On July 25, OFAC updated its Frequently Asked Questions (“FAQs”) on President Trump’s Cuba Announcement. The revised FAQs generally maintain the same tone and reiterate certain aspects of the new U.S.-Cuba policy.
However, as we develop below, there is an important subtle change: OFAC has included explicit language stating that existing specific licenses may be affected if it is explicitly noted in the forthcoming regulations. The changes in the guidance can be divided into three categories:
Prior Business in Cuba Will Not Be Affected (unless otherwise stated!)
- The key change in these FAQs relates to the potential effect of any amended regulations on existing licenses. In the first version issued on June 16, OFAC stated that new regulations will be forthcoming and will not affect specific licenses previously granted. In the revised FAQs, OFAC modified this position to note that existing licenses will not be affected “unless explicitly noted”. (See FAQ 12).
- OFAC includes an example explaining that U.S. businesses will be permitted to continue with prior transactions with entities related to the Cuban military, intelligence, or security service, when those transactions were outlined in contingent or other contractual arrangements agreed prior to the issuance of the forthcoming regulations. (See FAQ 9).
Reminder about the New Definition of “Prohibited Official”
- OFAC specifically states that while remittances remain authorized, the new definition of Cuban prohibited official may exclude certain Cubans from receiving remittances. (See FAQ 11).
- Group people-to-people travel will still be authorized; however, OFAC now notes that U.S. persons cannot deal with Cuban prohibited officials for a predominant portion of their activities in Cuba when travelling under such general license. (See FAQ 3).
- The State Department previously indicated it would be publishing a list of entities that are owned or controlled by the Cuban military. OFAC’s new FAQs reiterate that previously scheduled travel arrangements involving entities that are subsequently identified on the State Department list will remain authorized, provided that the arrangements have been made prior to the publication of the list (See FAQ 4, 5, 7, 8.). The new FAQs reiterate that no new transactions with listed entities will be authorized after publication of the list.
- Finally, for the first time, the new FAQs indicate that additional categories of currently authorized travel may be affected by the upcoming changes. Specifically, beyond “people-to-people” travel, OFAC notes that travel for (a) education or (b) ‘support for the Cuban people’ may be impacted by the upcoming regulations. (See FAQ 6).