Obama’s Not Slowing Down On Cuba: New Steps Forward Open Doors (and Humidors!) for Collaboration

by Sheppard Mullin Richter & Hampton LLP
Contact

With fewer than 100 days left in office, President Obama is not slowing down on his efforts to normalize relations between the United States and Cuba. Today, several changes to the Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR) go into effect. Those changes build on the plan President Obama laid out in December 2014 to increase the means for Americans and Cubans to collaborate in business, education, travel, and humanitarian work. The amendments will strengthen the ties between the two countries, stimulate Cuba’s private sector, create commercial opportunities for both the American and Cuban people, and potentially improve the lives of many Cubans. U.S. companies looking to expand into Cuba should review these changes carefully to identify and develop strategies for growth.

We have included some highlights from the updated regulations below that could significantly  impact your business (or may prompt you to create a new one!). For the full CACR amendments, click here. For the full EAR amendments, click here.

All Industries

  1.  All Contingent Contracts Authorized. The U.S. Treasury Department, Office of Foreign Assets Control (OFAC) expanded authorization for U.S. companies and individuals to enter into all contingent contracts in Cuba. Prior to today’s changes, U.S. persons could only enter into executory contracts related to goods for export from the United States to Cuba. Under the amended regulations, U.S. persons may enter into any contract with Cuba or Cuban persons, so long as the contract is contingent on obtaining authorization from U.S. regulators for any transactions currently prohibited by the U.S. embargo on Cuba.This is a big deal. The change eases the burden on U.S. companies looking to develop, negotiate, and finalize business opportunities in Cuba for goods, services, or a combination of both.
  1. Increased Exports of Goods from United States to Cuba. OFAC clarified the authorization enabling exports and reexports involving Cuba. The U.S. Department of Commerce Bureau of Industry and Security (BIS) will generally authorize the export of consumer goods, including goods sold online.This change is key for the development and growth of e-commerce in Cuba. The change will also allow U.S. companies in e-commerce to expand their consumer base and further drive the development of Cuba’s internet accessibility.

Aviation

Security and Safety-related Services in Cuba and to Cubans. U.S. companies and individuals are now authorized to provide a wide array of services aimed at promoting safety in civil aviation and the safe operation of commercial aircraft to Cuba and Cuban individuals and companies. For American aviation companies, as more and more travel increases between the two countries, these changes will greatly expand economic opportunities in Cuba’s burgeoning aviation industry.

Energy and Construction

Work on Cuban Infrastructure. U.S. companies and individuals are now authorized to provide services to develop, repair, maintain, and enhance infrastructure in Cuba. Under the regulations, “infrastructure” is defined broadly to include systems and assets used to provide the Cuban people with goods or services produced sectors such as public transportation, water and waste management, non-nuclear electricity generation, electricity distribution, hospitals, public housing, and primary and secondary schools. For American construction companies and contractors, this amendment potentially opens up a wide range of opportunities to provide construction-related services to assist in building and repairing Cuba’s infrastructure that will enable travel and commerce to increase between the United States and Cuba.

Healthcare, Medical Devices, and Pharma

Collaboration with Cuban Researchers and Medical Companies. U.S. companies and individuals may now engage in joint medical research projects with Cuban nationals. The authorization applies to both non-commercial and commercial research. For American labs, pharmaceutical companies, and universities, these changes create significant opportunities for collaboration to bring more Cuban scientists and researchers into medical and scientific innovation.

Travel

Monetary Limit on Cuban Imports While Traveling. The regulations no longer limit the value of goods that American travelers may bring back in their luggage when returning from Cuba! The agency press release specifically highlights the removal of value limits on Cuban-origin alcohol and tobacco products. In addition, travelers may purchase Cuban-origin goods outside of Cuba and bring the goods back to the United States in their luggage. In both cases, the products may only be for personal use, and of course, the normal duty and tax exemptions still apply.   Formerly the limit was 400 USD of total goods, 100 of which could be alcohol or tobacco products or about the price of 3 of the best Cohibas. Now you can bring home a box!

As ever, we will continue to  monitor updates on the breakdown of economic barriers between the United States and Cuba. As these historic changes occur, companies should always remain vigilant to stay compliant with the regulations while capitalizing on the newly created business opportunities.

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.

© Sheppard Mullin Richter & Hampton LLP | Attorney Advertising

Written by:

Sheppard Mullin Richter & Hampton LLP
Contact
more
less

Sheppard Mullin Richter & Hampton LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.