The newest round of regulatory amendments on Cuba policy will go into effect October 17, 2016. These changes are the 6th round of amendments to U.S. regulations on Cuba since December 17, 2014 and represent a continuation of the administration's policy of increasing engagement with Cuba and the Cuban people. Importantly, these latest changes open up the possibility of cooperation within healthcare and biomedical research, as well as expand authorization for investment in Cuban infrastructure to benefit the Cuban people.
Below, please find a memo that outlines the significant changes from this round.
Effective October 17, 2016, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Department of Commerce’s Bureau of Industry and Security (BIS) published amendments to the Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR), respectively. This is the sixth round of amendments since the December 17, 2014 announcement of a move toward normalization of relations.
This latest round of changes reflects ongoing efforts by the administration to increase the ability for U.S. citizens, companies, and organizations to engage with Cuba and, in doing so, empower the Cuban people.
In sum, the new amendments:
- Authorize some transactions related to Cuban-origin pharmaceuticals and joint medical research
- Allow for more authorized trade between U.S. and Cuba in certain sectors (e.g. consumer goods)
- Facilitate authorized travel to Cuba and allow additional travel-related imports (e.g. rum, cigars)
- Expand authorization for grants and humanitarian-related services to benefit the Cuban people
SUMMARY OF MAJOR CHANGES
Health: Joint medical research & importation of Cuban-origin pharmaceuticals
- General license for engaging in joint medical research projects with Cuban nationals, for commercial and non-commercial medical research.
- General license for transactions incident to obtaining approval from Food and Drug Administration (FDA) of Cuban-origin pharmaceuticals. The license includes discovery and development, pre-clinical/clinical research, regulatory review, regulatory approval and licensing, regulatory post-market activities, and import of Cuban-origin pharmaceuticals to the U.S.
- Authorized importation, marketing, sale or other distribution of FDA-approved Cuban-origin pharmaceuticals into the U.S.
- Authorized opening bank accounts at Cuban financial institutions for persons engaging in authorized activities outlined above.
Trade & Commerce: Add, expand, & clarify authorizations
- OFAC removed requirement for “100% U.S.-origin items” to minimize the need to obtain a specific license for the export (& re-export from a third country) to Cuba of authorized items. Does NOT authorize transactions between a U.S.-owned or -controlled firm in a third country and Cuba for exporting non-US or non-Cuba items to Cuba (e.g. does not authorize a U.S. subsidiary in Mexico to export commodities produced in Mexico to Cuba). Specific license would be required.
- BIS will generally authorize exports of certain consumer goods that are sold online or through other means directly to eligible individuals in Cuba for their personal use.
- Clarified that only “agricultural commodities” are subject to payment and financing limitations under the Trade Sanctions Reform & Export Enhancement Act of 2000 (TSRA). This clarifies that agricultural items, such as pesticides and tractors, are authorized by BIS for export or reexport to Cuba and are not subject to restrictions on payment terms.
- General license added to authorize import into U.S. or a third country of items previously exported or re-exported to Cuba, which will allow for the service and repair of authorized items that have been exported to Cuba (e.g. if an authorized item has been exported to Cuba, it may be returned to the U.S. for service and repairs).
- Added an exception to the 180-day rule (that prohibits foreign vessels that call on Cuban ports for trade purposes from entering US ports for 180 days) for foreign vessels that have carried authorized items from a third country to Cuba.
- BIS will generally authorize air cargo to transit Cuba, complementing an existing general authorization for cargo transiting Cuba aboard vessels. (Transit is intended to mean the cargo is not removed from the aircraft or vessel for use in Cuba.)
- General license authorizing persons subject to U.S. jurisdiction to enter into certain contingent contracts; the underlying transactions must be authorized by OFAC or another federal agency (or must not require authorization).
- BIS revision of Cuban nationals that are ineligible to receive gift parcels, consumer communication devices, or software to members of the Council of Ministers, flag officers of the Revolutionary Armed Forces, and members of the Politburo.
Civil Aviation: Authorize safety-related services
- New general license authorizing provision of service aimed at ensuring safety in civil aviationand the sage operation of commercial aircraft to Cuba and Cuban nationals, wherever located.
Humanitarian Activities: Increased authorization for grants & humanitarian services
- Expanded authorization for grants, scholarships, and awards to Cuba or Cuban nationals to include those related to scientific research and religious activities.
- New authorization that will allow persons subject to U.S. jurisdiction to provide services to Cuba or Cuban nationals related to developing, repairing, maintaining, and enhancing certain Cubaninfrastructure in order to directly benefit the Cuban people. [OFAC: “Infrastructure” in this case means systems and assets used to provide the Cuban people with goods and services produced by the public transportation, water management, waste management, non-nuclear electricity generation, and electricity distribution sectors, as well as hospitals, public housing, and primary and secondary schools.]
Travel: Expanded categories for authorized travel to Cuba and for allowable imports from Cuba
- OFAC removed the monetary value limitations on what authorized travelers may import from Cuba into the U.S. as accompanied baggage, including eliminating the value limitation onalcohol and tobacco products (e.g. rum and cigars).
- Persons subject to U.S. jurisdiction will be further authorized to import Cuban-origin merchandise acquired in third countries into the U.S. as accompanied baggage, again without value limitations.
- OFAC removed the prohibition on foreign travelers importing Cuban-origin alcohol and tobacco products into the U.S. as accompanied baggage. In all cases, the Cuban-origin goods must be imported for personal use, and normal limits on duty and tax exemptions will apply.
- The authorized travel category of professional research and professional meetings now allows for the attending or organizing professional meetings or conferences in Cuba whose purpose is the promotion of tourism.
- Persons subject to U.S. jurisdiction will be authorized to make remittances to third-country nationals for travel to, from, or within Cuba, provided the travel would be authorized by general license for a person subject to U.S. jurisdiction.
- OFAC clarified that providers of travel and carrier services may collect and retain either a copy of the traveler’s specific license or the traveler’s specific license number, in order to reduce burden of recordkeeping.