On January 16, 2015, the U.S. Department of the Treasury (“Treasury”) amended the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (“CACR”), and the U.S. Department of Commerce amended the Export Administration Regulations, 15 C.F.R. Parts 730-774 (“EAR”), to implement changes announced by President Obama on December 17, 2014, in connection with U.S. relations with Cuba. The revised regulations primarily impact travel, telecommunications services, financial services, remittances to certain Cuban nationals, third-country effects, and diplomatic relations.
Highlights of the new regulations include the following:
- In all 12 existing categories of authorized travel (family visits; official business of the U.S. government, foreign governments, and certain intergovernmental organizations; journalistic activity; professional research and professional meetings; educational activities; religious activities; public performances, clinics, workshops, athletic and other competitions, and exhibitions; support for the Cuban people; humanitarian projects; activities of private foundations or research or educational institutes; and in connection with exportation, importation, or transmission of information or information materials and certain authorized export transactions), travel previously authorized by specific license is now authorized by general license, subject to certain conditions.
- The per diem limitation previously imposed on authorized travelers is eliminated, with no specific dollar limit on authorized expenses. Authorized travelers are allowed to engage in transactions ordinarily incident to travel within Cuba, including payment of living expenses and the acquisition of goods in Cuba for personal consumption in Cuba.
- Authorized travelers are allowed to import into the United States up to $400 worth of goods acquired in Cuba for personal use, subject to a limit of $100 for alcohol or tobacco products.
- Authorized travelers are allowed to use U.S. credit and debit cards in Cuba.
- Travel agents and airlines are authorized to provide authorized travel and air carrier services without the need for a specific OFAC license.
- U.S. insurers will be able to provide coverage for global health, life, or travel insurance policies for individuals ordinarily resident in a third country who travel to or within Cuba, and health, life, and travel insurance-related services will be permitted for authorized U.S. travelers to Cuba.
- A new OFAC general license facilitates the establishment of commercial telecommunications facilities linking third countries and Cuba, and in Cuba itself.
- The commercial export of certain communications-related items (including the commercial sale of certain consumer communications devices, related software, applications, hardware, and services, and items for the creation and modernization of communications-related systems) is authorized without requiring a license under a new Commerce Department License Exception (Support for the Cuban People (SCP)).
- Additional services relating to Internet-based communications, and relating to certain exportations and reexportations of communications items, are also authorized by OFAC general license.
- Commercial sales, including donations, of the export and reexport of consumer communications devices (including personal computers, mobile phones, televisions, memory devices, recording devices, and consumer software) are authorized under the Commerce Department’s Consumer Communication Devices (CCD) License Exception.
- Depository institutions are permitted to open and maintain correspondent accounts at Cuban-national financial institutions to facilitate the processing of authorized transactions.
- U.S. financial institutions are authorized to enroll merchants and process credit and debit card transactions for travel-related and other permitted transactions consistent with Section 515.560 of the CACR.
- The limits on generally licensed remittances to Cuban nationals other than certain prohibited Cuban Government and Cuban Communist Party officials are increased to $2,000, per quarter.
- In most cases, remittances to Cuban nationals for humanitarian projects, support for the Cuban people , or development of private businesses are authorized, without limitation.
- Authorized travelers are allowed to carry to Cuba up to $10,000 in total family remittances, periodic remittances, remittances to religious organizations in Cuba, and remittances to students in Cuba pursuant to an educational license.
- Banking institutions, including U.S.-registered brokers or dealers in securities and U.S.-registered money transmitters, are permitted to process authorized remittances to Cuba, without having to apply for a specific license.
- U.S.-owned or -controlled entities in third countries are authorized to provide goods and services to individual Cuban nationals located outside of Cuba, as long as the transaction does not involve a commercial exportation of goods or services to or from Cuba.
- OFAC has authorized, in most cases, the unblocking of accounts of Cuban nationals who have permanently relocated outside of Cuba.
- OFAC has issued a general license that will authorize transactions related to third-country conferences attended by Cuban nationals.
- A general license authorizes foreign vessels to enter the United States after engaging in certain trade with Cuba.
- To facilitate the reestablishment of diplomatic relations with Cuba, OFAC has added a general license authorizing transactions with Cuban official missions and their employees in the United States.
- An expanded general license authorizes Cuba-related transactions by employees, grantees, and contractors of the U.S. government, foreign governments, and certain international organizations in their official capacities.
The SCP License Exception
- Exports and reexports that provide support for the Cuban people by (1) improving living conditions and supporting independent economic activity; (2) strengthening civil society; and (3) improving communications, are eligible under the new license exception.
- The license exception also authorizes (1) building materials, equipment, and tools for use by the private sector to construct or renovate privately-owned buildings, including privately-owned residences, businesses, places of worship, and buildings for private sector social or recreational uses; (2) tools and equipment for private agricultural activity; and (3) tools, equipment, supplies, and instruments for use by private sector entrepreneurs.
- The license exception authorizes the export and reexport of donated items and temporary export and reexport by travelers to Cuba of items for use in scientific, archaeological, cultural, ecological, educational, historic preservation, or sporting activities. The exception also authorizes exports and reexports to human rights organizations, individuals, or non-governmental organizations that promote independent activity intended to strengthen civil society.
- Travelers are also able to export temporarily items for use in professional research in their profession or full-time field of study. The activities or research must not be related to items on the United States Munitions List (USML) or items controlled for sensitive reasons on the Commerce Control List (CCL).
- The license exception authorizes exports and reexports of items for use by news media personnel and U.S. news bureaus.
- The exception does not authorize the export of items on the Commerce Control List for sensitive reasons such as national security, nuclear proliferation, regional stability, missile technology, and other reasons of similar sensitivity.
Finally, in order to allow the expanded financing of authorized trade with Cuba, the regulatory interpretation of “cash in advance” has been changed from “cash before shipment” to “cash before transfer of title to, and control of” exported items.