Last week the U.S. Department of the Treasury Office of Foreign Assets Control (“OFAC”) executed a number of actions in regards to the Cuban Assets Control Regulations (“CACR”). Yesterday, I wrote about updates made to the list of authorized service providers. Today I would like to mention the change in the language of the regulations that deals with the definition of payment of cash in advance of an exportation.

31 C.F.R. 515.533 has been amended to read, “the term ‘payment of cash in advance’ means that payment is received by the seller or the seller’s agent prior to shipment of the goods from the port at which they are loaded.” As many of you know that this definition had been changed in February of 2005. The February 2005 definition stated that payment was required to be made prior to the departure of a vessel containing goods headed for Cuba.

Obviously the new definition makes more sense and was actually how the definition read prior to February 2005. Moreover, it reflects the definition most commonly found in commercial law. So, OFAC did something good right? Well yes they did, however, it should be noted that this new definition only lasts until September 30, 2010. Since OFAC was required to change the rule pursuant to the 2010 Omnibus Appropriation Act, the required change is only effective until September 30th. Whether OFAC will at that time amend the regulations to maintain this definition remains to be seen.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC litigation. If you have any questions please contact him at 202-280-6370 at 202-351-6161 or ferrari@ferrari-legal.com.