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”

President Trump Outlines New U.S. Policy on Cuba

We’ve been patiently waiting for today’s announcement since President Trump took office on Friday, January 20, 2017. Some have speculated on whether President Trump’s stance on Cuba would further diplomatic relations following the steps of former President Barack Obama, while the majority have opined that Trump’s next steps could reverse some of the changes made by the former President. The speculation can now be put to the side as today President Trump delivered a speech in Miami (at the Manuel Artime Theater) today, a little over 90 miles away from the island of Cuba, outlining his new policy with the communist island. The announced changes do not take effect until the new OFAC regulations are issued. The forthcoming regulations will be prospective and will not affect existing contracts and licenses.  

Here is a summary of the MAIN changes, and background of why the President has signed an executive order making these changes in support of the Cuban people:

Catch up on DTL's TOP Blogs from 2016!

We want to make sure you stay up to date with the hottest trade topics from 2016. Below is a summary of what you missed by category. Enjoy!

CBP

1. Why Pre-Compliance is a Must
2. Ongoing Hoverboard Concerns
3. Yet Another Reason to Record your Trademark or Copyright with U.S. Customs and Border Protection (CBP)
4. U.S. Customs - Your Personal Policeman at the Border
5. Learn About "The ABC's of Customs Seizures - Plus Top 10 Tips to Ensure Import Compliance" From the Expert!
6. ISF Penalties Have Officially Arrived: Self File and Self Police

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)).

Cuban Cigars Seized by CBP

Mark Twain once said, “I never smoke to excess - that is, I smoke in moderation, only one cigar at a time.”

With the loosening of restrictions on travel and trade with Cuba, including the authorization to import Cuban Cigars (for personal use only, under a certain value), persons under “U.S. jurisdiction” are getting caught right and left trying to take advantage and import more than their share of Cuban cigars to the US. In May of this year, Maxim magazine declared Cuban Cigars are still the worlds best. However, as relations thaw, will the Cuban cigar be able to take back the market share it lost in the past half century when countries like Dominican Republic and Nicaragua have served the US? That is a question recently posed by Will Yakwowicz in an article for Inc. earlier this year.

Although you are allowed to bring Cuban cigars back to the U.S. (if you are on an “authorized trip” to Cuba) there is a limit and the United States Customs and Border Protection (CBP) can, and will, seize any amount over the allowed limit.

What is the scope and limit on how many cigars I can bring in?

• Persons authorized to travel to Cuba (see our previous post regarding authorized travel to Cuba) may purchase alcohol and tobacco products while in Cuba for personal consumption. Also, as an authorized traveler you may return to the United States with up to $400 worth of Cuban goods, but only $100 worth of alcohol or tobacco or a combination of both.

Will Customs and Border Protection seize as little as 1 cigar?

• YES! CBP can and will seize even one cigar. Since 2013, CBP posts seizure notices online, so the world can see what CBP seized. Here’s the proof that CBP has been seizing Cuban cigars. An example of U.S. CBP seizing JUST one cigar was as recent as 06/20/2016 at the port of JAMAICA, NY.

• During August of 2016, CBP has seized cigars from Ports of entry such as San Diego, California; Anacortes, Wa.; Jamaica, NY; Phoenix, Ar.; Washington, DC with the most being seized at the Port of Jamaica, NY, with a total of over 300 Cigars seized from different individuals.

U.S.’s normalization of ties with Cuba is progressing, and our office is well positioned to help you take advantage of these changes and ensure you stay compliant. Be sure you know the rules and don’t enter the U.S. with more than your $400 worth of Cuban goods, $100 of which of alcohol and tobacco. If you are faced with a seizure notice, or want to ensure you stay compliant, contact us at info@diaztradelaw.com with any questions.

This is no longer applicable due to new revised OFAC and BIS Regulations. What's new? Click here.

First Commercial flight to Cuba Scheduled to Depart August 31, 2016!

Co-Authored by Jennifer Diaz and Kristina Hernandez-Tilson, an attorney in Miami, Florida, practices in state and federal court, litigating matters of civil and administrative law. 

The novelist Graham Greene once said that Havana was a city to visit, not a city to live in – well, now visiting just became far simpler.

On Thursday, July 6, 2016, eight airlines were granted a tentative approval from the U.S. government for flights between certain U.S. cities and Cuba’s capital, Havana.

The U.S. cities are

Build Your Own 'People to People' Mission & More Cuba Changes

If you have been following our Cuba updates, you'll note we've been busy. A full listing of all of our posts to get you caught up are all the way at the bottom. Here's the Cliff Notes version:

• On December 17, 2014, President Obama made a historic announcement: “Today, the United States is taking historic steps to chart a new course in our relations with Cuba and to further engage and empower the Cuban people.”
• By January 16, 2015, both the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) amended its Cuban Assets Control Regulations, and the U.S. Department of Commerce’s, Bureau of Industry and Security (BIS) amended the Export Administration Regulations with a “Support for the Cuban People” license exception. Both OFAC and BIS’s new rules were effective as of January 16, 2015.
• OFAC and BIS issued additional new rules on June 15, 2015, September 21, 2015, January 27, 2016 and again today!

As far as travel goes, the NY Times posted their travel tips, but, here are MY travel tips to you:

Up to 110 Daily Flights from the U.S. to Cuba

If you are in aviation - commercial or private - there are potential new business opportunities in Cuba. The American government and the Republic of Cuba last sat at the negotiation table to discuss Air Transportation agreements in 1957, as parties to the Convention on International Civil Aviation. Nearly sixty years later, on February 16, 2016, the United States government and Cuba entered into an aviation agreement, the U.S.-Cuba Memorandum of Understanding of February 16, 2016, and intend to apply the basis of comity and reciprocity of the agreement.

Immediately after, Anthony Foxx, U.S. Transportation Secretary, Charles Rivkin, Assistant Secretary of State for Economic and Business Affairs, Adel Yzquierdo Rodriguez, Cuban Minister of Transportation and Colonel Alfredo Cordero Puig, President of the Cuban Civil Aviation Institute (IACC), Ministry of Transportation  signed the agreement, the U.S. Department of Transportation (DOT) encouraged U.S. air carriers to apply for licensing and authorization to offer flights to Cuba.

While there have been no scheduled flights between the United States and Cuba for over half a century, this agreement grants permission to American and Cuban airlines, cargo and passenger aircrafts, to perform scheduled and charter services between American and Cuban ports for the purposes of international air transportation.

At the outset, countries are able to operate flights to and from the other country (one-way or round-trip flights); combine different flight numbers; make layovers outside of the U.S. or Cuba or within either country, amongst other permissions.

Interestingly enough, this agreement offers flexibility to the airline companies with regard to regulation compliance. The agreement states that an airline should have the option to comply with the rules of its homeland or of the other country. But if an airline should opt for its homeland regulations, the other country must subject the airline to the least restrictive criterion it has in place. The clock is now ticking for international airlines to apply for route licenses and and flight frequencies from the U.S. to Cuba and vice-versa.

What does this agreement mean for commercial flights to Cuba?
Once the international airline company is permitted to travel to Cuba, they may offer up to twenty (20) daily scheduled round-trip flights to and from Havana. Scheduled services to the nine (9) other Cuban destinations are limited up to ten (10) daily round-trip flights, for a total of 110 daily roundtrip flights.

What does this mean for private or charter aviation companies?
Charter Services to any Cuban destination are not limited in the amount of round-trip flights to the island, so long as Cuban regulations permit such charters to land on its territory. The time to apply is now!

Applications are due March 2, 2016. If you are interested in submitting an application, Diaz Trade Law can assure compliance with the application requirements. Contact us at info@diaztradelaw.com to help you through the process.

Top 10 Changes with Cuba as a Result of NEW Revised OFAC and BIS Regulations

As of January 27^th, 2016, both OFAC and the BIS have amended their regulations again, and below details the top 10 changes as a result.  The last update was on September 21, 2015, and can be found here.  While the United States maintains its broad embargo on trade with Cuba, OFAC and BIS have released amendments to the Cuban Assets Control Regulations designed to advance President Obama’s policy to engage and empower the Cuban people.  The new changes, which can be found here and here, expand the scope of authorized business and travel by U.S. person and companies inside of Cuba. These changes were put into place to help facilitate engagement between the U.S. and Cuba.  Click here to read FAQ’s related to Cuba from the OFAC. Below we’ve providing you with a detailed summary of the top 10 significant changes:

1. Export Trade Financing
   • OFAC has amended sections of the regulations removing former restrictions on payment and financing terms for all exports from the U.S. or re-exports of 100% U.S. origin items authorized by the Department of Commerce, other than exports of agricultural items or commodities. - 515.533(a)
   • The amended rules will allow for financing of export trading through U.S. banks. Prior to the amendments, financing was required to be cash in advance or third country financing. - 515.584, and §515.421
2. Travel from the United States to Cuba
   • OFAC has amended the regulations to authorize entry of U.S. Nationals into blocked space, code-sharing, and leasing arrangements. This is an effort to facilitate the provision of air carriers authorized by section 515.572(a)(2), which includes entry into arrangements with a national of Cuba. - 515.572
   • The amended regulations have expanded upon authorized temporary trips to Cuba by explicitly authorizing travel-related transactions directly incident to the facilitation of temporary sojourn aircraft and vessels. - 515.533
3. Informational materials related to artistic and media productions
   • OFAC has expanded the general license authorizing travel-related and other transactions that are directly incident to the export, import, or transmission of informational materials to include professional media or artistic productions in Cuba. Artistic productions include movies, television programs, music recordings, and artworks. - 515.545
   • These amendments include the employment of Cuban nationals and the remittance of royalties or other payments. -515.206
4. Organization of professional meetings, conferences, and workshops
   • Travel related and other transactions to organize professional meetings or conferences in Cuba are now authorized by OFAC. - 515.564
5. Sports competitions, workshops, and performances
   • Amateur and semi-professional international sports federation competitions and public performances, clinics, workshops, other athletic or non-athletic competitions, and exhibitions are also now authorized in Cuba under the amendments. - 515.567
6. Requirements that profits be donated
   • The previously existing requirements for certain events that all U.S. profits be donated to an independent nongovernmental organization in Cuba, or a U.S. based charity, and that workshops and clinics be run by an authorized traveler are now lifted. - 515.567
7. Disaster Preparedness and Response
   • The list of authorized humanitarian projects has been expanded by OFAC to include projects that focus upon disaster preparedness, relief, and response. - 515.575
   • Authorized humanitarian projects include the following projects:
     1. Medical and health-related projects;
     2. Construction projects intended to benefit legitimately independent civil society groups;disaster preparedness, relief, and response;
     3. historical preservation;
     4. environmental projects;
     5. projects involving educational training on the following topics: entrepreneurship and business; civil education; journalism; advocacy and organizing; adult literacy; vocational skills;
     6. community based grassroots projects;
     7. projects suitable to the development of small-scale private enterprise;
     8. projects that are related to agricultural and rural development that promote independent activity;
     9. microfinancing projects (except for financing prohibited by §515.208); and
     10. projects to meet basic human needs. - §515.575(b)
8. Loosening of the licensing policy for the export and re-export of certain items to Cuba through case-by-case review
   • BIS has also adopted a case-by-case review policy for exports and re-exports of certain items that meet the needs of the Cuban people. This includes exports and re-exports for such purposes made to state-owned enterprises, agencies, and organizations of the Cuban government that provide goods and services for the use and benefit of the Cuban people.
   • The following items will be reviewed on a case-by-case basis:
     1. agricultural production; artistic endeavors (including the creation of public content, historic and cultural works and preservation); education; food processing; disaster preparedness, relief and response; public health and sanitation; residential construction and renovation; public transportation;
     2. construction of facilities for treating public water supplies; facilities for supplying electricity or other energy to the Cuban people; sports and recreation facilities; and other infrastructure that directly benefits the Cuban people; and
     3. wholesale and retail distribution for domestic consumption by the Cuban people.
9. Switch of licensing policy from case-by-case review to general policy of approval for certain items
   • BIS has revised its licensing policy from possible approval on a case-by-case basis to a general policy of approval for exports/re-exports for commodities that involve telecommunications, civil society, news gathering, agricultural items, and civil aviation safety.
10. A general policy of denial will still apply to applications to export or re-export certain other items
    • Items for use by state-owned enterprises, agencies, or other organizations of the Cuban government that primarily generate revenue for the state, including those in the tourism industry and those engaged in the extraction or production of minerals or other raw materials; or items that are destined to the Cuban military, police, intelligence, and security services, will still remain subject to a general policy of denial.

While the amendments to the Cuban Assets Control Regulations are significant in opening up relations with Cuba, many significant limitations still exist, which is why compliance is essential.  Diaz Trade Law can assure compliance with these regulatory provisions for businesses and individuals willing to pursue potential opportunities in Cuba. Contact us at info@diaztradelaw.com  today to schedule a consultation.

Update on U.S. Laws Regarding Commerce with Cuba

Join NEI for an insightful conversation about rapidly evolving business opportunities in Cuba, brought to you by yours truly. The Webinar will highlight particular areas of interest, including: a current overview of the current rules and regulations governing transactions with Cuba, learning what travel to Cuba is authorized, what the latest regulations by BIS and OFAC cover, and future opportunities for growth in telecommunication, construction, and finance.

The audience will be provided with the latest exceptions as they relate to business transactions with Cuba. U.S. companies with a desire to learn the new business opportunities as they relate to Cuba should attend.

TOP 11 NEW Business Opportunities with Cuba as a Result of NEW OFAC and BIS Laws

In December, 2014, we updated you on the president’s historic announcement in regards to doing business in Cuba, and in January we updated you on both the Office of Foreign Assets Control (“OFAC”) amendments to the Cuban Assets Controls Regulations (“CACR”) and the amendments to the Export Administration Regulations (“EAR”) administered by the United States Department of Commerce. As of September 21, 2015, both OFAC and the BIS have amended their regulations again, and below details the top 11 changes as a result of the new laws.

We'll be discussing these new changes on October 8th, at our Export Compliance Seminar at the Miami Free Zone. Blog subscribers get to take advantage of the discount code! Email me at jdiaz@bplegal.com for it. You can RSVP here. 

3 Part Seminar Series You DON'T Want to Miss!

We are excited to announce our upcoming 3 part seminar series on Importing, Exporting, and FDA Compliance! Government and private speakers will participate.  

Each seminar will provide resources for new and experienced international trade professionals including:

Embassies and Island Wide Wi-Fi by July in Cuba

President Barack Obama announced Wednesday that the U.S. and Cuba will now reestablish diplomatic ties and reopen embassies in their respective capitals. The announcement comes just one month after the Secretary of State removed Cuba from the State Sponsor of Terrorism list. Although it would take an act of Congress to lift the trade embargo, reopening embassies is another brick in the foundation of normalizing trade relations. With the new embassies opening in July, there will be greater contact between the US and the Cuban people which will ultimately lead to a change in the US’s attitude towards the trade embargo.

Doing Business in Cuba: What's Next? Live Webinar - June 23

On Tuesday, June 23, 2015 at 12:00 noon EST, join OWIT International for an insightful conversation about rapidly evolving business opportunities in Cuba. 

The Webinar will highlight particular areas of interest, including:

Top Impacts of Cuba Being Removed From "Terrorism List"

As you know, the President made a big announcement back in December, 2014 that the US would take historic steps to chart a new course in our diplomatic relations with Cuba. One specific action item was instructing the Secretary of State to immediately launch a review of Cuba’s designation as a State Sponsor of Terrorism, and provide a report to the President within six months regarding Cuba’s support for international terrorism.

Within four months of the President's announcement, on April 8, 2015 (2 months early!), the Secretary of State finalized their review and recommended that Cuba no longer be designated as a State Sponsor of Terrorism.  Thereafter, on April 14, the President sent Congress the statutorily required report indicating the Administration’s intent to rescind Cuba’s State Sponsor of Terrorism designation, including the certification that "Cuba has not provided any support for international terrorism during the previous six-months; and that Cuba has provided assurances that it will not support acts of international terrorism in the future." Members of Congress, initially vowing to block the removal of Cuba from the "terrorism list" had no legal outlet to voice their opposition, and as of today, the 45-day Congressional pre-notification period has expired. As a result, the Secretary of State has officially made the final decision to rescind Cuba’s designation as a State Sponsor of Terrorism, effective today, May 29, 2015.

The Department of State issued a Press Statement today advising that:

The rescission of Cuba’s designation as a State Sponsor of Terrorism reflects our assessment that Cuba meets the statutory criteria for rescission. While the United States has significant concerns and disagreements with a wide range of Cuba’s policies and actions, these fall outside the criteria relevant to the rescission of a State Sponsor of Terrorism designation

Below are the top 4 impacts I foresee as a result of Cuba being removed from the State Sponsor of Terrorism List (leaving only Iran, Sudan, and Syria now on the list):

Hear How Companies are SUCCESSFULLY Doing Business with Cuba - May 14, 2015

Are you in South Florida and thinking of doing business with Cuba? Do you want to hear from those already successfully doing business with Cuba? Do you want to fully understand what is legal now? 

May 14, 2015, I have JUST the event for you! This is your LAST CHANCE to register!

You'll get a snapshot of the important revisions to the regulations and what travel and trade is legal now. 

Want to understand how companies are taking advantage of the revised regulations? 

You'll hear from IDT, who successfully entered into an agreement with Cuba's Empresa de Telecomunicaciones  de Cuba S.A. to provide direct international long distance to Cuba. Get a sneak peak of what IDT will do next.

You'll also hear from Cargill who is helping take the lead urging an end to the Cuba trade restrictions. Cargill has successfully traded agricultural commodities to Cuba for years now - you'll learn how they do it and what they hope for future trade.

Additionally, Roots of Hope will discuss its vast efforts to bring technology to the Cuban people including its recent hackathon at Facebook. 

The event will take place May 14, 2015 at the Riviera Country Club in Coral Gables, Florida from 11:30-1:30 pm. Register Today. 

In Tampa? Meet the Expert May 12, 2015

I'm proud to participate in America's SBDC's "Meet the Expert" seminar on May 12, 2015. If you are in Tampa, you won't want to miss this seminar. It will take place from 3:30-5:30 PM at the FSBDC at the University of South Florida, Port Tampa Bay Building, and will cover the following HOT Topics in International Law:

OFAC Publishes NEW FAQ on Cuba

Today, the Office of Foreign Assets Control published a new updated Frequently Asked Questions Related To Cuba. The last FAQ from OFAC was on January 15, 2015, discussed in this previous post "Revised Cuba Regulations Officially Released". There are 12 new questions discussed in OFAC's new FAQ - made easy for your review - as all NEW questions are posted below, with some commentary in italics above the question. 

Urban Land Institute Discusses New Trading Opportunities with Cuba

On April 29, 2015, the Urban Land Institute hosts private and public sector leaders for an interactive morning exploring the latest best practice trends, technology, and emerging markets affecting South Florida development, including the latest update on business with Cuba.

The program will take place from 8:00 am - 11:30 am at the Sheraton Fort Lauderdale Airport Hotel, 1825 Griffin Rd. , Dania Beach, FL 33004 United States. Get behind-the-scenes info of two the hottest developments in the nation - the Pearl District in Portland and Denver's Union Station. Learn how technology is changing the way we plan and implement development and explore the opportunities/challenges that lie ahead with Cuba's emerging freight and consumer goods market.

I will be joined by Barbara Pimental of the Florida Customs Brokers and Forwarders Association and Michael Williamson of Cambridge Systematics to discuss exactly what the new trading opportunities with Cuba are, and what is still subject to the current sanctions program in place.
Don't miss this opportunity to network with key industry professionals and get your questions related to Cuban business transactions answered! Pre-registration ends April 27, 2015. You can register HERE.

Revised Cuba Regulations Officially Released

Today, a final rule, opening U.S. trade with Cuba, was published in the Federal Register by the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce’s, Bureau of Industry and Security (BIS). Through this Federal Register notice, OFAC has amended its Cuban Assets Control Regulations and the BIS has amended the Export Administration Regulations with a “Support for the Cuban People” license exception. This final rule is effective today, with proposed rulemaking, opportunity for public participation, and delay in effective date deemed inapplicable because this regulation involves a foreign affairs function of the U.S.

Cuban cigars will not be readily available for U.S. consumers to purchase as a result of these changes.