On June 4, 2019, the Department of the Treasury's Office of Foreign Assets Control (OFAC) announced amendments to the Cuban Assets Control Regulations (CACR), and the Department of Commerce's Bureau of Industry and Security (BIS) also announced amendments to the Export Administration Regulations (EAR) restricting Cuba travel in furtherance of President Trump's foreign policy on Cuba. Effective June 5, 2019, U.S. persons will no longer be able to travel to Cuba for group people-to-people educational purposes, and U.S. passenger and recreational vehicles and private aircraft (including cruise ships) will no longer be able to travel to Cuba. These changes are made in furtherance of the 2017 National Security Presidential Memorandum outlining a general policy of tightening sanctions on Cuba.

The CACR are being amended to remove the general license authorization for group people-to-people educational travel conducted by an organization subject to U.S. jurisdiction. This follows a previous OFAC action in June 2017 that ended individual people-to-people travel to Cuba, on which we previously reported. As in the past, the CACR amendments include a grandfathering provision authorizing travel to Cuba made in reliance on the general license if at least one travel-related transaction, such as purchasing a flight ticket, was made prior to June 5, 2019. U.S. persons have relied on this general license to travel to Cuba in increasing rates in recent years. The new CACR amendments are likely to sharply reduce the number of U.S. travelers to Cuba, thereby also impacting cruise, airline, hotel companies, and others operating in the Cuban travel industry.

The EAR are being amended to remove the authorization for the export or reexport to Cuba of aircraft and vessels (including those on temporary sojourn, such as cruise ships), and adopting a policy of general denial for license applications for such exports. The only U.S. civil aircraft that will now be allowed to travel to Cuba absent a license are commercial passenger flights that meet the conditions of License Exception AVS. These amendments do not include any grandfathering language, which had caused the sudden cancellation or rerouting of Cuba-bound cruises.

When announcing these sanctions, Treasury Secretary Steven Mnuchin said that "Cuba continues to play a destabilizing role in the Western Hemisphere, providing a communist foothold in the region and propping up U.S. adversaries in places like Venezuela and Nicaragua by fomenting instability, undermining the rule of law, and suppressing democratic processes." The U.S. Department of State also issued a statement noting that "These actions are directly linked to the tourism industry, which has strong economic ties to the Cuban security, military, and intelligence sectors in Cuba." Consistent with other recent sanctions developments, these changes seem to be targeted largely at pressuring the Venezuelan regime. The Trump administration also appears committed to tightening restrictions on doing business with Cuba, and in particular, cutting off revenue streams to the Cuban military and intelligence sectors. U.S. businesses with a nexus to Cuba should remain vigilant and aware of the latest developments in the Cuba sanctions and export control programs.