Cuban Assets Control Regulations amendments further restrict travel and trade

Hogan Lovells

The Cuban Assets Control Regulations have been amended to prohibit U.S. persons from lodging at certain properties in Cuba, incorporate restrictions on imports of Cuban alcohol and tobacco, and revoke general licenses authorizing travel to Cuba for professional meetings and public events.

On 24 September 2020, the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) amended the Cuban Assets Control Regulations (CACR) to further restrict U.S. engagement with Cuba, consistent with the Trump administration's goal of decreasing revenue to the Cuban regime. The updated regulations are effective immediately.

Lodging restrictions

Persons subject to U.S. jurisdiction are now prohibited from lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba that the secretary of state has identified as a property that is owned or controlled by the Cuban government, a prohibited official of the Cuban Government, a prohibited member of the Cuban Communist Party, or a close relative of any of the foregoing.

In furtherance of this change, the State Department is creating a new list, the Cuba Prohibited Accommodations List, which will identify the names, addresses, or other identifying details of properties subject to this prohibition. OFAC advised that lodging arrangements at any prohibited properties will be permitted so long as those arrangements were initiated prior to the State Department's addition of the property to the list. Once the State Department adds a property to the list, new lodging arrangements and related transactions with the property are prohibited, unless authorized by OFAC.

Import restrictions on cuban alcohol and tobacco

Prior to the 24 September 2020 amendments, persons subject to U.S. jurisdiction could import Cuban-origin alcohol and tobacco products into the United States in their accompanied baggage so long as the goods were for personal/non-commercial use. The updated CACR regulations now prohibit the importation of Cuban-origin alcohol and tobacco products into the United States from Cuba or third countries. U.S. persons are still allowed to purchase and consume such items outside of the United States.

Revocation of general licenses for professional meetings and public events

The amendments eliminated certain general licenses which previously authorized two categories of travel to Cuba. First, OFAC eliminated the general authorization for U.S. persons to organize and attend professional meeting or conferences in Cuba. U.S. persons are still generally authorized to conduct professional research in Cuba, but such persons will need to apply for and receive a specific license from OFAC in order to attend professional meetings or conferences in Cuba.

Second, OFAC eliminated the general authorization for participation in and organization of public performances, clinics, workshops, competitions (except certain competitions noted below), and exhibits in Cuba. OFAC advised that it would consider issuing specific licenses, on a case-by-case basis, for travel-related transactions and other transactions that are directly incident to participation in or organization of public performances, clinics, workshops, competitions, and exhibits in Cuba, subject to certain conditions. As a result of these amendments, the only remaining general license in Section 515.567 for participation in and organization of athletic competitions in Cuba will be the general license in § 515.567(a) for athletic competitions by amateur or semi-professional athletes or athletic teams.

While OFAC implemented these restrictions, several other related authorizations remain in place. These include the general licenses related to the creation of informational materials in Section 515.545 and transactions related to publishing in Section 515.577, as well as travel for activities set forth in the general license involving support for the Cuban people in Section 515.574, among others.

OFAC also updated the Cuba sanctions FAQs pursuant to these changes. These amendments are in furtherance of the Trump administration's policy on Cuba as articulated in the National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba of 16 June 2017. This is the latest in a series of regulations tightening restrictions on activities related to Cuba.

Next steps

As the CACR amendments are effective immediately, persons subject to U.S. jurisdiction should be prepared to comply with the updated regulations as of 24 September 2020. In particular, the travel, hospitality, conference, and sports industries should review their compliance obligations in light of these changes.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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