USA: Foreigners Can’t Use Credit Cards in Embargoed Countries

by P. T. Freeman
The Nestmann Group, Ltd.

Recently by P. T. Freeman: Welcome Back to the U.S.A!

Do you think that the U.S. Treasury has the right to tell non-U.S. citizens with no connection whatsoever to the United States in what countries they can use their credit cards? The U.S. Treasury agency called the Office of Foreign Assets Control (OFAC) says that it does.

A few days ago, a letter was sent from RBC Financial (Caribbean) Limited’s head office in Port of Spain, Trinidad. All of the banks’ credit card holders throughout the Caribbean received the same form letter, of which I obtained a copy. It says:

Dear Valued Client:

Your credit card is accepted virtually anywhere you travel throughout the world, except in certain countries that are subject to economic and trade sanctions imposed by regulatory bodies and otherwise.

As a result of economic sanctions in place by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“U.S. OFAC”) on certain countries, which currently include Iran, Cuba, North Korea, Sudan and Myanmar (Burma), please be advised that effective July 31, 2011, you will no longer be able to use your U.S. [dollar] denominated RBTT credit card in any of these sanctioned countries.

For your information, we advise you that we are required to comply with all US OFAC sanctions, since our U.S. dollar Visa and MasterCard international transactions are settled through a U.S. Correspondent Bank, which needs to comply with U.S. OFAC rules. As a result, we would be unable to process these transactions.

These sanctions are subject to change, and additional information can be obtained from the US Treasury website.

If you need further clarification, kindly contact the call centre or your branch. This notice has also been posted on our website www.rbc.com/caribbean for ease of reference.
Thank you for choosing RBTT as your financial services provider.

Yours Truly,

Steve Wickham
Senior Manager Card Solutions – Debit & Credit

After reading this letter, I was stunned. I called my friend and colleague, Mark Nestmann and read the letter to him. Suffice it to say, he was also astonished and outraged.

The implications of this policy are massive. It means that the mere use of a U.S. dollar-denominated credit card by individuals who have never lived, visited, or had any connection with the United States subjects those persons to U.S. law. Just holding a credit card from a bank that may have an upstream correspondent in the United States now makes people who are not U.S. citizens subject to U.S. embargo and sanction regulations. In such cases, you can’t use your U.S. dollar denominated credit card in hotels, shops, airline offices, or department stores in embargoed countries.

These are political sanctions imposed because of domestic political considerations in the United States, and nothing more. It is blatantly obvious that the biggest export of the United States isn’t movies or software, but Big Brother. Totalitarianism doesn’t stop at the U.S. border.

Reprinted with permission from The Nestmann Group, Ltd.

July 26, 2011

P.T. Freeman is a pseudonym for a former U.S. citizen and friend of Mark Nestmann.

Copyright © 2011 Mark Nestmann