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OFAC enforces US Cuba sanctions against French company

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On 22 February 2016 OFAC announced that it had entered into an agreement with CGG France whereby CGG would pay $614,250 to settle its (and its subsidiaries’) potential liability for alleged violations of the Cuban Assets Control Regulations (the US Sanctions).

In its announcement OFAC stated that CGG (or its subsidiaries) had, in breach of US sanctions: exported spare parts and other equipment from the US to vessels in Cuban waters; exported US origin goods to vessels in Cuban territorial waters; and processed data from seismic surveys conducted in Cuba’s Exclusive Economic Zone benefiting a Cuban company.

The size of the settlement reflects a number of factors including that OFAC considered CGG to have “acted with reckless disregard for US sanctions” and found that CGG had taken steps to avoid OFAC violations by removing US personnel and equipment from a vessel prior to it entering Cuba’s territorial waters.

This settlement highlights an interesting dilemma for EU companies when considering whether or not to export to Cuba, as under the EU’s “Blocking Regulation”, CGG would have broken EU law if it had refused to export to Cuba on the basis of wanting to comply with the US sanctions against Cuba. However, exporting to Cuba resulted in a significant US fine for this EU company. This case should act as a reminder to companies subject to both EU and US jurisdiction which are considering supplying to Cuba, that before any decisions are made in respect of whether or not to supply, careful consideration must be given to both sets of rules to avoid inadvertently breaching EU law whilst attempting to comply with US law.