FROM THE OFFICE OF PUBLIC AFFAIRS

Mr. Chairman, today’s hearing is especially timely. Last Friday, Assistant Secretary Noriega and I joined President Bush in the Rose Garden where he announced a number of important new initiatives to assist the Cuban people in their struggle for democracy and to prepare for the happy day when Fidel Castro’s tyrannical regime falls and the Cuban people can at last know freedom. In his speech, the President called for increased enforcement of travel restrictions to ensure that permitted travel to Cuba, such as visits to relatives or humanitarian missions, are not abused for illegal business trips and tourism.

Mr. Chairman, while illegal travel to Cuba -- especially tourist travel -- may seem harmless, it is in fact an important source of revenue for the Castro regime. A dollar paid to a tourist hotel in Cuba goes mostly to the regime, leaving only pennies in worthless pesos for the workers. Tourist dollars provide vital hard currency that Castro and his cronies use to continue to oppress Cuba. President Bush said it best Friday, “Illegal tourism perpetuates the misery of the Cuban people.”

OFAC looks forward to working with the Department of Homeland Security to answer the President’s call to step-up the enforcement of illegal travel to Cuba and to deny Fidel Castro the financial wherewithal to perpetuate the despair he has visited on the Cuban people for more than four decades.

As we have in the past, the Office of Foreign Assets Control (“OFAC”) will work closely with the Department of Homeland Security, Bureau of Customs and Border Protection, at all ports, but in particular JFK, LAX, and Miami where charter flights to Cuba operate under OFAC license. We will also coordinate closely with Homeland Security at other locations used by unlicensed travelers and remittance couriers to travel to and from Cuba via third countries. In addition, we will also enhance our investigation and enforcement efforts against individuals and companies that provide travel and remittance services to Cuba without an OFAC license.

Already, in response to the President’s announcement, Customs and Border Protection inspectors have stepped-up their efforts by examining nearly all of the charter flights departing from Miami. We will work with Homeland Security to have similar levels of scrutiny in other ports of departure to Cuba - JFK, LAX and other locations used as third country transit points by Americans for travel to Cuba. In one operation this last weekend, inspectors seized approximately $10,000 in unlicensed currency from a charter flight passenger. I am also pleased to report that today, OFAC hosted an interagency meeting with Homeland Security, State Department, Commerce and U.S. Coast Guard officials to develop an effective enforcement strategy to ensure that this program is implemented fully and effectively on a nationwide basis. OFAC will provide training, advice and assistance to inspectors at the affected U.S. ports.

We have procedures in place with Homeland Security to receive currency seizure reports and take appropriate penalty action against violators and work with our interagency partners to refine enforcement strategies and operations to achieve maximum results in coordination with U.S. attorneys identifying promising cases for criminal prosecution of embargo violators.

With regard to licensing, we eliminated altogether a category of travel related to non-accredited educational exchanges, where licenses were largely being abused to pursue tourist activities. Following through on a commitment I made at a Congressional hearing in 2002, OFAC published the Comprehensive Guidelines for License Applications to Engage in Travel-Related Transactions Involving Cuba (the “Comprehensive Application Guidelines”) on its website on April 29 of this year, providing clearly articulated criteria for applying for licenses pursuant to each of the eleven categories of activities for which specific licenses may be granted. Examples are often included to provide additional guidance to applicants in furtherance of our goal to promote transparency and understanding by the public of OFAC’s administrative process.

The criteria set forth in the Comprehensive Application Guidelines seek to more strictly define licensing parameters and criteria and ensure that existing policy is clear and properly carried out through OFAC’s licensing process. In particular, the Comprehensive Application Guidelines seek to eliminate the abusive practice of allowing unaffiliated persons to travel under a license issued to another party, and ensure that there exists a sufficient nexus between the qualifications of persons traveling under the authority of a license and the full-time agenda of authorized activities they will engage in while in Cuba. OFAC will continue to monitor activities of licensed travelers to ensure that conduct does not deviate from that which has been authorized. Licenses themselves may also be suspended and revoked if their parameters are not met or are otherwise violated.

OFAC is also in the process of carrying out a statutory mandate involving the initiation of hearings before an administrative law judge (“ALJ”) on the imposition of civil penalties for engaging in unauthorized travel-related transactions. I have forwarded more than 50 hearing requests to the Treasury Department’s Office of General Counsel for hearings before these ALJs.

In short, we at OFAC are well positioned to implement, fully and with alacrity, the new enforcement policy announced by the President.