Worldwide: Smoother Sailing Ahead For Shippers After OFAC Clarifies Cuba Sanctions

On Friday, 6 January 2017, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) revised its Frequently Asked Questions (FAQs), adding five new FAQs (numbers 86-90) pertaining to vessel transactions with Cuba. The new FAQs come on the heels of a general licence issued by OFAC in October 2016 that significantly narrowed the scope of the so-called '180-day rule'— a restriction that prevents foreign-flag vessels from calling at U.S. ports for at least 180 days after calling at a Cuban port. See Reed Smith Client Alert, 17 October 2016. The five new FAQs discussed below provide clarity on several issues relevant to this and related rules.

FAQ No. 86: The 180-Day Rule and Goods/Passengers-on-Board Rule

FAQ No. 86 explains the nature of the so-called '180-day rule' and the 'goods/passengers-on-board rule'. OFAC stated that the 180-day rule is a "restriction prohibiting any vessel that enters a port or place in Cuba to engage in the trade of goods or the purchase or provision of services there from entering any U.S. port for the purpose of loading or unloading freight for 180 days after leaving Cuba, unless authorized by OFAC". Traditionally, this rule has applied "even if a vessel has stopped in Cuba solely to purchase services unrelated to the trade of goods, such as planned ship maintenance". A description of the 180-day rule can be found in 31 C.F.R. §515.207(a).

OFAC also explained the goods/passengers-on-board rule, which "prohibits any vessel carrying goods or passengers to or from Cuba or carrying goods in which Cuba or a Cuban national has an interest from entering a U.S. port with such goods or passengers on board, unless authorized or exempt". A description of the good/passengers-on-board rule can be found in 31 C.F.R. §515.207(b).

The general exceptions that apply can be found in 31 C.F.R. §§ 515.206 and 515.550.

FAQ No. 87: Exceptions to the Rules

There are exceptions to the 180-day rule and the goods/passengers-on-board rule, which OFAC addressed in the new FAQ 87. Specifically, OFAC explained that under the general licence issued by OFAC in 2016, a vessel will not be subject to the 180-day rule or the goods/passengers-on-board rule if the vessel is:

  • engaging in trade with Cuba that is not prohibited under U.S. regulations either because it is licensed or exempt from U.S. prohibitions (e.g., carrying goods from the U.S. that are licensed or otherwise authorised for export or re-export to Cuba);
  • engaging in the export or re-export from a third country to Cuba of agricultural commodities, medicines or medical devices that, were they subject to the Export Administration Regulations (EAR), would be classified as 'EAR99';
  • carrying persons between the United States and Cuba (or within Cuba) pursuant to OFAC's general licence for the provision of carrier services, or, in the case of a vessel used solely for personal travel (and not transporting passengers), pursuant to a licence or other authorisation issued by the Commerce Department for the exportation or re-exportation of the vessel to Cuba; or
  • a foreign vessel that has entered a port or place in Cuba while carrying students, faculty and staff that are authorised to travel to Cuba pursuant to the general licence for educational activities under U.S. regulations.

OFAC also clarified that a vessel will not be subject to the 180-day rule if the vessel's only transactions with Cuba are the exportation to Cuba from a third country of items that, were they subject to the EAR, would be designated as EAR99 or controlled on the Commerce Control List only for anti-terrorism reasons.

OFAC emphasised in FAQ No. 87 that exceptions to the 180-day rule do not apply to vessels that:

  • carry goods to Cuba that, were they subject to the EAR, would not be designated as EAR99 or controlled for only anti-terrorism reasons;
  • load goods in Cuba, unless the transactions involving those goods are authorised by OFAC or exempt from U.S. prohibitions; or
  • purchase or provide services in Cuba, other than docking, unloading or other services associated with normal shipping transactions.

FAQ No. 88: The Exceptions Distinguished from Authorisations

In FAQ No. 88, OFAC makes clear that the exceptions to the 180-day rule do not themselves authorise shipments to or from Cuba; they merely authorise certain vessels to enter a U.S. port without waiting 180 days after leaving a port or place in Cuba. However, shipments to or from Cuba may be separately authorised under other provisions of U.S. regulations. Most shipments from third countries to Cuba, for example, are not even subject to U.S. restrictions.

FAQ No. 89: U.S. Destination Cargo Aboard Vessels in Cuban Ports

FAQ No. 89 clarifies an issue of special importance to foreign vessels. It expressly states that the 180-day rule does not apply to foreign vessels travelling to the United States, via Cuba, with cargo destined for the United States, provided all goods destined for the United States remain aboard while the vessel is docked in a Cuban port.

Prior to OFAC issuing FAQ No. 89, there was some uncertainty regarding the scope of 31 C.F.R. § 515.204, which prohibits all persons subject to U.S. restrictions from purchasing, transporting, importing or otherwise dealing in merchandise if it has beaen "located in or transported from or through Cuba".

OFAC states expressly that "goods entering the U.S. that remained on board the ship while it docked in a Cuban port . . . are not considered goods that have been located in or transported through Cuba for the purposes of 31 C.F.R. § 515.204".

Nevertheless, OFAC notes that goods may not be unloaded in Cuba, other than goods that would be designated as EAR99 or controlled only for anti-terrorism reasons if they had been exported from the United States. Nor may merchandise be loaded in Cuba unless it is licensed or exempt.

FAQ No. 90: Code-Sharing Agreements

FAQ No. 90 addresses whether companies that use different ocean carriers as part of a broader shipping service utilising code-sharing agreements may take advantage of the exceptions to the 180-day rule.

OFAC advises that "any shipping company may deploy a vessel in a broader shipping arrangement and, so long as the vessel meets the terms of the general license, that vessel may enter a U.S. port accordingly. There is no requirement for authorization of the individual companies or the broader code-sharing arrangement." In short, OFAC stated, "code-sharing agreements do not affect the general license or its requirements".

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

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

In association with
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 (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

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’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 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

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

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

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