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New Regulations Implement Relaxed Trade and Other Policies Toward Cuba

Friday, January 16, 2015
Sandler, Travis & Rosenberg Trade Report

Revised U.S. government regulations implementing recent changes in U.S. trade and other policies toward Cuba will take effect Jan. 16. These regulatory modifications do not lift the U.S. economic embargo against Cuba but do allow additional trade-related activities. Sandler, Travis & Rosenberg will be conducting a webinar on this topic, "Cuba at the Crossroads: New Policies, Laws & Potential Opportunities" on Feb. 19. For more information and to register click here.

The Department of the Treasury’s Office of Foreign Assets Control has issued a final rule amending the Cuban Assets Control Regulations to facilitate travel to Cuba for authorized purposes, facilitate the provision by travel agents and airlines of authorized travel services and the forwarding by certain entities of authorized remittances, raise the limit on certain categories of remittances to Cuba, allow U.S. financial institutions to open correspondent accounts at Cuban financial institutions to facilitate the processing of authorized transactions, authorize certain transactions with Cuban nationals located outside of Cuba, and allow a number of other activities related to telecommunications, financial services, trade and shipping. Highlights of the changes made by this rule include the following.

- authorized travelers may import no more than $400 worth of goods from Cuba, including up to $100 in alcohol or tobacco products

- certain micro-financing activities and entrepreneurial and business training, such as for private businesses and agricultural operations, are authorized

- commercial imports of certain specified goods and services produced by independent Cuban entrepreneurs are authorized

- the regulatory interpretation of “cash in advance” is changed from “cash before shipment” to “cash before transfer of title and control” to allow expanded financing options for authorized exports to Cuba

- a general license authorizes persons subject to U.S. jurisdiction to provide additional services incident to Internet-based communications and related to certain exportations and reexportations of communications items

- a general license authorizes foreign vessels to enter the United States after engaging in certain trade with Cuba

- airlines may provide authorized air carrier services without the need for a specific license from OFAC

- U.S.-owned or –controlled entities in third countries, including banks, may provide goods and services to individual Cuban nationals located outside of Cuba provided the transaction does not involve a commercial exportation of goods or services to or from Cuba

Similarly, the Bureau of Industry and Security has issued a final rule making the following amendments to the Export Administration Regulations.

- new license exception Support for the Cuban People (SCP) authorizes the export and reexport to Cuba of certain items, including building materials for use by the private sector to construct or renovate privately-owned buildings; goods for use by private-sector entrepreneurs such as auto mechanics, barbers and hairstylists, and restaurateurs; tools and equipment for private-sector agricultural activity; items for the establishment and upgrade of communications-related systems; and certain consumer communications devices, related software, applications and hardware (only items designated as EAR99 or controlled only for anti-terrorism reasons are eligible for this license exception)

- existing license exception Consumer Communications Devices (CCD) is amended by eliminating the donation requirement, thereby authorizing exports or reexports of certain communications items (e.g., computers, mobile phones, televisions, radios and digital cameras) for commercial sale or donation to eligible end users in Cuba

- license exception Gift Parcels and Humanitarian Donations (GFT) is expended to authorize exports of consolidated shipments of multiple parcels for delivery to individuals residing in Cuba, thus eliminating the requirement to obtain individual validated licenses for such parcels

- a general policy of approval is established for exports and reexports to Cuba of items necessary for the environmental protection of U.S. and international air quality, waters and coastlines

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