Today, the United States Department of the Treasury announced amendments to the Cuban Assets Controls Regulations (“CACR”) and the Export Administration Regulations (“EAR”) administered by the United States Department of Commerce which expand upon the new policy towards U.S.-Cuba relations. While the actual regulations will not be published until Monday, here is a sneak preview at what they will include:
1. Authorized travelers will now be able to travel by vessel directly between Cuba and the United States, so long as there are no stops in third countries. Certain related lodging services aboard vessels used for such travel will also be authorized.
2. License Exception Aircraft, Vessels, and Spacecraft (AVS) will authorize temporary sojourns to Cuba of certain categories of vessels. This will include 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 recreational vessels that are used in connection with travel authorized by the Treasury. In addition, License Exception AVS will authorize 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.
3. Close relatives will be allowed to visit or accompany authorized travelers for official government business, educational activities, to visit additional family members residing in Cuba, journalistic activity, professional research, and religious activities, as well as activities related to humanitarian projects and activities of private foundations or certain research or educational institutes. Close relatives are defined as someone related to a person by blood, marriage, or adoption – and who is no more than three generations removed from that person or a common ancestor with that person.
4. All authorized travelers will be allowed to open and maintain bank accounts in Cuba in order to access funds for authorized transactions while in Cuba.
II. Telecommunications & Internet-based Services
1. Persons subject to U.S. jurisdiction will be allowed to establish a business presence in Cuba, including through joint ventures with Cuban entities, to provide certain telecommunications and internet-based services, as well as to enter into licensing agreements related to, and to market, such services.
2. Persons subject to U.S. jurisdiction will be allowed to import Cuban-origin mobile applications into the United States and to hire Cuban nationals to develop them.
3. The authorization for provision of services related to certain consumer communications devices exported to Cuba will be expanded to authorize services related to additional types of items authorized by Commerce, and to add training related to the installation, repair, or replacement of those items.
4. 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.
III. Commercial and Financial Transactions
1. Persons subject to U.S. jurisdiction will be allowed to provide goods and services to individual Cuban nationals located outside of Cuba, provided there is no commercial exportation of goods or services to or from Cuba.
2. 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.
IV. Physical Presence and Operations in Cuba
1. Persons subject to U.S. jurisdiction engaging in the following categories of authorized activities will be allowed to establish and maintain a physical presence, such as an office, retail outlet, or warehouse, in Cuba: A) news bureaus; B) exporters of certain goods authorized for export or reexport to Cuba by Commerce and OFAC, such as agricultural products and materials for construction or renovation of privately-owned buildings; C) entities providing mail or parcel transmission services or certain cargo transportation services; providers of telecommunications or internet-based services; D) entities organizing or conducting educational activities; E) religious organizations; and F) providers of carrier and certain travel services.
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.
V. Support for the Cuban People
1. License Exception Support for the Cuban People (SCP) will authorize certain exports and reexports of items to Cuba for use in establishing and operating a physical presence in Cuba. Eligible end-users of the items include certain persons providing telecommunications or internet-based services; establishing telecommunications facilities; providing travel or carrier services; organizing or conducting educational activities; or transporting authorized items between the United States and Cuba. 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.
2. Certain temporary reexports from a foreign country to Cuba will be authorized by License Exception SCP when the items are for use in scientific, archeological, cultural, ecological, educational, historic preservation, sporting activities, or in the traveler’s professional research and meetings.
3. Certain commodities and software for use in software development may be exported or reexported to eligible end-users in Cuba pursuant to License Exception SCP.
4. License Exception SCP will authorize temporary exports and reexports to Cuba of additional categories of items, including certain tools of trade to install, service, or repair items; and certain commodities and software for exhibition or demonstration.
1. The limits on donative remittances to Cuban nationals other than prohibited Cuban Government or Cuban Communist Party officials will be removed entirely. The limits on authorized remittances that individuals may carry to Cuba will also be removed entirely.
2. 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 allowed.
3. Depository institutions will be allowed to maintain accounts for certain Cuban nationals present in the United States in a non-immigrant status, and will no longer be required to block such accounts if not closed before the Cuban national’s departure. Access to such accounts will be limited to the Cuban national lawfully presence in the United States, however, the account may remain open while the Cuban national is not in the United States. Moreover, the $250 monthly limit on payments from previously blocked accounts held in the name of such Cuban nationals will be removed.
4. Remittances from Cuba and from Cuban nationals in third countries to the United States will be authorized, and financial institutions will be allowed to provide related services.
5. Remittances to Cuban nationals in connection with the administration of estates will also now be allowed.
VII. Legal Services
1.The general authorization for provision of certain legal services to Cuba and Cuban nationals will be expanded to allow the receipt of payment for such services. There will be certain limits on payments from prohibited Cuban Government or Cuban Communist Party officials. Further, authorization is being provided for persons subject to U.S. jurisdiction to receive, and make payment for, certain legal services from Cuba or Cuban nationals.
VIII. Civil Aviation Safety
1. A statement of licensing policy concerning exports and reexports to Cuba of items to help ensure the safety of civil aviation and the safe operation of commercial passenger aircraft will be set forth. The policy will include aircraft parts and components; software and technology related to safety of flight; air traffic control, aviation communications, and aviation weather related equipment; airport safety equipment; and devices used for security screening of passengers and baggage.
IX. Gift Imports
1. Imports of merchandise from Cuba or Cuban-origin merchandise from a third country intended as gifts, excluding alcohol and tobacco products, will be allowed to be sent to the United States provided that the merchandise is not carried by a traveler, the value of the merchandise is not more than $100, and the item is a type and in quantities normally given as a gift.
X. Educational Activities
1. Under an expanded general license, additional educational activities involving Cuba and Cuban nationals, including the provision of standardized testing services and internet-based courses, will be authorized.
2. Academic exchanges and joint non-commercial academic research with universities or academic institutions in Cuba will also be authorized.
XI. Air Ambulances and Emergency Medical Services
1. The provision of air ambulance and other related emergency medical services to travelers in Cuba will be 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.
XII. Humanitarian Projects
1. Current authorization related to specified humanitarian projects will be expanded to include disaster relief and historical preservation.
XIII. Supporting Diplomatic Relations
1. International funds transfers will not be included in the authorization of transactions with official missions of Cuba to the United States.
FAQ #8 – What constitutes “a close relative” for generally authorized family Travel?
OFAC has added language to the FAQ to clarify that authorized travel includes travel to Cuba to visit or accompany a close relative who is traveling to Cuba pursuant to one of the authorized travel categories, including official government business, journalistic activity, professional research, educational activities, religious activities, humanitarian projects, and the activities of private foundations or research or educational institutes.
FAQ #11 – What constitutes “educational activities” for generally authorized travel and other transactions?
New language has been added to the FAQ to clarify that U.S. and Cuban universities are authorized to engage in academic exchanges and join non-commercial academic research. Additionally, U.S. persons are authorized to provide standardized testing services and certain internet-based courses to Cuban nationals.
NEW FAQ #22 – May a person that qualifies for the general license to provide carrier services transport a third-country national located in the United States to Cuba for travel authorized by a general license under one of the 12 categories of travel listed in Section 515.560 or by specific license from OFAC?
Clarifies that third-country nationals traveling to Cuba from the United States be be transported by an authorized carrier if the third-country national is engaging in authorized travel.
NEW FAQ #23 – May I take a commercial passenger ferry to travel to Cuba?
While commercial passenger ferry services are now authorized by general license, the authorization to provide carrier services does not allow for stops in third-countries.
FAQ # 25 – Are U.S. vessels, including private boats and commercial passenger ferries, permitted to carry passengers to or from Cuba?
As noted above commercial passenger ferries are now authorized by general license to carry passengers to Cuba. Additionally certain language regarding temporary sojourn licenses from the Commerce Department’s Bureau of Industry and Security has been removed to coincide with the expansion of License Exception Aircraft, Vessels, and Spacecraft (AVS).
NEW FAQ # 26 – May vessels transporting authorized travelers to Cuba provide lodging services?
Under § 515.572(a)(2) of the CACR, U.S. persons providing carrier services may provide lodging for authorized travelers.
NEW FAQ # 27 – Are authorized U.S. travelers permitted to travel onboard vessels in Cuba to meet their transportation needs within Cuba?
Makes clear the U.S. persons engaging in authorized travel to Cuba may travel onboard a vessel inside Cuba.
NEW FAQ # 32 – As an authorized traveler, may I travel from a third country to Cuba and from Cuba to a third country?
Travel to Cuba from a third country is authorized, provided that U.S. persons’ activities in Cuba are authorized by general or specific license.
NEW FAQ # 36 – To which travelers may I provide carrier services between the United States and Cuba?
OFAC has issued a new guidance titled Guidance Regarding Travel between the United States and Cuba. This guidance outlines which travelers authorized carriers are allowed to transport to Cuba, which include:
- U.S. persons traveling pursuant to one of the 12 categories of travel authorized pursuant to 31 C.F.R. § 515.560;
- Cuban nationals applying for admission to the United States, as well as third-country nationals, with a valid visa or other travel authorization1 issued by the U.S. government;
- Cuban nationals present in the United States in a non-immigrant status or pursuant to other non-immigrant travel authorization issued by the U.S. government;
- Cuban nationals who have taken up residence in the United States and are licensed as unblocked nationals pursuant to 31 C.F.R. § 515.505(a)(1) are persons subject to U.S. jurisdiction and;
- An individual, including a foreign national, who is traveling on official business of the U.S. government, a foreign government, or an intergovernmental organization of which the United States is a member or in which the United States holds observer status – including an employee, contractor, or grantee of such government or intergovernmental organization and any individual traveling on a diplomatic passport, as well as any close relative, as defined in 31 C.F.R. § 515.339, accompanying the traveler.
FAQ # 37 (formerly # 31) – What changes have been made with respect to authorized remittances by U.S. persons to Cuba?
Outlines changes to the CACR removing dollar limits on generally licensed donative remittances sent to a Cuban national, other than prohibited Government official or Cuban Communist Party member. Also outlines the new general license authorizing the unblocking and return of remittances that were previously blocked for exceeding the previous per-quarter limits.
NEW FAQ # 39 – Are authorized travelers permitted to open bank accounts in Cuba?
OFAC has now authorized U.S. persons engaging in authorized travel to Cuba may open and maintain bank accounts in Cuba to access funds for authorized transactions, as well as to close such accounts when the authorized travel is complete.
NEW FAQ # 45 – May U.S. banks open and operate accounts for Cuban nationals lawfully present in the United States?
U.S. financial institutions are authorized to open accounts for Cuban nationals in the United States in a non-immigrant capacity, however such accounts may only be accessed while the Cuban national is present in the United States.
FAQ # 46 (formerly #38) – May U.S. banks, their foreign branches, and foreign subsidiaries open and operate accounts for Cuban nationals in third countries?
Under an expanded general license, U.S. persons are authorized to provide goods and services to Cuban nationals outside of Cuba, including the opening and maintenance of bank accounts, so long as services are not provided to the Cuban national while they are in Cuba and do not involve the commercial exportation of goods or services to or from Cuba.
FAQ # 49 (formerly # 41) – Should financial institutions apply for a specific license to unblock funds transfers or accounts which meet the conditions for unblocking set forth in 31 CFR §§ 515.505, or 515.584 (e)?
Because OFAC has expanded a variety of general licenses with the latest release of the CACR, it has included a general license authorizing U.S. financial institutions to unblock certain funds transfers that were previously blocked, but now would be authorized to be processed or rejected (rather than blocked).
NEW FAQ #52 – May a person subject to U.S. jurisdiction utilize online payment platforms to facilitate or process authorized transactions involving Cuba or a Cuban entity?
OFAC considers utilizing online payment platforms to facilitate or process authorized transactions involving Cuba or a Cuban entity to be ordinarily incident to an authorized transaction and therefore authorized.
NEW FAQ # 55 – May persons subject to U.S. jurisdiction open an office in Cuba?
U.S. persons engaged in certain categories of authorized activity are authorized to open and maintain a physical presence in Cuba, such as an office, warehouse, or retail outlet. These authorized categories of persons include:
- News bureaus;
- Exporters of certain authorized goods;
- entities providing mail or parcel transmission services;
- providers of telecommunications or internet-based services;
- entities organizing or conducting certain educational activities;
- religious organizations; and
- providers of carrier and certain travel services.
These persons may also employ Cuban nationals as well as open and maintain bank accounts in Cuba.
NEW FAQ # 58 – May U.S. insurers, either directly or through third-country subsidiaries, issue policies, or pay insurance or reinsurance claims related to non-U.S. persons providing goods or services that facilitate travel by third-country nationals from a third country to Cuba?
Clarifies that with the exception of certain global health, life or travel insurance policies for individuals, U.S. insurers and their subsidiaries may not issue policies, provide reinsurance coverage, or pay insurance or reinsurance claims related to non-U.S. persons providing goods or services that facilitate travel by third-country nationals from a third country to Cuba.
FAQ #60 (formerly #49) – What types of Cuban-origin goods are authorized for importation directly into the United States?
Adds that U.S. persons who purchase certain goods produced by independent Cuban entrepreneurs, as described in the State Department’s Section 515.582 list, these goods may be carried as accompanied baggage and are not subject to the $400 monetary limit for the importation of Cuban origin goods.
FAQs # 61-62 (formerly # 50) – What types of telecommunications (and internet-based services) are recently authorized under general license?
OFAC has divided this FAQ into two separate sections dealing with telecommunications and internet-based services. With regards to telecommunications services, OFAC has expanded the general license to authorize U.S. persons to enter into licensing agreements related to, and to market, authorized telecommunications services. With regards to internet-based services OFAC has clarified that the provision of services such as cloud storage, software design, business consulting, and the provision of IT management and support is authorized for commodities or software used to develop software exported or reexported to Cuba pursuant to the Commerce Department’s License Exception Support for the Cuban People (in addition to License Exception Consumer Communications Device).
NEW FAQ # 63 – What type(s) of business arrangements are telecommunications and internet-based service providers that are subject to U.S. jurisdiction authorized to establish in Cuba?
U.S. telecommunications and internet-based service providers are now authorized to establish and maintain a business presence in Cuba in order to provide authorized telecommunications or internet-based services. Examples of business presence include:
- joint ventures;
- franchises; and
- agency or other business relationships with any Cuban individual or entity
NEW FAQ # 64 – May persons subject to U.S. jurisdiction who open an authorized physical presence, such as an office or retail outlet, in Cuba market their telecommunications or internet-based services?
U.S. telecommunications and internet-based services providers are authorized engage in marketing related to their physical presence in Cuba.
NEW FAQ # 65 – Are persons subject to U.S. jurisdiction engaging in authorized transactions permitted to enter in arrangements with Cuban state-owned entities, such as ETECSA?
U.S. persons engaging in transactions pursuant to a general or specific license are authorized to engage with Cuban state-owned entities such as Empresa de Telecomunicaciones de Cuba S.A (“ETECSA”). Transactions with state-owned entities must be authorized by the terms of that license.
FAQ # 66 (formerly #51) – Are Cuban nationals located outside of Cuba still considered blocked?
Additional information reiterates that U.S. persons may provide goods and services to individual Cuban nationals located outside of Cuba so long as there is no commercial exportation of goods or services to or from Cuba.
NEW FAQ #69 – Are specific licenses still required for transactions relative to the administration of a Cuban estate?
OFAC has expanded the general license located at 31 C.F.R. § 515.523 to authorize all transactions incident to the administration and distribution of the assets of a blocked estate of a decedent.