U.S. Further Eases Embargo on Cuba

by Wilson Sonsini Goodrich & Rosati
Contact

To further implement President Obama's December 2014 policy to support independent economic activity and improve communications and living conditions in Cuba, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) and the U.S. Department of Treasury's Office of Foreign Assets Controls (OFAC) have again amended their regulations to relax certain restrictions on doing business in Cuba. The amendments to OFAC's Cuban Assets Control Regulations (CACR), 31 CFR Part 515, are more extensive than the changes to BIS's Export Administration Regulations (EAR), 15 CFR Parts 730-774. The easing of the sanctions is focused on expanding commerce, travel, and trade to support the Cuban people, authorizing services related to Cuban infrastructure and civil-aviation-related services, and authorization for the conduct of medical research and importing Cuban-origin pharmaceuticals into the United States. The amendments are effective today and key changes are summarized in this WSGR Alert.

Amendments to the EAR

The scope of the EAR's license exception Support for the Cuban People (SCP) has been expanded to authorize exports and reexports of EAR99 items and items subject to the EAR controlled only for anti-terrorism reasons to eligible individuals in Cuba when: i.) the sales are direct; and ii.) the items are for the individual's personal use or the personal use of the individual's immediate family. Thus, online retailers and other such retailers may now sell consumer goods directly to individuals in Cuba without obtaining a license from BIS.

BIS also expanded the group of individuals within Cuba who are authorized to receive exports and reexports under license exceptions Gift (GFT), Consumer Communications Devices (CCD), and SCP. BIS has listed ineligible parties, which include members of the Council of Ministers, Flag Officers of the Revolutionary Armed Forces, and members of the Politburo. Thus, no exports or reexports of any items subject to the EAR may be made to these ineligible persons absent a specific license from BIS. This change aligns the scope of EAR authorizations with the CACR.

Further, it is important to remember that a license is still required for the export or reexport of any item (commodity, technology, and software) subject to the EAR to Cuba unless a license exception applies.

Amendments to the CACR

The CACR amendments apply to persons subject to the jurisdiction of the United States, including U.S. citizens wherever located and foreign persons in the United States. This WSGR Alert will refer to persons subject to U.S. jurisdiction as "U.S. persons."

Provision of Services to Cuba and Cuban Nationals

Significant CACR changes include the issuance of General Licenses authorizing:

  • U.S. persons to engage in commercial and non-commercial joint medical research projects with Cuban nationals, including in Cuba;
  • transactions incident to obtaining U.S. Food and Drug Administration (FDA) approval for Cuban-origin pharmaceuticals, including but not limited to discovery and development, pre-clinical and clinical research, regulatory review, approval and licensing, and importation into the U.S.;
  • the importation into the U.S. of FDA-approved Cuban-origin pharmaceuticals;
  • the marketing, sale, and distribution of the FDA-approved Cuban-origin pharmaceuticals in the U.S.; and
  • U.S. persons to open and maintain bank accounts in Cuba for conducting business covered by the aforementioned General Licenses.

In further support of collaboration and scientific research, the amendments expanded the General License set forth in Section 515.590 of the CACR to allow grants, scholarships, and awards to individuals in Cuba or Cuban nationals for educational activities, humanitarian projects, scientific research, and religious activities.

OFAC also issued new General Licenses authorizing U.S. persons:

  • to provide services to Cuba and Cuban nationals related to the development, repair, maintenance, and enhancement of certain Cuban infrastructure, including public transportation, water and waste management, electricity distribution sectors (not nuclear), primary and secondary schools, public housing, and hospitals to directly benefit the people in Cuba;
  • to provide civil-aviation-related services to Cuba and Cuban nationals for safety in civil aviation, including safe operation of civil aircraft; and
  • to enter into certain contingent contracts, as well as transactions ordinarily incident to negotiating and entering into such contracts, for transactions that require specific licenses under the CACR or EAR upon the condition that the performance of the contract is expressly contingent upon obtaining the requisite license(s) from the appropriate U.S. government agencies.

Importation of Cuban-Origin Items

OFAC relaxed the restrictions on the importation of Cuban-origin goods by deleting the value limitation on alcohol and tobacco products. The importation must occur as accompanied baggage of an authorized traveler and must be for personal use only.

Items that were exported to Cuba under a BIS or OFAC authorization are now authorized to be imported back into the U.S. under a new General License. The General License further authorizes U.S. persons to service and repair such items and engage in transactions ordinarily incident to the importation of goods into the U.S. However, the appropriate BIS or other required export or reexport authorization is required for the repaired or replacement items to go back to Cuba.

OFAC also broadened the General License authorizing personal remittances to now allow remittances to third country nationals for travel to, from or within Cuba so long as the third country national's travel would be authorized under the CACR if performed by a U.S. person.

What Has Not Changed—Restrictions Are Still in Place

  • The U.S. embargo against Cuba remains, and a license is required to export or reexport an item from the U.S. or any other item subject to the EAR to Cuba unless a license exception applies.
  • Travel to Cuba is still restricted and U.S. persons may only travel to Cuba under one of the General Licenses in the CACR or with a license from OFAC. Tourism travel is still not allowed.
  • Transacting business with any member of the Council of Ministers, Flag Officer of the Revolutionary Armed Forces, or member of the Politburo, as well as any other person on one of the applicable U.S. government lists of sanctioned persons is not permitted.
  • Transactions between a U.S.-owned or controlled company in a third country and Cuba for the export to Cuba of commodities produced in a foreign or third country (not the U.S. or Cuba) are not authorized absent a license from OFAC.

Written by:

Wilson Sonsini Goodrich & Rosati
Contact
more
less

Wilson Sonsini Goodrich & Rosati 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.