The Department of Commerce’s Bureau of Industry and Security (BIS) further tightened U.S. sanctions on Cuba “for its repression of the Cuban people and its support of the Maduro regime in Venezuela.” Overall, the United States maintains a comprehensive embargo on trade with Cuba, and the export and reexport to Cuba of items subject to the Export Administration Regulations (EAR) require a BIS license unless authorized by a license exception. With the tightening of these sanctions, BIS issued an amendment to the Cuba provisions of the EAR that implements the following changes:
- Licensing Policy for Aircraft – BIS will now apply a general policy of denial for leases of aircraft to Cuban state-owned airlines and has clarified that aircraft and vessels are no longer eligible for the License Exception Aircraft and Vessels (AVS) if they are leased to or chartered by a national of Cuba. Further, BIS has indicated that existing licenses will be revoked within the next seven days.
- Change in De Minimis Amount Allowed in Foreign Goods – BIS has established a general 10 percent U.S.-origin de minimis content level for foreign items that contain U.S. content. The prior level had been 25 percent. This amendment drastically lowers the U.S. content level and will thus increase the amount of foreign-made items located abroad that are subject to the EAR under specified circumstances, including when they incorporate, or are bundled or commingled with, specified levels of controlled U.S.-origin commodities, software or technology. BIS has announced that license applications for the export or reexport of foreign-made items including 10 percent of more of U.S.-origin content will be subject to a policy of denial.
- Revisions to License Exception Support for the Cuban People (SCP) – BIS has amended this license exception to: (1) make the Cuban government and Communist Party ineligible for certain donations, requiring a license application by any exporter wanting to donate items to organizations administered or controlled by the Cuban government or Communist Party so that the proposed donation can be reviewed by the U.S. government to determine whether donations to those entities would benefit the Cuban people; (2) eliminate an authorization for items to be given away for free for promotional purposes (BIS states that this provision has been primarily beneficial to the Cuban government since it has a virtual monopoly on importing items into the country); and (3) clarify that the SCP exemption for certain items for telecommunications is limited to eligible items for the creation and upgrade of telecommunications infrastructure to improve the free flow of information to, from, and among the Cuban people. Specifically, BIS notes that a license is required for the export or reexport to Cuba of items for telecommunications infrastructure that would be used to connect other specific end users (e.g., Cuban government ministries and state-owned hotels).
These amendments to the EAR are effective as of October 21, 2019. Secretary of Commerce Wilbur Ross stated, “This action … sends another clear message to the Cuban regime – that they must immediately cease their destructive behavior at home and abroad.”