On December 17, 2014, President Obama announced that the United States will ease certain travel, trade, and financial restrictions on Cuba and will pursue normalized diplomatic relations between the two countries. The announcement represents a shift in US sanctions policy toward Cuba, which has been subject to a strict embargo by the United States for over fifty years.
The US Treasury Department, Office of Foreign Assets Control (OFAC) has issued Frequently Asked Question guidance stating that the changes will be implemented “in the coming weeks” through OFAC’s amendment of the Cuban Assets Control Regulations (31 C.F.R. Part 515), as well as through amendment of the Export Administration Regulations (15 C.F.R. Parts 730-774) by the US Department of Commerce, Bureau of Industry and Security (BIS).
General licenses will be issued to travelers under twelve categories of previously authorized travel, including family visits, journalistic activity, professional research and meetings, educational or religious activities, support for the Cuban people, and humanitarian projects. Currently, there are only general licenses for certain of the twelve categories, while there is a specific licensing requirement for other categories. Authorized travelers will be able to make arrangements through a service provider that complies with the regulations on travel services to Cuba established by OFAC. General licenses will be issued to authorize the provision of such travel service. Finally, the Administration contemplates policy changes to make it easier for US persons to provide training to private Cuban businesses and small farmers, as well as to provide other (as of yet unspecified) types of support for the growth of Cuba’s private sector.
The United States will also authorize the commercial sale and export of certain goods and services to Cuba, including building materials for private residential construction, “goods for use by private sector Cuban entrepreneurs,” agricultural equipment for small farmers, and consumer communication devices, software, applications, and services.
Telecommunications providers will be authorized to “establish necessary mechanisms, including infrastructure,” to provide commercial telecommunications and internet access. In addition, OFAC will authorize the commercial sale and export of certain consumer communications devices, as well as related software, applications, hardware, and services.
Licensed travelers to Cuba may also import to the United States up to $400 in Cuban goods, including no more than $100 of tobacco and alcohol products.
Financial Restrictions and Remittances
US credit and debit cards will be permitted for use in Cuba, and US financial institutions will be permitted to open correspondent accounts at Cuban financial institutions to facilitate authorized transactions.
Furthermore, remittance levels for general donative remittances to Cuba will be raised from $500 per quarter to $2,000 per quarter, and a general license will be available for donative remittances for humanitarian projects, support for the Cuban people, and support for the development of private business in Cuba. Remittance forwarders will no longer require a specific license.
General licenses will unblock the accounts in US banks of Cuban nationals who have relocated outside of Cuba. Further, foreign subsidiaries of US companies will be generally licensed to provide services to, and engage in financial transactions with, Cuban individuals in third countries.
US persons will be authorized to participate in third-country conferences and meetings related to Cuba.
In addition, foreign vessels will be permitted to enter the United States after having engaged in certain humanitarian trade with Cuba.
President Obama’s announcement clears the way for OFAC and BIS to introduce a limited easing of sanctions against Cuba. While this may mark a diplomatic breakthrough, it is important to note that this initial round of sanctions relaxation will be focused on certain narrow areas. The core aspects of the embargo have been codified into law by Congress, and can only be fully lifted through congressional action. Furthermore, the Obama Administration has made clear that it will continue to enforce existing restrictions. However, the President’s announcement has placed the United States and Cuba on a new diplomatic footing, and for the first time in decades there may be a significant prospect of the embargo being lifted at some point in the future.