I am here to encourage newly authorized trade to and from Cuba. However, my job is also to ensure that exporters have all of the information they need to make informed business decisions and remain compliant with U.S. trade laws – not just the information in the introductory paragraphs of news articles or press releases.
Here is an example of what I mean: a news source tells you your company can now do business in Cuba. You have a member of your team take a look at the Cuba sanctions. They prepare material for you covering the new rules but they miss a few important details. Why? Because the applicable information is in several places throughout multiple sets of regulations. You must review both the Export Administration Regulations (EAR) and the Cuban Assets Control Regulations (CACR). And don’t forget that there are specific exclusions at the end of some general licenses. For instance, the general license under §515.564(a)(2) of the CACR that allows individuals to travel to Cuba to attend professional meetings cannot be used if the purpose of the meeting is “the promotion of tourism in Cuba.” It’s also important to read all of the regulatory definitions that apply – you can’t assume that words in the regulations are used in the usual way because the definitions are often very precise and technical. For example, what is “technology” and what is “publically available” under the EAR may not match Webster’s definition and the variation could be the difference between needing to apply for a license to export your product or qualifying for a general license or exemption.
Here are a few general pointers:
- You have to pay attention to at least two agencies. With the new rules, the Office of Foreign Assets Control (OFAC) doesn’t “trump” the Bureau of Industry and Security (BIS) on all matters. For example, you may need licenses from both agencies if your product is EAR99 and going to a government entity. The point is if you don’t use these regulations all of the time you have to consider both agencies and you should create a cheat sheet or procedure to help you think through overlapping agency rules, definitions, and license requirements for each export or transaction.
- While certain business development trips are authorized under §515.564(a)(2) you have to determine the scope of what exactly is being authorized under these general licenses. For example, you may need authorizations for your work-related equipment. Consider each item and transaction with respect to each applicable exclusions and/or special license.
- And don’t forget the Commerce Department’s Denied Persons List and OFAC’s Specially Designated Nationals (SDN) List. Just because something is “not subject to the EAR” doesn’t mean it isn’t subject to OFAC’s SDN List. In Cuba there is government ownership in many industries. Remember there is not really a private sector yet. So don’t assume anything: check to ensure you know the ownership of your potential partner. Does it have government ownership? Does that make it an SDN?
So while the opportunities are real, you have to do your homework.