Category Archives: Cuba

June 16, 2017

Trump’s Cuba Announcement Signals a Change of Tone, but not Substance

by Jeremy Paner

Earlier today, President Trump announced upcoming revisions to the Cuban embargo.  The announcement should be viewed as a preview of coming changes, as the current Treasury and Commerce general licenses will remain in effect until those departments implement amended regulations.  During his speech in Miami, Trump characterized these changes as a “complete” cancellation of the Obama policy and media reports have generally echoed this significant overstatement.  Irrespective of the tonal shift from the current occupant of the White House, current travel and business between Cuba and the United States will generally remain unchanged.

Prior to President Trump’s announcement, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) released a series of 12 frequently asked questions on the upcoming sanctions changes.  These FAQs are interesting for a number of reasons.  First, contrary to the general sanctions practice in the United States, changes in the sanctions regulations will not affect existing contracts.  This means there will be no disruption to current business relationships formed under the existing rules.  Secondly, the revisions to the regulations appear quite minimal.  Trump will only direct OFAC to limit one form of authorized travel and prohibit “direct transactions” with Cuban military, intelligence, or security services entities contained on list to be published by the State Department.      Continue reading

March 16, 2016

OFAC Provides Cuba Access to the U.S. Dollar

by Jeremy Paner

u-turn-istockYesterday, the U.S. Department of the Treasury and U.S. Department of Commerce announced  further amendments to the Cuban embargo that take effect today.  Changes involving travel and related transactions, banking and financial services, trade and commerce, and the authorization of certain grants and awards will be effective today.  Whereas the majority of the previous amendments sought to benefit the Cuban people by opening certain aspects of Cuban markets to U.S. businesses, many of the most recent revisions to the General Licenses more narrowly and directly benefit Cuban interests.

U-Turn Payments

The most significant change is likely the authorization of so-called U-turn payments, which notionally grants Cuba access to the U.S. dollar.  An amended General License found in 31 C.F.R. 515.584(d) permits funds transfers from foreign banks to pass through one or more U.S. financial institutions before being transferred to another foreign bank,  if neither the originator nor the beneficiary of that transfer is a person subject to the  jurisdiction of the United States.

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October 6, 2015

Winners in the New Cuban Sanctions Program: Telecommunication and Internet Service Providers, Travelers, and Attorneys

cubaby Jeremy Paner

In late September, the U.S. Department of the Treasury and U.S. Department of Commerce amended the regulations that form the Cuban embargo. These revisions further support the policy shift President Obama announced in December 2014. This new policy seeks to increase the free-flow of information to and within Cuba, facilitate people-to-people travel, and empower the nascent Cuban private sector. The business community influenced the September amendments through its dialogue with the Office of Foreign Assets Control (OFAC) and the Bureau of Industry and Security (BIS). Although additional relaxation of the Cuban embargo may not be possible without Congressional action[1], U.S. businesses should continue to seek specific licenses when their activity furthers the new Cuba policy, but does not fall within the general licenses.

Physical Presence in Cuba

The most significant change in the new Cuba regulations is the authorization for the following businesses and organizations to establish and maintain a  presence in Cuba to conduct ongoing operations:

  1. News bureaus;
  2. Exporters of certain goods authorized for export or reexport by Commerce and OFAC to Cuba;
  3. Mail and parcel transmission, and cargo transportation service providers;
  4. Telecommunication and internet-based services providers;
  5. Organizers and providers of certain educational activities;
  6. Religious organizations; and
  7. Carrier and certain travel service providers. (31 CFR 515.573).

The second category of permitted physical presence facilitates the U.S. Commerce Department’s Support for the Cuban People license exception, which authorizes the export of EAR99[2] building materials, equipment, tools, supplies and instruments for use by the private sector in Cuba. (15 CFR 740.21(b)). Although this license exception seems quite broad, it does not permit partnership with the Cuban government, as its purpose is the promotion of independent economic activity.

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June 8, 2015

And Then There Were Three – The U.S. Department of State Removes Cuba from the State Sponsor of Terrorism List

by Jeremy Paner

The U.S. Department of State announced today that it removed Cuba from its list of State Sponsors of Terrorism. This removal followed a review of the designation criteria[1] and the submission of a report certifying that the Cuban government has not provided any support for international terrorism during the preceding six-month period, and that the Cuban government has provided assurances that it will not support acts of international terrorism in the future. Following today’s removal of Cuba, the list is limited to Iran, Syria, and Sudan.

Sanctions resulting from designation as a  State Sponsor of Terrorism include prohibitions on U.S. foreign assistance, a ban on defense exports and sales, controls on exports of dual-use items, and miscellaneous financial prohibitions. These include a requirement to actively oppose World Bank and International Monetary Fund loans, and prohibit financial transactions through U.S. banks.

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May 5, 2015

OFAC Provides Cuba Travel Guidance, Leaves Ultimate Effect of Authorization Certification Unresolved

by Jeremy P. Paner

Today, OFAC provided guidance to aircraft and passenger vessel carriers for two issues involving travel to and from Cuba following the January 2015 regulatory amendments to the Cuba sanctions program.

Who may be authorized to travel?

First, OFAC clarified that the following individuals may be transported between the United States and Cuba pursuant to the general license for air travel or specific license for commercial passenger vessels:

  1. Persons subject to the jurisdiction of the United States traveling to or from Cuba (to include unblocked Cuban nationals residing in the United States);
  2. Any individual traveling between the United States and Cuba on official business of the U.S. government, a foreign government, or an intergovernmental organization of which the United States is a member or in which the United States holds observer status;
  3. Cuban nationals applying for admission to the United States with a valid visa or other travel authorization;
  4. Third-country nationals traveling from Cuba to the United States with a valid visa or other travel authorization; and
  5. Cuban nationals present in the United States traveling to Cuba.

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