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JANUARY 16, 2015
Cuba - U.S. Department of Commerce and U.S. Department of
the Treasury Implement Regulatory Changes
As previously reported, President Obama announced on December 17, 2014 that the United States and Cuba will
seek to normalize their relations, including an easing of U.S. sanctions against Cuba intended to further engage
and empower the Cuban people. On January 15, 2015, the U.S. Department of Treasury’s Office of Foreign Assets
Control (OFAC) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced the
forthcoming publication of the amended Cuban Assets Control Regulations (CACR) and Export Administration
Regulations (EAR), respectively, which will implement these changes to the sanctions. The amendments took
effect on January 16, 2015, when the regulations were published in the Federal Register.
With these new amendments, OFAC and BIS implemented policy changes and authorized a number of
previously prohibited activities related to travel, financial services, telecommunications, trade and shipping.
These amendments are summarized below.
1. Travel to Cuba for Authorized Purposes
OFAC authorized travel-related transactions and other transactions incident to activities within the twelve
existing travel categories in OFAC’s regulations, including (1) family visits; (2) official governmental business;
(3) journalistic activities; (4) professional research and meetings; (5) educational activities; (6) religious
activities; (7) public performances, clinics, workshops, athletic and other competitions and exhibits; (8) support
for the Cuban people; (9) humanitarian projects; (10) activities of private foundations or research or educational
institutes; (11) export, import or transmission of information or informational materials; and (12) certain export
transactions. The amended regulations will not require travelers to secure case-by-case specific licenses for these
categories. The regulations contain certain restrictions appropriate to each category of activities, and continue to
prohibit travel for tourist activities.
2. Travel Services
Persons subject to U.S. jurisdiction, including travel agents and airlines, will be able to provide certain travel and
air carrier services without needing to apply for a specific license from OFAC.
OFAC increased the limits on generally licensed remittances to Cuban nationals (other than certain prohibited
Cuban Government and Cuban Communist Party officials) from $500 to $2,000 per quarter. Certain
remittances to Cuban nationals for humanitarian projects, support for the Cuban people and development of
private business in Cuba are generally authorized without limitation. OFAC also raised the total amount of SANCTIONS UPDATE
remittances that a traveler may carry to Cuba to $10,000. Banking institutions are permitted to process
authorized remittances to Cuba without having to apply for a specific license.
4. Credit and Debit Cards, Per Diem, and Importation of Certain Goods and Services
OFAC authorized U.S. financial institutions to enroll merchants and process credit and debit card transactions
for travel-related and other transactions consistent with the regulations. These measures are expected to
improve the speed and efficiency of authorized payments between the United States and Cuba. OFAC also
eliminated the per diem limitation on authorized spending in Cuba, and permitted authorized U.S. travelers to
Cuba to import up to $400 worth of goods acquired in Cuba for personal use. This amount cannot include more
than $100 of alcohol or tobacco products.
5. Micro-Financing, Business and Commercial Import Activities
OFAC authorized certain micro-financing projects and entrepreneurial and business training, such as those for
private business and agricultural operations. In addition, commercial imports of certain independent Cuban
entrepreneur-produced goods and services are authorized.
6. Financial Transactions
OFAC created a general license to permit depository institutions to open and maintain correspondent accounts
at Cuban financial institutions in order to facilitate the processing of authorized transactions, as well as to
permit U.S. financial institutions to reject and process certain funds transfer transactions.
7. “Cash in Advance”
The regulatory interpretation of “cash in advance” has been liberalized from “cash before shipment” to “cash
before transfer of title and control” to allow expanded financing options for authorized exports to Cuba.
A new OFAC general license facilitates the establishment of commercial telecommunications facilities linking
third countries and Cuba and within Cuba. The commercial export of certain items that will aid in the ability of
the Cuban people to communicate with people within Cuba, in the United States and with the rest of the world is
allowed under a new BIS license exception (Support for the Cuban People (SCP)). This includes the commercial
sale of certain consumer communication devices, related software, applications, hardware and services, as well
as items for the establishment and update of communications-related systems. OFAC also authorized persons
subject to U.S. jurisdiction to provide additional services incident to internet-based communications and related
to certain exportations and re-exportations of communications items.
9. Consumer Communications Devices
BIS’s existing license exception Consumer Communication Devices (CCD) has been amended to authorize the
commercial sale of communication devices, including personal computers, mobiles, televisions, memory devices,
recording devices and consumer software to eligible persons and NGO’s in Cuba. Previously, the license
exception authorized only donations of these items. SANCTIONS UPDATE
10. Transactions with Cuban Nationals Located Outside of Cuba
A new CACR provision authorizes U.S.-owned or -controlled entities in third countries, including banks, to
provide goods and services to Cuban nationals in third countries. Such transactions may not involve a
commercial exportation of goods or services to or from Cuba. OFAC also authorized the unblocking of accounts
of Cuban nationals who have permanently relocated outside of Cuba. OFAC will allow funds transfers through
the United States for the personal expenditures of employees, grantees, contractors and persons who share a
common dwelling as a family member of such employees, grantees and contractors, of third-country official
missions in Cuba, or any intergovernmental organization of which the United States is a member or holds
observer status in Cuba. Transactions related to third-country professional meetings and conferences attended
by Cuban nationals will be authorized, and the provision of certain goods and services to Cuban national sailors
sequestered aboard ships in U.S. ports will be permitted.
11. Official Government Business and Cuban Official Missions
In an effort to support significant U.S. government interests, OFAC expanded an existing authorization related
to the conduct of official business to cover all Cuba-related transactions by employees, grantees and contractors
of the U.S. Government, foreign governments and certain international organizations in their official capacities.
To facilitate the reestablishment of diplomatic relations with Cuba, OFAC authorized transactions with Cuban
official missions and their employees in the United States.
OFAC authorized insurance companies to offer global insurance policies to cover third-country nationals
traveling to Cuba. Health, life and travel insurance-related services will continue to be permitted for authorized
U.S. travelers to Cuba.
Under the amended regulations, foreign vessels are authorized to enter the United States after engaging in
certain trade with Cuba.
14. Support for the Cuban People
License exception SCP also authorizes exports and re-exports of certain items to provide support for the Cuban
people in three areas: (1) improving living conditions and supporting independent economic activity; (2)
strengthening civil society; and (3) improving communications. To improve living conditions and support
independent economic activity, SCP authorizes building materials, equipment and tools for use by the private
sector to construct or renovate privately-owned buildings; tools and equipment for private agricultural activity;
and tools, equipment, supplies and instruments for use by private sector entrepreneurs. To strengthen civil
society, SCP allows the export and re-export of donated items for use in scientific, cultural, educational, sporting
and similar activities. Exports and re-exports to certain human rights organizations, individuals or nongovernmental
organizations are authorized. A traveler will be able to temporarily export items for use in
professional research in the traveler’s profession or full time field of study, as long as the activities or research
are not related to items on the U.S. Munitions List or items controlled by the Commerce Control List (CCL). To
improve communications, SCP will allow exports and re-exports of items for use by news media personnel and SANCTIONS UPDATE
U.S. news bureaus. SCP will not authorize the export of items on the CCL for sensitive reasons (i.e., national
security, nuclear proliferation, regional stability, etc.).
15. Gift Parcels
BIS’s license exception GFT now authorizes consolidated shipments of gift parcels in addition to individual gift
16. Liberalization of License Application Review Policy
BIS also set forth a general policy of approval for license applications related to the export and re-export of items
necessary for the environmental protection or enhancement of U.S. and international air and water quality or
If you have any questions regarding this update, please contact the Sidley lawyer with whom you usually work, or
Andrew W. Shoyer
Sidley Economic Sanctions Practice
Lawyers in our U.S. and EU Sanctions Practice advise companies on the applicability of sanctions programs to corporate and
banking transactions, insurance contracts and the sale of goods and services. We handle license applications for agricultural
commodities, medical devices and medicines under the Trade Sanctions Reform and Export Enhancement Act of 2000. We also
represent companies in enforcement actions involving sanctions, assist with internal investigations, counsel clients on voluntary
disclosures and assist with the development of compliance programs.
For more information about our U.S. Sanctions Practice please contact Robert Torresen (email@example.com, +1.202.736.8570)
or Lindsay Bourne (firstname.lastname@example.org, +1.202.736.8776) and for more information about our EU Sanctions Practice please
contact Sven de Knop (email@example.com, +32.2.504.64.09) or Yohan Benizri (firstname.lastname@example.org, +32.2.504.64.06).
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