On June 16, 2017, the White House released a Presidential Memorandum ("Memo") outlining a new policy regarding travel and business with Cuba. The Memo is subject to implementation through the Office of Foreign Assets Control ("OFAC") at the Department of Treasury and Bureau of Industry and Security ("BIS") at the Department of Commerce as well as the Departments of State and Transportation. Neither OFAC nor BIS has yet issued implementing regulations.
As noted in our prior briefing, both BIS and OFAC have released guidance on their interpretations of the memo. On July 25, 2017, OFAC updated its guidance to provide further insights into the effect the President's memo will have on travel and business with Cuba.
The updated guidance provides additional information and clarification for businesses and travelers who began their plans to work or travel to Cuba prior to the memo's June 16 release date. For example, the initial OFAC guidance noted that any commercial engagement that includes direct transactions with entities related to the Cuban military would still be permitted as long as the commercial engagement was in place prior to the issuance of the forthcoming regulations. The new guidance clarifies that statement and informs the public that "businesses will be permitted to continue with transactions outlined in contingent or other types of contractual arrangements agreed to prior to the issuance of the new regulations, consistent with other CACR [Cuban Assets Control Regulations] authorizations."
Not all of the changes to OFAC's guidance are simple clarifications of prior answers, however. One change to the prior guidance is the shift in OFAC's answer to the question of how the new policy will impact existing OFAC specific licenses. In the previous version of its guidance, OFAC stated unequivocally that "[t]he forthcoming regulations will be prospective and thus will not affect existing contracts and licenses." In its new guidance, however, OFAC allowed for the possibility that a specific license that was in place before the memo's release date could be impacted if that impact is "explicitly noted" in the regulations. This change allows for the possibility of OFAC deciding to pull or change a business's existing specific license in light of any new regulations that may be put in place. It is not clear how OFAC will determine what regulations, if any, will be made retroactive.
The guidance continues to state that the State Department will be publishing a list of entities and subentities in Cuba with which companies will not be permitted to engage in direct commercial transactions. However, this list has not yet been published.
While the updated guidance provides some new help for businesses concerned about the June 16 memo, much more information is required before the full scope of the memo's influence on American businesses and travelers can be determined. While BIS and OFAC have both released guidance about their interpretations of the memo, actual changes to the Export Administration Regulations ("EAR") and the Cuban Assets Control Regulations ("CACR") are still forthcoming.