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The Letters - Update December 21, 2008

Wilkey,
Thanks for sharing all of this. I'm a bit of a novice but have wondered about this sort of stuff.
 
Up next I'll present some examples of how people who have received these letters have responded. Shortly thereafter, information about the real life consequences of violating the Trading with the Enemy Act and Helms Burton (Cuban Democracy Act) laws.

Wilkey
 
It has also been reported that the new letter(s) have been sent to people who have never had any item seized.
 
Badhangover,

Yes, that's right. This is a new wrinkle. We've wondered whether or not a seizure puts one at greater risk for receiving either of the new letters. At this point, there just is not enough information to say.

Wilkey
 
It is interesting to note just how widespread this concern has become. Vendors across the globe, and not just in Asia, are modifying their "techniques" in response to the current climate.
 
Wilkey,
Is there any correlation to when someone placed an order and when the letters were mailed. For example, you say the time frame was late 2004 and early 2005. Did people who ordered in 2004 get their letter sooner or later than those in 2005? I only ask because this consideration was never touched upon.

Thanks for the informative read.
Darren
 
How have people responded to these letters?

The C-Letter
This letter has been known for years. I have not heard of a case where a person did anything other than ignore this letter. I have not heard of any consequences as a result of this action.

The W-Letter
Public awareness of this letter has surfaced only recently. The nature of the text does not require any action from the recipient other than to "not do it ever again" under threat of criminal or civil penalties. As such, recipients so far have reported that they have done nothing and if they were doing what they were being accused of doing, they have stopped.

The R-Letter
Public awareness of this letter has surfaced only recently. At least one recipient has publically acknowledged that they have ignored the request to furnish information. Others have reported that they have sought some sort of legal advice. A draft response letter of the following form has been proposed:
Office of Foreign Assets Control (OFAC)
Attn: Mr./Ms. ______________________
1500 Pennsylvania Avenue, N.W. (Annex)
Washington, D.C. 20220
FAX: 202 622-0447

Re: [INSERT YOUR NAME] (FAC #CU-[INSERT "CU" NUMBER FROM OFAC LETTER TO YOU])

Dear Mr./Ms. _______________________:

This letter is in response to your "Requirement to Furnish Information" letter to me, dated [INSERT DATE OF OFAC LETTER TO YOU] and received by me [INSERT DATE YOU ACTUALLY RECEIVED THE LETTER]. I have no information responsive to your request but, if I did, I would decline to produce information under my Fifth Amendment rights

OFAC’s regulations of transactions relating to Cuban goods, and OFAC’s demand for information pursuant to such regulations are a violation of the rights of U.S. citizens as guaranteed by the First and Fifth Amendments to the Constitution of the United States.

Furthermore, OFAC’s regulations and OFAC’s demand for information pursuant to such regulations constitute discriminatory enforcement of the laws on the basis of national origin and political viewpoint, in violation of the First and Fifth Amendments to the Constitution of the United States. The imposition of any penalties is also discriminatory. Such conduct is arbitrary and capricious and in violation of the Administrative Procedure Act. In this respect, it is noted that substantial numbers of Americans, including elected officials, purchase and possess Cuban goods with the knowledge of OFAC, in apparent violation of the Cuban Assets Control Regulations, but without consequence.

Furthermore, with respect to any further communication, I assert my privilege against self-incrimination under the Fifth Amendment to the Constitution of the United States.

Sincerely
XXXXX
Click to expand...
This draft response appears to be based on this draft letter found on the National Lawyers Guild website. That model response letter was written to address the subject of travel to Cuba and not the purchase of goods of Cuban origin. As such, the almost direct substitution of "goods" for "travel" may or may not be valid in any one of a number of different ways. I have not dug into the relevant legislation but it is not at all clear to me that these two things are equivalent even though they are mentioned in the same document on Cuba Sanctions here.

Even if the above response letter were sent, the recipient of the R-Letter could and probably would still be subject to civil penalties. The analogy that was offered to explain this was that of refusing to take a breathalyzer test. That is one's choice, however, civil and administrative sanctions such as suspension or loss of license may still be levied.

Has anyone been fined as a result of violations of Cuba sanctions?
Yes.

Here is the November 2006 Release of Civil Penalties notice. One individual settled for the sum of $967 for goods purchased in August-September 2004. It was not noted whether this was voluntarily disclosed. Voluntary disclosure can reduce the penalty amount.

In the December release, an individual was penalized $1,222 for purchases made August 2003-February 2004.

Here is the main OFAC page where you can go to read about the penalties levied by month.
 
badhangover said:
It is interesting to note just how widespread this concern has become. Vendors across the globe, and not just in Asia, are modifying their "techniques" in response to the current climate.
Click to expand...


This is something we need to tread very carefully around, and may not want to discuss publically. I've already pm'd the info I have regarding the above statement to Wilkey, and he agreed that we would not discuss it at this time. :thumbs:
 
Very interesting reading. It has been a while since I've purchased any cigars online, but I had thought of ordering a box at the beginning of 2007. After seeing what has been written here, that will not be happening; I can't risk it.
 
Gonz said:
badhangover said:
It is interesting to note just how widespread this concern has become. Vendors across the globe, and not just in Asia, are modifying their "techniques" in response to the current climate.
Click to expand...


This is something we need to tread very carefully around, and may not want to discuss publically. I've already pm'd the info I have regarding the above statement to Wilkey, and he agreed that we would not discuss it at this time. :thumbs:
Click to expand...



Agreed. Please watch what you publically post... ;)
 
I do agree, gentlemen. I must ask, however, could I have been more vague in my post while still discussing the topic of the thread? I am not intending to be rude here, but is this to only be the Ginseng thread? I honestly think I have respected the parameters of this thread and did not venture much beyond its scope.
 
badhangover said:
I do agree, gentlemen. I must ask, however, could I have been more vague in my post while still discussing the topic of the thread? I am not intending to be rude here, but is this to only be the Ginseng thread? I honestly think I have respected the parameters of this thread and did not venture much beyond its scope.
Click to expand...
Badhangover,

I think your post was acceptable and I did not find your comments rude. I'd consider Gonz's response as a general admonition to the community using the topic you broached as an example. Please feel free to continue adding your thoughts on the matter.

Thus far, I have been bringing what I've found and others have been adding bits here and there. The fact that this thread is only two pages long I think is an indication of just how little there is in terms of concrete, verifiable information out there. There is easily 50 times the number of posts out there on the subject with much of it consisting of little more than conjecture, hand wringing, and unanswered wonderings.

I'm satisfied with the progress of this thread so far and I believe Rod is as well.

If at some point we (meaning the communal "we") feel that the parameters of this discussion should be relaxed or expanded, then that will happen. Of this I am confident. Right now, though, we seem to be in a bit of a lull as the first public wave of response and non-response has taken place. The next move is up to OFAC and thus far, no one has publically reported on this.

Wilkey
 
badhangover said:
I do agree, gentlemen. I must ask, however, could I have been more vague in my post while still discussing the topic of the thread? I am not intending to be rude here, but is this to only be the Ginseng thread? I honestly think I have respected the parameters of this thread and did not venture much beyond its scope.
Click to expand...



My bad for misreading that. I apologize to you, badhangover - sorry for misunderstanding what you were doing. :blush:



So that there is no future misunderstandings like this - why don't we just start a thread entitled, "The Tactics Vendors Are Using To Avoid The US Embargo". I'm sure that would be very useful to segments within our community, primarily that sector that may be reading more and not posting! But please, people - follow badhangover's lead - let's just keep that discussion vague. :thumbs:
 
As Wilkey stated, my post was simply a reminder to the community as a whole that this thread is for informational purposes only, and as Rod outlined in his "rules of engagement" (that's my own term for it, not his), we are not in any way to discuss strategy for aquiring or to encourage the purchase of illegal goods.

Badhangover, I applaud your restraint and attempt at being vague. However I think most will agree that discussion of techniques is something that should not take place publically in this thread.
 
I wanted to offer an interesting point of clarification regarding the two most recent OFAC Enforcement Disclosures I linked in post #30, above.

We have wondered how and what sanctions might actually be applied for responding to versus ignoring an R-Letter. I believe there might be a clue in these two releases.

In the November release, the sanction was referred to as a "settlement." In the December release, the sanction was referred to as the assessment of a "penalty." Based on the language in the R-Letter itself, one might surmise that a settlement would involve communications between the individual and OFAC whereas a penalty might not.

While this disctinction has not yet been confirmed, it seems reasonable based on a reading of the known documents.
 
I'm processing some OFAC documents that have recently been cited on another board. I believe there might be some information as to the triggering of the W and R-Letters.

Also, I think there could be considered two different "negative" responses to the R-letter. One is ignoring and the other would be to plead the fifth. There is no way to know whether the penalties levied thus far are due to one or the other although the recent emergence of the "decline to respond" letter suggests that ignore has been the route taken thus far.

Wilkey
 
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