OFAC Issues Regulations Making Changes to Cuban Embargo

Today the Treasury Department's Office of Foreign Assets Control (OFAC) issued the long-awaited final rule to amend the Cuban Assets Control Regulations to implement changes to the U.S. embargo on Cuba passed by Congress in March of this year.

The advance version of the final rule that will be published in the Federal Register on Tuesday, September 8, 2009 can be found here (pdf). These regulations are effective today. OFAC’s fact sheet providing an overview of these changes is reprinted below.

While these regulations expand the ability of Americans to visit “close relatives” in Cuba and send remittances to family members in Cuba, from the perspective of U.S. exporters the regulations make two important changes:

1. The amended regulations authorize a greatly expanded range of commercial telecommunications transactions with Cuba, such as cellular and satellite communications. In addition, the amended regulations contains a general license authorizing travel to Cuba related to the commercial export of telecommunications-related items that have been authorized by the Department of Commerce. Individuals traveling under this general license must be employed by a telecommunications services provider that is a person subject to U.S. jurisdiction or by an entity duly appointed to represent such a provider. In addition, the traveler’s schedule of activities cannot include free time, travel, or recreation in excess of that consistent with a full work schedule (i.e., no long weekends on the beach); and

2. The amended regulations also authorize a general license to authorize, with certain conditions, employees of producers or distributors of medical or agricultural products (including food) to travel to Cuba to engage in the marketing, sales negotiation, accompanied delivery, or servicing in Cuba of agricultural commodities, medicine, or medical devices eligible under the Department of Commerce's export or reexport licensing policy to Cuba. Note that persons traveling to Cuba under this general license must submit pre and post-departure reports to Cuba identifying
the traveler and the producer/distributor and describing the purpose and scope of such travel and describing the business activities conducted, the persons with whom the traveler met in the course of such activities, and the expenses incurred. The same limitations on free time describe above also apply. This is a major change for U.S. exporters of humanitarian products since all previous travel to Cuba had to take place pursuant to a specific license issued by OFAC.

Important Note: All travel to Cuba pursuant to these general licenses must be arranged and provided by OFAC authorized providers of air and travel services.

Fact Sheet: Treasury Amends Cuban Assets Control Regulations
To Implement the President’s Initiative on
Family Visits, Remittances, and Telecommunications

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) today issued a final rule amending the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR), to implement the President's initiative of April 13, 2009, to reach out to the Cuban people in support of their desire to freely determine their country's future, promote greater contact between separated family members in the United States and Cuba, and increase the flow of remittances and information to the Cuban people.

Today's amendments to the CACR change the rules in three major areas: (1) family visits; (2) family remittances; and (3) telecommunications. These amendments also make certain technical and conforming changes to the CACR.

Family visits. OFAC has eased restrictions on travel-related transactions for visits to "close relatives" who are nationals of Cuba by issuing a general license.

• Travelers may visit "close relatives" (including, for example, aunts, uncles, cousins, and second cousins) who are nationals of Cuba.
• There is no limit on the duration of a visit to these "close relatives."
• There is no limit on the frequency of visits to these "close relatives."
• Authorized expenditure limits for travel within Cuba have been increased to match the expenditures allowed for all other authorized categories of travel to Cuba -- specifically, the current State Department "per diem rate" for Havana (for use anywhere in Cuba) plus amounts for additional transactions directly incident to visiting close relatives in Cuba. The current "maximum per diem rate" is $179. For future updates to this rate, travelers may check the Department of State's Office of Allowances web site (http://aoprals.state.gov).
• Travelers may be accompanied by persons who share a common dwelling as a family with them.

Remittances. OFAC has also eased restrictions on remittances (including from inherited blocked accounts) to "close relatives" who are nationals of Cuba by issuing a general license.

• Persons subject to the jurisdiction of the United States may send remittances to "close relatives" (including, as noted above, aunts, uncles, cousins, and second cousins) who are nationals of Cuba. These amendments do not affect the prohibition on remittances to a "prohibited official of the Government of Cuba" or a "prohibited member of the Cuban Communist Party," as defined in the CACR.
• There is no limit on the amount of such a remittance.
• There is no limit on the frequency with which persons subject to the jurisdiction of the United States may send such remittances.
• Authorized family travelers may carry up to $3,000 of such remittances to Cuba.
• Remittances for emigration-related purposes continue to be subject to separate restrictions.
• Remittances may be made from depository institutions. To facilitate this, depository institutions are permitted to set up testing arrangements and exchange authenticator keys with Cuban financial institutions.

Telecommunications. Certain telecommunications services, contracts, related payments, and travel-related transactions are authorized by general licenses. The CACR amendments ease the telecommunications rules in three broad areas, as well as allow travel-related transactions for the specific purpose of conducting business in all three areas.

• Persons subject to U.S. jurisdiction may contract with and pay non-Cuban telecommunications services providers to provide services to particular individuals in Cuba (other than prohibited officials of the Government of Cuba or prohibited members of the Cuban Communist Party, as defined in the CACR). For example, an individual in the United States may contract with and pay a U.S. or third-country telecommunications company to provide cellular telephone service for a phone owned and used by that individual's friend in Cuba. Moreover, a U.S. telecommunications services provider may enter into a contract with a particular individual in Cuba to provide telecommunications services to that individual.
• Telecommunications services providers that are persons subject to U.S. jurisdiction are generally licensed (1) to make payments incident to the provision of telecommunications services between the United States and Cuba and the provision of satellite radio or satellite television services to Cuba and (2) to enter into and perform (including making payments) under roaming services agreements with telecommunications services providers in Cuba.
• Transactions incident to establishing facilities to provide telecommunications services linking the United States and Cuba, including fiber-optic cable and satellite facilities, are authorized by general license. The Bureau of Industry and Security of the U.S. Department of Commerce licenses the exportation and re-exportation of goods and technology for the establishment of telecommunications facilities linking the United States and Cuba.
• Two general licenses have been added authorizing, with certain conditions, travel-related transactions incident to authorized telecommunications transactions. One of these licenses authorizes, with certain conditions, travel transactions incident to the commercial export of telecommunications-related items that have been authorized by the Department of Commerce. The second license authorizes travel transactions incident to participation in telecommunications-related professional meetings.

New general license for TSRA travel-related transactions. The new amendments to the CACR also implement provisions of the Omnibus Appropriations Act, 2009. Pursuant to section 620 of the Omnibus Appropriations Act, 2009, which amended the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), there is a new general license for travel-related transactions incident to agricultural and medical sales under TSRA.

• This new general license authorizes, with certain conditions, travel-related transactions that are directly incident to the commercial marketing, sales negotiation, accompanied delivery, or servicing in Cuba of agricultural commodities, medicine, or medical devices that appear consistent with the Department of Commerce's export or reexport licensing policy.
• A traveler may rely on this general license if he or she is regularly employed by a producer or distributor of the agricultural or medical items or by an entity duly appointed to represent such a producer or distributor, and if that traveler's schedule of activities is consistent with a full work schedule.
• Under the new general license, written reports must be submitted to OFAC at least 14 days before departure for Cuba and within 14 days of return.