Effective September 21, 2015, both OFAC and the BIS have again amended their regulations (31 C.F.R. 515 as to OFAC and 15 C.F.R. 740 as to BIS), to expand the previous changes promulgated during January, 2015. These changes establish a relinquishment by OFAC of specific licensing for previously regulated activity, instead creating “general licenses” in designated activities in which a license is not required. In other instances, as in remittances, dollar limitations were eliminated. A significant change is the ability to directly partner with the Republic of Cuba in Telecommunications and Internet-based services and for private business relationships, the ability to open offices in Cuba. A summary of the significant changes to both OFAC and BIS rules follows. The expansion of license exceptions, referred to as “General Licenses”, to wit, the unilateral authority of U.S. Nationals, in authorized activities, to invoke trade or travel with Cuba without obtaining an OFAC or BIS license.
The specific regulations amended, and discussed briefly herein are the Cuban Assets Control Regulations,31 C.F.R.515, which are regulations of the United States Department of the Treasury on July 8, 1963, under the Trading with the Enemy Act of 1917, that general regulate relations between Cuba and the U.S. and are the main mechanism of domestic enforcement of the United States “embargo” against Cuba, as well as 15. CFR 740 which are the Department of Commerce’s Export Administration Regulations (EAR) in which exceptions regarding trade with Cuba are promugated.
WHILE THE OFAC AND BIS RULES HAVE BEEN RELAXED, EXPANDED OR ELIMINATED, THE PARALLEL RULES AND AUTHORITY REQUIRED BY THE REPUBLIC OF CUBA HAVE NOT YET BEEN ELIMINATED AND AS SUCH, IN CERTAIN INSTANCES, U.S. “GENERAL LICENSES STILL REQUIRED CUBAN GOVERNMENT APPROVAL.
The following changes, revisions and/or additional requirements are as follows
Travelers who have been authorized under the Twelve Permitted categories, can travel by maritime vessel from travel to and thought different ports in Cuba, on journey originating in the the United States as long as the vessel returns within 14 days of the commencement of the sojourn, and no travel to third countries is within the loop. –§515.572
Persons subject to U.S. jurisdiction providing authorized carrier services by vessel are also authorized to provide lodging for authorized travelers onboard during the period of time the vessel is traveling to, from, or within Cuba, including when docked in a port in Cuba. –§515.572
The amended license exception for Aircraft, Vessels, and Spacecraft (AVS) authorizes temporary sojourns to Cuba of certain categories of vessels. These vessels are: cargo vessels for hire for use in the transportation of items; passenger vessels for hire for use in the transportation of passengers and/or items; and authorized recreational vessels that are used in connection with travel. This temporary sojourns provides that an aircraft on temporary sojourn to remain in Cuba for up to 7 consecutive days and authorizes vessels on temporary sojourn to remain in Cuba for up to 14 consecutive days. § 740.15
The General License permits relatives of authorized traveler to Cuba, to also to visit or accompany those authorized travelers on the specific educational, journalistic, professional research, humanitarian projects, activities of private foundations, certain research or educational travel and related permitted to travel.
OFAC is also amending a restriction that requires a authorized traveler that is to be visited or accompanied in Cuba, to be there for more than 60 days if the traveler is located in Cuba pursuant to 515.565(a)(1)-(4) – §515.561
Those who travel to Cuba are allowed under U.S. Law (not Cuban law) to now open and maintain bank accounts for authorized transactions while in Cuba. §515.560.
The following changes, revisions and/or additional requirements are as follows
Travelers who are subject to U.S. jurisdiction will now be allowed to establish a business presence in Cuba, including through joint ventures with Cuban entities, to provide certain telecommnications and internet-based services. This as well as, authorizing licensing agreements related to services authorized by sections 515.542(b) through (d) and section 515.578(a), and to market such services. – §515.542 and §515.578
OFAC has authorized the importation into the U.S. Cuban-Origin mobile applications and the employment of Cuban national by persons subject to U.S. jurisdiction to develop mobile applications, as well as authorizing persons subject to U.S. jurisdiction to provide services related to all such items that were exported to Cuba. – §515.578
The License Exception Consumer Communications Devices (CCD) will no longer be limited to sales or donations. Other types of transactions, such as leases and loans of eligible items for use by eligible end-users will also be included. – §515.578
The following changes, revisions and/or additional requirements are as follows
OFAC expanded the existing authorization to allow all persons subject to U.S. jurisdiction to provide goods and services to Cuban national individuals located in a third country. In addition, OFAC is adding an authorization to allow banking institutions to open, maintain, and close bank accounts for such Cuban nationals. – §515.585
U.S. Banks will be able to open/maintain accounts for Cuban individuals for use while the Cuban national is located outside of Cuba, and to close such accounts. Additionally, the acciut may stay active in the U.S. Even though the Cuban national has left the U.S. – §515.571
The following changes, revisions and/or additional requirements are as follows
Persons subject to U.S. jurisdiction who engage in the following authorized activities will be allowed to establish and maintain a physical presence, such as an offices, warehouses, distributions facilities and stores, or other facilities Cuba, so long as permitted by the Republic of Cuba– §515.573:
This authorization will extend to the employment of Cuban nationals and persons subject to U.S. jurisdiction in Cuba, and the opening/maintaining of bank accounts in Cuba.
The importation of materials is limited to private cubans transactions (i.e., not to government or state agencies.)
The following changes, revisions and/or additional requirements are as follows
License Exception Support for the Cuban People (SCP) now authorizes certain exports and reexports of items to Cuba to improve the free flow of information to, from, and among the Cuban people. This license exception will no longer be limited to sales or donations, and will include other types of transactions, such as leases and loans of eligible items. Authorized travelers departing the United States or a foreign country are now allowed to temporarily export or reexport authorized items to Cuba for eligible end-uses. – 15 C.F.R. §740.21
Limited Persons subject to U.S. jurisdiction may now establish, maintain, or operate a physical presence in Cuba. Any resulting payments associated with such a physical presence, such as lease payments, are permitted only to the extent authorized by § 515.573 of the Cuban Assets Control Regulations – 15 C.F.R. §740.21
Temporary (not to exceed one year) exports and reexports to Cuba of EAR99 items and items controlled on the CCL only for anti-terrorism reasons, such as certain commodities and software for use in software development; which now may be exported or reexported to eligible end-users in Cuba pursuant to License Exception SCP. – 15 C.F.R. §740.21
Temporary exports and reexports to Cuba of additional categories of items, including certain tools of trade to install, service, replace, or repair items; and certain commodities and software for exhibition or demonstration. – 15 C.F.R. §740.21
The following changes, revisions and/or additional requirements are as follows
The new OFAC regulations remove the limitation on the donative remittances to Cuban nationals who are not prohibited officials of the Government of Cuba or prohibited members of the Cuban Communist Party. OFAC also is amending section 515.560(c)(4)(i) to remove the limitation on certain authorized remittances that authorized travelers may carry to Cuba, and the limits on authorized remittances that individuals may carry to Cuba also was removed entirely. – §515.570.
It is significant to remember that other U.S. And Cuban laws restrict the unreported personal carrying or transfer of currency to or from each country.
The unblocking and return of remittances that were previously blocked because they exceeded the then-applicable caps on periodic remittances, and of certain previously blocked funds transfers, will be issued a new general license in section 515.570(h) which authorizes the unblocking and return of such blocked remittances, provided they would be authorized under the current regulations. – §515.584
This new general license allows remittance from Cuba or from certain Cuban nationals located in third countries to the United States, and financial institutions will be allowed to provide related services. §515.587
Remittances to Cuban nationals in connection with the administration of estates will also now be allowed. – §515.522
The following changes, revisions and/or additional requirements are as follows
Certain legal services to Cuba and Cuban nationals have been expanded to allow the receipt of payment for such services. There is a certain limit on payments from prohibited Cuban Government or Cuban Communist Party officials. – §515.512
Persons subject to U.S. jurisdiction to are now authorized to receive, and make payment for, certain legal services from Cuba or Cuban nationals, within certain conditions. –§515.588
A plain reading of the regulations does NOT permit U.S. Lawyers to provide legal services in Cuba to U.S. Persons or corporations
The following changes, revisions and/or additional requirements are as follows
The importation into the United States of merchandise from Cuba or Cuban-origin merchandise from a third country intended as gifts is authorized, excluding alcohol and tobacco products, is now allowed to be sent to the United States. As long as the merchandise is not being sent or being carried by a traveler, the value of the merchandise is not more than $100, and the item is of a type and in quantities normally given as a gift. – §515.544
The following changes, revisions and/or additional requirements are as follows
The following changes, revisions and/or additional requirements are as follows
OFAC has allowed U.S. medical and other essential personnel to provide services to individual travelers such as air ambulance and other related emergency medical services to travelers in Cuba who have been authorized by general license, and clarity as to the provision of nonscheduled emergency medical services to Cuban nationals in the United States being authorized will be provided. – 515.548
The following changes, revisions and/or additional requirements are as follows
OFAC’s amendment permits a general license for historical preservation as authorized humanitarian projects – 515.575
REGARDING GENERAL LICENSES. ALTHOUGH GENERAL LICENSES PERMIT CERTAIN TYPES OF ACTIVITY WITHOUT THE NEED TO APPLY FOR SPECIFIC LICENSES FROM EITHER OFAC OR BIS, THE DEGREE AND SCOPE OF SUCH ACTIVITY MAY STILL REQUIRE A LICENSE FROM ONE OR BOTH OF THOSE AGENCIES OR OTHERWISE MAY STILL BE PROHIBITED, AND AS WELL, THE APPLICATION OF OTHER U.S. LAWS AND REGULATIONS MAY AFFECT THE LEGALITY OF THE TRANSACTION OR ACTIVITY. THE SUMMARY OF THESE RULE CHANGES ARE PROVIDED FOR INFORMATIONAL PURPOSES ONLY, AND ARE NOT INTENDED TO BE, NOR ARE THEY A SUBSTITUTE FOR APPROPRIATE LEGAL, FINANCIAL OR OTHER COUNSELING, AND U.S. CUBA BUSINESS ADVISORY DISCLAIMS ANY LIABILITY FOR ANY LOSS OR CLAIM ARISING TO ANY READER OF THESE REGULATIONS OR SUMMARY ARISING FROM THE RELIANCE ON THESE BASIC SUMMARIES.
AS SUCH, BEFORE ENGAGING IN SOME OF THESE ACTIVITIES, YOU SHOULD CONSIDER HIRING AN APPROPRIATE LEGAL, FINANCIAL OR CONSULTING EXPERT.
YOU MAY REACH SAUL CIMBLER, THE PRESIDENT OF U.S. CUBA BUSINESS ADIVISORY IF YOU HAVE ANY QUESTIONS, AT SAUL@LEGALLYDOINGBUSINESSINCUBA.COM
