Poor Advisers: Online Travel Agencies Misinterpret OFAC Regulations

As sanctions have increased over the years, planning a trip to Tehran has gotten progressively more difficult. A brief review of a number of popular online travel booking services bears this out, as each site has a different method of refusing to secure flights to Iran. A search for flights between Washington, D.C.’s Dulles airport and Imam Khomeini Airport in Tehran on Priceline orExpedia ends with a simple error message explaining that there are no flights that match the search criteria. Orbitz’s response is slightly more revealing – apparently flights to or from Iran are not supported by the site. Based on these responses it is uncertain as to why these companies decided not to offer any Iran-related services.

Tripadvisor, however, is very clear about why you cannot use their service to book flights to Iran. A search using the above criteria results in the following message: “Tripadvisor is unable to show requested itineraries or travel plans that include Iran due to U.S. government regulations.” This is yet another example of how the broad sanctions against Iran have resulted in transactions that are authorized by OFAC regulations can still end up being prohibited. 31 CFR § 560.210(d) states that the Iranian Transactions and Sanctions Regulations (ITSR) do not apply to transactions ordinarily incident to travel to or from any country. The section also explicitly includes “arrangement or facilities of such travel.” This exemption stems from § 1702(b)(4) of the International Emergency Economic Powers Act (IEEPA), which uses identical language to exempt travel-related transactions from regulatory prohibitions enacted under IEEPA.

Moreover, in 2003 OFAC published interpretive guidance explaining some of the activities covered by § 560.210(d). Covered transactions include but are not necessarily limited to:

1. Publication of schedules of flights between Europe and Iran;
2) Publication of interline airfares;
3) Acceptance of reservations for travel between the United States and Iran;
4) Issuance of airline tickets for the entire trip between the
United States and Iran; and
5) Advertisement of air service between the United States and Iran.

This would seem to cover all of the services provided by the aforementioned online travel booking sites. While the entity that requested the interpretive guidance has been redacted, it’s fairly obvious that it was a travel agent of some kind and it is difficult to come up with a reason why the regulations would apply differently to an online travel service provider. There is a possibility that various banking sanctions imposed on Iran have resulted in payment issues which have led Tripadvisor and other sites to discontinue Iran-related transactions. This explanation does not quite add up, however, when one considers the fact that Kayak, a subsidiary of Priceline, continues to facilitate travel to and from Iran.

Nevertheless, the refusal of these sites to book travel to and from Iran despite the exemptions contained within the regulations is indicative of how of U.S. sanctions on Iran can have myriad unintended consequences. What is clear is that that the impact of confusing and overlapping sanctions legislation, regulations, and executive orders is far greater than the sum of their parts. In the case of booking travel related to Iran, its best to avoid getting your trip advice from Tripadvisor, as they have demonstrated they are far better at booking plane tickets than interpreting OFAC regulations.