As I wrote last week, The United States Department of the Treasury Office of Foreign Assets Control (OFAC) has been providing new rules and guidance relating to the Cuban Assets Control Regulations. As part of these changes there has been some changes issued which allow for investment by U.S. persons in private business in Cuba.

Under these new guidelines for Cuba-related license applications, OFAC now encourages sending funds to private businesses in Cuba. In fact, OFAC has created a license category allowing remittances “to individuals or independent non-governmental entities to support the development of private businesses, including small farms.”

The assistance which OFACnow authorizes, allows for a U.S. person to provide up to $2,000 per year to a private business in Cuba without having to apply for a license. For those wishing to send more than $2,000 per year, there is the option of applying for a specific license from OFAC to authorize those transactions.

At the same time, the Cuban governmentis encouraging the creation of small businesses and private farming. Since last fall, over 180,000 self-employment licenses have been issued by the Cuban Government. In addition, the Cuban Government has granted more than 110,000 long-term leases of fallow farmland to private farmers.

So how will the newly permitted assistance work? OFAC provided some scenarios in which a permissible transfer of this type of assistance would take place. For example, OFAC describes “a U.S. charitable organization [wishing] to transfer funds to Cuba to support the rebuilding of poultry production farms and to provide training sessions to local poultry farmers.” Another example could be, “an individual [wishing] to send $1,000 to a Cuban national to buy the equipment necessary to start a small business.”

With this latest move the deterioration of the Cuban Assets Control Regulations continues. This isn’t necessarily a bad thing, perhaps OFAC is beginning to see that a less restrictive program will actually further U.S. foreign policy objectives towards Cuba. On the other hand, perhaps the continuing easing of U.S. sanctions against Cuba portends the revocation of that program. Either way, it is unlikely that the current trend in relation to Cuba sanctions will change anytime soon, so those impacted by such sanctions or those of us practicing law in this area would be wise to stay abreast of this constantly changing program.

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

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