- June 14, 2022
- Posted by: Florence
- Categories: Economics, Sanctions
At a Glance…
On June 8, 2022, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) announced that it is amending the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR) to implement aspects of a policy announced by President Biden’s administration on May 16, 2022 that aims to “increase support for the Cuban people.”
Authors: Leigh T. Hansson; Alexander Brandt; Ray-Shio Ho; Tan Albayrak; Ozra Ajizadeh
A similar relaxation to the Cuban sanctions was seen during President Obama’s administration, when OFAC allowed transactions for travel relating to agriculture or medical sales and certain other types of business, telecommunications, personal remittances, family visits to Cuba and the use of U.S. dollars for some transactions.
Moreover, the export control restrictions on Cuba were eased in part when certain categories of licenses were made available by the Bureau of Industry and Security under a general policy of approval.
In addition, in 2015, President Obama removed Cuba from the list of State Sponsors of Terrorism (SST).
Many of these restrictions were later reimposed by the Trump Administration, when he implemented a “maximum pressure” campaign against the Cuban government. These actions included suspending U.S. flights to Cuban cities outside of Havana, blocking U.S. travelers from staying at properties owned by the Cuban government, restricting imports of Cuban tobacco and alcohol, and eliminating people-to-people travel to Cuba, as well as once again restricting the use of U.S. dollars. The U.S. State Department also re-designated Cuba as an SST in January 2021, with Cuba once again becoming ineligible to receive U.S. foreign aid, munitions, and certain dual-use items.
OFAC’s final rule on Cuba, which once again relaxed many of the sanctions, became effective upon publication in the Federal Register on June 9, 2022. Simultaneously, OFAC also published several new and updated FAQs.
Since the early 1960s, the United States has maintained a near-comprehensive embargo on Cuba. Since July 8, 1963, U.S. sanctions on Cuba have been generally implemented through the CACR and presidential executive orders. Subject to certain narrow exceptions outlined by OFAC, U.S. sanctions against Cuba prohibit persons “subject to U.S. jurisdiction” from engaging in nearly all direct or indirect trade, investment, or other activities involving the country, Cuban property, or Cuban nationals. In this context, “subject to U.S. jurisdiction” includes U.S. citizens and permanent residents, entities organized under the laws of the United States and their foreign branches, non-U.S. entities owned or controlled by the foregoing, and persons physically located in the United States regardless of their citizenship or residency status. While non-U.S. persons must avoid the use of U.S. dollars or U.S. banks for transactions related to Cuba, and must not facilitate or export/re-export controlled U.S.-origin goods to Cuba, the United States has not imposed secondary sanctions against Cuba.
Amendments to the CACR
While the CACR outlines a significant number of restrictions on transactions involving Cuba, the U.S. government has amended the regulations numerous times over the last several decades. On June 8, 2022, for example, OFAC announced that it will again authorize “group people-to-people educational travel to Cuba, remove certain restrictions on authorized academic educational activities, authoriz[e] travel to attend or organize professional meetings or conferences in Cuba, remove the $1,000 quarterly limit on family remittances, and authoriz[e] donative remittances to Cuba.”
In announcing these changes, OFAC also published FAQs 1056 and 1057, clarifying certain aspects of the new exceptions.
Professional meetings and conferences in Cuba
Effective June 9, 2022, OFAC issued a general license authorizing “travel-related and other transactions incident to attending or organizing professional meetings or conferences in Cuba.” This includes professional meetings and conferences “to support expanded internet access and remittance processing and to provide additional support and training to independent Cuban entrepreneurs.” This authorization is subject to certain conditions, as follows:
- For a traveler attending a professional meeting or conference, the purpose of the gathering must directly relate to the traveler’s expertise, background, profession, or area of full-time or graduate-level study;
- For a traveler organizing a professional meeting or conference on behalf of an entity, the traveler’s profession must relate to the organization of professional gatherings, or they must be an employee or contractor of an organization involved in the professional meeting or conference; and
- The traveler’s schedule must not include leisure or recreation excessive of that consistent with a full-time schedule of attending or organizing professional meetings or conferences.
Group people-to-people and other academic educational activities
OFAC has also removed certain restrictions on authorized academic educational activities, and will “authorize group people-to-people educational travel conducted under the auspices of an organization that is subject to U.S. jurisdiction and that sponsors such exchanges to promote people-to-people contact, provided such travelers are accompanied by an employee, paid consultant, or agent of the sponsoring organization.”
More specifically, authorized transactions include persons engaging in a full-time schedule of activities intended to promote the Cuban people’s independence from the country’s authorities, enhance contact with the Cuban people, or support Cuban civil society. Such transactions must also take place while in Cuba and result in meaningful interactions with persons in Cuba.
Additionally, OFAC has removed the $1,000 quarterly limit on family remittances to Cuban nationals who are close relatives. Furthermore, OFAC has also authorized donative remittances to Cuban nationals who are not close relatives of a public official of the government of Cuba, prohibited officials of the government of Cuba, prohibited members of the Cuban Communist Party or close relatives thereof.
It is typical to see changes to the Cuba sanctions program as different U.S. administrations take office. The restrictions have been relaxed once again this time around, and it is important that persons and businesses take note and utilize any of the new benefits that may apply, as the tide may turn against Cuba once again.