Q: I have read a little about the new Florida law that requires travel agencies selling travel to Cuba to pay heavy registration fees, obtain large bonds and make extensive disclosure filings with the state government. I understand that a federal judge has blocked the law, but possibly only temporarily. Am I correct to assume that the idea is to discourage agents from selling Cuba travel, even if the federal government has approved it? Is it legal for a state to do that? Does the law apply to agencies outside Florida?
A: The law became effective July 1 but was immediately blocked by a federal judge until he has a chance to rule on its constitutionality. It applies to travel to every country designated by the U.S. Department of State as a "state sponsor of terrorism" (currently Cuba, Iran, North Korea, Sudan and Syria), but there is no doubt that the law is targeted at travel to Cuba. Florida has effectively adopted its own anti-Cuba foreign policy under the guise of consumer protection.
At the federal level, Treasury Department regulations prohibit ordinary tourist travel to Cuba, and they prohibit agencies from arranging or operating such travel. The Treasury Department will allow or "license" only the following kinds of travelers: government and international organization employees traveling on official business, journalists, persons visiting close relatives, humanitarian workers, professional researchers, students traveling for educational purposes and religious activists.
Retail travel agencies can sell Cuba travel to those categories of travelers. To organize or sell such a trip, a U.S. agency must obtain a license from the Treasury Department's Office of Foreign Assets Control for the specific trip or group of trips.
Under the decade-old Florida Seller of Travel law, if you offer to sell any travel to Floridians, the state requires you to obtain a Seller of Travel registration, regardless of your office's location. You can also obtain an exemption from registration if you have been an ARC-appointed agency under the same ownership for at least three years.
The new law applies to all agencies that have or should have Florida registrations or that have exemptions, but it applies only to trips that originate from Florida and go directly to a terrorist-list country.
If you arrange or sell such trips, you now must amend your registration or exemption to describe your terrorist-country-related activities, pay an annual registration fee of up to $2,500 and post a surety bond of either $100,000 or $250,000, depending on whether you merely arrange travel to Cuba or also perform other Cuba-related activities, such as sending packages there.
You must also submit a periodic certification to the state covering all your Cuba-related activities, including listing all your travel suppliers and proprietary contacts. If you do not register or amend your existing registration or exemption, post the bond and file the certification, you could be guilty of a felony.
Before the new law was enacted, ASTA wrote to Florida Gov. Charlie Crist asking him to veto it on the grounds that it violates several clauses of the U.S. Constitution, including the right of the federal government to conduct foreign relations and regulate foreign commerce free of state interference. The governor gave ASTA short shrift, but the court may well agree with ASTA.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email Pestronk at [email protected].