The US has taken further steps towards normal trade relations with Cuba by amending the Cuban Assets Control Regulations in order to relax US sanctions against Cuba. These actions follow other important milestones achieved since US President Barack Obama and Cuban President Raul Castro announced the normalization process on December 17, 2014. For example, the countries have resumed full diplomatic relations, the US has removed Cuba from its list of state sponsors of terrorism, and the US has allowed the Cuban government to open a bank account in the US.
The new regulations expand the ability of US persons to do business with Cuba, Cuban people, and Cuban companies. Most importantly, persons subject to US jurisdiction related to certain industries (such as travel or authorized exports) may now maintain and operate a physical presence in Cuba and hire Cuban people to work in such a venture. So long as the transactions at issue are authorized by or exempt from the CACR, an entity can maintain such a physical presence.
The regulations also codify and expand general licenses for authorized travel to Cuba in certain situations. These general licenses represent travel to Cuba that previously required a specific license from OFAC. Relatedly, US financial institutions are now able to allow travelers to Cuba to use their credit or debit cards in Cuba. The amendments also generally license certain remittances to Cuba or Cuban nationals and unblock funds that were blocked related to the same type of remittances.
Despite this liberalization of relations with Cuba, it is important to note that a majority of the prohibitions against investment in, trade with, or travel to Cuba for persons subject to US jurisdiction remain in place. These amendments add further complexity to an already complex sanctions regime. For example, OFAC released 73 new Frequently Asked Questions related to the amended CACR. We recommend consulting with counsel prior to undertaking any Cuba-related investment or trade.