United States: US Revises Cuba Sanctions Regulations To Further Normalize Trade With Cuba

On September 18, 2015, the US Department of Treasury and US Department of Commerce released significant revisions to the US embargo on Cuba, as set out in the Cuban Assets Control Regulations (CACR) and the Export Administration Regulations (EAR). These changes will loosen a number of trade sanctions currently in effect. Among other things, the revised regulations permit US businesses to establish operations in Cuba in certain circumstances, relax controls on travel and remittances to Cuba, authorize commercial and financial transactions with Cuban nationals outside of Cuba, and expand opportunities for US firms to provide telecommunications services to Cuba. The changes took effect on September 21, 2015.

The revised Cuba sanctions regime

The US has long had one of the most extensive sanctions regimes with respect to Cuba. Many of the prohibitions set out in the CACR apply not only to US individuals and entities, but also to the overseas subsidiaries of US entities.1 The CACR has moreover prohibited transactions with Cuban nationals even where they are located outside of Cuba. The revisions to the CACR and EAR roll back many of these prohibitions.

The key changes set out in the revised CACR and EAR are as follows:

Establishing a presence and opening accounts in Cuba. Persons subject to US jurisdiction who are now authorized to engage in trade with Cuba will also now be able to establish a physical presence in Cuba and open bank accounts in Cuban banks. Thus, persons who have been authorized under the revised CACR to trade with Cuba will also now be able to open an office, hire Cuban nationals and open a Cuban bank account. They will also be permitted to conduct marketing activities in connection with their presence in Cuba. Companies that may establish a physical presence in Cuba under this new rule include companies facilitating permitted exports (including certain consumer communications devices, construction supplies and equipment to the private sector, agricultural equipment to the private sector, and supplies, equipment and tools for private sector entrepreneurs); as well as companies involved in mail, parcel and cargo transportation; telecommunications services (see below); news; travel services; and entities engaging in authorized educational and religious activities.

Transactions with Cuban nationals outside of Cuba. All persons subject to US jurisdiction will now be permitted to provide goods and services to Cuban nationals located outside of Cuba. Under the revised CACR, moreover, banking institutions—whether or not subject to US jurisdiction—will also be allowed to open, maintain and close bank accounts for these Cuban nationals without risk of US sanctions.

Financial transactions. The revised CACR loosens restrictions on sending money to or from Cuban nationals, whether located in or outside of Cuba. Cuban nationals may now make remittances to persons subject to US jurisdiction, and vice versa, without a cap on the amount, so long as neither the sender nor receiver is a prohibited official of the government of Cuba or the Cuban Communist Party. The revised CACR furthermore eliminates the limitation on remittances that may be carried on one's person back to Cuba. Where remittances are currently blocked (such as because the remittances were over the limitation), the revised CACR establishes a general license that would allow these to be unblocked. Cuban nationals lawfully present in the United States (in a non-immigrant status, or pursuant to other non-immigrant travel authorization) may now also open and maintain bank accounts without having to close them prior to their departure.

Expansion of telecommunications services. The revised CACR also rolls back prohibitions in the telecommunications and Internet sector, expanding the list of services now permitted to be exported or re-exported to Cuba with regard to consumer communications devices under the EAR, including with respect to software design, business consulting and IT management services. The CACR also now authorizes training related to the installation, repair or replacement of those permitted items. As noted above, persons subject to US jurisdiction who are engaged in providing telecommunications and Internet-based services may now establish a presence and open a bank account in Cuba. The revised CACR also authorizes these persons to enter into license agreements and to market services, and permits the import of Cuban-origin mobile applications and the employment of Cuban nationals to develop such applications.

Travel. New general licenses will be available for direct travel between the US and Cuba, and for travel for close relatives to visit or accompany authorized travelers on a number of different grounds, such as educational activities, journalistic activity, professional research and religious activities, as well as activities related to humanitarian projects and activities of private foundations or certain research or educational institutes. Notably, however, the US continues to prohibit general tourism travel to Cuba.

Exports. The EAR license exception Support for the Cuban People (SCP), which was created in January 2015, has been expanded.2 Exception SCP is now adapted to facilitate the various trade opportunities allowed under the revised CACR. Accordingly, SCP will now authorize a range of new exports and re-exports, including exports and re-exports of items to Cuba for use in establishing, maintaining and operating a physical presence in Cuba by authorized end-users, i.e., persons providing permitted telecommunications or Internet-based services, travel services, etc. Previously, the SCP was limited to sales and donations transactions; it will now be expanded to other types of transactions, such as leases and loans.

The EAR will also be amended to facilitate export of certain items relating to civil aviation and vessels, as well as the temporary sojourn in Cuba of certain vessels. License exception Aircraft, Vessels and Spacecraft (AVS), which allows export of equipment, spare parts for permanent use on a vessel or aircraft, and ship and plane stores, will now be available for use to Cuba, provided any items exported are designated as EAR 99 or controlled only for anti-terrorism (AT) reasons. The Bureau of Industry and Security (BIS) will also now permit use of the exception for temporary sojourn in Cuba of cargo and commercial passenger vessels, as well as recreational vessels if used in connection with travel authorized by the Office of Foreign Assets Control (OFAC).

In addition, BIS will now evaluate on a case-by-case basis license applications to Cuba relating to improving the safety of civil aviation, such as for aircraft parts and components relating to safety, weather observation stations, airport safety equipment and commodities used for security screening of passengers. Until now, BIS has applied a policy of denial to such license applications.

Other. Building on President Obama's December 2014 announcement and the January 2015 changes, the revised CACR also loosens prohibitions in the following areas:

  • Legal advice. The revised CACR permits persons subject to US jurisdiction to provide—and be paid for—the provision of legal services to Cuba and Cuban nationals, with regard to legal advice on US law, so long as the advice is not in furtherance of transactions violating the CACR.
  • Mail and cargo. The revised CACR allows persons subject to US jurisdiction to provide mail and cargo services, as well as remittance forwarding services, for authorized services.
  • Educational activities. The revised CACR expands the scope of authorized educational activities, including standardized testing services and Internet-based courses to Cuban nationals, and also authorizes academic exchanges and joint non-commercial academic research between US and Cuban universities.
  • Air ambulances. The revised CACR authorizes air ambulances to travel to and from Cuba to evacuate individuals requiring medical care.
  • Gifts. The revised CACR will allow goods from Cuba or Cuban-origin goods that are intended as gifts to be sent to the United States, under certain circumstances.
  • Humanitarian projects. The revised CACR expands humanitarian projects to include disaster relief and historical preservation missions.
  • Cuban official missions. The revised CACR authorizes fund transfers on behalf of official missions of the government of Cuba in the United States.
  • New section to permit transactions "ordinarily incident" to a licensed transaction. The revised CACR adds a new section 515.521 to authorize any transaction ordinarily incident to a licensed transaction and necessary to give effect to such licensed transaction. In its new guidance, the Office of Foreign Assets Control provides the example of a payment made using an online payment platform for authorized transactions.


With its historical ties, close proximity to US shores and US$68 billion economy, Cuba may prove to be a significant market for a number of US businesses. Under the revised CACR, this market is now more open to US citizens and residents, US businesses as well as US businesses' overseas subsidiaries. Certain companies that are permitted to export items or services to Cuba now have a path by which they might establish a greater commercial foothold in that country. The telecommunications, banking and travel sectors in particular benefit from the revisions to the CACR. In addition, it is not unreasonable to expect that the expanded authorizations of financial transactions with Cuba may make it easier for US persons or entities lawfully conducting business in or traveling to Cuba to access US accounts—an issue that has reportedly presented challenges to US travelers.

At the same time, the general commercial embargo remains in effect, and any transaction not authorized under the CACR or a general license will require a specific license from OFAC. Thus, for example, while travel to Cuba may now be significantly easier, travelers subject to US jurisdiction must still ensure their travel is valid under the CACR or general license, and ordinary tourism remains banned. This is reflected in the revised CACR section authorizing travel to Cuba for market research, commercial marketing, sales negotiation, accompanied delivery, installation or servicing, which still retains its caveat: "provided that the traveler's schedule of activities does not include free time or recreation in excess of that consistent with a full-time schedule."

Although the changes to the CACR and EAR are significant, the long-term trajectory of US-Cuba trade normalization and corresponding trade relief remains uncertain. This trajectory will likely depend as much on the next US president as the current one, and the topic of Cuba sanctions can be expected to surface in the coming months as the various US presidential candidates establish their positions on foreign policy. As noted in our earlier client alert, moreover, a number of Cuba sanctions are pursuant to statute. It will take an act of Congress to reverse these prohibitions. Businesses entering the Cuban market should therefore be prepared to navigate a shifting regulatory landscape.

1 The CACR defines "persons subject to the jurisdiction of the United States" to include not only US citizen or resident individuals (wherever located), persons physically in the US and entities organized under US law, but also any non-US entity owned or controlled by US individuals or US-organized entities.


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
24 Oct 2017, Seminar, Washington, DC, United States

The Dentons Forum for Women Executives invites you to join us for a luncheon featuring guest speaker Liza Mundy, journalist and author. Ms. Mundy recently released her latest book, Code Girls, the riveting untold story of more than 10,000 spirited young American women who cracked German and Japanese codes to help win World War II.

27 Oct 2017, Seminar, New York, United States

Please join us for a milestone event, our 10th annual CLE Seminar for In-House Counsel.

1 Nov 2017, Seminar, Washington, DC, United States

Celebrate the 58th anniversary of Dentons' Government Contracts practice

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.