U.S. Eases Restrictions on Financing Exports to Cuba
February 1, 2016 •
On Jan. 26, the U.S. government announced a further easing of restrictions on financing exports to Cuba in an ongoing effort to further support President Obama’s policy of eliminating barriers to engagement with Cuba.
According to the U.S. Department of Commerce’s press release, the new amendments will (among other things):
- Remove existing restrictions on payment and financing terms for authorized exports and re-exports to Cuba of items other than agricultural items or commodities. U.S. depository institutions will be authorized to provide financing, including, for example, issuing a letter of credit for such exports and re-exports. Previously, payment and financing terms for all authorized exports were restricted to cash-in-advance or third-country financing. Effective Jan. 27, 2016, examples of permissible payment and financing terms for authorized non-agricultural exports and re-exports will include: payment of cash in advance; sales on an open account; and financing by third-country financial institutions or U.S. financial institutions. Among exports authorized by the new policy are “building materials” and goods for Cuban entrepreneurs.
- The Treasury Department’s Office of Foreign Assets Control (OFAC) is also expanding an existing general license to authorize certain additional travel-related transactions as are directly incident to the conduct of market research; commercial marketing; sales or contract negotiation; accompanied delivery; installation; leasing; or servicing in Cuba of items consistent with the export or re-export licensing policy of the Department of Commerce, provided that the traveler’s schedule of activities does not include free time or recreation in excess of that consistent with a full-time schedule.
- The Department of Commerce’s Bureau of Industry and Security (BIS) is simultaneously establishing a case-by-case licensing policy that will apply to exports and re-exports of items to meet the needs of the Cuban people, including exports and re-exports for such purposes made to state-owned enterprises and agencies and organizations of the Cuban government that provide goods and services to the Cuban people.
The Cuban Assets Control Regulations (CACR) amendment was published in the Federal Register on Jan. 27, with immediate effect. OFAC is also publishing a number of new and updated “Frequently Asked Questions” and “Travel Guidance” relating to this regulatory amendment.
Contact ACA’s Allen Irish for more information.