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Treasury and Commerce Departments Make Additional Amendments to Cuba Sanctions Program

On September 21, 2015, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) announced additional revisions to the Cuban Assets Control Regulations (“CACR”) (31 C.F.R. Part 515) and Export Administration Regulations (“EAR”) (15 C.F.R. Parts 730-774) to further implement elements of the policy announced by President Obama on December 17, 2014 to engage and empower the Cuban people, building off the amendments made to the CACR and EAR on January 16, 2015.

Key elements of the September 21 amendments to the CACR and EAR include the following

1.Telecommunications and Internet-based Services

    • Persons subject to U.S. jurisdiction are now allowed to establish a business presence in Cuba (including through joint ventures with Cuban entities), to provide certain telecommunications and internet-based services, and to enter into licensing agreements related to, and to market, such services. 
    • Persons subject to U.S. jurisdiction are now allowed to import Cuban-origin mobile applications into the United States and to hire Cuban nationals to develop them. 
    • An existing authorization for the provision of services related to certain consumer communications devices exported to Cuba is now expanded to authorize services related to additional types of items authorized by BIS, and to add training related to the installation, repair, or replacement of those items. 
    • License Exception Consumer Communications Devices (CCD) under the EAR is no longer limited to sales or donations and now supports other types of transactions, such as leases and loans of eligible items for use by eligible end-users.

2. Physical Presence in Cuba

    • Persons subject to U.S. jurisdiction engaging in the following categories of authorized activities are now allowed to establish and maintain a physical presence, such as an office, retail outlet, or warehouse, in Cuba: ‚ó¶news bureaus;
      • exporters of certain goods authorized for export or re-export to Cuba by BIS and OFAC, such as agricultural products and materials for construction or renovation of privately-owned buildings; 
      • entities providing mail or parcel transmission services or certain cargo transportation services; 
      • providers of telecommunications or internet-based services; entities organizing or conducting educational activities; 
      • religious organizations; and 
      • providers of transportation and certain travel services. 

These individuals and entities are now also authorized to employ Cuban nationals, open and maintain bank accounts in Cuba, and employ persons subject to U.S. jurisdiction in Cuba.

3. Commercial and Financial Transactions

    • All persons subject to U.S. jurisdiction are now 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. 
    • Banking institutions are now able to open and maintain or close accounts for Cuban individuals for use while the Cuban national is located outside of Cuba.

4. Travel and Related Services

    • Transportation by sea-going vessel of authorized travelers (between the United States and Cuba only and without stops in third countries) is now authorized by general license. Certain related lodging services aboard vessels used for such travel is also authorized. 
    • License Exception Aircraft, Vessels, and Spacecraft (AVS) under the EAR now authorizes temporary sojourns to Cuba of certain categories of vessels. Eligible categories of vessels are 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 OFAC. 
    • License Exception AVS now also authorizes 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.
    • Close relatives are now allowed to visit or accompany authorized travelers for additional activities. In the January 16, 2015 revisions to the CACR, OFAC permitted close relatives to join visits related to official government business and certain educational activities, and to visit additional family members residing in Cuba. Close relatives are now allowed to visit or accompany authorized travelers for additional educational activities, 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. (For purposes of this provision, a close relative is 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.)
    • All authorized travelers are now allowed to open and maintain bank accounts in Cuba in order to access funds for authorized transactions while in Cuba.

5. Civil Aviation Safety

    • A case-by-case review policy will apply to license applications for exports and re-exports to Cuba of items to help ensure the safety of civil aviation and the safe operation of commercial passenger aircraft. Items that are to be reviewed pursuant to this policy 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.

6. Educational Services

    • Under an expanded general license, additional educational activities involving Cuba and Cuban nationals, including the provision of standardized testing services and internet-based courses, are now authorized. 
    • Academic exchanges and joint non-commercial academic research with universities or academic institutions in Cuba are also now authorized. 

7. Support for the Cuban People

    • License Exception Support for the Cuban People (SCP) under the EAR now authorizes certain exports and re-exports of items to Cuba for use in establishing, maintaining, 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 transportation services; organizing or conducting educational activities; or transporting authorized items between the United States and Cuba. 
    • License Exception SCP is no longer limited to sales or donations and now supports other types of transactions, such as leases and loans of eligible items for use by eligible end-users.
    • Certain temporary re-exports from a foreign country to Cuba are now 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. Previously, this provision was limited to temporary exports by persons departing the United States.
    • Certain commodities and software for use in software development may now be exported or re-exported to eligible end-users in Cuba pursuant to License Exception SCP.
    • License Exception SCP will now authorize temporary exports and re-exports 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.

8. Remittances

    • The limits on donative remittances to Cuban nationals other than prohibited Cuban Government or Cuban Communist Party officials, currently set at $2,000 per quarter, has been removed. The limits on authorized remittances that individuals may carry to Cuba, previously $10,000 for persons subject to U.S. jurisdiction and $3,000 for Cuban nationals, has also been removed.
    • 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, is now allowed. 
    • Depository institutions are now allowed to maintain accounts for certain Cuban nationals present in the United States in a non-immigrant status, and are no longer required to block such accounts if not closed before the Cuban national’s departure. Access to such accounts are limited to while the Cuban national is lawfully present in the United States, although the account may remain open while the Cuban national is not in the United States. The $250 monthly limit on payments from previously blocked accounts held in the name of such Cuban nationals has been removed to more adequately allow access to funds for living expenses.
    • Remittances from Cuba and from Cuban nationals in third countries to the United States are now authorized by general license, and financial institutions are now allowed to provide related services.
    • An expanded general license now authorizes additional remittances to Cuban nationals in connection with the administration of estates. This provision complements another general license authorizing all transactions incident to the administration and distribution of the assets of estates in which a Cuban national has an interest.

9. Gift Imports

    • Imports of merchandise from Cuba or Cuban-origin merchandise from a third country intended as gifts, excluding alcohol and tobacco products, are now 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.

10. Ordinarily Incident Transactions 
    • OFAC has clarified that the CACR provisions that are already in place allow most transactions that are ordinarily incident and necessary to give effect to a licensed transaction. For example, certain payments made using online payment platforms are permitted for authorized transactions.

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