactions in each country? Is the NSA involved in monitoring such financial activities?

Presently US law establishes that: "any "person subject to the jurisdiction of the United States" may not do business in Cuba or with Cuban nationals or businesses. "Persons subject to
the jurisdiction of the United States" includes:
- U.S. residents, 
- U.S. corporations and their U.S. or foreign subsidiaries,
- any person or corporation - including foreign ones - operating within the United States

Thus, a foreign corporation such as the bank of Scotland - who has a branch in the US, is held accountable for what any branch anywhere else in the world does.

See: 
http://www.mayerbrown.com/files/Publication/bc828278-4516-41ea-bc07-5cbcf909be56/Presentation/PublicationAttachment/6746390a-c4f7-46fe-afb3-0a9b3cc7cccb/05_Lakatos_Bloechliger.pdf

and

http://www.omm.com/obama-administration-eases-some-of-the-restrictions-on-cuba-but-broad-and-long-standing-economic-sanctions-remain-in-place-04-15-2009/


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