OFAC released this week its latest civil penalties information which reported two fines, one against a company and one against an individual.

The first penalty noted in the report was a $500 fine imposed by OFAC on Osment Models d/b/a Woodland Scenics for violation of the Iranian Transaction Regulations. Woodland Scenics makes the trees, tunnels, rocks and similar stuff used by model railroaders to add scenery to their train kits. The fine arises from a voluntary disclosure by the company after it exported its model railroad products to Iran. Model railroaders are a significant political force in Iran so it seems reasonable to suppose that OFAC’s action in this case will hasten the end of the current regime in Iran.

OFAC also imposed a fine of $975 on an individual for buying Cuban cigars on the Internet. Not surprisingly, there are a number of web sites, like this one, which offer to ship Cuban cigars from Europe (or elsewhere) to the United States in clear violation of the embargo. Although OFAC arguably has better things to do with its time than to chase down Internet Cohiba shipments, it’s hard to shed many tears for this purchaser who certainly should have known better.

It would appear that Iran’s nascent efforts to cook up a few nuclear bombs hasn’t been a tremendous boon for its tourism industry. So, Iran has announced a plan to pay a bribe, no, make that bounty, well let’s just say an incentive, to travel agents that convince Western tourists to visit Iran. And they are offering a premium incentive for Americans ($20) versus tourists from the rest of the Western World (worth only $10).

Now, of course, it’s impossible for me to see such a promotion without wondering how OFAC might react. At first, the incentive payment might seem to be permitted under 31 C.F.R. 560.210(d), which permits:

transactions ordinarily incident to travel to or from any country, including . . . arrangement or facilitation of such travel including nonscheduled air, sea, or land voyages.

But is a payment of a bounty to a travel agent a transaction ordinarily incident to the arrangement of such travel? Particularly where a premium is paid for Americans? That’s hard to say with certainty but it seems to me that there is at least a reasonable argument that it isn’t.

Assuming, however, that it is ordinarily incident to facilitating travel, this guidance letter from OFAC suggests there may be other problems:

With respect to the advertisement of air service between the United States and Iran, the Regulations do not prohibit such transactions unless they are undertaken at the behest of a person in Iran or an Iranian entity. The Regulations would prohibit advertising-related transactions undertaken at the behest of a person or entity in Iran, unless the information or informational materials exemption applies. To fall within the scope of the information and informational materials exemption, such transactions must be limited to the direct dissemination of copy-ready materials. A U.S. person cannot provide any other related services to Iran, such as the development of advertising materials or an advertising campaign or serving as an agent for the buying or brokering of advertising space, without OFAC authorization.

I would read this to suggest that there would be issues if the agent, in response to the bounty, developed advertising or promotional campaigns (such as a sweepstakes) to encourage travel to Iran. Perhaps one would argue that the payment of the bounty only indirectly results in the promotional campaign and thus that it is not at the behest of Iran. If I were a travel agent, however, I’d want to hear from OFAC before running a “Win A Free Trip to Iran” contest.