President Trump today announced changes to U.S.-Cuban sanctions policy which will reverse amendments made by the Obama administration in 2015 and 2016 intended to normalize relations with Cuba. President Trump stated that these changes will include eliminating unsponsored individual travel under the “people-to-people” program and restricting transactions with Cuban military, intelligence and security agencies. The U.S. Department of Treasury’s Office of Foreign Assets Control and the U.S. Department of Commerce’s Bureau of Industry and Security have not yet revised their rules to formally implement today’s announced policy changes, however OFAC has provided preliminary FAQ guidance. According to OFAC, today’s announced changes will not become effective until the new regulations are issued.
As amended by President Obama in March 17, 2016, the individual “people-to-people” program allowed individual U.S. travelers to travel to Cuba without an OFAC license for educational travel involving a full-time schedule of educational exchange activities in order to facilitate meaningful interaction between U.S. travelers and Cuban citizens. According to the OFAC FAQ issued today, if prospective individual “people-to-people” travelers have completed at least one travel-related transaction before today’s announcement (such as purchasing a flight or reserving accommodations), then those travelers may still conduct their trips under the March 2016 rules even if those trips occur after the new rules take effect. Today’s FAQ also provides that when the new regulations become effective, they will continue to allow travel to Cuba under the group “people-to-people” program, provided such group travel takes place under the auspices of a qualifying organization authorized to sponsor group “people-to-people” trips. OFAC will continue to allow travel to Cuba under the other 12 authorized travel categories (which include some forms of permitted business travel).
It is important to note that tourism travel to Cuba has been and will continue to be prohibited, however the informal nature of the individual “people-to-people” program was susceptible to abuse. President Trump’s speech today indicates that OFAC and BIS will likely take a more aggressive stance in enforcing the tourist travel prohibitions. Accordingly, prospective travelers to Cuba should be careful to ensure that their trip complies with OFAC and BIS restrictions.
It is less clear how the restrictions against dealings with the Cuban military, intelligence and security service agencies will take shape. Obama amendments to the OFAC and BIS Cuban export restrictions authorized BIS to issue export licenses which would potentially permit certain transactions with the Cuban government if the end result of those transactions would benefit the Cuban people. Presumably, transactions with Cuban government entities related to the military, intelligence or security sectors will no longer be eligible for these licenses. The FAQ also indicates that, when the new regulations become effective, they will prohibit U.S. persons who travel to Cuba from engaging in direct transactions with entities related to the Cuban military, intelligence or security agencies. According to OFAC, the State Department will be publishing a list of these prohibited Cuban agencies, which will hopefully shed more light on the forthcoming regulations.
OFAC has indicated that it will issue the official amendments sometime “in the coming months”. Husch Blackwell’s export controls and sanctions team is closely monitoring these policy changes and will provide updates on developments as information becomes available.