Two federal agencies are taking action to further ease U.S. sanctions against Cuba related to travel, telecommunications and Internet-based services, business operations in Cuba, and remittances. Among the changes being made by the Treasury Department’s Office of Foreign Assets Control and the Commerce Department’s Bureau of Industry and Security in final rules that will take effect Sept. 21 are the following.
Physical Presence in Cuba. Persons subject to U.S. jurisdiction and engaging in the following categories of authorized activities will be able to establish a physical presence, such as an office, retail outlet or warehouse, in Cuba: news bureaus, exporters of authorized goods such as agricultural products and materials for construction or renovation of privately-owned buildings, providers of authorized mail and parcel transmission services and cargo transportation services, providers of telecom or Internet-based services, entities organizing or conducting certain educational activities, religious organizations, and providers of travel and carrier services. In addition, these individuals and entities will be authorized to employ Cuban nationals, open and maintain bank accounts in Cuba, and employ persons subject to U.S. jurisdiction in Cuba.
Travel. Transportation by vessel of authorized travelers between the U.S. and Cuba, without stops in third countries, is allowed by general license, and certain lodging services aboard such vessels in connection with such transportation are also authorized. License exception AVS (aircraft, vessels and spacecraft) will authorize trips to Cuba of no more than 14 days for cargo vessels for hire for use in the transportation of items, passenger vessels for hire for use in the transportation of passengers and/or items, and recreational vessels used in connection with authorized travel.
Close relatives will be allowed to visit or accompany authorized travelers for additional educational activities, journalistic activity, professional research and religious activities as well as activities related to humanitarian projects and activities of private foundations or certain research or educational institutes. A close relative is defined as someone related to a person by blood, marriage or adoption and who is no more than three generations removed from that person or a common ancestor with that person.
All authorized travelers will be allowed to open and maintain bank accounts in Cuba in order to access funds for authorized transactions while in Cuba.
Commercial and Financial Transactions. All persons subject to U.S. jurisdiction will be allowed to provide goods and services to individual Cuban nationals located outside of Cuba provided there is no commercial exportation of goods or services to or from Cuba. Banking institutions will be able to open and maintain accounts for Cuban individuals for use while they are outside of Cuba and to close such accounts.
Telecom Services. Persons subject to U.S. jurisdiction will be allowed to establish and maintain a business presence in Cuba, including through subsidiaries, branches, offices, joint ventures, franchises, and agency or other business relationships with any Cuban individual or entity, to provide authorized telecommunications and Internet-based services and to enter into licensing agreements related to, and to market, such services.
Persons subject to U.S. jurisdiction will be allowed to import Cuban-origin mobile applications and to hire Cuban nationals to develop them.
An existing authorization for the provision of services related to certain consumer communications devices exported to Cuba will be expanded to authorize services related to additional types of items authorized by Commerce and to add training related to the installation, repair or replacement of those items. License exception CCD (consumer communications devices) will no longer be limited to sales or donations, a change intended to support other types of transactions such as leases and loans of eligible items for use by eligible end-users.
License Exception SCP. License exception SCP (Support for the Cuban People) will authorize certain exports and reexports of items to Cuba for use in establishing, maintaining and operating a physical presence in Cuba. Eligible end-users of the items include certain persons providing telecom or Internet-based services, establishing telecom facilities, providing travel or carrier services, organizing or conducting educational activities, or transporting authorized items between the U.S. and Cuba.
License exception SCP will also:
- no longer be limited to sales or donations in order to support other types of transactions, such as leases and loans of eligible items for use by eligible end-users;
- authorize certain temporary reexports from a foreign country to Cuba when the items are for use in scientific, archeological, cultural, ecological, educational, historic preservation or sporting activities or in the traveler’s professional research and meetings;
- authorize exports or reexports to eligible end-users in Cuba of certain commodities and software for use in software development; and
- authorize temporary exports and reexports to Cuba of additional categories of items, including certain tools of trade to install, service or repair items and certain commodities and software for exhibition or demonstration.
Legal Services. OFAC’s existing general license authorizing the provision of certain legal services to Cuba and Cuban nationals will be expanded to allow the receipt of payment for such services, subject to limitations related to payments from prohibited Cuban government or Cuban Communist Party officials. Additionally, a new general license will authorize persons subject to U.S. jurisdiction to receive, and make payment for, certain legal services from Cuba or Cuban nationals.
Market Research. A new general license will allow certain travel-related transactions and such additional transactions as are directly incident to the conduct of market research, commercial marketing, sales negotiation, accompanied delivery, installation, or servicing in Cuba of items consistent with the DOC’s export or reexport licensing policy, provided that the traveler’s schedule of activities does not include free time or recreation in excess of that consistent with a full-time schedule.
Deemed Exports. A license will be required for the release of technology or source code on the Commerce Control List to Cuban nationals in the U.S. or a third country but not for the deemed export or deemed reexports of technology or source code designated as EAR99.
Civil Aviation Safety. A case-by-case review policy will apply to license applications for exports and reexports to Cuba of items to help ensure the safety of civil aviation and the safe operation of commercial passenger aircraft. Items that are to be reviewed pursuant to this policy include aircraft parts and components; software and technology related to the safety of flight; air traffic control, aviation communications, and aviation weather related equipment; airport safety equipment; and devices used for security screening of passengers and baggage.
Gift Imports. Imports of merchandise from Cuba or Cuban-origin merchandise from a third country intended as gifts, excluding alcohol and tobacco products, will be allowed to be sent to the U.S. provided that it is not carried by a traveler, is valued at not more than $100, and is a type and in quantities normally given as a gift.
Ordinarily Incident Transactions. OFAC is clarifying that the Cuba sanctions provisions that are already in place allow most transactions that are ordinarily incident and necessary to give effect to a licensed transaction. For example, certain payments made using online payment platforms are permitted for authorized transactions.