United States: Commerce And Treasury Further Ease Restrictions On Cuba

On March 16, 2016, the Obama Administration took another step towards normalizing trade relations with Cuba (a policy first announced by the Administration in December 2014), through new regulations published by the Departments of Commerce (see 81 Fed. Reg. 13972) and Treasury (81 Fed. Reg. 13989). These new regulations are the latest in a series of authorizations related to consumer communications, the operation of U.S. companies in Cuba, and travel, among others.

These new regulations focus on four main areas. First, they ease travel restrictions on Americans seeking to engage with the Cuban people through people-to-people educational travel. Second, they increase the access of Cuban nationals to the U.S. financial system by allowing certain transactions processed through U.S. institutions and the maintenance of bank accounts in the U.S. Third, the regulations expand current authorizations related to trade and commerce (such as easing of shipping restrictions, and expanding authorizations for U.S. persons engaged in certain activities to establish a presence in Cuba). Finally, U.S. companies may now sponsor nonimmigrant Cuban nationals for visas to work in the U.S. and to pay their salaries.

Below is a brief summary of some of the new authorizations:

Travel restrictions:

  • People-to-people educational travel. Until now, the authorization for educational travel required that trips be organized by an entity subject to U.S. jurisdiction and that all travelers be accompanied by a sponsor from that organization during the travel. These new regulations authorize travel to Cuba for educational "individual people-to-people" travel, subject to certain conditions. For example, the individual traveler must have a full schedule of educational activities that results in meaningful interaction between the U.S. traveler and Cuban individuals, and: 1) enhance contact with the Cuban public; 2) support Cuban civil society; or 3) promote the Cuban people's independence from Cuban authorities. U.S. travelers must continue to keep records of their activities while on the travel, or if traveling with an organization, they may allow that organization to keep records on their behalf. 31 C.F.R. § 515.565(b).

    These regulatory changes do not affect the statutory ban on tourism.

Access to U.S. Financial System:

  • U-turn transactions. OFAC is amending its regulations to authorize "U-turn" transactions through the U.S. financial system in which Cuba or a Cuban national has an interest. A Uturn transaction is one in which funds originating outside of the U.S. are routed through at least one U.S. financial institution before being rerouted to a non-U.S. institution, and in which neither the originator nor the beneficiary is subject to U.S. jurisdiction. 31 C.F.R. § 515.584(d).

    Transactions that do not meet these criteria remain prohibited. Significantly, this includes any transaction in which either the originator or the beneficiary is subject to U.S. jurisdiction, unless the transaction is otherwise authorized in the regulations.
  • Processing of U.S. dollar instruments. OFAC is authorizing U.S. financial institutions to process U.S. dollar instruments presented indirectly by Cuban financial institutions, and correspondent accounts used in these transactions may be denominated in U.S. dollars. However, U.S. institutions may not open a correspondent account for a banking institution subject to Cuban jurisdiction. 31 C.F.R. § 515.584(g).

Trade and Commerce:

  • Business presence. Previously, OFAC authorized U.S. persons to maintain a "business presence" in Cuba (e.g., via subsidiaries, branches, joint ventures, agency relationships, or other business relationships with a Cuban person or entity) to facilitate the provision of authorized telecommunication and internet-based services. OFAC is now expanding the authorization to include other persons subject to U.S. jurisdiction, including exporters of goods authorized for export or reexport to Cuba, entities providing cargo transportation services in connection with authorized trade involving Cuba, and providers of travel services. Each of these types of entities had previously been authorized to have a "physical presence" in Cuba (e.g., an office or retail outlet). 31 C.F.R. § 515.573.
  • Physical presence. As noted above, OFAC had already authorized certain types of entities to maintain a physical presence in Cuba. OFAC is expanding this authorization to include entities engaging in non-commercial activities meeting the regulatory definition of providing support for the Cuban people, entities engaging in certain humanitarian projects, and private research or educational institutions engaging in authorized transactions. Companies that are eligible to take advantage of this are also now authorized to engage in assembly operations in Cuba, provided they do not incorporate Cuban-origin components or materials. 31 C.F.R. § 515.573.

    BIS has revised its applicable license exception to authorize the export or reexport of EAR99 items or of items controlled only for anti-terrorism purposes for use by persons authorized to establish and maintain a physical business presence in Cuba. 15 C.F.R. § 740.21(e).
  • Shipping. BIS is expanding the scope of the Aircraft, Vessels, and Spacecraft license exception to generally authorize the transportation of cargo from the U.S. to Cuba, and then on to other countries, provided the cargo does not enter Cuban commerce and departs from Cuba on the same vessel, without a license. Previously, a vessel on such a "temporary sojourn" required a license for that cargo. 15 C.F.R. § 740.15(d)
  • Case-by-case review of certain license applications. BIS is amending its licensing policy regarding requests to export or reexport items that will enable or facilitate exports from Cuba of items produced by Cuba's private sector. To facilitate export of such goods from Cuba, BIS is adopting a case-by-case review policy. 15 C.F.R. § 746.2(b).

Allowing Cuban Citizens to Earn Salaries in the U.S.:

  • Payment of salaries and sponsorship. U.S. entities are now authorized to pay salaries (i.e., make compensation above basic living expenses) to Cuban nationals in the U.S., consistent with the terms of the specific visa. U.S. entities are also authorized to engage in the sponsorship and hiring of Cuban nationals to work In the U.S., provided that no payments are made to the Cuban government as part of the process. 31 C.F.R. § 515.571.

These changes broadly represent expansions or extensions of actions previously taken by regulators to normalize trade relations with Cuba. However, it is important to remember that the trade embargo and travel ban, which is statutory, remains in place. Also, unless the transaction is covered by a general license, a license exception, or a specific license, the trade embargo is still in full force, and the use of U.S. dollars still carries certain restrictions. U.S. persons that wish to take advantage of these liberalizations must undertake a careful review of applicable regulations to ensure compliance with these highly technical requirements.

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.

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.