Federal Agencies Issue Guidance on Changes to U.S.-Cuba Policy
November 20, 2017 •
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has amended the Cuban Assets Control Regulations, 31 C.F.R. part 515, to implement the National Security Presidential Memorandum (NSPM) issued in June. These regulatory amendments alter the rules issued by both OFAC and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) following President Obama’s December 2014 restoration of U.S. diplomatic relations with Cuba and liberalization of long-standing restrictions on travel and trade.
The amendments, which were published in the Federal Register on Nov. 9, were effective immediately. OFAC has published an updated Frequently Asked Questions and a Fact Sheet to clarify the regulatory amendment.
On June 16, 2017, President Trump announced changes to U.S. policy toward Cuba reportedly intended to enhance compliance with United States law, hold the Cuban regime accountable for oppression and human rights abuses, further the national security and foreign policy interests of the United States and the interests of the Cuban people, and lay the groundwork for empowering the Cuban people to develop greater economic and political liberty. The NSPM also directs the Secretaries of Commerce, State, and Treasury to take certain actions to implement the President’s Cuba policy.
Major elements of the changes in the revised regulations include the following.
Trade and Commerce
- In accordance with the NSPM, BIS is establishing a general policy of denial for license applications to export items for use by entities and sub-entities on the Cuba Restricted List (unless the transaction is otherwise consistent with the NSPM).
- Consistent with the Administration’s policy to support free enterprise in Cuba, BIS is expanding its policy exception that authorizes certain license-free exports to the Cuban private sector.
- In accordance with the NSPM, the State Department is publishing its Cuba Restricted List, which is comprised of entities and sub-entities that are under the control of, or act for or on behalf of, the Cuban military, intelligence, or security services, or personnel with whom direct financial transactions would disproportionately benefit the Cuban military, intelligence, or security services or personnel at the expense of the Cuban people or private enterprise in Cuba (the State Department’s “List of Restricted Entities and Sub-entities Associated with Cuba”).
- Persons subject to U.S. jurisdiction will now be prohibited from engaging in certain direct financial transactions with entities and sub-entities on the Cuba Restricted List. Certain transactions will be excluded from this prohibition pursuant to exceptions detailed in the NSPM.
- Consistent with the Administration’s interest in avoiding negative impacts on American businesses and travelers, commercial engagements that were in place prior to the State Department’s listing of any entity or sub-entity will continue to be authorized, as will most previously arranged travel. For example, businesses will be permitted to continue transactions consistent with other regulatory authorizations that were the subject of contingent or other types of contractual arrangements in place to prior to the issuance of the new regulations.
Additionally, the amended regulations place new parameters and restrictions on U.S. travel to Cuba. Most U.S. citizens will now have to travel as part of a licensed group, accompanied by a group representative, and there are new restrictions on establishments U.S. citizens can patronize.
Contact ACA’s Allen Irish for more information.