The normalization of diplomatic relations between the United States and Cuba has significant
implications for the legal and financial landscape of North America, with far-reaching economic
impacts around the world. However, it is critical to note that the recently announced measures
easing restrictions on travel to and trade with Cuba do not lift the long-standing US sanctions
placed on Cuba by several statutes and their implementing regulations. Many of these
sanctions are preserved by legislation and will remain in full force for the foreseeable future.
Lifting all of the sanctions currently in place would require an act of Congress. The changes in
rules and regulations will be ongoing and require careful attention to insure compliance. In
addition to addressing immediate implications, this alert highlights the existing statutory regime
and previous actions taken by the Obama Administration.
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The White House’s policy changes are directed toward strengthening the Cuban economy by providing
opportunities for the self-employment of and private-property ownership by the Cuban people.
The easing of travel, trade, banking and finance restrictions are expected to facilitate US investment in
Cuba and promote the growth of entrepreneurship and the Cuban private sector. Expanded commercial
imports and exports are expected to invite new business opportunities for US producers of goods and
services and their many partners abroad.
These historic developments are certain to change the legal and financial landscape of North America,
with far-reaching economic impacts around the world. The changes in rules and regulations will be
ongoing and require careful attention to ensure compliance. We will continue monitoring these
developments as US Treasury’s Office of Foreign Assets Control (OFAC) and the Department of
Commerce’s Bureau of Industry and Security (BIS) update the relevant regulations.C L I E N T A L E R T 2
The Embargo Is Not Over
Importantly, the recently announced measures easing restrictions on travel to and trade with Cuba do
not lift all of the long-standing US sanctions placed on Cuba by several statutes and their implementing
regulations. Many of these sanctions are preserved by legislation including the Cuban Democracy Act
of 1992 (CDA) and the Helms-Burton Act and will remain in full force for the foreseeable future. Lifting
all of the sanctions currently in place would require an act of Congress.
Trade, Telecommunications, Banking and Finance
With the recent loosening of trade restrictions, certain building materials, agricultural equipment and
telecommunications items, including consumer communications devices, software, applications,
hardware and services, will be authorized for export to Cuba, adding to the 2009 loosening of economic
sanctions related to telecommunications services. Telecommunications providers will also be permitted
to build infrastructure in Cuba in order to provide Commercial telecommunications and Internet
services, expanding upon previous regulations that allowed for the provision of telecommunications
services linking the United States and Cuba, and “third countries” and Cuba. At the consumer level,
American travelers will be allowed to import up to US$400 worth of goods, including up to US$100
worth of tobacco and alcohol.
President Obama's executive actions will also impact banking and finance between the US and Cuba.
US-owned or -controlled entities in third countries will be generally licensed to provide services to and
transact certain financial business with Cuban individuals in third countries. Additionally, general
licenses will unblock the accounts at US banks of Cuban nationals who have relocated outside of Cuba.
Similar to the proposed authorization by general license for travel to Cuba for professional meetings,
US persons will also be authorized to participate in professional meetings and conferences related to
Cuba in third countries. Finally, travelers to Cuba will be permitted to use American-issued credit and
debit cards while US institutions will be permitted to open accounts at Cuban financial institutions to
enable efficient processing of authorized transactions.
General Licenses Related to Travel
As a result of President Obama’s latest announcement, OFAC will issue general licenses allowing
travel to Cuba for the following purposes authorized by law:
(1) Family visits1
(2) Official business of the US government, foreign governments and certain
(3) Journalistic activity2
(4) Professional research and professional meetings;
Already authorized by general license under the 2009 OFAC amendments to the CACR.
Already authorized by general license under the 2011 OFAC amendments to the CACR.C L I E N T A L E R T 3
(5) Educational activities;
(6) Religious activities;
(7) Public performances, clinics, workshops, athletic and other competitions and exhibitions;
(8) Support for the Cuban people;
(9) Humanitarian projects;
(10) Activities of private foundations or research or educational institutes;
(11) Exportation, importation or transmission of information or information materials; and
(12) Certain export transactions that may be considered for authorization under existing
regulations and guidelines.3
OFAC’s updated regulations will specify precisely what conditions will attach to the new general
licenses. It is expected that authorized travelers will be able to arrange such travel with any service
provider that complies with OFAC travel regulations. However, travel for ordinary tourism will remain
banned until congressional action lifts the restriction.
Effective since 2009, there have been no limits on remittances to close relatives. The President’s
recently announced measures seek to permit remittances of up to US$2,000 per quarter (increasing the
amount from US$500 per quarter) to any Cuban national (except to certain officials of the government
or the Communist party); and donative remittances for humanitarian projects, support for the Cuban
people, and support for the development of private businesses in Cuba will no longer require a specific
license. Furthermore, those who provide remittance forwarding services, other than depository
institutions, will no longer require specific licenses to do so.
The Existing Statutory Regime. The United States’ Cuban sanctions regime consists of the Cuban
Democracy Act of 1992 (CDA) (22 U.S.C. ch. 69 § 6001, et seq.) and the Helms-Burton Act.
In 1992, through the CDA, Congress established the framework of the Cuba embargo and sanctions
program. The CDA states that the United States, with the goal of reaching “a peaceful transition to
democracy and resumption of economic growth in Cuba,” will implement sanctions directed at the
Castro government while also supporting the Cuban people. In doing so, the CDA mandates certain
sanctions, but also grants the President discretionary authority to provide support for the Cuban people.
In 1996, the Helms-Burton Act codified the existing Cuban sanctions regime. Section 102(h) of the
Helms-Burton Act stipulates that the “economic embargo of Cuba,”4
as in effect on March 1, 1996, must
See Press Release, The White House Office of the Press Sec’y, FACT SHEET: Charting a New Course on
Cuba (Dec. 17, 2014).
See 22 U.S.C. § 6023. In defining the “economic embargo of Cuba,” Congress included all restrictions on trade,
travel and transactions involving property in which Cuba or a Cuban national has an interest, as established under
the following legislation: Section 602(a) of the Foreign Assistance Act of 1961 (which provided the statutory
(Cont'd on following page)C L I E N T A L E R T 4
remain in place until the President determines that a transition government or a democratically elected
government is in power in Cuba.
The Helms-Burton Act also codified the existing restrictions issued by OFAC through the Cuban Assets
Control Regulations (CACR) and by the Secretary of Commerce through the Export Administration
The Helms-Burton Act further stipulates that the US Secretary of the Treasury and the US Secretary of
Commerce have the responsibility of enforcing the Cuban economic sanctions. However, the HelmsBurton
Act also gives the Secretary of the Treasury and the Secretary of Commerce the discretion to
create exceptions to the applicable Cuban restrictions.
In light of President Obama’s recent decision, OFAC and the Department of Commerce’s Bureau of
Industry and Security (BIS) have announced they intend to implement the new measures by amending
the CACR and the EAR, respectively, “in the coming weeks.” The changes will not take effect until
these new regulations are issued.
Specific and General Licenses. OFAC enforces applicable Cuban sanctions regulations and also
provides discretionary licenses that allow individuals and companies to engage in otherwise prohibited
transactions. The licenses issued by OFAC can be either specific or general.
A specific license is a written document issued by OFAC in response to a written license application
authorizing an applicant to engage in a particular transaction. Determinations for specific licenses are
made on a case-by-case basis. A general license authorizes a particular type of transaction for a class
of individuals without the need to apply for a specific license.
Previous Actions Taken by the Obama Administration. This is not the first time President Obama
has directed OFAC and the BIS to change the Cuban sanctions regulations. In 2009, President Obama
directed that his administration make a number of changes to the Cuban sanctions regime. OFAC
responded to this presidential directive regarding family travel to Cuba by amending the CACR to
authorize family travel by general, rather than specific, license, while removing limitations on the
frequency and duration of family visits. OFAC also eased restrictions on remittances (providing no limit
on remittances to close family) as well as telecommunications-related transactions.5
(Cont'd from preceding page)
authority under which President Kennedy originally imposed the embargo against Cuba by Proclamation 3447);
Section 5(b) of the Trading With the Enemy Act (which was the statutory authority for issuance of the Cuban
Assets Control Regulations); the CDA; and any other provision of law.
In March 2010, OFAC amended the CACR, allowing for the exportation of certain services to Cuba incident to
the exchange of personal communications over the Internet. For a comprehensive list and discussion of
telecommunications services-related transactions that were licensed by the March 2010 amendments to the
CACR, see Doing Business in Cuba: New Guidance on Embargo Rules, CLIENT ALERT (Chadbourne & Parke LLP,
New York, N.Y.), May 5, 2009.C L I E N T A L E R T 5
These amendments redefined “family travel” to include visits to close relatives who are Cuban
nationals, instead of the narrower category of immediate family members. Additionally, OFAC issued a
general license for travel related to the marketing and sale of agricultural and medical supplies to Cuba.
In 2011, President Obama announced a series of measures further easing restrictions on travel and
remittances to Cuba.6 OFAC implemented these measures by amending the CACR to authorize certain
educational and religious travel to Cuba as well as travel incident to certain journalistic activity by
general license, and related people-to-people travel by specific license.
* * *
President Obama allowed individual US persons to send remittances of up to US$500 per quarter to non-family
members in Cuba as long as such remittances supported private economic development, and as long as such
remittances were not delivered to senior members of the Cuban government or the Communist Party of Cuba.Our client alerts are for general informational purposes and should not be regarded as
legal advice. If you would like additional information or have any questions, please
+1 212 408-5390
Talbert I. Navia
+1 212 408-5316
Mark D. Beckett
+1 212 408-5226
+1 212 408-5158
Abbe David Lowell
+1 202 974-5605