Trump Administration Tightens Cuba’s Sanctions Program

Since June 2017, we have been anxiously awaiting changes to the Cuba sanctions program since President Trump signed an executive order and emphatically stated that his administration would tighten loose regulations established under the Obama Administration.

On November 8, 2017, the U.S. Department of the Treasury stated,

• “We have strengthened our Cuba policies to channel economic activity away from the Cuban military and to encourage the government to move toward greater political and economic freedom for the Cuban people”

The U.S. Department of the Treasury’s Office of Foreign Assets (OFAC) has implemented the Treasury-specific changes via amendments to its Cuban Assets Control Regulations (CACR), codified at 31 C.F.R. 515. Similarly, the Department of Commerce’s Bureau of Industry and Security (BIS) has implement necessary changes via amendments to its Export Administration Regulations (EAR), codified at 15 C.F.R. 730-746.

Additionally, the State Department has established corresponding initiatives to implement the policy changes promulgated by OFAC and BIS that target impeding economic activities from the Cuban military, intelligence, and security services. OFAC, BIS, and the State Department have taken steps to ensure policy implementations maintain opportunities for Americans to engage in authorized travel to Cuba and support the private, small business sector in Cuba.

The policy changes are effective TODAY, November 9, 2017, pursuant to Federal Register Notice.

The OFAC has already provided a three page FACT SHEET on its website discussing the main questions and answers you are likely pondering yourself. Here is a summary of the main changes:

Financial Transactions

• The Embargo will REMAIN in place.
• The State Department will publish a Cuba Restricted List, which covers Restricted Entities and Subentities associated with Cuba (it’s military, intelligence, or security services).
• Persons subject to U.S. jurisdiction are now prohibited from engaging in direct financial transactions with those entities listed pursuant to CACR. However, certain transactions will be excluded from this prohibition pursuant to exceptions detailed in the National Security Presidential Memoranda (NSPM).
• The Cuba Restricted List will be used during review of license applications submitted to BIS.
• For those who have commercial engagements in place prior to the State Department’s listing of any entity or subentity, the transactions will still be authorized, as will most previously arranged travel.

Trade and Commerce

• BIS now has a general policy of denial for license applications to export items for use by those listed on the Cuba Restricted List; unless the transaction is otherwise consistent with the NSPM.
• BIS has expanding its license exception that authorizes certain license-free exports to the Cuban private sector, in support of free enterprise in Cuba.

People-to-People Travel and Educational Travel

• All people-to-people nonacademic educational travel must be made by a travel group and must be accompanied by and conducted under an organization that is subject to U.S. jurisdiction that promotes people-to-people travel.
• Individual people-to-people nonacademic educational travel is no longer authorized.
• For certain American travelers who had previously arranged travel, they will continue to be authorized, if the traveler had already completed at least one travel-related transaction (such as purchasing a flight or reserving accommodation) prior to the President’s June 16, 2017 announcement.

Support for the Cuban People Travel

• Travelers under the category “Support for the Cuban People” are required to engage in a full-time schedule of activities that result in meaningful interaction with individuals in Cuba.
• Some examples of authorized activities: Renting a room in a private Cuban residence (casa particular), eating at privately owned Cuban restaurants (paladares), and shopping at privately owned stores run by self-employed Cubans (cuentapropistas).

Prohibited Officials

• The definition of “prohibited officials of the Government of Cuba” now includes certain additional individuals, under OFAC regulations and BIS is making conforming changes to three license exceptions that include the same definition.

Contact us today at info@diaztradelaw.com or 305-456-3830 with any questions related to the Cuban Embargo and see our past posts related to Cuba changes HERE.