Commentary: When sanctions are on the menu

Be careful where you eat and lodge when traveling abroad to avoid violating U.S. sanctions.    A U.S. business executive takes a long-awaited family vacation to visit the historic sites and beaches of Malta. When asking the locals in the capital city of Valleta for recommendations on where to have dinner, the executive is pointed to the Porticello Restaurant, which is well known for its fresh seafood dishes.
   The executive, who is savvy about international travel, and her family enjoy their dinner from a table in the restaurant that overlooks the sea. The dinner is paid for by credit card when they depart.
   Little does this executive — or any American who unwittingly eats at this restaurant for that matter — know that she has just violated U.S. Treasury Department sanctions that could have repercussions down the road.
   This is no joke. The Porticello Restaurant of Valleta, Malta, was recently listed on the Treasury Department Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List due to its owner and former Maltese soccer player Darren Debono’s alleged participation in an illegal scheme to smuggle oil from Libya to Italy. 
   OFAC’s Specially Designated Nationals (SDN) list includes individuals and companies owned or controlled by, or acting for or on behalf of, sanctioned countries. It also lists individuals, groups and entities, such as terrorists and narcotics traffickers, designated under programs that are not country specific. The assets of those individuals or companies listed on the SDN are blocked and U.S. persons are generally prohibited from dealing with them. 
   Even something as innocent as paying for a dinner by credit card at the Porticello Restaurant is a violation of the SDN in the eyes of OFAC. In fact, the credit card transaction is all the proof that the agency needs. All credit card transactions are automatically screened by Treasury against the SDN list.
   In effect, the credit card transaction is a transfer of money or, in other words, an act of money laundering to terrorists, drug kingpins or government agencies of U.S. embargoed countries.
   A similar example of this involves the four-star Hotel Nasco in Milan, Italy. This hotel was placed on OFAC’s SDN list in 2003 and remains there today. The establishment is owned by alleged al-Qaida financier Ahmed Idris Nasreddin of Morocco. NBC, which took a look at Nasreddin’s global business interests in 2005, warned at the time that “unsuspecting Americans who book a room in Milan may end up in a hotel owned by an alleged terrorist financier.”
   So what are Americans to do in order not to fall victim to a U.S. sanctions violation when traveling abroad?
   If the trip is booked through a travel agency, they should inquire whether the company checked the Commerce Department’s Consolidated List, which contains the OFAC SDN list among other export control lists, to ensure that all booked non-U.S. airlines and hotels are not restricted. Travelers also are urged to examine the SDN list themselves when conducting potential business transactions abroad.
   If you are found in violation by OFAC, you will be subject to Treasury fines and penalties, and that’s a dish best left alone.