The agencies that administer and enforce the Cuban embargo will need to update their licensing policies to authorize more transactions that align with President Obama's significant changes to US foreign policy with respect to Cuba.

Following successful prisoner exchanges, the Administration announced plans to normalize diplomatic relations with Cuba, including by opening a US embassy in Havana. The US will also ease restrictions currently administered by the Department of Treasury's Office of Foreign Assets Control (OFAC). Revision of the Cuban Assets Control Regulations and the Export Administration Regulations administered by the Department of Commerce's Bureau of Industry and Security (BIS), which together generally prohibit trade with and travel to Cuba, will increase access to markets restricted since the 1959 Cuban revolution. Under the current regulations, codified at 31 CFR Part 515, all persons subject to US jurisdiction, including branches and subsidiaries of US companies, are prohibited from exporting to Cuba, importing from Cuba, or otherwise engaging in transactions involving Cuban interests, unless they are licensed by OFAC.

General licenses exempt from the prohibition narrowly defined categories of transactions deemed consistent with US foreign policy, such as education and cultural exchange activities. Specific licenses are granted to US persons or entities that successfully apply for authorization to carry out an approved activity or transaction disclosed in advance on the license application.

Obama's promise to increase travel, commerce, and the flow of information to and from Cuba signals a further relaxation of OFAC licensing policy, which will be updated to permit higher-value remittances, increase telecommunications exports, and permit US travelers to use credit and debit cards in Cuba, as well as open bank accounts. Within moments of the announcement, OFAC published an FAQ confirming that the agency will issue regulatory amendments in the coming weeks. None of the changes will take effect until those new regulations are issued.

OFAC could also revise its penalty structure for violations; criminal penalties for violations currently range up to $1M in corporate fines and 10 years in prison per violation. OFAC also assesses civil penalties, up to $65,000 per violation.

Only Congress, however, has authority to lift the trade embargo codified in legislation, by making significant amendments to the Helms-Burton Act. For example, the Act makes "demonstrable progress" in returning property expropriated by the Cuban government a legal prerequisite to lifting the U.S. embargo. These claims, which are currently in limbo at the quasi-judicial Foreign Claims Settlement Commission (FCSC), concern roughly $7 billion worth of property nationalized by the Castro regime. Therefore, the 114th Congress, which is already expected to take on significant trade legislation such as Trade Promotion Authority (TPA) as early as January 2015, could weigh in on the FCSC claim settlement process and other Helms-Burton obstacles to normalizing trade with Cuba.

The Act also creates a private right of action authorizing US nationals with claims certified by the FCSC to bring suit against non-US entities "trafficking" in expropriated property. Specifically, any US national holding a claim certified by the FCSC can sue a foreign person or company for the amount certified, plus interest. The provision has been suspended by Presidential waiver since its inception, and will likely remain suspended during implementation of the Obama Administration's policy shift.

Although Congress faces high hurdles to normalize trade relations with Cuba, the foundation of normal diplomatic relations now appears to be in sight.