During the 2008 presidential campaign, then-Senator Barack Obama promised greater engagement with Cuba, contrary to the more stringent Cuba policies of the prior administration. Not long after his inauguration, on April 13, 2009, President Obama announced, in a White House press release, “a series of changes in U.S. policy to reach out to the Cuban people in support of their desire to freely determine their country’s future.” A fact sheet distributed by the White House stated that these changes will “help bridge the gap among divided Cuban families and promote the freer flow of information and humanitarian items to the Cuban people[.]”
On Sept. 8, 2009, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued a final rule, effective Sept. 3, 2009, amending the Cuban Assets Control Regulations (“CACR”), 31 C.F.R. Part 515. The rule implements the President’s initiative of April 13, 2009, and states that the amendments are meant “to promote greater contact between separated family members in the United States and Cuba and to increase the flow of remittances and information to the Cuban people.” The rule also implements provisions of the Omnibus Appropriations Act of 2009 and makes certain technical and conforming changes to the CACR.
The amendments revise provisions in the CACR that touch upon several important subjects. First, the amendments make it easier to unblock Cuban nationals who are not resident in Cuba. Second, they authorize banks and depository institutions to engage in certain remittances to Cuban nationals. Third, they clarify the rules for travel-related transactions incident to agricultural and medical sales. Further, the amendments modify the current legal regime with respect to three major areas: family remittances, family visits and telecommunications.
Summary of the Amendments
I. Cuban nationals not living in Cuba can more easily prove permanent residence outside of Cuba.
OFAC amended the specific license provision in the CACR unblocking Cuban nationals who have taken up permanent residence in a third country (i.e., one that is not Cuba or the United States). (See § 515.505(b)). Previously, a Cuban national had to obtain permanent resident status in the third country and submit at least two documents from a list of qualifying documents issued by the third country’s government. In some situations, individuals who have lived outside of Cuba for many years, or whose intention has not been to return to Cuba, have been unable to provide two of the qualifying documents. In order to permit these individuals to more readily complete their license applications, the CACR has been revised to allow for consideration of other evidence, such as that the individual has been resident for the past two years without interruption in a single country outside of Cuba, or that the individual does not intend to, or would not be welcome to, return to Cuba.
II. Most transactions are now authorized with Cuban nationals lawfully present in the United States.
OFAC amended a general license in the CACR to authorize most transactions with Cuban nationals who are “lawfully present in the United States in a non-visitor status.” (See § 515.505(c)). For authorization pursuant to this license, the individual cannot be in the United States on a non-immigrant visa that is valid only for a specified period of time.
III. Certain remittance-related transactions by banks and other depository institutions are authorized.
OFAC amended a general license, subject to specified conditions, authorizing certain remittances from blocked sources. (See §§ 515.570(c) and 515.339). Specifically, the amendment permits unlimited remittances of funds from an inherited blocked account in a banking institution located in the United States to a Cuban national who is a “close relative” of the decedent. Additionally, remittances of up to $300 within a period of three consecutive months are now authorized from any blocked account to a Cuban national in a third country who is an individual in whose name, or for whose beneficial interest, the account is held.
A new general license was also added to the CACR authorizing depository institutions to provide remittance forwarding services. (See §§ 515.572(a)(3) and 515.333). This will facilitate the remittances that are now more broadly permitted under the CACR. (Additional amendments to the provisions authorizing remittances to Cuban nationals are discussed below.) Previously, depository institutions required a specific license from OFAC to serve as a remittance forwarder. Pursuant to this general license, all licensed remittance forwarders, including depository institutions, are required to collect certain information from remitters. Depository institutions may not open or use their own direct correspondent accounts with Cuban financial institutions pursuant to this general license.
IV. Clarification of policy governing transactions incident to authorized exportation and reexportation of 100% U.S.-origin items.
OFAC amended the title of § 515.533, regarding the exportation and reexportation of U.S.-origin items. The amended title is “Transactions incident to exportations from the United States and reexportations of 100% U.S.-origin items to Cuba; negotiation of executory contracts.” (emphasis added). Because the previous title referred to “U.S.-origin items,” not “100% U.S.-origin items,” OFAC presumably intended to clarify that the items exported pursuant to the general license set forth in § 515.533 must be entirely from the United States, not blended with items from other countries.
Additionally, OFAC added a new paragraph to authorize, with certain conditions, the travel-related transactions set forth in § 515.560(c), as well as other transactions incident to the commercial marketing, sales negotiation, accompanied delivery or servicing in Cuba of agricultural commodities, medicine or medical devices that are consistent with the export or re-export licensing policy of the Department of Commerce. (See § 515.533(e)).
V. Amendments to the CACR regarding authorization for family (and other) remittances, family visits, and telecommunications.
Previously, remittances to Cuban nationals were limited to the “immediate family” of the remitter, and the maximum remittance amount was $300 per recipient household in any consecutive three-month period. OFAC removed all limits on the amount and frequency with which authorized family remittances may be made to Cuba, and expanded the category of persons who are permitted to receive such remittances to include “close relatives,” a term that is defined more broadly than “immediate family.” (See §§ 515.570(a) and 515.339). Additional amendments increase the total amount of family remittances an authorized traveler, or a national of Cuba departing the United States, may carry to Cuba from $300 to $3,000 (see § 515.560), and increase the value of the two remittances that may be made to a Cuban national, on a one-time basis, for the purpose of covering expenses related to the individual’s emigration from Cuba to the United States (see § 515.570(c)).
A number of amendments were made to the rules regarding travel-related transactions incident to visiting relatives in Cuba. (See §§ 515.560 and 515.561). The amended rules provide a general license allowing family members to travel to Cuba to visit close relatives who are Cuban nationals as often as they wish. The requirement that exigent circumstances exist in order to obtain a specific license to travel to Cuba to visit family members who are not Cuban nationals has been removed. Additionally, persons who share a common dwelling, as a family, with a licensed traveler may now accompany that traveler on a family visit to Cuba.
General and specific licenses were also added to the CACR, subject to certain conditions, authorizing transactions incident to the exchange of mail and telecommunications services between the United States and Cuba. (See §§ 515.533, 515.542 and 515.564).
OFAC’s release regarding the amendments to the Cuban Assets Control Regulations, and a link to the notice in the Federal Register, are available on OFAC’s website at: http://www.treasury.gov/offices/enforcement/ofac/actions/20090903_44.shtml.