United States: Cuba And The United States: A Continuing Shift In Export And Travel Policy

On January 26, 2016, the United States again modified its stance on travel to Cuba and eased certain export restrictions to that country. The changes are not surprising, considering the White House's determination to re-establish diplomatic relations with the nation and promote the "free flow of information" to, from and within Cuba. The new regulatory changes follow statements made by President Obama in December 2014, which ordered the restoration of full diplomatic relations with Cuba and removed Cuba from the list of states that sponsor terrorism.

U.S. trade and economic sanctions imposed against Cuba are primarily enforced by the Treasury Department's Office of Foreign Assets Control ("OFAC") through the Cuban Assets Control Regulations (31 C.F.R. Part 515) ("CACR"), and the Commerce Department's Bureau of Industry and Security ("BIS") through the Export Administration Regulations (15 C.F.R. Parts 730-774) ("EAR"). While there is some overlap, OFAC generally has jurisdiction to restrict the provision of services and funds to Cuba, while BIS has jurisdiction to license and/or prohibit the export or re-export of U.S.-origin items to Cuba.

BIS and OFAC issued a joint statement January 26 that announced further amendments to the CACR and the EAR that seek to "facilitate exports" so that they may "strengthen civil society and enhance communication to, from and among the Cuban people."1

CACR Amendments The CACR are revised to further facilitate certain types of travel and other activities under general licenses. The regulations have been expanded to allow travel and other activities for the following purposes:

  • Information and informational meetings. Travel directly related to professional media such as filmmaking, television programs, music records and the creation of artwork in Cuba will be authorized by OFAC. A general license may also be used to authorize transactions related to the creation or dissemination of artistic or informational materials, including employment of Cuban nationals.
  • Humanitarian projects. Travel for disaster preparedness and response projects are now added to the list of generally authorized humanitarian projects in Cuba. Humanitarian projects for which travel to Cuba was authorized before, and continue to be authorized, include: (1) medical and health-related projects; (2) construction projects to benefit independent civil society groups; (3) historic preservation; (4) environmental projects; (5) projects involving educational training, within Cuba or off-island, relating to topics involving entrepreneurship and business, civil education, journalism, advocacy and organizing, adult literacy, or vocational skills; (6) community-based grassroots projects; (7) projects for developing small-scale private enterprise; (8) agricultural and rural development projects to promote independent activity; and (9) microfinancing projects (except for loans, extensions of credit or other financing which are prohibited). Projects to meet basic human needs are also authorized. Remittances to Cuban nationals for humanitarian projects, support of the Cuban people, or developing private business were also generally authorized since January 16, 2015, and continue to be authorized.
  • Temporary sojourn. The "temporary sojourn" of aircraft and vessels may be authorized by the Department of Commerce, either through a license or license exception, in connection with permissible travel between the United States and Cuba. License exception Aircraft, Vessels, and Spacecraft (AVS) may be applicable, provided its requirements are met.
  • Professional meetings. OFAC will provide authorization by general license for organizing professional meetings or conferences in Cuba. Previously, only attendance at such meetings was permitted.
  • Sports competitions and athletic events. A general license may be used to organize certain amateur and semi-professional sports competitions.
  • Internet-based services. Certain services incident to internet-based communications, such as email, social networking, VOIP, web-hosting, and domain-name registration, are now authorized under a general license. The use of certain applications on personal computers, cell phones and other personal communication devices is also authorized by general license. Services such as cloud storage, software design, business consulting, and IT management related to exports of hardware/software are authorized under Commerce's license exception Consumer Communications Device (CCD). Software used to develop software exported to Cuba may be authorized under the license exception Support for the Cuban People (SCP).

Export Laws Additional export licenses may now be approved by a BIS license under a general policy of approval. Previously, all items subject to the EAR (even items designated as EAR-99) required a license to Cuba and were reviewed on a case-by-case basis. BIS also held a general policy of denial for many dual-use items subject to specific control identified on the Commerce Control List (CCL). The new general policy of approval may result in more efficient license processing times for certain items being exported or re-exported to Cuba.

  • Telecommunications. Exports and re-exports for telecommunications improving communications to, from, and among the Cuban people are now an exception to BIS' general policy of license denial. In addition, the commercial export of certain items contributing to the ability of the Cuban people to communicate with people within Cuba, in the United States, and rest of the world will be authorized under the new Commerce license exception SCP. OFAC recently issued an expanded general license to establish mechanisms for the provision of commercial telecommunications services in Cuba or linking third countries and Cuba, as well as authorizing telecommunications-related transactions. Previously, transactions incident to the establishment of telecommunications facilities linking third countries and Cuba required a specific license. Examples of the now-expanded general authorization are that U.S. persons may establish a telecommunications business presence in Cuba, which provides telecommunications and internet-based services. U.S. persons may also purchase calling cards for an individual to use in Cuba or pay the bills of such individual to a telecommunications operator in Cuba. The regulations were also amended September 21, 2015, to authorize U.S. persons to enter into licensing agreements related to, and to market, authorized telecommunications services. Those telecommunications services not specifically identified in the CACR and otherwise prohibited by the CACR continue to require an application for a specific license, subject to a policy of denial, such as investment in domestic telecommunications networks in Cuba and/or entering into joint ventures with telecommunications state-owned entities controlled by the Cuban government, officials or military.
  • News gathering. Individuals can obtain licenses for exports of certain commodities and software to U.S. news bureaus in Cuba.
  • Travel-related transactions. OFAC regulations will expand an existing general license to include market research, commercial marketing, sales or contract negotiation, accompanied delivery, installation, leasing, or servicing in Cuba of items consistent with the export or re-export licensing policy of the Department of Commerce.
  • Human rights organizations. BIS will generally approve license applications for exports related to human rights organizations or non-governmental organizations. Exports and re-exports made to Cuban government agencies that provide goods and services, or that otherwise "meet the needs" of the Cuban people, may also be authorized by license.
  • Agriculture. Exports/re-exports for certain U.S.-origin agricultural items may occur under license exception Agricultural Commodities (AGR).
  • Civil aviation safety. Individuals may obtain licenses for items to ensure safety of civil aviation and safe operation of commercial aircraft engaged in international air transportation.
  • Case-by-case assessment. BIS will authorize on a special case-by-case basis those exports that "meet the needs" of the Cuban people. BIS may also provide licenses for such items related to state-owned enterprises, organizations and agencies of the Cuban government.

Payment Terms for Certain Exports The amendments to the EAR and OFAC regulations also impact payment terms for certain exports:

  • Easing of restrictions on payment and financing terms for exports and re-exports. Restrictions on the payment and financing terms for authorized exports and re-exports involving Cuba will be removed. U.S. depository institutions may now be authorized to provide financing, such as a letter of credit, for exports and re-exports.
  • Expansion of payment terms for non-agricultural exports. For authorized non-agricultural exports and re-exports, permissible payment terms include: (1) payment of cash in advance; (2) sales on an open account; and (3) financing by third-country financial institutions or U.S. financial institutions.

Even though some restrictions have been eased, businesses and investors should continue to conduct due diligence prior to engaging in exports or other transactions involving Cuba. Certain transactions will still require specific licenses, and it is important that entities have the requisite authorization to partake in certain activities involving Cuba, or risk a violation of the EAR or CACR regulations.

Footnotes

1. See https://www.commerce.gov/news/press-releases/2016/01/commerce-and-treasury-announce-further-amendments-cuba-sanctions.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Hughes Hubbard & Reed LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Hughes Hubbard & Reed LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions