Effective Jan. 27, 2016, the U.S. Department of Commerce Bureau of Industry and Security and the U.S. Department of Treasury’s Office of Foreign Assets Control issued new rules amending the current sanctions regarding Cuba.
The amendments include a change to the general denial policy and case-by-case review policy for licenses of certain items subject to the Export Administration Regulations, removing certain restrictions relating to payments, further facilitating travel to Cuba for authorized purposes and authorizing additional transactions relating to professional meetings, including professional media or artistic productions in Cuba.
The amendments were made to further the policy announced by President Obama on Dec. 17, 2014 to engage and empower the Cuban people. While these amendments relax the sanctions, significant sanctions still apply and companies are still broadly prohibited from engaging in transactions involving Cuba. Significantly, the requirement for a license or a license exception for all items subject to the EAR remains in place and the general restrictions on transactions with Cuba remain in place.
BIS is amending the licensing policy in 15 CFR § 746.2 to change from a case-by-case review to a general policy of approval for exports and reexports of:
- Telecommunications items that would improve communications to, from and among the Cuban people;
- Certain commodities and software to human rights organizations or to individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba;
- Commodities and software to U.S. news bureaus in Cuba whose primary purpose is the gathering and dissemination of news to the general public;
- Agricultural items that are outside the scope of “agricultural commodities” as defined in part 772 of the EAR (such as insecticides, pesticides and herbicides) as well as agricultural commodities not eligible for License Exception Agricultural commodities (AGR); and
- Items that are necessary to ensure the safety of civil aviation and the safe operation of commercial aircraft engaged in international air transportation, including the export or reexport of such aircraft leased to state-owned enterprises.
Additionally, BIS will now adopt a case-by-case review policy of license applications for exports and reexports of certain items to meet the needs of the Cuban people, including state-owned enterprises that provide goods and services for the Cuban people. The new policy includes items for:
- Agricultural production;
- Artistic endeavors;
- Food Processing;
- Disaster Preparedness;
- Relief and Response;
- Public Health and Sanitation;
- Residential Construction and renovation of public transportation; and
Construction of facilities for: treating public water supplies, supplying electricity or other energy, sports and recreational facilities, and other infrastructure that directly benefits the Cuban people.
In connection with the BIS amendments, OFAC is amending sanctions to:
- Remove limitations on payment and financing terms for exports from the U.S. or reexports of 100 percent U.S.-origin items that are authorized by BIS, other than exports of agricultural items or commodities;
- Authorize entry into blocked space, code-sharing and leasing arrangements to facilitate the provision of carrier services by air authorized pursuant to 31 CFR § 515.572(a)(2);
- Authorize travel-related and other transactions directly incident to the facilitation of the temporary sojourn of aircraft and vessels authorized by BIS between the U.S. and Cuba;
- Expand the general license authorizing travel-related and other transactions regarding the transmission of informational materials to include professional media or artistic productions in Cuba, including media programs, music recordings and the creation of works of art;
- Authorize travel-related and other transactions to organize professional meetings and conferences in Cuba;
- Authorize travel-related and other transactions to organize amateur and semi-professional international sports competitions and public performances, clinics, workshops, other athletic and non-athletic competitions and exhibitions in Cuba; and
- Expand the list of authorized humanitarian projects.
Despite the relaxing of the sanctions, broad restrictions remain on exporting items, traveling to or transacting business in Cuba. Licenses or authorizations are still required for export of all items subject to the EAR, and leisure travel is still prohibited. Additionally, unless specifically authorized under a general license, transactions and services are still prohibited with Cuba. Additional information regarding the BIS amendments can be found here and regarding the OFAC amendments here.