The Current Playing Field for Cuba – A Summary of the Existing Requirements

The Department of Treasury and Department of Commerce have made several changes to the Cuban Assets Control Regulations (CACR) and the Export Administration Regulations (EAR) since the Administration announced its new direction toward Cuba in December 2014. Since the amendments have occurred in multiple sets of rule changes over the past seventeen months, here is an attempt to summarize where we are in terms of what is now allowed.

Travel to and from Cuba

  • No authorization required for travel related to, among other things:
    • Business travel related to authorized exports, including market research, commercial marketing, sales or contract negotiation, accompanied delivery, installation, leasing, and servicing
    • Professional meetings directly related to your profession, including marketing and sales meetings (includes attending and organizing)
    • Professional research related to your area of expertise
    • Educational activities such as academic exchange and joint research programs between U.S.-based and Cuban universities; study in programs that count toward credit at American universities; academic conferences on Cuba or global issues that affect Cuba; exchange activities intended to enhance contact with the Cuban people
  • Certain aircraft, vessels, and spacecraft may travel between the United States and Cuba
  • Vessels may now ship cargo from the United States to Cuba (and may sail to other countries with remaining cargo that was onloaded in the United States)
  • Authorized travelers may now open and maintain bank accounts in Cuba in order to carry out a number of limited transactions

Exports and Reexports

  • Certain Goods and services including:
    • Exports that meet the needs of the Cuban people (e.g., agricultural production; food processing; public health and sanitation; construction of infrastructure; public transportation; residential construction and renovation; disaster preparedness, relief, and response; emergency medical services (case-by-case review)
    • Consumer Communications Devices (CCD)
    • Telecommunications that will improve communications to, from, and among the Cuban people
    • Certain agricultural items (including insecticides and herbicides)
    • Aviation equipment and technology that improves the safety of civil aviation
    • Certain software not subject to the EAR
    • Software if end-use a non-governmental organization, e.g. a human rights or democracy group
    • Non-U.S. origin items located outside the United States
  • Promotional gifts and items for demonstrations and exhibitions
  • Temporary exports of tools to service or repair previous U.S. exports and foreign-owned items for the Cuban private sector

Business Presence in Cuba

  • S. companies exporting authorized goods to Cuba, mail or parcel transmission and cargo transportation services, travel and carrier services, and telecommunications and Internet-based services providers may establish subsidiaries, branches, offices, joint ventures, franchises, and agency or other relationships, including the ability to enter into licensing and marketing agreements
  • Office or facility in order to assemble items exported to Cuba subject to certain conditions
  • Entities organizing humanitarian projects, non-commercial activities intended to provide support to the Cuban people, or educational activities may also open an office

Banking and Financial Transactions

  • S. banks now may issue letters of credit for authorized non-agricultural exports
  • U-turn payments when neither the beneficiary nor the recipient are persons subject to U.S. jurisdiction (i.e., fund transfers from a bank outside the United States that nonetheless pass through the United States)
  • Processing of U.S. monetary instruments when presented indirectly by Cuban banks (e.g., cash and traveler’s checks)
  • Opening and maintenance of U.S. bank accounts by Cuban nationals for authorized or exempt transactions, including limited remittances to Cuba
  • Provision of goods and services to Cuban nationals located outside of Cuba

Imports

  • Importation of Cuban-origin software
  • Importation of Cuban-origin mobile devices
  • Importation of information and informational materials from Cuba (e.g., film, music, artworks)
  • Sharing of EAR99 technology and source code with Cuban nationals in the United States

Labor

  • Payment of salaries to Cuban nationals
  • Sponsoring Cuban nationals for non-immigrant visas

Education

  • Grants and scholarship awards for Cuban nationals or in which Cuba has an interest for education and authorized humanitarian projects
  • Standardized testing and Internet-based courses

Third Country-Consumption

  • Personal consumption of Cuban-origin merchandise
  • Receipt of goods or services from a Cuban national ordinarily incident to travel and maintenance within a third country

Remember that even if a general license or authorization has not been promulgated for a particular transaction, export, or other activity, it may still be possible to attain a specific license by filing an application with OFAC and/or the Commerce Department’s Bureau of Industry and Security. In light of the Administration’s efforts to normalize relations with Cuba, these agencies are sympathetic to reasonable and well-presented applications and are inclined to approve them.