Travel to the U.S. with an Unlimited Number of Cuban Cigars and Rum - Courtesy of New Revised OFAC and BIS Regulations

On October 14, 2016, President Obama issued a Presidential Policy Directive on United States-Cuba Normalization to further ease travel and trade restrictions with Cuba. As a result, Monday, October 17, 2016, amendments to both OFAC and BIS regulations will take effect.

Below are the top changes from both OFAC and BIS:

OFAC is making additional amendments to the Regulations with respect to health, trade and commerce, civil aviation safety, travel and related transactions, humanitarian-related activities, and certain other activities. Below is a recap:

• Health
  • Persons subject to U.S. jurisdiction are now permitted to engage in commercial and non-commercial joint medical research projects with Cuban nationals. (Section 515.547).

• Travel and Related Transactions
  • Importation of Cuban merchandise: Not too long ago we alerted our readers that CBP was targeting Cuban Cigars at American Ports. We haveBIG news for cigar and rum lovers… As of Monday, October 17, 2016, persons subject to U.S. jurisdiction are now able to return home from Cuba (or any other country where Cuban rum and cigars can legally be purchased) with an unlimited amount of rum and cigars. However, the number of cigars and amount rum must be for personal use and such merchandise must be imported as accompanied baggage and are subject to the normal limits on duty and tax exemptions. This is a huge step forward from OFAC’s initial limit of $400 or less (with no more than $100 of such merchandise consisting of alcohol or tobacco products). (Section 515.560(c)(3)).
  • OFAC considers “personal use” of an imported item to include giving the item to another individual as a personal gift, but not the transfer of the item to another person for payment or other consideration.

• Cuban-origin pharmaceuticals
  • Cuban-origin pharmaceuticals are now authorized to import, market for sale, or distribute in the U.S., and are also able to develop, conduct pre-clinical research, clinical research, regulatory review, regulatory approval and licensing, regulatory post-market activities with approval from FDA. (Section 515.547).
  • Persons subject to U.S. jurisdiction who are engaging in such authorized activities are now permitted to open, maintain, and close bank accounts at Cuban financial institutions as long as such accounts are used solely for the authorized activities.

• Trade and Commerce
  • Persons subject to U.S. jurisdiction are now permitted to make remittances to third-country nationals for travel by such nationals to, from, or within Cuba, provided that such travel would be authorized by a general license under the CACR if the traveler were a person subject to U.S. jurisdiction.
  • Transactions incident to exports and reexports to Cuba. OFAC is removing references to “100% U.S.-origin items” from Section 515.533(a) for clarity and to minimize the circumstances under which persons authorized by Commerce to export or reexport items to Cuba are required to obtain a specific license from OFAC.
  • A new general license authorizing the importation into the United States or a third country of items previously exported or reexported to Cuba pursuant to section 515.533 or 515.559. This authorization will allow recipients of authorized exports or reexports to Cuba to return the items to the United States or a third country, including for service and repair. (Section 515.533).
  • Certain vessel transactions. OFAC is issuing a general license that will waive the restriction prohibiting foreign vessels from entering a U.S. port for purposes of loading or unloading freight for 180 days after calling on a Cuban port for trade purposes if the items the vessel carried to Cuba would, if subject to the EAR, be designated as EAR99 or controlled on the Commerce Control List for anti-terrorism reasons only. (Section 515.207(a)).
    • BIS will generally authorize air cargo to transit Cuba, complementing an existing general authorization for cargo transiting Cuba aboard vessels.

• Humanitarian
  • Services related to Cuban infrastructure. OFAC is adding a new authorization that will allow persons subject to U.S. jurisdiction to provide services to Cuba or Cuban nationals related to developing, repairing, maintaining, and enhancing certain Cuban infrastructure in order to directly benefit the Cuban people. (Section 515.591).

BIS’s new rule allows cargo aboard aircraft bound for destinations other than Cuba to transit Cuba under a license exception. It also authorizes exports and reexports of certain items sold directly to individuals in Cuba under a license exception. Lastly, the new rule revises the list of ineligible Cuban officials for the purposes of certain license exceptions. Below is a recap:

• Now exports or reexports of eligible items sold directly to eligible individuals in Cuba for their personal use or their immediate family’s personal use eligible for License Exception SCP.

It’s is important that our readers understand that the Cuba embargo remains in place. As a result of the embargo, most transactions between the U.S. and Cuba continue to be prohibited. The embargo can only be lifted by Congress by repealing the Helms-Burton Act (Libertad Act), or automatically if Cuba legalizes all political activity, releases all political prisoners, commits to free and fair elections in the transition to representative democracy, grants freedom to the press, respects internationally recognized human rights, and allows labor unions.

If you are subject to U.S. jurisdiction and considering a Cuba transaction, it’s important to communicate with an expert on the revised US-Cuba relationship to analyze whether your transaction is in compliance with U.S. laws. If you have any questions related to Cuba, please contact our office at info@diaztradelaw.com.