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    On January 16, 2015, the new Cuban Asset Control Regulations (31 C.F.R. § 515) went into effect. This further relaxes the restrictions imposed by the United States government on travel to Cuba and on transactions by United States citizens, residents and other persons subject to the United States jurisdiction (“United States person”) with Cuba or Cuban nationals. Some say it is a further weakening of the United States embargo on Cuba. More important is the historic reestablishment of diplomatic relations between the United States and Cuban governments, with the announcement by President Obama of the establishment of the first United States embassy in Havana since the two countries ended diplomatic relations in 1961. 

    This memorandum summarizes generally the new regulations adopted by the Department of Treasury’s Office of Foreign Assets Control (“OFAC”). It is not an exhaustive list of changes to the OFAC regulations and there may be prohibitions or restrictions not mentioned herein that could apply to a person’s activities that should be consulted with counsel prior to engaging in same. This memorandum is intended for informational purposes only and not as legal advice nor is anyone by virtue of receiving this memorandum establishing a client relationship with GrayRobinson, P.A. 

    1. Travel-related transactions to, from, and within Cuba by persons subject to U.S. jurisdiction.

    Travel-related transactions in connection with travel for the following activities is authorized under a general license:

    (1) Family visits; (2) Official business of the U.S. government, foreign governments, and certain intergovernmental organizations; (3) Journalistic activity; (4) Professional research and professional meetings; (5) Educational activities; (6) Religious activities; (7) Public performances, clinics, workshops, athletic and other competitions, and exhibitions; (8) Support for the Cuban people; (9) Humanitarian projects; (10) Activities of private foundations or research or educational institutes; (11) Exportation, importation, or transmission of information or informational materials; and (12) Certain export transactions that may be considered for authorization under existing Department of Commerce regulations and guidelines with respect to Cuba or engaged in by United States-owned or United States-controlled foreign firms.

    The per diem rate previously imposed on authorized travelers will no longer apply, and there is no specific dollar limit on authorized expenses. However, tourist travel and travel-related transactions are still not permitted.

    2. Exportation from the United States to Cuba; Re-exportation of 100% U.S.-origin items to Cuba; Negotiation of executory contracts.

    Only two forms of financing for the sale of products to Cuba are authorized (under a general license): 

    (1) Payment of cash in advance, which was changed to mean that goods sold to Cuba can be paid for before transfer of title to, and control of, the exported items to the Cuban purchaser. Essentially, this provides for short-term financing of the sale prior to delivery of the products sold. 

    (2) Financing by a non-United States banking institution located in a third country. However, such financing may be confirmed or advised by a United States banking institution. Essentially, a letter of credit issued by a non-United States banking institution located in a third country (i.e., a Western European bank) can be accepted as payment to the seller in the United States.

    3. General license for travel-related transactions associated with sales of certain items.

    The travel-related transactions under permitted travel and additional transactions directly related to market research, commercial marketing, sales negotiation, accompanied delivery, or servicing in Cuba of items consistent with the export or re-export licensing policy of the Department of Commerce are authorized under a general license provided the traveler’s schedule of activities does not include free time or recreation inconsistent with a full-time schedule. This means that United States persons may enter into transactions in connection with permitted business travel.  

    4. Mail and telecommunications related transactions.

    All transactions, including payments, related to the receipt or transmission of mail between the United States and Cuba by persons subject to U.S. jurisdiction are authorized under a general license. This means that overnight mail service may be initiated.

    All transactions, including payments, related to the establishment of facilities, including fiber-optic cable and satellite facilities, to provide telecommunications services (i.e., data, telephone, telegraph, Internet connectivity, radio, television, news wire feeds, and similar services, regardless of the medium of transmission, including transmissions by satellite) linking the United States or third countries and Cuba, including facilities to provide telecommunications services in Cuba, are authorized under a general license. This means that United States telecommunications companies may establish fiber-optic cable and satellite facilities in Cuba. United States companies must notify OFAC in writing within 30 days after commencing or ceasing to offer such services, and will have a semi-annual reporting requirement  providing the total amount of all payments made to Cuba or a third country related to any of the services authorized during the prior six months. 

    Transactions, including payments for activation, installation, usage (monthly, pre-paid, intermittent, or other), roaming, maintenance, and termination fees, related to the provision of telecommunications services related to the transmission or the receipt of telecommunications involving Cuba are authorized under a general license. This means roaming service agreements with telecommunications services providers or particular individuals in Cuba can be entered into by persons subject to United States jurisdiction, provided that such individuals in Cuba are not prohibited officials of the Government of Cuba or prohibited members of the Cuban Communist Party. 

    5. Exportation and re-exportation of certain Internet-based services.

    The exportation or re-exportation, directly or indirectly, from the United States or by a United States person to Cuba of services related to the exchange of communications over the Internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, blogging, and web hosting is authorized under a general license, provided that it is not for the promotion of tourism, and domain name registration services. This means that United States Internet companies can provide the aforementioned services in Cuba.

    Also, the exportation or re-exportation of services, including software design, business consulting, and information technology management services (including cloud storage) related to certain items exempt from or subject to the Export Administration Regulations, such as software, or of services to install, repair (including repair training), or replace such items are authorized under a general license. This means that United States companies can sell and provide the aforementioned services in Cuba.

    6. Certain export and import transactions by U.S.-owned or U.S.-controlled foreign firms.

    Travel-related transactions permitted under general licenses and such other transactions directly related to market research, commercial marketing, sales negotiation, accompanied delivery, or servicing of exports consistent with Department of Commerce licensing policy are authorized under a general license, provided that the traveler’s schedule of activities does not include free time or recreation inconsistent with a full-time schedule. This means that United States-owned or United States-controlled foreign firms can purchase and sell products authorized by the Department of Commerce in Cuba. Also, the exportation of information, informational materials,  the donation of food to non-governmental entities, or individuals in Cuba are exempt and not subject to prohibition.

    7. Living expenses in Cuba. 

    All transactions ordinarily related to travel within Cuba, including payment of living expenses and the acquisition of goods in Cuba for personal consumption there, are authorized under a general license. This authorizes payment for goods or living expenses by  a United States person in Cuba for a permitted activity.  

    8. Importation of Cuban merchandise.

    United States persons are authorized under a general license to purchase in Cuba and import as accompanied baggage into the United States merchandise with a value not to exceed $400 per person, provided that no more than $100 of the merchandise consists of alcohol or tobacco products and the merchandise is imported for personal use only. The importation of Cuban origin information and informational materials is exempt from this prohibition. This means that United States persons may purchase and bring to the United States goods purchased in Cuba up to the stated limits. Foreigners arriving in the United States on a trip that included Cuba are authorized under a general license to import as accompanied baggage alcohol or tobacco products purchased or otherwise acquired in Cuba with a value not to exceed $100, provided such items are for personal use only.

    United States persons are authorized under a general license to engage in transactions, including payments, necessary to import certain goods and services produced by independent Cuban entrepreneurs as determined by the State Department in its Section 515.582 List. The list is not yet published. 

    9. Travel services.

    Travel agents and airlines are  permitted to provide authorized travel, carrier services, and certain entities to forward remittances without a specific license from OFAC. This means that more travel companies and airlines will be permitted to arrange for travel for United States persons traveling to Cuba.

    10. Remittances.

    Remittances up to $2,000 per quarter from an unblocked source by a United States person of 18 years of age or older to a Cuban national who is not a prohibited official of the Government of Cuba, or a prohibited member of the Cuban Communist Party, are authorized by a general license provided the remittances are not for emigration-related purposes. 

    An unlimited amount of remittances may be sent by a United States person to his or her close relative who is a student in Cuba under a general license for educational activities or under a specific license, provided that the remittances are not made from a blocked sources and are for the purpose of funding transactions authorized by the general license or the specific license under which the student is traveling.

    An unlimited amount of remittances may be sent by a United States person for humanitarian projects designed to directly benefit the Cuban people through activities of recognized human rights organizations, independent organizations designed to promote a rapid, peaceful transition to democracy, and activities of individuals and nongovernmental organizations that promote independent activity intended to strengthen civil society in Cuba, support for the Cuban people, and development of private businesses in Cuba under a general license, provided `such remittances are not made from blocked sources. Also, remittances to facilitate non-immigrant travel by an individual in Cuba to the United States due to illness or medical emergency is authorized under a general license.

    The maximum amount of cash that a United States person traveling to Cuba may carry is $10,000.  

    Banking institutions, including United States registered brokers or dealers in securities and United States registered money transmitters, are authorized under a general license to provide services in connection with the collection or forwarding of permitted remittances.

    This general license also authorizes employees, officials, consultants, or agents of United States persons providing permitted travel, carrier services, or remittance forwarding services to engage in permitted travel-related transactions and such additional transactions directly related to travel to Cuba for professional meetings in Cuba. Certain record retention and reporting requirements will apply.

    This does not authorize investment with respect to Cuba.

    11. Certain financial transactions involving Cuba.

    United States persons traveling to Cuba will now be allowed to use credit and debit cards in Cuba. All transactions related to the processing and payment of credit cards, debit cards, stored value cards, checks, drafts, travelers’ checks, and similar instruments used or negotiated in Cuba by any person authorized to engage in financial transactions in Cuba are authorized under a general license. This means United States banks will be permitted to process and pay on credit cards, debit cards, stored value cards, checks, drafts, travelers’ checks, and similar instruments used or negotiated in Cuba.

    United States depository institutions are authorized under a general license to engage in all transactions necessary to establish and maintain correspondent accounts at a financial institution that is a national of Cuba, provided that such accounts are used only for exempt or authorized transactions. This means that United States banks can establish correspondent  relationships with banks in Cuba. It does not mean that United States banks can establish and maintain accounts in the United States for the benefit of Cuba or a Cuban national unless it is for Cuban official missions in the United States or for a Cuban national’s non-immigrant travel to the United States during their stay in the United States.

    United States depository institutions are authorized under a general license to: (i) reject funds transfers originating and terminating outside the United States where neither the originator nor the beneficiary is a person subject to United States jurisdiction and provided that a prohibited official of the Government of Cuba or a prohibited member of the Cuban Communist Party does not have an interest in the transfer, and (ii) process funds transfers originating and terminating outside the United States relating to transactions that would be authorized if the originator or beneficiary were a United States person, provided that neither the originator nor the beneficiary is a United States person.

    12. Cuban official missions in the United States.

    The sale and payment for goods and services in the United States to official Government of Cuba missions to the United States and to international organizations in the United States is authorized under a general license, provided that: (i) the goods or services are for official mission business or for personal use of the employees or persons who share a common dwelling as a family member thereof and are not for resale, (ii) the transaction does not involve the purchase, sale, financing, or refinancing of real property, and (iii) the transaction is not otherwise prohibited by law. Similarly, the same activities are authorized under a general license in the case of employees of official Government of Cuba missions or persons who share a common dwelling as a family member thereof provided that: (i) the goods or services are for personal use of the employees or persons who share a common dwelling as a family member thereof and are not for resale, and (ii) the transaction is not otherwise prohibited by law. The prohibition against a transaction involving the purchase, sale, financing, or refinancing of real property does not appear to apply to employees of official Government of Cuba missions or persons who share a common dwelling as a family member thereof. This means that United States persons may sell goods,  provide services, and receive payment from official Government of Cuba missions to the United States and to international organizations in the United States or employees of official Government of Cuba missions or persons who share a common dwelling as a family member thereof traveling with such employees in the United States.

    United States depository institutions are authorized under a general license to operate accounts for, or extend credit to, the official Government of Cuba missions to the United States and to international organizations in the United States, and employees thereof, subject to the limitations set forth above. Certain OFAC reporting requirements apply following the establishment of a deposit account. 

    13. Certain transactions related to travel to, from, and within the United States by Cuban nationals.

    United States depository institutions are authorized under a general license to open and maintain accounts for Cuban nationals present in the United States in a non-immigrant status or pursuant to other non-immigrant travel authorization for the duration of a Cuban national’s stay in the United States in such status, and to close such accounts prior to the departure of a Cuban national from the United States. Accounts that are not closed prior to the departure of such a Cuban national from the United States must be blocked and reported as such. This means that United States depository institutions may open bank accounts for Cuban nationals during their visit to the United States.

    14. Insurance. 

    United States persons are authorized under a general license to issue or provide coverage for global health, life, or travel insurance policies for individuals ordinarily resident in a country outside of Cuba who travel to or within Cuba. The provision of health insurance-related services, life insurance-related services, and travel insurance-related services to authorized travelers, as well as the receipt of emergency medical services and the making of payments related thereto is authorized under a general license. This means that United States insurance companies who sell such types of insurance to United State persons may pay for health insurance-related services, life insurance-related services, travel insurance-related services and emergency medical services in Cuba.

    15. Transactions related to information and informational materials.

    The travel-related transactions permitted under general licenses and such additional transactions as are directly related to the exportation, importation, or transmission of information or informational materials are authorized under a general license, provided that the traveler’s schedule of activities does not include free time or recreation inconsistent with a full-time schedule. This means that publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD-ROMs, artworks, news wire feeds, and other information and informational articles may be purchased in Cuba.

    16. Services rendered by Cuba to United States aircraft.

    The receipt of services from Cuba and payment to Cuba of charges for services rendered by Cuba in connection with overflights of Cuba or emergency landings in Cuba by aircraft registered in the United States or owned or controlled by, or chartered to, persons subject to United States jurisdiction are authorized under a general license. Thus, if an airplane has to be serviced in Cuba, the services received from and payments to a Cuban person or company is permitted by the United States government.

    17. Certain vessel transactions authorized.

    Marine vessels engaging in permitted or exempt trade with Cuba or engaging in the exportation or re-exportation to Cuba from a third country of agricultural commodities, medicine, or medical devices that would be designated as EAR99 under the Export Administration Regulations if they were located in the United States, or foreign vessels that have entered Cuba while carrying students, faculty, and staff authorized to travel to Cuba will not be subject to the 6 months waiting period for re-entry restrictions. This means that more vessels will be permitted to engage in trade with Cuba, subject to the specific licensing requirements and the permitted or exempt trade rules. This does not authorize vessels to transport persons between the United States and Cuba.

    18. New Commerce license exception for Support for the Cuban People.

    The United States Department of Commerce will authorize a new licensing exception called Support for the Cuban People (“SCP”) to United States persons wishing to engage in exports and re-exports to provide support for the Cuban people in three areas: (i) improving living conditions and supporting independent economic activity; (ii) strengthening civil society; and (iii) improving communications. SCP will authorize exports and re-exports of: (i) building materials, equipment, and tools for use by the private sector to construct or renovate privately-owned buildings, including privately-owned residences, businesses, places of worship, and building for private sector social or recreational use; (ii) tools and equipment for private agricultural activity; (iii) tools, equipment, supplies, and instruments for use by private sector entrepreneurs; (iv) items for use by news media personnel and U.S. news bureaus; and (v) items for use in scientific, archaeological, cultural, ecological, educational, historic preservation, or sporting activities.

    19. New Commerce Consumer Communication Devices license exception.

    The United States Department of Commerce will authorize a new licensing exception for Consumer Communication Devices to United States persons wishing to engage in the export and re-export of consumer communications devices that enable the flow of information to, from, and among the Cuban people, such as personal computers, mobile phones, televisions, memory devices, recording devices, and consumer software.

    Authors - Milton A. VescovacciPeter A. Quinter, and Michael R. Santana


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