On October 17, 2016, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) amended the Cuban Assets Control Regulations (CACR) and the Export Administration Regulations (EAR), respectively, to further implement the new approach in U.S. policy toward Cuba announced by President Obama on December 7, 2014. Below we provide a synopsis of OFAC’s and BIS’s major amendments.
OFAC’s amendments include authorizations for certain transactions related to Cuban-origin pharmaceuticals and joint medical research; new authorizations for and the removal of certain restrictions on Cuba-related trade and commerce; an expansion of existing authorizations for grants and humanitarian-related services; and revisions that further facilitate authorized travel-related activities and civil aviation safety-related services.
Cuban-origin pharmaceuticals and joint medical research.
Persons subject to U.S. jurisdiction are now authorized to:
- Engage in all transactions incident to joint medical research with Cuban nationals;
- Engage in all transactions incident to obtaining FDA approval of Cuban-origin pharmaceuticals; and
- Open and maintain accounts at Cuban financial institutions provided that such persons are engaging in authorized (Cuban-origin pharmaceuticals and joint medical research-related) activities and the accounts are used solely for such activities.
Cuba-related trade and commerce. These amendments include:
- The removal of references to “100% U.S. origin items” in the general license authorizing transactions ordinarily incident to certain BIS-authorized exports (and reexports from a third country) to Cuba, for the purpose of clarity and to minimize the circumstances under which persons authorized by BIS to export or reexport items to Cuba are required to obtain a specific license from OFAC;
- A new general license authorizing the importation into the U.S. or a third country of certain items previously exported from the U.S. to Cuba or reexported from a third country to Cuba, including for service or repair, subject to limitations;
- A provision that allows a foreign vessel that calls in Cuban ports for trade purposes to enter the U.S. to load or unload freight prior to the lapse in the normal 180-day waiting period after departing Cuba, as generally required, provided that the vessel has carried from a third country to Cuba only those items that, were they subject to the EAR, would be designated as EAR99 or controlled for anti-terrorism reasons only; and
- A new general license authorizing persons subject to U.S. jurisdiction to enter into contingent contracts generally for transactions prohibited by the CACR, and to engage in transactions ordinarily incident to negotiating and entering into such contracts. (The performance of such contracts, however, must be made contingent on OFAC authorizing the underlying transaction, if required, and obtaining the required authorization from any other applicable federal agency (e.g., BIS).)
Humanitarian-related transactions. OFAC’s amendments in this area include:
- Expanding the authorization permitting grants, scholarships, and awards in which Cuba or a Cuban national has an interest to two additional categories: scientific research and religious activities;
- This authorization was previously limited to educational and humanitarian activities.
- Adding a provision to permit persons subject to U.S. jurisdiction to provide services to Cuba or Cuban nationals related to developing, repairing, maintaining, and enhancing Cuban infrastructure, consistent with the export or reexport licensing policy of BIS.
Travel-related activities. These amendments include:
- The removal of the monetary value limits on travelers importing merchandise acquired in Cuba as accompanied baggage (for personal use);
- (Previously, travelers could only import into the U.S. as accompanied baggage for their personal use merchandise valued at $400 or less with no more than $100 of such merchandise consisting of alcohol or tobacco products.)
- The removal of the requirement that merchandise, including Cuban-origin goods, purchased or acquired in a third country for personal use must be consumed while abroad;
- A provision allowing foreign passengers to import Cuban-origin alcohol and tobacco products (which was previously prohibited), provided that the goods are not in commercial quantities and not imported for resale;
- A revision to the general license authorizing professional research and professional meetings in Cuba to remove the restriction that the purpose of such meetings or conferences not be for the promotion of tourism in Cuba;
- A new authorization that permits persons subject to U.S. jurisdiction to make remittances to third-country nationals for travel by third-country nationals to, from, and within Cuba so long as their travel would be authorized by a general license if they themselves were subject to U.S. jurisdiction; and
- A provision specifying that providers of authorized travel and carrier services may collect and retain either a copy of the traveler’s specific license or the traveler’s specific license number.
Civil aviation safety-related services. OFAC added a new general license authorizing persons subject to U.S. jurisdiction to provide Cuba and Cuban nationals, wherever located, with services aimed at ensuring safety in civil aviation and the safe operation of commercial aircraft.
Additionally, OFAC narrowed the definitions of prohibited officials of the Government of Cuba and prohibited members of the Cuban Communist Party.
OFAC’s final rule can be accessed here.
BIS’s amendments include a revision to License Exception AVS
to allow cargo aboard aircraft to transit Cuba when that cargo is destined for other destinations, an expansion of License Exception SCP
to facilitate direct sales to individuals in Cuba, and revisions to the lists of Cuban officials ineligible for certain license exceptions.
License Exception AVS (Aircraft, Vessels and Spacecraft)
BIS made cargo transiting Cuba via aircraft on temporary sojourn eligible for License Exception AVS even when the cargo is destined for destinations other than Cuba. BIS made a similar authorization available for vessels earlier this year. BIS also made a clarifying edit regarding this provision.
License Exception SCP (Support for the Cuban People)
BIS revised License Exception SCP to authorize exports and reexports of eligible items sold directly to eligible individuals in Cuba for their personal use (or their immediate family’s personal use). To be eligible, items must be designated as EAR99 or controlled for anti-terrorism reasons only. In addition, the purchasers and end-users must not be members of the Council of Ministers, flag officers of the Revolutionary Armed Forces, or members of the Politburo.
The Council of Ministers, flag officers of the Revolutionary Armed Forces, and members of the Politburo, as a result of the rule, are now listed as ineligible for License Exceptions GFT
, and SCP. BIS revised these lists to correspond to amendments made by OFAC to its definitions of prohibited officials of the Government of Cuba and prohibited members of the Cuban Communist Party.
BIS’s final rule may be accessed here
For specific questions, please contact us.
Food and Drug Administration.
OFAC added a note clarifying that this paragraph authorizes the importation into the U.S. of items from a third country for exportation to Cuba pursuant to a license or other BIS authorization. OFAC also stated that this general license does not authorize a transaction between a U.S.-owned or –controlled firm in a third-country and Cuba for the exportation to Cuba of commodities produced in a country other than the U.S. or Cuba.
OFAC stated that the term “infrastructure” here means “systems and assets used to provide the Cuban people with goods and services produced by the public transportation, water management, waste management, non-nuclear electricity generation, and electricity distribution sectors, as well as hospitals, public housing, and primary and secondary schools.”
License Exception Aircraft, Vessels and Spacecraft (AVS).
License Exception Support for the Cuban People (SCP).
License Exception Gift Parcels and Humanitarian Donations (GFT).
License Exception Consumer Communications Devices (CCD).