Monday, November 21, 2016

President Obama Continues To Loosen Cuba Sanctions

President Obama Continues To Loosen Cuba Sanctions
Last Updated: November 21 2016
Article by Andrea Fraser-Reid
Torres Law, PLLC

In December 2014, President Obama announced a shift in U.S. policy to
Cuba and initiated a process leading towards normalizing relations. In
the latest step in that process, the Office of Foreign Asset Controls
("OFAC") announced new amendments to the Cuban Assets Control
Regulations ("CACR").1 The regulatory changes became effective on
October 17, 2016 when they were published in the Federal Register.2 The
changes include the following:

Health-related Transactions

The latest amendments authorize U.S. persons to engage in commercial and
non-commercial medical research projects with Cuban nationals. The
regulations now also allow certain transactions incident to securing
U.S. Food and Drug Administration approval for certain Cuba-origin
pharmaceuticals. Note that this general license does not authorize
imports of sample quantities of Cuban-origin commodities for research

Humanitarian-related Transactions

The authorization has been expanded to include grants, scholarships and
awards to Cuba or Cuban nationals related to scientific research and
religious activities. In addition, OFAC is now authorizing U.S. persons
to provide to Cuba or Cuban nationals services relating to the
development and repair of infrastructure, including, for example, public
transportation, water and waste management, non-nuclear electricity
generation and electricity distribution sectors, hospitals, public
housing, and schools.

Travel-related Transactions

OFAC travel-related changes are intended to support people-to-people
contact by facilitating authorized travel. To that end, OFAC authorized
persons subject to U.S. jurisdiction to make remittances to
third-country nationals to cover travel by third-country nationals to,
from or within Cuba provided the travel would be authorized if conducted
by a U.S. person.

OFAC has removed its limits on the goods a traveler may hand carry from
Cuba. The limit for goods for personal use had been $400, with no more
than $100 of such merchandise consisting of alcohol or tobacco
products. Note that the duty and tax exemptions normally applicable to
travelers and their accompanying baggage apply.

The regulations have been revised to remove the requirement that the
underlying reason behind authorized travel by U.S. persons to attend or
organize professional meetings or conferences in Cuba not be for the
promotion of tourism in Cuba.

In an effort to support safe air travel, OFAC issued a new general
license authorizing U.S. persons to provide services in connection with
civil aviation safety to Cuba and Cuban nationals.

Trade and Commerce –

In an effort to further bolster trade and commercial opportunities in
support of Cuba's private sector, OFAC has amended general licenses
authorizing certain transactions incident to Bureau of Industry and
Security ("BIS") authorized exports and reexports by deleting the
reference to "100% U.S.-origin items." In-so-doing, OFAC is endeavoring
to minimize the circumstances requiring OFAC authorization for
BIS-authorized transactions.

In an apparent effort to enable U.S. companies to prepare for further
relaxation of restrictions, OFAC added a general license authorizing
entry into certain contingent contracts 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 would have to be contingent upon OFAC authorizing the
underlying transactions or another development that results in the
removal of any licensing requirement. The same contingency requirement
applies in the event that another agency of the U.S. government has to
authorize the transaction.

OFAC has narrowed the definitions of "prohibited officials of the
Government of Cuba" and "prohibited members of the Cuban Communist
Party" to mean members of the Council of Ministers and flag officers of
the Revolutionary Armed Forces, and members of the Politburo, respectively.

To further simplify authorized transactions, OFAC clarified that
BIS-authorized exports and reexports of agricultural items, such as
pesticides and tractors, are not subject to payment term restrictions.
U.S. depository institutions may provide financing, such as letters of
credit for such exports and reexports. Exports of agricultural
commodities, however, occur pursuant to the Trade Sanctions Reform and
Export Enhancement Act3 which limits financing options to "payment of
cash in advance" or financing by a third country banking.

OFAC has added a new general license authorizing imports into the U.S.
or a third country of items previously exported or reexported to Cuba.
This essentially permits the return of goods for service and repair.
Returning the repaired item or providing a replacement would still need
a license from OFAC in addition to any needed licensing from BIS.

Finally, OFAC has removed the "180 day" Cuba port restriction.
Previously, the Cuba program prohibited, absent specific authorization,
foreign vessels that call on Cuban ports from entering U.S. ports for
the purpose of loading or unloading freight for 180 days from the date
they depart Cuba. OFAC has now waived this restriction for any vessel if
the items carried onboard would be designated as EAR99 if subject to the
EAR, or would be controlled on the Commerce Control List only for
anti-terrorism reasons.

The latest revisions represent an ongoing relaxation of restrictions and
provide opportunities to prepare for business opportunities and to
engage with Cuba and the Cuban people. However, the newly authorized
conduct is somewhat specific, and it is important to remain aware of the
continuing restrictions on activities in Cuba. Although these amendments
further the Administration's efforts to ease sanctions on Cuba,
normalizing trade with Cuba ultimately will require ending the embargo,
and that will require Congressional action.


1 Office of Foreign Assets Control; Cuban Assets Control Regulations;
Final rule, 81 Fed. Reg. 71,372 Oct. 17, 2016) available at

2 The Department of Commerce's Bureau of Industry and Security
concurrently issued amendments to the Export Administration Regulations
(EAR). The Final Rule amended a license exception to authorize cargo
aboard aircraft to transit Cuba when that cargo is bound for
destinations other than Cuba; authorized export and reexport of certain
items sold directly to individuals in Cuba under a license exception;
and, revised the lists of ineligible Cuban officials for purposes of
certain license exceptions. Bureau of Industry and Security; Cuba:
Revisions to License Exceptions; Final rule, 81 Fed. Reg. 71,365 (Oct.
17, 2016) available at

3 Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), PL

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.

Source: President Obama Continues To Loosen Cuba Sanctions -
International Law - United States -

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